FRANKFORT MEDICAL INVESTORS,LLC, d/b/a THE LANTERN ATMORNING POINTE OF FRANKFORT; ANDFRANKFORT SENIOR COMMUNITY,LP, d/b/a MORNING POINTE OFFRANKFORTAPPELLANTS
JOHN THOMAS, SR., BY AND THROUGH JOHN THOMAS, JR., AS POWER OF ATTORNEY; and DEANN THOMASAPPELLEES
FROM FRANKLIN CIRCUIT COURT HONORABLE PHILLIP J. SHEPHERD,
JUDGE ACTION NO. 17-CI-00410
FOR APPELLANTS: Emily W. Newman Paul A. Dzenitis Christopher
Piekarski Louisville, Kentucky
FOR APPELLEES: Corey Ann Finn S. Wade Yeoman Louisville,
BEFORE: DIXON, KRAMER, AND LAMBERT, JUDGES.
appeal is from an order of the Franklin Circuit Court holding
that the Appellants' (collectively, The Lantern's)
arbitration agreement is invalid and denying their motion to
dismiss or stay the Appellees' (the Thomas family's)
claims. We affirm.
Thomas, Sr., 82 years old and in declining mental health,
became a resident at The Lantern on January 25, 2017, and
remained there until February 11 of that same year. During
his brief stay, Thomas suffered several falls, the last of
which resulted in severe injuries and required
hospitalization. He did not return to the facility.
April 14, 2017, his family (his son, John Thomas, Jr., as
power of attorney, and his wife, DeAnn Thomas) filed a
complaint in Franklin Circuit Court seeking compensation for
damages resulting from alleged negligence, medical
negligence, corporate negligence, and gross negligence. The
complaint also sought redress for loss of consortium as well
as punitive damages and recoupment of attorney fees and
Lantern asserted that the parties were bound by an
arbitration agreement contained within the numerous documents
John Thomas, Jr., signed upon his father's admission to
the personal care home. The Lantern requested that the matter
be dismissed or, in the alternative, stayed until the
arbitration process could be completed. The parties briefed
the issues, and the circuit court held hearings on the
matter. On December 1, 2017, the circuit court entered its
order finding that the arbitration agreement was invalid and
denying The Lantern's motion to stay or dismiss. The
standard of review is set forth in Padgett v.
Steinbrecher, 355 S.W.3d 457, 459 (Ky. App. 2011):
In reviewing an order denying enforcement of an arbitration
clause or agreement, we apply a two-fold standard of review.
See [Kentucky Revised Statute] KRS 417.220(2)
("The appeal shall be taken in the manner and to the
same extent as from orders or judgments in a civil
action."). First, we examine the trial court's
findings of fact. Conseco Fin. Servicing Corp. v.
Wilder, 47 S.W.3d 335, 340 (Ky. App. 2001). Those
factual findings are reviewed under the clearly erroneous
standard and are deemed conclusive if they are supported by
substantial evidence. Id. Second, we review the
circuit court's legal conclusions de novo to
determine if the law was properly applied to the facts.
See also Kindred Nursing Centers Ltd. Partnership v.
Cox, 486 S.W.3d 892, 894 (Ky. App. 2015). Additionally,
"a party seeking to compel arbitration has the initial
burden of establishing the existence of a valid agreement to
arbitrate." Ping v. Beverly Enterprises, Inc.,
376 S.W.3d 581, 590 (Ky. 2012) (citation omitted).
Lantern first argues that the circuit court erred in its
interpretation of the agreement's choice-of-law
provision. The arbitration agreement specifically stated:
"This Arbitration Agreement shall be governed by and
interpreted in accordance with the laws of the State of
Tennessee, including the Tennessee Uniform Arbitration
Act." The Lantern avers that both Frankfort Medical
Investors, LLC, and Frankfort Senior Community Limited
Partnership are "foreign business entities formed under
the laws of Tennessee with principal offices in
Tennessee," which would provide the proper nexus to the
laws of that state. Furthermore, The Lantern argues, the
choice-of-law provision did not render the agreement
unenforceable but rather it could have been enforced under
applicable Kentucky law. Therefore, The Lantern continues,
the circuit court incorrectly determined that the agreement
was invalid because of its choice-of-law provision.
Thomas family counters that The Lantern is making this
argument for the first time on appeal. Additionally, the
Thomas family states that this was an integral rather than
ancillary term of the agreement, and the circuit court
correctly held that the choice-of-law ...