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Hardy v. Beach

Court of Appeals of Kentucky

February 16, 2018

PATRICK HARDY APPELLANT
v.
DAVID BEACH APPELLEE

         APPEAL FROM JEFFERSON CIRCUIT COURT HONORABLE ANGELA MCCORMICK BISIG, JUDGE ACTION NO. 14-CI-005773

          BRIEF FOR APPELLANTS: Nader G. Shunnarah Louisville, Kentucky

          BRIEF FOR APPELLEE: Robert Waugh Adams III Louisville, Kentucky Andrew Noland Louisville, Kentucky

          BEFORE: JONES, D. LAMBERT, AND THOMPSON, JUDGES.

          OPINION

          LAMBERT, D., JUDGE:

         Patrick Hardy appeals the dismissal by the Jefferson Circuit Court of his breach of contract claim against David Beach. Hardy asks this Court to determine whether an arbitration clause deprives the trial court of subject-matter jurisdiction beyond a ruling as to the binding nature of the arbitration clause itself. We hold that it does not, and that the trial court also has jurisdiction to issue injunctive relief if a party is so entitled. However, after reviewing the record, and finding no error in the trial court's determination that Hardy has not shown entitlement to injunctive relief, we affirm.

         I. FACTUAL AND PROCEDURAL HISTORY

         The parties entered into a contract for the construction and sale of a residence on May 21, 2014. The agreement obligated the Appellee to construct a single-family dwelling on a parcel of realty in Jefferson County, and sell the newly-improved real estate to Hardy, upon completion, for a price of $138, 000. The agreement also specified that the closing date of the sale would occur either 160 days after the execution of the agreement or on October 28, 2014.

         Hardy describes the home as "custom-built" and unique, while Beach describes the home Hardy requested as a "cookie cutter" home similar to another that Beach had constructed, with only certain items being subject to Hardy's specifications.

         The parties agreed that at a certain point in the construction, Beach asked Hardy to provide funding for the construction to continue. The parties' dispute originated from this request. Hardy describes the request as a demand by Beach for an "additional fee" above the agreed-upon price, but Beach contends that Hardy had demanded optional components outside the scope of the original agreement which increased the cost of construction.

         On October 13, 2014, Hardy's attorney contacted Beach to request assurances that the closing would occur on schedule according to the contract. Beach responded that construction would not be complete, and the next day contacted Hardy's attorney to inform him that construction would cease until the matter for which he had been retained could be resolved.

         Beach emailed Hardy's counsel on November 6, 2014, declaring Hardy to be in breach of the agreement, and, consequently, the home would be listed for sale, with Hardy's deposit put toward Beach's damages. According to Hardy, the house was listed for sale online. These actions by Beach prompted Hardy to file the civil action below and a notice of lis pendens to encumber the property and prevent any sale.

         The parties agreed that mediation was appropriate, but each side accuses the other of attempting to avoid mediation. Beach refused to participate in mediation unless Hardy dismissed the civil action, relying on language in the contract providing that disputes must first be submitted to mediation or arbitration. Hardy filed two separate motions with the trial court to schedule mediation, which the trial court denied. Beach filed a motion to dismiss, pursuant to Kentucky Rules of Civil Procedure ("CR") 12.02 for lack of subject-matter jurisdiction. The trial court agreed, concluding that the arbitration clause in the contract was binding, and issued an order dismissing the action and directing the parties to mediate or arbitrate the claims asserted according to the terms of the contract. This order did not specify whether the dismissal was prejudicial. In that order, the trial court also agreed with Beach's assertion that the property had not been listed for sale to another party.

         Hardy filed a motion to reconsider, which the trial court denied, and the instant appeal ensued. On appeal, Hardy argues that the trial court erroneously declined to exercise jurisdiction over the contract dispute when it dismissed the action. Hardy also argues that the trial court had jurisdiction over the matter to issue ...


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