Kentucky Neurometabolic Center, Pllc D/B/A the Neurometabolic Institute v. Phillip Wayne Leigh, Sr.

RENDERED: JULY 22, 2022; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2021-CA-0313-MR
KENTUCKY NEUROMETABOLIC
CENTER, PLLC D/B/A THE
NEUROMETABOLIC INSTITUTE
AND LARRY ANTHONY SEARS,
D.C. APPELLANTS
APPEAL FROM JEFFERSON CIRCUIT COURT
v. HONORABLE BRIAN C. EDWARDS, JUDGE
ACTION NO. 19-CI-007846
PHILLIP WAYNE LEIGH, SR. APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: ACREE, DIXON, AND K. THOMPSON, JUDGES.
ACREE, JUDGE: Appellants, Kentucky Neurometabolic Center, PLLC d/b/a The
Neurometabolic Institute and Larry Anthony Sears, D.C., appeal the Jefferson
Circuit Court’s February 23, 2021 order denying Appellants’ motion to compel
arbitration between Appellants and Appellee, Phillip W. Leigh, Sr. Finding no
error, we affirm.
BACKGROUND
Mr. Leigh received laser therapy treatment from Dr. Sears at The
Neurometabolic Institute on multiple occasions between March 12, 2019, and May
2, 2019. Mr. Leigh alleges he suffered multiple burns and open wounds resulting
from negligent medical care he received from Dr. Sears. In anticipation of a
lawsuit, Mr. Leigh requested a complete, electronic copy of Appellants’ records
pertaining to him and his treatment. The request advised Appellants they were
“not [to] abstract or remove any portions of any chart, record, or file.”
Appellants produced a purportedly complete copy of these records to
Mr. Leigh in response to the request. Appellants’ response totaled thirty (30)
pages of material. The second page of the production was a one-page document
Mr. Leigh had signed. The document does not contain an arbitration clause or any
reference to arbitration.
Mr. Leigh subsequently initiated legal action. Appellants’ Answer
averred that the parties agreed to resolve disputes through arbitration and that the
agreement could be found in a four-page document entitled “Agreement for
Wellness Services.” They appended an unsigned copy of the four-page document
to their Answer.
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The second page of the document, at paragraph 8, includes an
arbitration clause that reads as follows: “For all other complaints, disagreements,
and grievances, Parties agree to use their best efforts to resolve their dispute
privately and if that fails, the sole recourse shall be resolution through arbitration,
and the decision pursuant to arbitration shall be final and binding.”
In an affidavit, Mr. Leigh swore he was only given a single page to
sign at his first appointment, and that he believed the single page constituted the
entire agreement between the parties. Mr. Leigh claimed the first time he knew of
the existence of the other three pages of the agreement – and therefore became
aware of the arbitration provision – was when Appellants included an unsigned
copy of the agreement with their Answer.
In his own affidavit, Dr. Sears stated Appellants’ ordinary practice is
to provide the entire agreement for a new patient to review, and that signing the
agreement is a precondition to treatment. He also stated Appellants only retain
signature pages because the entire document is the same for each patient.
Appellants moved to compel arbitration, and the circuit court denied
the motion. This appeal followed.
STANDARD OF REVIEW
When an appellate court reviews the denial of a motion to compel
arbitration, “[t]he trial court’s factual findings, if any, are reviewed for clear error,
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but its construction of the contract, a purely legal determination, is reviewed de
novo.” North Fork Collieries, LLC v. Hall, 322 S.W.3d 98, 102 (Ky. 2010) (citing
Am. Gen. Home Equity, Inc. v. Kestel, 253 S.W.3d 543 (Ky. 2008)). “When
reviewing a trial court’s findings under the clear error standard, the appellant court
must determine ‘whether or not those findings are supported by substantial
evidence.’” CertainTeed Corp. v. Dexter, 330 S.W.3d 64, 72 (Ky. 2010) (quoting
Moore v. Asente, 110 S.W.3d 336, 354 (Ky. 2003)). “Substantial evidence is more
than a scintilla, and must do more than create a suspicion of the existence of the
fact to be established.” Am. Rolling Mill Co. v. Pack, 278 Ky. 175, 182, 128
S.W.2d 187, 190 (1939). Rather, “‘[substantial evidence] means such relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion[.]’” Id. (quoting Consol. Edison Co. of New York v. N.L.R.B., 305 U.S.
