Almcare, LLC v. Commonwealth of Kentucky Cabinet for Health and Family Services

RENDERED: DECEMBER 4, 2020; 10:00 A.M.
NOT TO BE PUBLISHED

Commonwealth of Kentucky
Court of Appeals

NO. 2020-CA-0100-MR

ALMCARE, LLC APPELLANT

APPEAL FROM FRANKLIN CIRCUIT COURT
v. HONORABLE THOMAS D. WINGATE, JUDGE
ACTION NO. 19-CI-01102

COMMONWEALTH OF KENTUCKY,
CABINET FOR HEALTH AND
FAMILY SERVICES; ADAM MEIER,
IN HIS OFFICIAL CAPACITY AS
SECRETARY OF COMMONWEALTH
OF KENTUCKY, CABINET FOR
HEALTH AND FAMILY SERVICES;
AND CAROL STECKEL, IN HER
OFFICIAL CAPACITY AS
COMMISSIONER OF DEPARTMENT
OF MEDICAID SERVICES, CABINET
FOR HEALTH AND FAMILY
SERVICES APPELLEES

OPINION
AFFIRMING

** ** ** ** **
BEFORE: COMBS, DIXON, AND MAZE, JUDGES.

COMBS, JUDGE: Almcare, LLC (Almcare), appeals an order of the Franklin

Circuit Court of December 20, 2019, dismissing its petition for review pursuant to

CR1 12.02(a) for failure of strict compliance with KRS2 13B.140. After our

review, we affirm.

This appeal arises from Almcare’s attempt to appeal the final order of

the Cabinet for Health and Family Services, Department of Medicaid Services

(DMS). DMS is a state agency that regulates and monitors the Kentucky Medicaid

program. Almcare provides Medicaid services to eligible individuals and has

contracted with DMS to provide said services.

In November 2018, Almcare, acting through its executive director,

who was not a licensed attorney, requested an administrative hearing concerning a

recoupment amount that was determined after a post-payment audit by DMS. In

February 2019, DMS filed a motion with the hearing officer to dismiss the matter,

arguing that Almcare’s appeal was void because it was not requested by a licensed

attorney. Following some motion practice and a hearing, the hearing officer issued

an order recommending that the Secretary of the Cabinet for Health and Family

Services enter a final order granting DMS’s motion to dismiss. The Secretary did

1
Kentucky Rules of Civil Procedure.
2
Kentucky Revised Statutes.

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so on September 25, 2019, reciting that Almcare’s appeal was unauthorized and

untimely.

Subsequently, on October 25, 2019, Almcare filed a petition for

review of the Secretary’s final order and for declaratory judgment. However, it did

not attach a copy of the final order to its petition as required by KRS 13B.140. On

November 13, 2019, DMS filed a motion to dismiss Almcare’s petition under CR

12.02(a) for lack of subject matter jurisdiction because of Almcare’s failure to

include a copy of the Secretary’s final order. On November 22, 2019, Almcare

filed an amended complaint and attached a copy of the Secretary’s final order.

Additionally, on December 12, 2019, Almcare filed a response to DMS’s motion to

dismiss. Several days after the hearing on DMS’s motion, the circuit court entered

an order granting the motion due to Almcare’s failure to strictly comply with KRS

13B.140. This appeal followed.

The issue before us is whether the circuit court properly dismissed

Almcare’s petition for review for failure to strictly comply with KRS 13B.140.

Because this is a question of law, our review is de novo. Cinelli v. Ward, 997

S.W.2d 474, 476 (Ky. App. 1998).

While the factual scenario presented to the Court might appear to be

one of first impression, the legal issue is well settled. Kentucky law is clear: an

appeal from an administrative agency is a matter of legislative grace, and thus

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strict compliance with statutory requirements is essential. The Kentucky Supreme

Court has stated:

[t]here is no appeal to the courts from an action of an
administrative agency as a matter of right. When grace
to appeal is granted by statute, a strict compliance with
its terms is required. Where the conditions for the
exercise of power by a court are not met, the judicial
power is not lawfully invoked. That is to say, that the
court lacks jurisdiction or has no right to decide the
controversy.

Board of Adjustments of City of Richmond v. Flood, 581 S.W.2d 1, 2 (Ky. 1978)

(citations omitted); see also Gallien v. Kentucky Bd. of Medical Licensure, 336

S.W.3d 924, 928 (Ky. App. 2011); Spencer County Preservation, Inc. v. Beacon

Hill, LLC, 214 S.W.3d 327, 329 (Ky. App. 2007); Ky. Unemployment Ins. Comm’n

v. Providian Agency Group, Inc., 981 S.W.2d 138, 139-40 (Ky. App. 1998); Taylor

v. Duke, 896 S.W.2d 618, 621 (Ky. App. 1995).

