Signature Healthcare, LLC v. Appalachian Regional Healthcare, Inc.

• Court: Court of Appeals of Kentucky
• Decided: June 6, 2025
• Docket: 2024-CA-0158
• Status: Unpublished

Opinion

RENDERED: JUNE 6, 2025; 10:00 A.M. NOT TO BE PUBLISHED

Commonwealth of Kentucky Court of Appeals NO. 2024-CA-0158-MR

SIGNATURE HEALTHCARE, LLC AND LP PRESTONSBURG RIVERVIEW, LLC D/B/A RIVERVIEW HEALTH CARE CENTER APPELLANTS

APPEAL FROM FLOYD CIRCUIT COURT v. HONORABLE JOHNNY RAY HARRIS, JUDGE ACTION NO. 23-CI-00455

TONY CLICK; APPALACHIAN REGIONAL HEALTHCARE, INC.; KNOTT COUNTY NURSING HOME, INC.; POLLY JOHNSON; AND PRIMARY CARE CENTERS OF EASTERN KENTUCKY APPELLEES

OPINION VACATING IN PART AND REMANDING

** ** ** ** **

BEFORE: THOMPSON, CHIEF JUDGE; CALDWELL AND L. JONES, JUDGES. CALDWELL, JUDGE: LP Prestonsburg Riverview, LLC d/b/a Riverview Health

Care Center and Signature HealthCARE, LLC (collectively “Signature”) appeal

orders of the Floyd Circuit Court lifting a stay and setting aside a prior order

compelling arbitration, as well as requiring Signature to participate in pretrial

discovery while its motion to compel arbitration was pending. After careful

review, we vacate and remand the orders only insofar as they require Signature to

participate in pretrial discovery beyond matters relevant to arbitrability.

BACKGROUND

On August 11, 2023, Tony Click and Polly Johnson, in her capacities

as both spouse and power of attorney to Mr. Click, (collectively “Click”) filed suit

in Floyd Circuit Court alleging negligence on the part of multiple defendants in the

care and medical treatment Mr. Click received during a period beginning in August

of 2022. Two of the defendants are the appellants here, LP Prestonsburg

Riverview, LLC d/b/a Riverview Health Care Center and Signature HealthCARE,

LLC.

The Signature defendants both filed answers to Click’s complaint in

September of 2023, and included defenses that all claims were subject to a binding

arbitration agreement. Contemporaneously, Signature filed a motion to compel

arbitration and to stay proceedings with the circuit court, citing to the Kentucky

-2- Uniform Arbitration Act (KUAA), KRS1 417.045 et seq., and the Federal

Arbitration Act (FAA), 9 U.S.C.2 §§ 1 et seq. On September 11, 2023, Signature

filed a supplement to its motion to compel arbitration and attached the alleged

arbitration agreement, indicating it had inadvertently been left out of the original

motion’s attachments. Prior to this date, co-defendants of Signature had filed

unrelated motions with the circuit court. On September 15, 2023, a hearing before

the circuit court occurred on then-pending matters including Signature’s motion to

compel arbitration. Nineteen days later, on October 4, 2023, the circuit court

ordered: “that the motion to compel arbitration and stay action is hereby sustained

pending the outcome of Arbitration.”

On October 17th, 2023, Click filed a notice with the circuit court that

they had served written discovery requests on Signature. Thereafter, on November

9, 2023, Click filed a motion for leave to amend their complaint and add claims

against another entity. Subsequently, on November 14, 2023, Click filed a

pleading with the circuit court styled “Motion to Lift Stay.” The motion argued to

the circuit court that the validity of the arbitration agreement was in dispute and

had never been examined by the circuit court and that the order staying the case

had been entered without an evidentiary hearing. The memorandum further argued

1 Kentucky Revised Statutes. 2 United States Code.

-3- the matter of arbitrability required discovery and alleged possible defenses to

formation of the contract related to the circumstances of its execution.

In November of 2023, Signature served objections to Click’s

discovery requests, asserting that discovery could only properly take place within

arbitration proceedings. Signature also filed a memorandum with the circuit court

in response to Click’s motion to lift the stay. Signature argued Click had failed to

produce affirmative evidence to dispute the arbitration agreement and that the

motion was untimely in light of the date of entry of the order granting the stay. On

January 5, 2024, with the motion to lift the stay still pending, Click filed a motion

to compel Signature, and others, to substantively respond to written discovery

requests.

