Landmark of Iroquois Park Rehabiliation and Nursing Center LLC v. Joseph P. Gill, Jr., as Administrator of the Estate of Barbara S. Gill

RENDERED: JUNE 17, 2022; 10:00 A.M.
NOT TO BE PUBLISHED

Commonwealth of Kentucky
Court of Appeals

NO. 2020-CA-1362-MR

LANDMARK OF IROQUOIS
PARK REHABILITATION
AND NURSING CENTER, LLC; A&M
HEALTHCARE INVESTMENTS LLC;
900 GAGEL AVENUE LLC (SUBSTITUTED
DEFENDANT FOR 945 WEST RUSSELL STREET LLC);
STRAWBERRY FIELDS REIT LLC;
STRAWBERRY FIELDS MANAGEMENT SERVICE LLC;
BENCHMARK HEALTHCARE CONSULTANTS LLC;
INFINITY HEALTHCARE MANAGEMENT
CONSULTING OF KENTUCKY LLC;
JOSEPH MEISELS;
RAYMOND BELL, IN HIS CAPACITY AS ADMINISTRATOR
OF LANDMARK OF IROQUOIS PARK REHABILITATION
AND NURSING CENTER; AND CATHY ALLEN,
IN HER CAPACITY AS ADMINISTRATOR OF
LANDMARK OF IROQUOIS PARK REHABILITATION
AND NURSING CENTER APPELLANTS

APPEAL FROM JEFFERSON CIRCUIT COURT
v. HONORABLE MITCH PERRY, JUDGE
ACTION NO. 20-CI-000237

JOSEPH P. GILL JR., AS
ADMINISTRATOR OF THE ESTATE
OF BARBARA S. GILL, DECEASED;
AND 945 WEST RUSSELL STREET LLC APPELLEES
 OPINION
AFFIRMING IN PART, REVERSING IN PART,
AND REMANDING

** ** ** ** **

BEFORE: ACREE, CETRULO, AND TAYLOR, JUDGES.

ACREE, JUDGE: Appellant, Landmark of Iroquois Park Rehabilitation and

Nursing Center, LLC (“Landmark”), and others1 appeal from the Jefferson Circuit

Court’s October 1, 2020, Order denying their motion to compel arbitration.

Following a careful review of the record and the law, we affirm in part, reverse in

part, and remand with instructions as set forth more fully herein.

I. FACTUAL AND PROCEDURAL BACKGROUND

Barbara S. Gill’s adult son, Joseph P. Gill, as her attorney-in-fact,

executed a Voluntary Arbitration and Limitation of Liability Agreement

(“Agreement” or “Arbitration Agreement”) attendant with Ms. Gill’s admittance to

Georgetown Manor, a skilled nursing facility. 2, 3 When Ms. Gill was admitted on

1
Unless otherwise noted, “Appellants” as used in this Opinion refers collectively to all
appellants herein. “Appellee” or “Mr. Gill” refers to Joseph P. Gill, as Administrator of the
estate of Barbara S. Gill, deceased.
2
Mr. Gill’s authority to execute the Agreement on behalf of Ms. Gill is not at issue. The
Amended Complaint alleges Ms. Gill was of unsound mind at all relevant times. (Amended
Complaint, para. 4, Record (“R.”) 381.)
3
The Agreement provides:

Signing this Agreement is not mandatory. The Resident will
receive the same quality care and treatment at the Facility whether
he or she signs this Agreement or not.

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January 19, 2016, Georgetown Manor was operated by AHF Kentucky-Iowa, Inc.

(“AHF”), which is not a party to this action. Ms. Gill remained a resident until

March 18, 2019, three days before her death. (R. 381, 404.)

On July 16, 2018, AHF entered into an Operations Transfer

Agreement (“OTA”) with Landmark. (R. at 798.)4 After Ms. Gill passed away on

March 21, 2019, Mr. Gill, in his capacity as Administrator of Ms. Gill’s estate,

brought in the Jefferson Circuit Court a complaint against Appellants alleging their

negligence caused Ms. Gill personal injury.5 Appellants filed a joint motion to

compel arbitration, which was denied by order entered October 1, 2020. Therein,

the circuit court determined the Agreement was unenforceable on several grounds:

first, the Appellants did not sign the agreement, were not parties to it, and therefore

could not enforce it; second, Appellants could not enforce the Agreement as

purported third-party beneficiaries thereof; third, enforcement of the Agreement

would be tantamount to an impermissible contract in perpetuity; and fourth, the

(R. 774.)
4
The OTA was filed under seal below and was certified and transmitted to this Court in a sealed
manila envelope. However, Appellants then appended the OTA as Appendix 4 to their
Appellants’ Brief.