Under the present statutory scheme, persons or entities subject to

administrative actions have the ability to request judicial review pursuant to KRS

13B.140. The statute provides that:

[a]ll final orders of an agency shall be subject to judicial
review in accordance with the provisions of this chapter.
A party shall institute an appeal by filing a petition in the
Circuit Court of venue, as provided in the agency’s
enabling statutes, within thirty (30) days after the final
order of the agency is mailed or delivered by personal
service. . . . Copies of the petition shall be served by the
petitioner upon the agency and all parties of record. The
petition shall include the names and addresses of all

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 parties to the proceeding and the agency involved, and a
statement of the grounds on which the review is
requested. The petition shall be accompanied by a
copy of the final order.

KRS 13B.140(1) (emphases added).

In the case before us, Almcare asks us to disregard that precise and

mandatory statutory language and instead to adopt a standard which requires only

substantial compliance with KRS 13B.140(1) in order to invoke the circuit court’s

jurisdiction. We cannot do so.

Almcare primarily relies upon Transportation Cabinet v. Caudill, 278

S.W.3d 643 (Ky. App. 2009), for its argument that substantial compliance should

be the proper standard. However, Caudill is both distinguishable and anomalous.

In Caudill, the Transportation Cabinet filed a petition for review with the circuit

court, but it was dismissed because the Cabinet did not list Caudill’s address as

required by KRS 13B.140(1). Id. at 645. Instead, the Transportation Cabinet

listed the address of Caudill’s attorney and attempted to effectuate service on

Caudill through his attorney. Id. The Court made clear in its opinion that “waiver

of service by counsel is a common procedure” that is encouraged. Id. at 646.

However, whether Caudill’s counsel had agreed to accept service was a disputed

fact that the circuit court did not resolve. Id. at 648. As a result, the Court

declined review. Id.

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 Additionally, in Caudill, the Transportation Cabinet argued that

failing to list Caudill’s address was not fatal to its appeal. Id. The Court agreed,

stating as follows:

omitting an address of a party of record is not fatal to an
appeal so long as service was issued to another address in
good faith, and the error was remedied with due diligence
upon discovery.

Id. Nevertheless, the Transportation Cabinet never attempted to serve Caudill

personally (failing to heed the road map alluded to by the court) until it filed its

notice of appeal. Id. Therefore, the circuit court’s order dismissing the petition for

review was affirmed. In discussing the Court’s opinion, Almcare suggests that:

implicit in [the Court’s] determination is the fact that
strict compliance with KRS § 13B.140 is not necessary
for Franklin Circuit Court to have jurisdiction over an
administrative appeal, and the failure to include a copy of
the agency’s final order in Almcare’s original Complaint
did not deprive the Franklin Circuit Court of jurisdiction
over this matter.

Appellant’s Brief at p. 8.

The reasoning unique and specific to the factual background of

Caudill is contrary to the case law cited at the outset of this analysis and would

impermissibly extend Caudill far beyond its intended purpose. Caudill applies

only in cases where: (1) counsel had waived personal service and (2) where a good

faith effort had been made to remedy a defect with proper service. Caudill, 278

S.W.3d at 646-48. We cannot – and we decline – to extend the Court’s narrow

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holding in Caudill to change the well settled principle of strict compliance with

KRS 13B.140.

Almcare also argues that even if strict compliance is required, any

defect in its petition was remedied by its amended complaint, which was filed

pursuant to CR 15.01. Again, case law holds otherwise. “The civil rules which

would normally permit amendment do not apply to appeals of administrative

decisions until after the appeal has been perfected and jurisdiction has attached.”

Cabinet for Human Resources v. Holbrook, 672 S.W.2d 672, 675 (Ky. App. 1984)

(citations omitted). Almcare filed its petition for review on October 25, 2019, the

thirtieth day of the thirty-day period of limitations set by statute. KRS 13B.140(1).

Its petition was not timely perfected, and the circuit court lacked jurisdiction at the

time the petition was filed because the final order was not attached. As a result,

the civil rules did not apply. Holbrook, 672 S.W.2d at 675. Almcare did not file

its amended petition until November 22, 2019, twenty-eight days after the passage

of the statute of limitations.

Almcare’s final argument is moot because the administrative appeal

was properly dismissed on procedural grounds. However, we shall briefly address

it. Almcare’s final argument is that the circuit court erred in failing to consider its

request for declaratory and injunctive relief, which was set forth in its amended

petition. Almcare sought a declaration that only the Kentucky Supreme Court is

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authorized to determine what constitutes an unauthorized practice of law. To

recapitulate, Almcare’s administrative proceeding had been dismissed because the

Secretary determined that Almcare’s executive director was engaging in the

unauthorized practice of law. The Supreme Court has indeed already spoken on

this issue. Azmat as Next Friend of Azmat v. Bauer, 588 S.W.3d 441, 450 (Ky.

2018). Persons not holding a license to practice law are barred from representing

legal claims before a tribunal. The circuit court properly applied the rule set forth

in Azmat.

We AFFIRM the order of the Franklin Circuit Court of December 20,

2019, dismissing Almcare’s petition for review.

ALL CONCUR.

BRIEFS FOR APPELLANT: BRIEF FOR APPELLEES:

Jeremy S. Rogers Shaun T. Orme
Matthew Barszcz Frankfort, Kentucky
Paul R. Schurman
Louisville, Kentucky

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