PARKVIEW HEALTHCARE, LLC, ET AL. V. HON. STEVEN D. COMBS, JUDGE, PIKE CIRCUIT COURT AND, ROGER COPLEY, ET AL. ()
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RENDERED : NOVEMBER 18, 2010
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2010-SC-000335-MR
PARKVIEW HEALTHCARE, LLC ; ANGELA
OWENS ; SHORELINE HEALTHCARE
MANAGEMENT, LLC ; COASTAL
ADMINISTRATIVE SERVICES, LLC; AND
CENTENNIAL HEALTHCARE HOLDING
COMPANY, LLC
V
APPELLANTS
ON APPEAL FROM COURT OF APPEALS
CASE NO . 2010-CA-000109-OA
PIKE CIRCUIT COURT NO. 09-CI-00710
HONORABLE STEVEN D . COMBS, JUDGE,
PIKE CIRCUIT COURT
AND
ROGER COPLEY ; CHADWARD L. TRACKER,
M .D . ; AND RAYMOND O . BISHOP, M .D.
(REAL PARTIES IN INTEREST)
APPELAEES
MEMORANDUM OPINION OF THE COURT
AFFIRMING
The Appellants appeal the denial of their petition for a writ of mandamus
to require the trial court to enforce a settlement agreement, which they claim
was reached to resolve a medical malpractice claim: Because the Appellants
have not shown the prerequisites for the availability of a writ, specifically that
they have no adequate remedy by appeal or otherwise, the decision of the Court
of Appeals is affirmed .
I. Background
This case is related to a medical malpractice lawsuit in Pike Circuit
Court. Delbert Copley, whose estate prosecuted the action, was a patient at
the Parkview Nursing and Rehabilitation Center.' While a patient there, he
allegedly suffered abuse and neglect, which ultimately resulted in his death.
His son, Roger Copley, filed suit in June 2009, naming Parkview and several
other business entities and individuals as defendants .
Parkview almost immediately offered to settle the claim against it.
Parkview had a $250,000 declining balance insurance policy, which works by
subtracting defense costs from the maximum policy limits, and offered to settle
for the limits of the policy with a deduction for the minimal defense expenses
that had been incurred at that time.
By a letter dated June 24, 2009, Copley's counsel, Anita Johnson,
"conditionally agreed to accept" the settlement offer. The acceptance was
conditioned on Copley still being allowed to pursue claims against the other
defendants, specifically Omnicare, Inc. and Dr. Mohammed Bhutta. Johnson's
letter concluded with the following language: "I imagine a carefully worded
release could allow these claims to go forward . If you will provide me with the
exact amount of the proposed settlement, and the Release terms you envision,
we can proceed from there ."
' Parkview Nursing and Rehabilitation Center is the assumed name of Parkview
Healthcare, LLC, the first named Appellant. The other Appellants, with one
exception, appear to be corporate entities related to Parkview Healthcare, LLC.
Rather than use the generic term "Appellants" to describe these entities, this opinion
hereinafter refers to them collectively as "Parkview."
2
On July 21, Parkview's counsel, Kevin Murphy, spoke with Johnson by
phone . Murphy claims that he told Johnson that the defense costs had not yet
been ascertained and that he then asked whether Copley would be interested
in settling for a flat sum of $200,000 . According to Murphy, Johnson said that
her client would not be interested in such an offer and that he expected the
insurance policy limits less the defense costs.
Just a few minutes after the phone call, Murphy sent the proposed
settlement agreement to Johnson by email. The email stated, in part, "Please
call me with any questions or suggested revisions after you have had a chance
to look at the document. If we can agree on language and terms, then we can
talk about potential resolution figures ." The draft settlement agreement
appears to have included unclear language regarding a possible release against
Dr. Bhutta, stating both that it covered claims against Dr. Bhutta related to his
official capacity as a medical director of Parkview and that it excluded claims
related to his personal capacity as a treating physician.
