GOOD SAMARITAN HOSPITAL OF LEXINGTON, KENTUCKY; GOOD SAMARITAN FOUNDATION, INC.; GOOD SAMARITAN FOUNDATION; GOOD SAMARITAN CORPORATION; GOOD SAMARITAN SERVICE CORPORATION, II; GOOD SAMARITAN SERVICE CORPORATION, III; INTERNET SERVICE CORP.; AND WWW.CHARITYBALL.INC. v. KENTUCKY ANNUAL CONFERENCE OF THE UNITED METHODIST CHURCH, INC.; AND GENERAL BOARD OF GLOBAL MINISTRIES OF THE UNITED METHODIST CHURCH
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RENDERED: July 8, 2005; 10:00 a.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2003-CA-002625-MR
GOOD SAMARITAN HOSPITAL OF LEXINGTON,
KENTUCKY; GOOD SAMARITAN FOUNDATION,
INC.; GOOD SAMARITAN FOUNDATION; GOOD
SAMARITAN CORPORATION;1 GOOD SAMARITAN
SERVICE CORPORATION, II; GOOD SAMARITAN
SERVICE CORPORATION, III; INTERNET
SERVICE CORP.; AND WWW.CHARITYBALL.INC.
v.
APPELLANTS
APPEAL FROM FAYETTE CIRCUIT COURT
HONORABLE GARY D. PAYNE, JUDGE
ACTION NO. 00-CI-01901
KENTUCKY ANNUAL CONFERENCE OF THE
UNITED METHODIST CHURCH, INC.; AND
GENERAL BOARD OF GLOBAL MINISTRIES
OF THE UNITED METHODIST CHURCH
APPELLEES
OPINION AND ORDER
DISMISSING
** ** ** ** **
BEFORE:
GUIDUGLI AND TAYLOR, JUDGES; HUDDLESTON, SENIOR JUDGE.2
GUIDUGLI, JUDGE:
The appellants (hereinafter “Good Samaritan”)
have appealed from an Opinion and Order entered by the Fayette
1
This party should properly have been named “Good Samaritan Service
Corporation” in the notice of appeal.
2
Senior Judge Joseph R. Huddleston, sitting as Special Judge by assignment of
the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution
and KRS 21.580.
Circuit Court on October 28, 2003, as well as from a November
26, 2003, order ruling on several CR 59.05 motions to alter,
amend or vacate.
The issue in the limited proceedings below and
before this Court concerns the existence of a trust relating to
the proceeds of the 1995 sale of Good Samaritan Hospital for
$30,000,000.
Because we have determined that this appeal was
taken from a non-final, non-appealable decision, we are
constrained to dismiss the above-styled appeal.
For a better understanding of the underlying facts and
background of this dispute, we shall rely upon a portion of the
circuit court’s findings of fact contained in its Opinion and
Order:
The Women’s Guild of Christ Church,
Lexington conveyed the Old Protestant
Infirmary property to Good Samaritan
Hospital Corporation in February 1899. The
deed contained a reversionary interest,
which provided:
. . . in the event that said
property or the property in which
the proceeds of same may be
reinvested, shall cease to be used
for the purposes of a Hospital
conducted under a general
Protestant control vested in the
Protestant denomination upon the
principle of equality prescribed
in the present Articles of
Incorporation of said Good
Samaritan Hospital, then the
property, or the property
representing the invested proceeds
of same, shall pass to, and the
title thereto vest in the
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corporation known as the “Rector,
Wardens and Vestries of Christ
Church in the City of Lexington or
other such persons or corporate
body as may at that time hold the
title to the property of Christ
Church Cathedral in the City of
Lexington subject, however, to any
incumbrances that may have been
created thereon by the said party
of the second part.
