Journeypure Bowling Green, LLC v. The Mediccal Center at Clinton County, Inc. D/B/A the Medical Center at Albany

• Court: Court of Appeals of Kentucky
• Decided: August 15, 2025
• Docket: 2024-CA-0176
• Status: Unpublished

Opinion

RENDERED: AUGUST 15, 2025; 10:00 A.M. NOT TO BE PUBLISHED

Commonwealth of Kentucky Court of Appeals NO. 2024-CA-0176-MR

JOURNEYPURE BOWLING GREEN, LLC; JOURNEYPURE HOLDINGS, INC.; JOURNEYPURE, LLC; AND REGARD RECOVERY JP, LLC APPELLANTS

APPEAL FROM CLINTON CIRCUIT COURT v. HONORABLE DAVID L. WILLIAMS, JUDGE ACTION NO. 23-CI-00077

THE MEDICAL CENTER AT CLINTON COUNTY, INC. D/B/A THE MEDICAL CENTER AT ALBANY APPELLEE

OPINION AFFIRMING IN PART, REVERSING IN PART, AND REMANDING

** ** ** ** **

BEFORE: KAREM, MCNEILL, AND TAYLOR, JUDGES.

MCNEILL, JUDGE: This is a landlord-tenant dispute between corporate entities.

Appellant, JourneyPure Bowling Green, LLC, is the Lessee. The Medical Center at Clinton County, Inc. d/b/a The Medical Center at Albany, is the Appellee.1 The

parties executed a three-year lease for commercial real estate on or about August 1,

2020 (hereafter, the “Lease”). They amended the Lease and then executed a

Consent to Assignment Agreement. Appellee filed suit in Clinton County Circuit

Court on June 15, 2023, alleging that Appellants failed to pay rent required under

the terms of the Lease. The Complaint specifically alleges the following:

10. The Lease Agreement was amended by an Addendum to Lease effective April 5, 2021 and a Second Addendum to Lease effective May 1, 2022 to a four-year lease term. A complete copy of the Lease Agreement, including the aforementioned addenda, is attached hereto as Exhibit 1.

11. Additionally, Medical Center Albany and JourneyPure executed a Consent to Assignment by letter from JourneyPure dated September 2, 2021. A copy of said Consent to Assignment is attached hereto as Exhibit 2.

12. The Consent to Assignment provided that JourneyPure “intend[ed] to sell substantially all of its assets to Regard Recovery JP, LLC . . . pursuant to an Equity Purchase Agreement . . .” Specifically, the parties agreed, inter alia, that “the [Lease] will continue in full force and effect in accordance with its terms following the Closing.”

1 The other Appellants named in the caption are entities either directly or tangentially associated with JourneyPure Bowling Green, LLC. To be clear, the underlying lease was executed by a representative of JourneyPure Bowling Green, LLC. Therefore, we will reference that Appellant as “Lessee.” The other corporate entities will be discussed as necessary.

-2- 13. Article 14.1 of the Lease Agreement provided that “[i]n the event Tenant assigns the Lease or sublets the Premises, Tenant shall continue to be liable for all payments and performance under this Lease unless released by Landlord, which release may be granted or denied in Landlord’s sole discretion.”

14. Medical Center Albany consented to the assignment but did not release JourneyPure from its obligations under the Lease Agreement. JourneyPure remained responsible for its obligations under the Lease Agreement, particularly its obligation to pay rent on time.

After the time for filing an Answer expired, Appellee filed a motion

for a default judgment on July 26, 2023. A hearing on the motion was held on

August 10, 2023. Appellants did not attend, and a default judgment was ordered.2

Appellants filed an Answer on August 23, 2023. In an order entered on September

22, 2023, the circuit court granted Appellee’s motion to strike the Answer and

entered a default judgment in Appellee’s favor “in the amount of $437,930.00,

plus pre-judgment interest in the amount of $28,777.28, [and] post-judgment

interest at the legal rate of 6% from the date of entry of this order to the date the

default judgment amount is paid in full, and attorney’s fees and court costs to be

determined at a later date by the Court.” Appellee filed a Notice of Judgment Lien

on December 13, 2023.

2 It is unclear whether the court entered a default judgment from the bench at the hearing. In any event, in an order entered on September 22, 2023, the court memorialized that the default judgment was “[g]ranted on August 10, 2023 . . . .”

-3- Appellants filed a motion to set aside the default judgment and to

release the judgment lien. In an order entered on January 25, 2024, the court

denied the then “pending motions.” Therein, the court denied the motions to set

aside the default and to release the lien.3 Appellants appeal to this Court as a

matter of right. For the following reasons, we affirm in part, reverse in part, and

remand.