On July 27, Murphy sent Johnson a letter stating that the balance on
the insurance policy, after defense costs, was $247,653 .45 . He also asked to
whom the check should be written, and noted that he had "previously
forwarded a carefully worked release stating that Plaintiffs claims against Dr.
Bhutta and Omnicare, Inc . are unaffected by this release ."
Johnson responded with a telephone call and a follow-up letter stating:
As you have been advised by telephone, I have referred this
case to Rick and Lisa Circeo for further development. I took this
action after you sent the release which included parties other than
your client, which I considered a counter-offer at that time.
Further, you informed me that there would only be $200,000
available, which I further considered a counter-offer.
Please be advised that we do not have a settlement in this
case and direct all further correspondence, etc ., to the Circeos .
Parkview then moved the circuit court to enforce the claimed settlement
agreement against Copley. When the circuit court found that no agreement
had been reached, Parkview petitioned the Court of Appeals for a writ of
mandamus requiring the circuit court to enforce the alleged settlement
agreement. The Court of Appeals denied the petition . It first addressed the
merits of Parkview's claim that a settlement agreement had been reached,
holding that the circuit court's order was not erroneous because there was
never "a true meeting of the minds in that there was never a set amount of
settlement and the proposed release did not meet the condition Copley placed
upon the settlement ." The court then stated that Parkview had failed to show
the requirements for a writ"that it has no adequate remedy by appeal or that
a substantial miscarriage ofjustice will result."
Because writ petitions are original actions before the appellate court,
Parkview appeals to this Court as matter of right.
II. Analysis
As this Court has noted on numerous occasions, remedy by way of a writ
of prohibition or mandamus is disfavored because it upsets the normal
progression of trial and appeal. As this Court recently noted,
The writ of mandamus, like the writ of prohibition, is
extraordinary in nature . Such a writ bypasses the regular appellate
process and requires significant interference with the lower courts'
administration of justice. The expedited nature of writ proceedings
necessitates an abbreviated record . This magnifies the chance of
incorrect rulings that would prematurely and improperly cut off
4
the rights of litigants, if the process were not strictly scrutinized for
appropriateness . As such, the specter of injustice always hovers
over writ proceedings, which explains why courts of this
Commonwealth are-and should be---loath to grant the
extraordinary writs unless absolutely necessary. Because they fall
outside the regular appellate process, especially when they are
used as de facto interlocutory appeals (an increasing, undesired
trend), writ petitions also consume valuable judicial resources,
slow down the administration of justice (even when correctly
entertained), and impose potentially unnecessary costs on
litigants.
Cox v. Braden, 266 S .W.3d 792, 795 (Ky. 2008) .
This policy, though rarely described in such explicit language of disfavor,
has nevertheless been the driving force behind our writ law. To carry out this
policy of disfavoring writs and to preserve the ordinary process to which
litigants are due, this Court has applied a strict standard for deciding whether
the remedy of a writ is even available to the litigants . See Hoskins v. Maricle,
150 S .W .3d 1, 10 (Ky. 2004) . Such an approach allows an appellate court to
resolve writ claims quickly and usually without having to address the merits of
the underlying claim, and thus return the case to the appropriate forum for the
initial resolution of claims-the trial court. See Indep. Order ofForesters v.
Chauvin, 175 S.W .3d 610, 615 (Ky. 2005) ("This is why the bar is set so high-
in the form of the `conditions precedent' for the mere availability of a writ as a
possible remedy-for an appellate court even to reach the question of whether
the lower court has committed error.") .
The standard requires a writ petitioner to show "that the lower court is
acting or is about to act erroneously, although within its jurisdiction, and there
exists no adequate remedy by appeal or otherwise and great injustice and
irreparable injury will result if the petition is not granted." Hoskins, 150 S .W.3d
5
at 10 .2 Essentially, under this category of writ, a petitioner must show two
things: (1) lack of an adequate remedy other than a writ, and (2) great and
irreparable injury. This test applies to writs of mandamus and writs of
prohibition. See Cox, 266 S .W.3d at 795; Hodge v. Coleman, 244 S .W.3d 102,
109 (Ky. 2008) .