The circuit court heard arguments on Click’s motion to lift the stay,

motion to compel discovery, and motion for leave to amend the complaint on

January 22, 2024. On January 29, 2024, the circuit court entered orders granting

Click’s three motions.

With respect to the motion to lift the stay, the circuit court ordered

“that the Order lifting the stay of the case and compelling arbitration is set aside.

The Court further allows discovery to proceed on all issues.” The order granting

Click’s motion to compel discovery responses directed “that each of the

-4- Defendants, shall respond to Plaintiff’s Interrogatories and Requests for Production

of Documents, within twenty (20) days from the date of this Order.”

On February 8, 2024, Signature filed a notice of appeal. In May of

2024, Click filed a motion with this Court to dismiss Signature’s appeal. Click

argued Signature was seeking a writ of mandamus or prohibition which should not

be granted. In response, Signature argued it did not seek injunctive relief pursuant

to RAP3 60 but instead filed an appeal pursuant to KRS 417.220(1)(a). We denied

Click’s motion to dismiss on June 27, 2024. The matter is now fully briefed and

ripe for our review. Additional facts will be developed as necessary.

ANALYSIS

Signature asserts the order of the circuit court effectively denied its

motion to compel arbitration and asks this Court to reverse, remand and instruct

the circuit court to again enter an order compelling arbitration. Click argues that

the circuit court has yet to decide Signature’s motion to compel arbitration and the

circuit court merely re-opened the arbitration agreement’s enforceability to its own

determination.

We review a circuit court's ruling on a motion to compel arbitration de

novo, i.e., we review the trial court's identification and application of legal

principles without deference. Conseco Fin. Servicing Corp. v. Wilder, 47 S.W.3d

3 Kentucky Rules of Appellate Procedure.

-5- 335, 340 (Ky. App. 2001). Here, however, the parties dispute whether the circuit

court has made any ruling that is properly subject to appellate review. In its

appellate brief, Signature takes the position that the circuit court’s “decision to

vacate the Arbitration Order . . . had the force and effect of a denial of Signature’s

initial Motion to Compel Arbitration.” In contrast, Click argues that by granting

only a motion to set aside the stay, the circuit court has yet to reach the threshold

issue that could render the matter ripe for our review – that of the enforceability of

the arbitration agreement. Click remains of the position that Signature’s appeal

should be dismissed outright, arguing it is premature.

Jurisdiction

While the parties dispute whether the circuit court’s orders should be

reviewed for error, neither party focuses its arguments directly or explicitly on the

jurisdiction of this Court. Nevertheless, ensuring our jurisdiction is a

determination we have an independent duty to address. See Linden v. Griffin, 436

S.W.3d 521, 524 (Ky. 2014), as modified on denial of reh’g (Aug. 21, 2014).

Generally, the scope of our review is that of final and appealable

orders and of only certain, specific kinds of orders which are interlocutory. Id. at

524 (citing Breathitt Cnty. Bd. of Educ. v. Prater, 292 S.W.3d 883, 885 (Ky.

2009)). An appellate court lacks jurisdiction to review interlocutory, non-

appealable orders. Upper Pond Creek Volunteer Fire Department, Inc. v. Kinser,

-6- 617 S.W.3d 328, 333 (Ky. 2020). There is no dispute as to whether the order at

issue is interlocutory. Signature argues the orders are appealable pursuant to KRS

417.220(1)(a) which allows that “[a]n appeal may be taken from . . . [a]n order

denying an application to compel arbitration made under KRS 417.0604[.]” KRS

417.220(1)(a) (emphasis added), see also Linden, 436 S.W.3d at 524. Precedent of

our Supreme Court confirms appellate jurisdiction per KRS 417.220(1)(a) is

invoked under a very specific procedural posture: “Procedurally, under state law

regarding arbitration, if a court finds that as a matter of state contract law there is

no arbitration agreement and denies the application to compel arbitration, the

moving party may file an immediate appeal under KRS 417.220(l )(a)[.]”

JPMorgan Chase Bank, N.A. v. Bluegrass Powerboats, 424 S.W.3d 902, 907-08

(Ky. 2014) (citing North Fork Collieries, LLC v. Hall, 322 S.W.3d 98, 102 (Ky.