Legal title and the above reversionary
interest to the hospital property remained
with “Old” Good Samaritan Hospital from the
date of the 1899 deed until June 15, 1918 at
which time the reversionary interest was
deleted and replaced by a liquidated payment
deed restriction. Under the new deed
restriction “Old” Good Samaritan Hospital
would pay $8,000 to the Rector, Wardens and
Vestries of Christ Church in the City of
Lexington “. . . in the event the hospital
property ceased to be used for the purpose
of a hospital under Protestant control.”
On March 24, 1925 the hospital property
was sold by “Old” Good Samaritan Hospital to
the General Hospital Board of the Methodist
Episcopal Church, South. The deed set forth
a provision whereby the Methodist Hospital
Board or its successors would pay certain
funds in the event the property was no
longer used for operating a hospital under
Protestant control. Should that event
occur, the Methodist Hospital Board agreed
to pay $5,000 to the City of Lexington for a
loan which enabled “Old” Good Samaritan
Hospital to acquire some property; $5,000 to
Fayette County for a similar loan; $8,000 to
the Rector, Wardens and Vestries of Christ
Church in the City of Lexington; and,
$232,000 to the Protestant Churches of
Lexington.
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On August 27, 1929 the “New” Good
Samaritan Hospital was incorporated. The
Articles of Incorporation state:
. . . the present Board of
Trustees of The Good Samaritan
Hospital of Lexington, Kentucky,
duly elected by the Kentucky
Conference of the Methodist
Episcopal Church[,] South at its
regular Session held at London,
Kentucky from September 7, 1927 to
September 11, 1927, do under the
power and authority granted by
said Session of said Kentucky
Annual Conference of the Methodist
Episcopal Church South, by
resolution duly adopted hereby
associate ourselves and our
successors in office to and hereby
become a body corporate. . .
In reviewing the minutes of the
September 7, 1927 to September 11, 1927
session of the Kentucky Annual Conference of
the Methodist Episcopal Church, South
referred to in the above Articles of
Incorporation, said trustees are clearly
instructed to:
. . . take over from the General
Hospital Board a deed of conveyance to
the Good Samaritan Hospital and hold
the same in trust for the Methodist
Episcopal Church, South, and to manage
the same for the Kentucky Conference.
The trustees were granted all
traditional powers to manage the hospital,
but they did not have the power to sell the
hospital without the assent of the Church.
The 1927 Kentucky Methodist Minutes further
contain action by the church as it
authorized the issuance of bonds in the
amount of $144,000 to pay certain
indebtedness on the property. The
resolution states:
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. . . Whereas, The Good Samaritan
Hospital property at Lexington,
Kentucky, has come under the
supervision, control and ownership
of the Kentucky Conference of the
Methodist Episcopal Church, South,
the title to which said Good
Samaritan Hospital property is to
be taken in the name of a
corporation to be organized for
the purpose of acquiring and
holding title to the said
property, the trustees of which
said corporation have been elected
at this annual meeting of the
aforesaid Conference, . . .
In compliance with the mandate of the
1927 Methodist minutes, the hospital
property was conveyed by the Methodist
Hospital Board to the Good Samaritan
Hospital of Lexington, Kentucky on September
3, 1929. The grantee in the 1929 Deed was
not the “Old” Good Samaritan Hospital
Corporation, which was incorporated in 1899.
It was the new corporation that had been
incorporated just two weeks earlier to the
conveyance as authorized in 1927 by the
Methodist church. The Premises of the 1929
Deed state:
Witnesseth: That Whereas the
property hereinafter described was
conveyed to the party of the first
part [The General Hospital Board
of The Methodist Episcopal Church,
South], to hold until such time as
the Kentucky Conference of the
Methodist Episcopal Church, South
desired to take same into the name
of one of its subsidiary
organizations, and
Whereas, the said Conference
has authorized the incorporating
of the [New] Good Samaritan
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Hospital, and has requested that
said property be conveyed to said
Corporation. . .
The 1928 Deed goes on to stipulate that
the “New” Good Samaritan Hospital trustees
agreed to comply with the terms of the 1925
Deed and would make the required payments to
the Christ Church, Fayette County, the city
of Lexington, and the Lexington Protestant
churches in the event the property ceased to
be used for hospital purposes under
Protestant control.