STANDARD OF REVIEW

“Although default judgments are not favored, trial courts possess

broad discretion in considering motions to set them aside and we will not disturb

the exercise of that discretion absent abuse.” Howard v. Fountain, 749 S.W.2d

690, 692 (Ky. App. 1988) (citation omitted). A trial court does not abuse its

discretion unless its decision is “arbitrary, unreasonable, unfair, or unsupported by

sound legal principles.” Miller v. Eldridge, 146 S.W.3d 909, 914 (Ky. 2004)

(internal quotation marks and citation omitted). CR4 55.02 provides: “For good

cause shown the court may set aside a judgment by default in accordance with

Rule 60.02.” (Emphasis added.) See VerraLab Ja LLC v. Cemerlic, 584 S.W.3d

3 The court granted Appellants’ motion to file a counterclaim in an order entered on January 19, 2024. 4 Kentucky Rules of Civil Procedure.

-4- 284, 287 (Ky. 2019) (“Good cause is not mere inattention on the part of the

defendant . . . .”) (citation omitted).

CR 60.02 provides in relevant part: “On motion a court may, upon

such terms as are just, relieve a party or his legal representative from its final

judgment, order, or proceeding upon the following grounds: (a) mistake,

inadvertence, surprise or excusable neglect . . . or (f) any other reason of an

extraordinary nature justifying relief.” “We review the denial of a CR 60.02

motion under an abuse of discretion standard.” Foley v. Commonwealth, 425

S.W.3d 880, 886 (Ky. 2014) (citation omitted). With these standards in mind, we

now return to the present case.

ANALYSIS

For their first argument, Appellants contend that the circuit court’s

“Order on Pending Motions” was interlocutory. “It is fundamental that a court

must have jurisdiction before it has authority to decide a case.” Wilson v. Russell,

162 S.W.3d 911, 913 (Ky. 2005). “Our rules require that there be a final order or

judgment from which an appeal is taken.” Id. (footnote omitted). CR 54.01

defines a final and appealable order as, “a final order adjudicating all the rights of

all the parties in an action or proceeding, or a judgment made final under Rule

54.02.”

-5- In an action involving multiple claims and/or multiple parties CR

54.02(1) permits the circuit court to make an otherwise interlocutory order final

and appealable upon a determination there is no just cause for delay. Turner

Constr. Co. v. Smith Bros., Inc., 295 S.W.2d 569 (Ky. 1956). It is within the

circuit court’s discretion to “release” a claim for appeal. See Watson v. Best Fin.

Servs., Inc., 245 S.W.3d 722, 726 (Ky. 2008). However, if an order is inherently

interlocutory, CR 54.02 finality recitations cannot make it final. Hale v. Deaton,

528 S.W.2d 719, 722 (Ky. 1975).

To be clear, the order from which the appeal is taken includes

recitations mandated by CR 54.02(1). Nevertheless, Appellants assert that the

order is an interlocutory, in part, because its pending counterclaims negate finality.

We disagree. See Watson, 245 S.W.3d at 726 (“By the express provisions of CR

54.02, however, a trial court may grant a final judgment on less than all the claims

when more than one claim for relief is presented in an action, even when the

remaining claim is a counterclaim.”). There is no further indication that the order

from which Appellants appeal is inherently interlocutory, or otherwise

impermissible for purposes of appellate review. We will now address the merits of

the motion to set aside the default.

“Factors to consider in deciding whether to set aside a judgment are:

(1) valid excuse for default, (2) meritorious defense, and (3) absence of prejudice

-6- to the other party.” Perry v. Central Bank and Trust Company, 812 S.W.2d 166,

170 (Ky. App. 1991) (citation omitted). In the present case, the default judgment

and order denying the motion to set aside the default judgment do not specify the

court’s reasoning for its rulings. And there is no indication that Appellants

requested additional findings. See CR 52.04. As to the merits of the setting aside

the default judgment, Appellants do not provide any arguments or evidence that

would necessitate setting aside the default judgment in this instance. Indeed,

Appellants’ substantive arguments for setting aside the default judgment are

mostly confined to their reply brief. We have considered these arguments and find

them unpersuasive. Instead, Appellants’ primary issues on appeal challenge the

alleged interlocutory nature of the appeal, damages, and the judgment lien. Having

dispensed with the former, we proceed to address the latter two issues.