Though the second requirement of this test is subject to exceptions in
"certain special cases," Bender v. Eaton, 343 S.W.2d 799, 801 (Ky. 1961) ;
Hoskins, 150 S .W.3d at 20, the first requirementno adequate remedy by
appeal or otherwise---is an "absolute prerequisite ." Bender, 343 S.W .2d at 801 ;
see id. ("Our cases involving controversies in this second class, where it is
alleged the lower court is acting or proceeding erroneously within its
jurisdiction, have consistently (apparently without exception) required the
petitioner to pass the first test; i .e., he must show he has no adequate remedy
by appeal or otherwise." (emphasis added)) ; see also Gilbert v. McDonaldBurkman, No . 2010-SC-000035-MR, 2010 WL 3374410, at * 5,
at
S.W .3d
,
(Ky. 2010) ("[T]the lack of an adequate remedy by appeal is the one
requirement that is set in stone and unavoidable.") .
Thus, for Parkview to succeed it must demonstrate that it has no
adequate remedy other than a writ. This it cannot do.
At its most basic, Parkview's complaint in this regard is that an appeal
cannot remedy forcing it to litigate this case and then seek an appeal. But, as
Parkview admits, "[t]he fact that [it] might be required to prosecute an appeal to
2
A slightly different test applies when the petitioner claims the lower court is acting
outside its jurisdiction, see Hoskins, 150 S .W.3d at 10, but no such claim has been
made in this case .
protect its rights does not establish that it has no adequate remedy by appeal ."
Estate of Cline v. Weddle, 250 S .W.3d 330, 335 (Ky. 2008) ; see also id. ("[W]e
have similarly rejected another party's argument that an appeal could not
remedy its having to go to the expense of litigating its case at trial in the first
place.") .
Parkview attempts to avoid this black-letter law by noting that its
situation is different than that faced by the ordinary writ petitioner .
Specifically, it notes that the underlying question is the existence of a
settlement agreement, the main point of which is to allow the parties to avoid
litigation, and that it has a declining balance insurance policy, which means
litigation followed by an appeal would eat up the insurance coverage available
and require payment out of pocket in the future . Neither of these facts
demonstrates that Parkview has an inadequate remedy by appeal or otherwise.
Parkview's strongest argument is that forcing it to go to trial destroys the
settlement agreement. Parkview's primary benefits from the agreement are
avoiding the risk of a jury verdict in excess of insurance policy limits and
avoiding the cost of defending at trial and possibly on appeal. If the appeal is
the only remedy, it would be inadequate to protect this latter benefit, since the
cost of defending will be incurred by the time an appeal could be successful.
Unlike the usual interest in avoiding litigation shared by most defendants, and
assuming that a settlement agreement was reached, Parkview specifically
bargained for this benefit, which cannot be vindicated by an appeal. But a writ
requires that no other adequate remedy-appellate or otherwise-be available .
While an appeal might not vindicate Parkview's interest, a claim for
breach of the settlement agreement against Copley would. "Settlement
agreements are a type of contract and therefore are governed by contract law."
Frear v. P.T.A. Indust., Inc., 103 S.W .3d 99, 105 (Ky. 2003) ; see also Humana,
Inc. v. Blose, 247 S .W.3d 892, 895 (Ky. 2008) . While there is little precedent on
the issue, this Court has on at least one occasion recognized a claim for breach
of contract related to a settlement agreement, see Frear, 103 S.W.3d at 106-08,
and has decided other cases, albeit on other grounds, where the basic claim
was for breach of a settlement agreement, see Hines v. Thomas Jefferson Fire
Ins. Co., 267 S.W.2d 709 (Ky. 1953) (finding no agreement had been reached
and affirming trial court's dismissal) ; Maupin v. Sumpter, 308 Ky. 713, 713,
215 S.W .2d 832, 832 (1948) (reformation of settlement agreement instead of
damages) . Though relief under such a claim may not be perfect, it is a
sufficiently "adequate remedy by appeal or otherwise" to bar the availability of
writ under Hoskins .