2010)) (emphasis added).5

Many factual matters are disputed by the parties here, including the

substance of the oral rulings of the circuit court in hearings preceding the orders

lifting the stay. However, there is no real dispute as to the procedural effect of the

4 Per KRS 417.060, a party may seek a judicial order to compel arbitration upon a showing that a valid arbitration agreement exists and that the opposing party refuses to arbitrate. 5 Previously, we have commented that the statutory framework of KRS 417.220 allows for interlocutory appeals specifically upon denial of a motion: “because an ordinary appeal at the close of litigation will often not provide an adequate remedy for the wrongful denial of a right to arbitrate[.]” Conseco, 47 S.W.3d at 340; see also Kindred Hosps. Ltd. P’ship v. Lutrell, 190 S.W.3d 916, 920 (Ky. 2006), as corrected (Jun. 12, 2006).

-7- trial court’s granting Click’s motion to lift the stay. Although Signature asserts the

order had the effect of denying its motion to compel arbitration and stay

proceedings, elsewhere Signature concedes its motion to compel arbitration was

once again pending for the circuit court’s determination. By lifting the stay and

setting aside its prior order, the circuit court did not deny Signature’s motion to

compel arbitration. In fact, the order merely reopened and deferred the

determination of Signature’s motion. However, KRS 417.220 “does not provide

for the appeal of an order deferring a ruling on a motion to compel arbitration.”

Stanton Health Facilities, LP v. Fletcher, 454 S.W.3d 312, 314 (Ky. App. 2015).

Signature cites to no authority to establish the circuit court lacked the

authority to reconsider the matter of arbitrability. Nevertheless, Signature requests

that this Court forbid any reconsideration by the trial court, primarily through

arguments that Click did not act in a timely manner by waiting for a period after

entry of the order compelling arbitration before making the motion to lift the stay.

Signature characterizes the motion to lift the stay as, in fact, an impermissible

motion for reconsideration. However:

There is nothing in the law that prevents a litigant from renewing a motion to the trial court before finality of the case. Until a final judgment is entered, all rulings by a court are interlocutory, and subject to revision.

JPMorgan Chase Bank, 424 S.W.3d at 909.

-8- The parties dispute what occurred in the hearings before the circuit

court. Upon review of the record, at the close of the hearing where Signature’s

motion to compel arbitration was first discussed, the circuit court gave Click thirty

days from September 15, 2023, to supplement the record and show the agreement

was contested. The circuit court granted the motion to compel arbitration and

entered an order staying the case just nineteen days later, on October 4, 2023.

More than a month after this, Click filed the motion to lift stay. In a response

memorandum opposing Click’s motion, Signature argued the motion was actually

one to alter or amend per CR6 59.05 and was thus untimely per CR 59.02.

During the January 2024 hearing, Click’s motions to lift the stay and

to compel discovery were heard. Signature argued Click had been given an

opportunity to contest the arbitration agreement at the prior hearing and had failed

to do so. Click argued that the matter of arbitrability merited a period of discovery

and that an evidentiary hearing on the matter should occur after Click had been

given an opportunity to take evidence regarding the arbitration agreement.

The orders Signature appeals are sparse and contain no specific

findings. Signature argues this constrains our review to questions of law, Conseco,

47 S.W.3d at 340. However, when deciding an application for arbitration, we have

held a circuit court is bound by CR 52.01 and must set forth specific findings of

6 Kentucky Rules of Civil Procedure.

-9- fact and separate conclusions of law in its order or judgment. Kindred Nursing

Centers Ltd. P’ship v. Sloan, 329 S.W.3d 347, 348 (Ky. App. 2010) (citing

Conseco, 47 S.W.3d at 340). We held in Sloan that any findings of fact and

conclusions of law made orally by the circuit court could not be considered on

appeal unless specifically incorporated into a written and properly entered order.

Id.