Appellants contend that the circuit court erred by not holding a

hearing on damages pursuant to CR 55.01. First, Lessees did not appeal from the

default judgment itself, only the order denying the motion to set aside.5 Further,

nothing in the plain language of CR 55.01 requires a damages hearing. Pursuant to

the relevant portion of that permissive rule, a hearing is required only if “it is

5 See Kentucky Rules of Appellate Procedure (RAP) 2(B)(1)(b). Nevertheless, we will treat the default judgment as merged with the order denying the motion to set aside that judgment. See Johnson v. Smith, 885 S.W.2d 944, 950 (Ky. 1994) (“Excepting for tardy appeals . . . we follow a rule of substantial compliance.”).

-7- necessary to take an account or to determine the amount of damages . . . .” CR

55.01. See also State Farm Ins. Co. v. Edwards, 339 S.W.3d 456, 460 n.3 (Ky.

2011) (“We note that under the plain language of CR 55.01 the trial judge should

exercise discretion . . . .”).

However, we believe that a damages hearing was necessary here. On

remand, the circuit court shall consider relevant evidence of contract damages

resulting from breach of the Lease. These damages include, without limitation:

rental payments owed, acceleration of rental payments, fees, penalties, or any other

damages arising under the express terms of the Lease, for which sufficient

evidence has been presented to the court entitling Appellee to such damages.

Potential mitigation evidence shall also be considered in the court’s determination

and calculation. The court shall specify its findings. Deskins v. Estep, 314 S.W.3d

300, 305 (Ky. App. 2010) (Taylor, J., presiding) (reversing and remanding with

directions that the circuit court conduct an evidentiary hearing on damages arising

from default judgment).

And because we are remanding for a damages hearing, we need not

address the merits of Appellants’ argument concerning the judgment lien arising

from the default judgment award. Moreover, the only order presented to this Court

approving the judgment lien was the circuit court’s “Order on Pending Motions.”

That order, from which the present appeal was taken, simultaneously denied

-8- Appellants’ motion to release the lien, and their motion to set aside the default

judgment. Therefore, any potential injury between the filing of a judgment lien

and the final and appealable order at issue here, lacks any concrete basis from

which a remedy could be ordered by this Court.

CONCLUSION

For the foregoing reasons, we AFFIRM the default judgment. The

order of Clinton Circuit Court awarding damages to Appellee is REVERSED and

REMANDED with directions that the circuit court conduct an evidentiary hearing

on damages consistent with this Opinion.

KAREM, JUDGE, CONCURS.

TAYLOR, JUDGE, CONCURS IN RESULT ONLY AND FILES SEPARATE OPINION.

TAYLOR, JUDGE, CONCURRING: I agree with the majority that a damage

hearing is required in this case as the damages alleged below are unliquidated for

which an evidentiary hearing is mandated by the circuit court under CR 55.01.

Deskins v. Estep, 314 S.W.3d 300, 304 (Ky. App. 2010).

In this case, the court awarded damages in the order entered

September 22, 2023, totaling $437,930 plus prejudgment and post-judgment

interest and attorney’s fees. Presumably this calculation was based on the Lease,

Second Addendum to Lease and the affidavit of David Gray, Vice President for the

Medical Center. The total rent owed is listed at $337,580 in Gray’s affidavit.

-9- While the revised schedule to the Second Addendum to Lease purports to break out

monthly installments regarding the annual lease payment of $99,645, neither the

schedule nor Gray’s affidavit details how the alleged outstanding rent arrearage is

calculated. Gray’s affidavit states that the default in payment began in October of

2022, and no monthly rent payments had been made up to the date of his affidavit

in July of 2023, less than one year under the lease. However, Gray asserts the

unpaid rent as of that date was $337,580, yet the annual rent owed under the lease

was only $99,645. Presumably, Gray included the 5 percent monthly penalty for

the late payment of rent or simply accelerated the total lease payments remaining

due under the lease at the time of default. Again, there is no evidence in the record

to support how the rent damages were calculated. Additionally, the lease provided

for $50,000 of leasehold improvements to be paid by JourneyPure but there is no

evidence in the record regarding whether those improvements were completed.

Similarly, the claim for $10,300 in meals provided by the Medical Center is not

adequately established in the record below.

Accordingly, the actual damages claim is not ascertainable from the

record which reflects that the damages are unliquidated and an evidentiary hearing

upon remand is warranted in accordance with CR 55.01 and CR 52.01. I would

also note that the court awarded attorney fees which are also unliquidated and

-10- should be established at the damages hearing. Key v. Mariner Finance, LLC, 617

S.W.3d 819, 825 (Ky. App. 2020).

BRIEFS FOR APPELLANTS: BRIEF FOR APPELLEE:

April A. Wimberg Charles E. English, Jr. Cara Alexiou John A. Sowell Louisville, Kentucky Bowling Green, Kentucky

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