197, 229, 59 S. Ct. 206, 217, 83 L. Ed. 126 (1938)).
ANALYSIS
Appellants argue the circuit court erred in denying their motion to
compel arbitration and, therefore, the Agreements’ arbitration provision deprives
the circuit court of jurisdiction over this matter. We do not agree.
The circuit court made several relevant findings of fact. It found the
signature page of the version of the Agreement Appellants included with their
Answer did not match the single-page document Mr. Leigh had signed, and
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Appellants offered no other proof that Mr. Leigh had an opportunity to review and
consent to the entire Agreement. Therefore, the circuit court determined
Appellants did not satisfy their burden of proving Mr. Leigh had consented to
arbitration.
Because substantial evidence supports each of these findings, we are
bound by them. What remains of our review is to apply the law to these facts de
novo. North Fork Collieries, 322 S.W.3d at 102.
Unlike most interlocutory orders, an order denying a motion to
compel arbitration under the KUAA1 is immediately appealable. KRS2
417.220(1)(a). Both the KUAA and the FAA3 govern arbitration agreements.
Ping v. Beverly Enters., Inc., 376 S.W.3d 581, 588 (Ky. 2012). However, the FAA
does not preempt state contract law, including questions regarding the elements of
a binding agreement. Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630, 129 S.
Ct. 1896, 1902, 173 L. Ed. 2d 832 (2009). Thus, we apply Kentucky jurisprudence
regarding the making of contracts to determine if a party has assented and, thus,
can be compelled to arbitrate.
1
Kentucky Uniform Arbitration Act, KRS Chapter 417.
2
Kentucky Revised Statutes.
3
Federal Arbitration Act, 9 U.S.C. §§ 1 et seq.
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Under both the KUAA and the FAA, “a party seeking to compel
arbitration has the initial burden of establishing the existence of a valid agreement
to arbitrate.” New Meadowview Health & Rehab. Ctr., LLC v. Booker, 550 S.W.3d
56, 58 (Ky. App. 2018) (citing Ping, 376 S.W.3d at 589). “[A] written agreement
duly executed by the party to be held, who had an opportunity to read it, will be
enforced according to its terms.” Conseco Fin. Servicing Corp. v. Wilder, 47
S.W.3d 335, 341 (Ky. App. 2001). “Mere evidence of a common habit or practice
of presenting arbitration agreements for signature” does not suffice as proof it was
presented to a specific party on a specific occasion. New Meadowview, 550
S.W.3d at 59 (citing Mt. Holly Nursing Home v. Crowdus, 281 S.W.3d 809, 814
(Ky. App. 2008)).
Appellants argue they proved Mr. Leigh’s agreement to arbitrate by
evidence of his signature, in combination with (a) Dr. Sears’s affidavit that it is
Appellants’ ordinary practice to provide the entire agreement to patients to review
prior to signing, and (b) an unsigned exemplar of their standard services agreement
which contains an arbitration provision. This is insufficient.
For an enforceable contract to exist, “there must, of course, be a
mutual assent by the parties – a meeting of minds – and also an intentional
manifestation of such assent.” Furtula v. University of Kentucky, 438 S.W.3d 303,
308 (Ky. 2014) (emphasis original). Appellants’ evidence of their common
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practice tells us what was in their (or their agent’s) mind when Mr. Leigh signed
but says nothing about what was in his. Their evidence fails to establish or even
suggest Mr. Leigh was aware of the Appellants’ common practice. Their evidence
fails to show he had been presented with the pages containing the arbitration
clause.