In 1995, the property of Good Samaritan Hospital was
sold by its trustees to CHCK, Inc., for $30,000,000.
The
trustees then paid $8,000 to Christ Church and $10,000 to
Lexington-Fayette Urban County Government, thereby obtaining a
release of the covenants, reverters, and restrictions in the
1925 Deed.
The trustees also filed a petition to assume
possession of the $232,000, which was to have been paid to the
Protestant Churches of Lexington.
As a result of the 1995 sale,
the Kentucky Annual Conference of the United Methodist Church,
Inc., (hereinafter “the Annual Conference”) instituted this
lawsuit against Good Samaritan, seeking a declaration that a
trust existed, by which Good Samaritan held the proceeds of the
1995 sale in trust for the benefit of the Annual Conference, as
well as an accounting of the sale.
Additionally, the Annual
Conference named as defendants attorney Foster Ockerman, Jr.,
Arch Mainous, Jr., and attorney Ockerman’s law firm, Martin,
Ockerman & Brabant, alleging claims that the individuals
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breached their fiduciary duties and conspired to convert the
proceeds of the sale.3
Good Samaritan filed a third-party
complaint against the General Board of Global Ministries of the
United Methodist Church (hereinafter “the General Board”),
seeking indemnification, by way of a 1929 warranty deed, for any
economic loss it might incur.
By a scheduling order entered May 21, 2001, the
parties were ordered to file motions for summary judgment
limited to the existence of a trust.
With the exception of the
General Board, all of the parties filed motions for summary
judgment pursuant to the order.
On October 28, 2003, the
circuit court entered an Opinion and Order granting the Annual
Conference’s motion for summary judgment, thereby finding the
existence of an express trust in its favor, and denying the
remaining motions.
The circuit court further ordered that all
Good Samaritan trustees were to be replaced by persons
designated by the Annual Conference, that Good Samaritan’s
business records and accounts were to remain intact and where
they were currently located, and that Good Samaritan was to
refrain from disposing of any assets, without the written
consent of the Annual Conference, until new trustees were
appointed.
With the exception of Mainous, who immediately filed
a notice of appeal, all of the parties filed CR 59.05 motions to
3
The Annual Conference settled its claims with the individual defendants
during the pendency of the present appeal.
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alter, amend or vacate.
By order entered November 26, 2003, the
circuit court reaffirmed the previous Opinion and Order, but
deleted the references in the judgment to the appointment of new
trustees.
The circuit court also included the recitation in the
judgment that “THERE BEING NO JUST REASON FOR DELAY, THIS IS A
FINAL AND APPEALABLE ORDER PURSUANT TO CR 54.02.”
This appeal
followed.4
On appeal, the Good Samaritan argues that its
properties had always been held subject to a charitable trust in
favor of the Lexington community, that the Annual Conference had
not demonstrated that it was the legal successor to the earlier
conference, and because there was no trust relationship
established in favor of the earlier conference.
On the other
hand, the Annual Conference asserts that a parol trust was
created in its favor.
The General Board limits its arguments to
issues not addressed by the circuit court in its Opinion and
Order, namely that no proof establishes that it was the
successor in interest to the conveyor of the property and that
it cannot be held to indemnify Good Samaritan.
The General
Board is essentially seeking a dismissal of all claims against
it.
4
In addition to this appeal, several other appeals and cross-appeals were
filed, each of which was dismissed as settled by order of this Court entered
November 24, 2004.
-8-
Before we are permitted to reach the merits of this
appeal and in spite of the failure of the parties to raise the
issue, we must first determine whether the orders from which
this appeal was taken are final and appealable.
In other words,
we must determine whether we have the requisite jurisdiction to
review this appeal.
Because the circuit has not finally
resolved the trust issue, we are forced to conclude that the
orders are not final or appealable at this time.
CR 54.01 defines a final and appealable judgment 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.”
