UNIT COLLIERIES, INC. VS. ROGERS (FON), SUCCESSOR IN TRUST OF THE FON ROGERS TRUST NO. 2
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RENDERED: OCTOBER 22, 2010; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2009-CA-001328-MR
UNIT COLLIERIES, INC.
v.
APPELLANT
APPEAL FROM PIKE CIRCUIT COURT
HONORABLE EDDY COLEMAN, JUDGE
ACTION NO. 07-CI-01633
FON ROGERS, SUCCESSOR IN TRUST OF
THE FON ROGERS TRUST NO. 2
APPELLEE
OPINION AND ORDER
DISMISSING
** ** ** ** **
BEFORE: CLAYTON AND COMBS, JUDGES; LAMBERT,1 SENIOR JUDGE.
COMBS, JUDGE: Unit Collieries, Inc., (Unit) appeals from an order of the Pike
Circuit Court enforcing a contract provision in its lease with the Fon Rogers Trust
No. 2 (Rogers). Rogers has filed a motion to dismiss the appeal. Upon careful
review, we grant Rogers’s motion and accordingly dismiss this appeal.
1
Senior Judge Joseph Lambert sitting as Special Judge by assignment of the Chief Justice
pursuant to Section 110(5)(b) of the Kentucky Constitution and KRS 21.580.
Unit mines coal on land that it leases in Pike County from Rogers, and
Rogers receives royalties from the coal that is mined. In 2005, a dispute arose
between the parties regarding “lost coal,”2 which is coal that Unit has failed to
mine. Rogers seeks compensation for the lost coal.
Paragraph 8(c) of the lease agreement between the parties is a
provision specifically addressing lost coal. It directs in pertinent part that:
if there be any dispute as to coal so lost, it will, under the
notice provisions and within the time limits prescribed by
Paragraph 21 herein, be resolved between the engineers
for the respective parties and if they be unable to agree,
then the two shall select a third engineer, and the decision
of two of the three shall be binding.
The notice provisions and time limits of Paragraph 21 refer to direct formal
arbitration procedures for all other types of disputes arising from the lease.
In accordance with Paragraph 8(c), Rogers initiated communications
with Unit, requesting that their engineers meet to discuss the lost coal issue. Unit’s
engineer did not participate, and Rogers’s engineer determined that lost coal was
on the land with a value in excess of one million dollars. In 2007, Rogers filed a
complaint in Pike Circuit Court seeking either enforcement of Paragraph 8(c) or an
award of the value of the lost coal. Unit countered by asking the court to compel
arbitration according to Paragraph 21.
On June 23, 2009, the trial court entered an order requiring Unit and
Rogers to submit to the provisions of Paragraph 8(c). Unit then appealed, and
Rogers filed a motion to dismiss the appeal.
2
The parties are embroiled in another dispute arising from their contract, which is not before us
in this appeal.
-2-
Unit argues that the appeal should not be dismissed because the trial
court denied its motion to compel arbitration under the provisions of Paragraph 21.
We disagree.
An order compelling or denying arbitration is an interlocutory order.
See Kentucky Rule[s] of Civil Procedure (CR) 54.01. By definition, it lacks
finality and cannot be appealed. However, Kentucky Revised Statute[s] (KRS)
417.220 provides narrow exceptions for interlocutory orders that are appealable.
One of them is a denial of a motion to compel arbitration. KRS 417.220(1)(a).
We are persuaded that KRS 417.220(1)(a) is irrelevant to the case before us
because the trial court actually compelled arbitration, which is not one of the
statutory exceptions.
Arbitration is defined as “a method of dispute resolution involving
one or more neutral third parties who are usually agreed to by the disputing parties
and whose decision is binding.” Black’s Law Dictionary 100 (7th ed. 1999).
Paragraph 8(c) of the lease does not explicitly contain the word “arbitration,” but
its provisions describe and constitute that very procedure. The engineers are not
parties to the litigation, and the parties have agreed that their decision will be
binding. In a venerable old case that is directly pertinent to this matter, our
Commonwealth’s highest court held more than a century ago as follows:
a stipulation in a contract . . . that the engineer shall be
the sole judge of the quality and quantity of the work,
and from his decision there shall be no appeal, is binding
upon the parties, and constitutes the engineer the
arbitrator or umpire between them.
-3-
City of Covington v. Limerick, 40 S.W. 254, 256 (Ky. 1897) (quoting Herrick v.
Belknap’s Est., 27 Vt. 673 (Vt. 1855)). (Emphasis added).
It is well established that an order to compel arbitration cannot be
heard on appeal. Fayette County Farm Bureau Federation v. Martin, 758 S.W.2d
713, 714 (Ky. 1988). Therefore, because the trial court has ordered the parties to
participate in arbitration, we are obliged to grant Rogers’s motion.
Therefore, it is ORDERED that this appeal be, and it is hereby,
DISMISSED.
/s/ Sara Walter Combs__________
SARA WALTER COMBS,
JUDGE
ENTERED: OCTOBER 22, 2010
ALL CONCUR.
COUNSEL FOR APPELLANT:
BRIEF FOR APPELLEE:
John S. Reed
David J. Hale
Trevor L. Earl
Louisville, Kentucky
Stephen L. Hogg
Pikeville, Kentucky
Randy G. Clark
Pikeville, Kentucky
-4-
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