Ironically, the page Mr. Leigh acknowledges signing in person
describes how assent – a meeting of the minds – could be proved if execution had
occurred electronically. (Record (R.) 36). Referencing Mr. Leigh as the “Client,”
it says Appellants or their agent could “caus[e] an email to be sent automatically to
Client and Practitioner with copies of the completed Agreement and above-
referenced Practice Disclosure, and . . . by Client . . . acknowledging receipt of the
completed Agreement and Practice Disclosure and the Client’s acceptance of the
terms thereof.” (Id. (emphasis added)). Such email exchanges could be
convincing evidence of assent. If Appellants have a similar business practice of
patient/client acknowledgment when an agreement is signed in person, they
presented no proof that they followed it in this case.
In New Meadowview, we affirmed the Jefferson Circuit Court’s denial
of a motion to compel arbitration, holding a party seeking to enforce an arbitration
agreement was unable to prove a “valid and enforceable arbitration agreement”
existed. New Meadowview, 550 S.W.3d at 60. In New Meadowview, the
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appellants were only able to produce a signed signature page of an “alternative
dispute resolution agreement” and stated the remaining pages of the document
were not in their records. Id. at 57-58. The signature page contained the statement
that “the undersigned hereby acknowledge that we have read this entire agreement
and voluntarily consent to all of the terms of the agreement . . . [w]e further
acknowledge that we have waived our rights to a trial before a judge or jury by
agreeing to binding arbitration.” Id. at 58 (capitalization removed).
A representative of the appellant’s parent corporation submitted an
affidavit wherein he stated the signature page appeared to be the final page of
appellant’s standard alternative dispute resolution agreement, an unexecuted copy
of which accompanied his affidavit. Id. The unexecuted document’s signature
page appeared to be identical to the executed signature page. Id. Nevertheless,
this Court concluded the appellant “failed to meet its burden of establishing the
existence of a valid and enforceable arbitration agreement” because “[t]he partial
agreement and extrinsic evidence presented by [appellant] was insufficient to
establish a complete contract.” Id. at 60.
The similarities this case and New Meadowview share are more than
remarkable; the slight differences provide greater confidence in the Court’s
holding than in New Meadowview itself. In both, the parties seeking to enforce an
arbitration agreement could only produce a signed signature page as evidence of an
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agreement to arbitrate disputes, and in both the appellants stated their practice to
only retain signature pages. In both, an affiant explained that requiring agreement
to arbitration was standard business practice. And in both, the appellant seeking to
enforce arbitration offered an unexecuted standardized form of the purported
agreement as further evidence of that business practice.
However, the signature page in New Meadowview contained explicit
reference to arbitration, 550 S.W.3d at 58, but the page Mr. Leigh signed clearly
does not. The signed signature page in New Meadowview was the same as the
signature page in the unexecuted copy of the arbitration agreement, id., but the
blanks on the signature page Mr. Leigh signed were completed differently than on
the copy Appellants attached to their Answer.
And, while the document at issue in New Meadowview was devoted
entirely to arbitration, id. at 57-58, the document Appellants seek to enforce is a
broad “Agreement for Wellness Services” that so happens to contain an arbitration
clause on a second page Appellants could not prove Mr. Leigh ever saw, even after
sending him thirty pages of documentation upon his request. For these reasons,
this case is a better one than New Meadowview to illustrate that an arbitration
agreement will not be enforced in the absence of proof of all the elements of
contract formation, including mutual assent.
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CONCLUSION
Based on the foregoing, we affirm the Jefferson Circuit Court’s order
denying Appellants’ motion to compel arbitration.
ALL CONCUR.
BRIEFS FOR APPELLANTS: BRIEF FOR APPELLEE:
Benjamin J. Weigel Nicholas Craddock
Louisville, Kentucky Louisville, Kentucky
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