CR 54.02(1) provides:
When more than one claim for relief is
presented in an action, whether as a claim,
counterclaim, cross-claim, or third-party
claim, or when multiple parties are
involved, the court may grant a final
judgment upon one or more but less than all
of the claims or parties only upon a
determination that there is no just reason
for delay. The judgment shall recite such
determination and shall recite that the
judgment is final. In the absence of such
recital, any order or other form of
decision, however designated, which
adjudicates less that all the claims or the
rights and liabilities of less than all the
parties shall not terminate the action as to
any of the claims or parties, and the order
or other form of decision is interlocutory
and subject to revision at any time before
the entry of judgment adjudicating all the
claims and the rights and liabilities of all
the parties.
-9-
In Hale v. Deaton,5 the former Court of Appeals held:
Before the processes of CR 54.02 may be
invoked for the purpose of making an
otherwise interlocutory judgment final and
appealable, there must be a final
adjudication upon one or more of the claims
in litigation. The judgment must
conclusively determine the rights of the
parties in regard to that particular phase
of the proceeding.
Furthermore, the Supreme Court of Kentucky later emphasized that
“[w]here an order is by its very nature interlocutory, even the
inclusion of the recitals provided for in CR 54.02 will not make
it appealable.”6
While none of the parties in this appeal raised
the issue of finality in their respective briefs (although the
issue was raised by counsel for Good Samaritan in the circuit
court during the hearing on the CR 59.05 motions), we note that
“jurisdiction may not be waived, and it can not be conferred by
consent of the parties.
[The appellate] court must determine
for itself whether it has jurisdiction.”7
The present matter concerns multiple parties as well
as multiple claims, meaning that CR 54.02 would apply if the
correct circumstances existed.
Although the Opinion and Order,
in conjunction with the Order ruling on the CR 59.05 motions,
contained the necessary recitals, the rulings are nevertheless
5
528 S.W.2d 719, 722 (Ky. 1975).
6
Hook v. Hook, 563 S.W.2d 716, 717 (Ky. 1978).
7
Hubbard v. Hubbard, 197 S.W.2d 923, 923 (Ky. 1946).
Russell, ___ S.W.3d ___ (Ky. 2005).
-10-
See also Wilson v.
interlocutory because they fail to finally resolve at least one
claim, namely, the trust issue.
Based upon the complaint, the
Annual Conference sought a declaration that a trust existed,
which would mean that Good Samaritan held the proceeds of the
1995 sale in trust for the benefit of the Annual Conference.
In
its answer, Good Samaritan asserted a number of affirmative
defenses, any of which could prevent the enforcement of a trust,
if one existed.
Those defenses included the doctrines of
laches, equitable estoppel, and waiver, as well as violations of
the applicable statutes of limitation, among others.
None of
those defenses had been litigated at the time the circuit court
entered its Opinion and Order or the subsequent ruling on the CR
59.05 motions.
Therefore, it does not appear that the trust
issue has been finally resolved, as there remains a question as
to the enforcement of the trust.
Until the trust issue has been
fully and conclusively resolved in favor of one party or the
other, a ruling limited to whether a trust existed is not final
and cannot be presently appealed.
For the foregoing reasons, the above-styled appeal is
ORDERED DISMISSED this date.
ALL CONCUR.
ENTERED:
July 8, 2005
/s/ Daniel T. Guidugli______
JUDGE, COURT OF APPEALS
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BRIEF FOR APPELLANTS:
John R. Leathers
Pittsburgh, PA
BRIEF FOR APPELLEE, KENTUCKY
ANNUAL CONFERENCE OF THE
UNITED METHODIST CHURCH, INC.:
Mark D. Guilfoyle
Daniel T. Mistler
Crestview Hills, KY
BRIEF FOR APPELLEE, GENERAL
BOARD OF GLOBAL MINISTRIES OF
THE UNITED METHODIST CHURCH:
Elizabeth S. Feamster
Tiffany L. Phillips
Lexington, KY
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