GREEN TREE SERVICING, LLC.F/K/A CONSECO FINANCE VS. PHELPS (PAM), ET AL.
Annotate this Case
Download PDF
RENDERED: FEBRUARY 4, 2011; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2009-CA-002239-MR
GREEN TREE SERVICING, LLC
f/k/a CONSECO FINANCE SERVICING
CORP., f/k/a GREEN TREE FINANCIAL
SERVICING CORPORATION
v.
APPELLANT
APPEAL FROM PULASKI CIRCUIT COURT
HONORABLE DAVID A. TAPP, JUDGE
ACTION NO. 01-CI-00533
PAM PHELPS and
SCOTT PHELPS
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: VANMETER AND WINE, JUDGES; SHAKE,1 SENIOR JUDGE.
SHAKE, SENIOR JUDGE: Green Tree Servicing, LLC (“Green Tree”) appeals
from the Pulaski Circuit Court’s November 13, 2009, order denying Green Tree’s
motion to compel arbitration between themselves and Pam and Scott Phelps.
1
Senior Judge Ann O’Malley Shake sitting as Special Judge by assignment of the Chief Justice
pursuant to Section 110(5)(b) of the Kentucky Constitution and KRS 21.580.
Because we hold that Green Tree has previously waived its right to arbitration, we
affirm.
This matter is before this Court for a second time. The underlying
action is a foreclosure proceeding initiated by Green Tree against the Phelpses via
a complaint filed on May 21, 2001. In response to the complaint filed against
them, the Phelpses filed an answer and counterclaim against Green Tree on
September 24, 2004, alleging intentional infliction of emotional distress, loss of
business advantage, and violation of the Federal Debt Collections Practice Act
(FDCPA). On October 13, 2004, Green Tree filed a motion to strike the Phelpses’
counterclaim and that motion was subsequently denied. Thereafter, on May 31,
2005, Green Tree filed a motion to compel arbitration, pursuant to language found
in the original mortgage note between the parties. The motion was denied and
Green Tree appealed to this Court on August 10, 2005.2
On March 2, 2007, this Court rendered an opinion affirming the trial
court’s denial of Green Tree’s motion to compel arbitration. In support of that
holding, the Court concluded that Green Tree’s four-year delay in moving to
compel arbitration effectively waived any rights to arbitration. The Court noted
that the Phelpses had already expended considerable time and expense litigating
the action. It was further opined that Green Tree was equitably estopped from
enforcing its arbitration rights because litigation had proceeded to the extent that to
remove the matter to another forum would be unfairly prejudicial to the Phelpses.
2
See Green Tree Servicing, LLC v. Phelps, 2005-CA-001666-MR, 2007 WL 625077 (Ky. App.
Mar. 2, 2007).
-2-
In response to the holding of this Court, Green Tree filed a petition for
rehearing, which was summarily denied. Green Tree then filed a motion for
discretionary review with the Supreme Court of Kentucky, which was also denied.
The matter progressed in the trial court and on March 23, 2009, Green Tree
received a judgment and order of sale dismissing the Phelpses’ FDCPA claim, but
denying the dismissal of the remaining counterclaims. On September 30, 2009, the
Phelpses received leave to file a supplemental counterclaim and third party
complaint. The supplemental counterclaim alleges that the subject property was
damaged by inclement weather and that Green Tree was negligent in its choice of
the force-placed insurance provider on the property. In response to the
supplemental counterclaim, Green Tree filed a motion to compel arbitration on the
theory that the new counterclaim was unrelated to the original and therefore
revived the arbitration clause found in the agreement between the parties. The trial
court denied the motion to compel arbitration and this appeal followed.
Interlocutory appeals of a trial court’s ruling on a motion to compel
arbitration are appropriate as a matter of right. See KRS 417.220(1)(a); Valley
Contr. Co. v. Perry Host Mgmt. Co., 796 S.W.2d 365, 366 (Ky.App. 1990). A trial
court's arbitration decision is reviewed de novo by this Court, except that findings
of fact are reviewed only for clear error. Conseco v. Wilder, 47 S.W.3d 335, 340
(Ky.App. 2001).
Green Tree’s argument on appeal is the same which was presented to
the trial court: the Phelpses’ supplemental counterclaim revived the arbitration
-3-
clause in the note. As the main source of support for its argument, Green Tree
cites to Envirex, Inc. v. K.H. Schussler Fur Umwelttechnik GMBH, 832 F. Supp.
1293, 1297 (E.D. Wis. 1993). The relevant facts of Envirex are as follows:
plaintiff Envirex filed an indemnity action against defendant K.H. Schussler. After
multiple delays in the court proceedings, at the behest of both parties, plaintiff filed
an amended complaint and a second amended complaint. In response to the
second amended complaint, defendant moved to stay proceedings in favor of
arbitration.
We first note that as an opinion of the United States District Court for
the Eastern District of Wisconsin, Envirex is not binding on this Court. Moreover,
the facts of Envirex are distinguishable from those before us. Whereas the court in
Envirex found that the party seeking arbitration had not waived its right to such,
this Court has previously determined that Green Tree waived its right to arbitration
and was therefore not entitled to such. Green Tree has failed to show how their
original delay in seeking arbitration has been reduced by the Phelpses’
counterclaim or that the inequity no longer remains. The legal analysis and
application in our Mar. 2, 2007, opinion is sound and we are bound by the law of
the case.3
For the foregoing reasons, the November 13, 2009, order of the
Pulaski Circuit Court is affirmed.
3
The law of the case doctrine is “an iron rule, universally recognized, that an opinion or decision
of an appellate court in the same cause is the law of the case for a subsequent trial or appeal
however erroneous the opinion or decision may have been.” Union Light, Heat & Power Co. v.
Blackwell's Adm'r, 291 S.W.2d 539, 542 (Ky. 1956).
-4-
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Christopher M. Hill
Frankfort, Kentucky
Dan Thompson
Somerset, Kentucky
REPLY BRIEF FOR APPELLANT:
Wendell R. Clark, III
Frankfort, Kentucky
-5-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.