Here, the circuit court had yet to decide the application for arbitration

upon entry of the orders under appeal. And, while there were no oral findings of

fact noteworthy for this review, we do note the circuit court inquired into the status

of arbitration proceedings during the hearing and confirmed they had not yet

commenced. It is additionally noteworthy that, while no party accurately recalled

the timeline to the circuit court, through possible inadvertence or error, the order

staying the case had been entered just nineteen days after Click had been given

thirty days to supplement the record. The circuit court’s decision to reconsider

arbitrability was not arbitrary or unsupported by the record. Neither was the

decision rendered after finality. We do not desire to interfere with a circuit court’s

reconsideration of an interlocutory order which may have been mistakenly entered

in haste:

. . . efficient judicial process mandates that a trial court correct an erroneous ruling before finality when possible. There is an expectation that trial courts will apply the correct law to matters before it. Certainly, if a court

-10- believes before finality that it has made an error in the law, it is incumbent upon the court to correct the matter. Cf. Potter v. Eli Lilly & Co., 926 S.W.2d 449, 453 (Ky.1996) (“[T]he trial court has a duty and a right to determine that its judgments are correct and accurately reflect the truth.”), abrogated on other grounds by Hoskins v. Maricle, 150 S.W.3d 1 (Ky. 2004). To fail to do so strikes at the heart of what it means to get a fair trial in a court of law. After finality, the question becomes a matter for the appellate courts, which may be avoided by correct trial court action.

Accordingly, insofar as the circuit court’s order simply lifts the stay

and opens the matter of arbitrability up for reconsideration by the circuit court, it is

not an order within the scope of KRS 417.220(1)(a). Therefore, review is outside

of our jurisdiction.

Pretrial Discovery

The central feature of the circuit court’s orders that Signature asserts

as an error of law is that the orders allow pretrial discovery. Furthermore, the

aspect Signature emphasizes in the circuit court’s orders is that they appear to

require it to participate in discovery matters beyond arbitrability. In the motion to

dismiss the appeal, Click has argued the orders only required Signature to

participate in limited discovery. However, the plain language of either order under

appeal lacks any language to limit the scope of discovery. The order compelling

discovery directs “that each of the Defendants, shall respond to Plaintiff’s

-11- Interrogatories and Requests for Production of Documents, within twenty (20) days

from the date of this Order.” Furthermore, the order lifting the stay utilizes

language indicating the very opposite of limitation, indicating that the circuit court

“further allows discovery to proceed on all issues.” (Emphasis added.)

Accordingly, we agree with Signature that the orders plainly require it to

participate in discovery beyond the issue of arbitrability while its motion to compel

arbitration is pending.

While the order of the circuit court does not outright deny Signature’s

motion to compel arbitration, the order does require Signature to engage in

discovery on the merits of the claim prior to the circuit court deciding the

enforceability of the arbitration agreement. As we previously determined,

Signature’s motion to compel arbitration was again before the circuit court upon

granting Click’s motion to lift the stay. When a party such as Signature moves to

compel arbitration, the circuit court must “decide under ordinary contract law

whether the asserted arbitration agreement actually exist[ed] between the parties

and, if so, whether it appli[ed] to the claim raised in the complaint.” Fletcher, 454

S.W.3d at 315 (citing N. Fork Collieries, LLC v. Hall, 322 S.W.3d 98, 102 (Ky.

2010)).

-12- KRS 417.060(4) requires “[a]ny action or proceeding involving an

issue subject to arbitration shall be stayed if an order for arbitration or an

application therefor has been made under this section[.]” (Emphasis added.)

Requiring a party to defend an action in court irreparably destroys the

bargained-for contractual right to proceed in another forum. North Fork Collieries,

LLC, 322 S.W.3d at 103. The costs and burdens of defending an action include

pretrial discovery. Fletcher, 454 S.W.3d at 315. While a circuit court may

appropriately order limited discovery on the issue of arbitrability while a motion to

compel arbitration is pending, the circuit court may not order the party seeking

arbitration to participate in discovery on the merits of the claim before deciding on

the matter of arbitrability. Id. at 314-15.

Accordingly, insofar as the orders of the circuit court require

Signature to participate in discovery beyond matters related to enforceability of the

arbitration agreement, they are vacated.

CONCLUSION

For the foregoing reasons, the order of the Floyd Circuit Court is

vacated in part, and this matter is remanded with instructions that the circuit court

enter an order limiting the scope of pretrial discovery to matters of arbitrability

until such time as the court determines under state contract laws as to whether the

parties entered a binding arbitration agreement.

-13- ALL CONCUR.

BRIEFS FOR APPELLANTS: BRIEF FOR APPELLEES:

Connor B. Egan Glenn M. Hammond Kif H. Skidmore Pikeville, Kentucky Louisville, Kentucky

-14-