Similarly, Parkview's choice of insurance coverage does not make nonwrit remedies inadequate . Parkview complains in its brief that allowing the
litigation to proceed, without enforcing the alleged agreement immediately, will
deplete the available insurance proceeds, which will, in turn, affect Parkview's
ability to tender the agreed upon amount of insurance proceeds. Parkview's
argument implies that the source of the settlement funds matters, but the
source of the funds is irrelevant .
If at the end of the litigation and appeal, a
court finds that the parties had reached a settlement agreement, then the
agreement can be enforced. That Parkview might have to pay out of pocket at
that time, since its insurance may be depleted, is of no consequence to the
adequacy of the appellate remedy. A party's choice of insurance cannot render
its appellate and other remedies inadequate any more than a set of parties
could enter into an agreement by which they grant each other a right to obtain
a writ. The power to grant the extraordinary writs is a constitutional power of
the judiciary and is subject only to its discretion, not that of a party seeking
the writ.
Because Appellants have an adequate remedy by appeal or otherwise, we
need not address whether the other requirement of a writ (or its limited
exception) have been met . The failure to demonstrate the inadequacy of other
remedies alone demonstrates that a writ is unavailable in this case . Nor do we
need to address the merits of the underlying claim,3 and we thus express no
opinion about whether the parties reached a settlement agreement.
III. Conclusion
For the foregoing reasons, the order of the Court of Appeals denying the
writ is affirmed.
All sitting. All concur .
3
We note in passing that the Court of Appeals addressed the merits of the settlementagreement issues. Though it is understandable that the court wished to resolve all
the issues presented to it, reaching the merits was unnecessary in this case . Cf.
Gilbert, 2010 WL 33744 10, at *5,
S.W.3d , at
(Ky. 2010) ("In fact, the Court
of Appeals skipped over the initial steps required by Hoskins and directly considered
the merits. . . . [In so doing,] it prematurely addressed the merits by failing to first
analyze whether the writ was even available . Assuming that Appellant could not
show that the writ was available under Hoskins, he actually received a more in-depth
review than he was entitled to.") . The better practice, to avoid confusion and
multiplication of issues on appeal, is to address the writ prerequisites first. If the
matter can be resolved by stating simply that the prerequisites have not been shown,
then nothing more need be said.
COUNSEL FOR APPELLANTS:
Byron N . Miller
Kevin Michael Murphy
Heather Renee Cash
Thompson, Miller 8v Simpson, PLC
734 West Main Street
Suite 400
Louisville, Kentucky 40202
APPELLEE:
Hon. Steven D. Combs
Judge, Pike Circuit Court
Hall of Justice
Suite 423
172 Division Street
Pikeville, Kentucky 41501
COUNSEL FOR REAL PARTY IN INTEREST, ROGER COPLEY :
Anita Parsons Johnson
Office of Gary C. Johnson, PSC
PO Box 231
110 Caroline Avenue
Pikeville, Kentucky 41502
Richard Eric Circeo
Lisa Erickson Circeo
Wilkes 8v McHugh PA
429 North Broadway
Lexington, Kentucky 40508
Deborah Kay Riordan
1 Information Way
Suite 300
Little Rock, AR 72202
COUNSEL FOR REAL PARTIES IN INTEREST, CHADWARD L. THACKER, M.D .
AND RAYMOND O. BISHOP, M.D. :
Mark Edward Nichols
Wellman, Nicholas 8s Smith, PLLC
444 Lewis Hargett Circle
Suite 170
Lexington, Kentucky 40503
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