5
The Amended Complaint further asserts a cause of action for wrongful death. (R. 404.) The
parties debate whether Mr. Gill may be compelled to arbitrate the wrongful death claim;
however, the circuit court did not rule on this issue. We do not pass upon specific issues not
reached by a trial court because “[t]he proper role for an appellate court is to review [the trial
court’s decisions] for error[.]” Norton Healthcare, Inc. v. Deng, 487 S.W.3d 846, 852 (Ky.
2016).

-3-
contractual provision at Section 3 was unenforceable as it purported to limit Ms.

Gill’s ability to claim damages, and such provision could not be severed from the

remainder of the Agreement. (R. 794-96.)

II. STANDARD OF REVIEW

This interlocutory appeal from an order denying a motion to compel

arbitration is authorized under Kentucky Revised Statute (“KRS”) 417.220(1)(a).

In such a matter, “we defer to the trial court’s factual findings, upsetting them only

if clearly erroneous or if unsupported by substantial evidence, but we review

without deference [i.e., de novo] the trial court’s identification and application of

legal principles[.]” Conseco Finance Servicing Corp. v. Wilder, 47 S.W.3d 335,

340 (Ky. App. 2001).

III. ANALYSIS

It is well established that the party seeking to compel arbitration bears

the burden of proving, in the first instance, the existence of an agreement to

arbitrate. Ping v. Beverly Enterprises, Inc., 376 S.W.3d 581, 590 (Ky. 2012).

Although Appellants devote a significant portion of their brief to parsing whether

the Federal Arbitration Act, 9 United States Code (“U.S.C.”) § 2 (“FAA”), applies

to the parties’ dispute, “[q]uestions concerning the formation of an arbitration

agreement are resolved in accordance with the applicable state law governing

contract formation.” Kentucky Shakespeare Festival, Inc. v. Dunaway, 490 S.W.3d

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691, 694 (Ky. 2016) (citation omitted). See also Genesis Healthcare, LLC v.

Stevens, 544 S.W.3d 645, 649 (Ky. App. 2017) (citations omitted) (emphasis

added) (“But under both [the FAA and the Kentucky Uniform Arbitration Act

(“KUAA”)], a party seeking to compel arbitration has the initial burden of

establishing the existence of a valid agreement to arbitrate. That question is

controlled by state law rules of contract formation. The FAA does not preempt

state law contract principles, including . . . which parties may be bound by that

contract.”). Thus, this Court will “apply here the same fundamental principles of

contract interpretation that would apply for interpreting any other type of contract.”

Dunaway, 490 S.W.3d at 694. See also Conseco, 47 S.W.3d at 340 (internal

quotation marks and footnote omitted) (emphasis in original) (“Under either

act . . . the clause is to be enforced and arbitration compelled unless the agreement

to arbitrate did not encompass [the claims at issue] or unless it may be avoided

upon such grounds as exist at law or in equity for the revocation of any contract.”).

With these principles in mind, we address first whether Landmark is

entitled to enforce the Agreement as an assignee of AHF Kentucky-Iowa, Inc.,

d/b/a Georgetown Manor. We conclude that it is unless it waived any such right.

In Conseco, 47 S.W.3d 335, the Wilders purchased a mobile home

from Southern Living Housing, Inc., financing a portion of the purchase price. “As

part of the financing arrangement, Southern Living assigned the contract to Green

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Tree Financial Servicing Corporation[.]” Id. at 337. Green Tree was the

predecessor of Conseco, which brought suit against the Wilders under the contract

and “soon thereafter repossessed the mobile home.” Id. at 338. In the Wilders’

subsequent civil action seeking rescission of the contract and other relief, Conseco

“responded in relevant part by moving to compel arbitration pursuant to an

arbitration clause in the contract.” Id. The trial court denied the motion, and this

Court reversed, id. at 344, specifically describing the arbitration agreement as

follows:

The contract at issue is on a three-page, preprinted, fill-in-
the blank form. In addition to a list of the parties (buyer:
the Wilders, seller: Southern Living Housing, Inc., and
assignee: Green Tree Financial Servicing Corporation)
and an indication that the Wilders are giving a security
interest in the mobile home, the first page includes details
of the financing arrangements. . . .

Id. at 337. Notably, the Conseco Court did not indicate that Conseco was

identified by name as a successor in the contract, nor did the Court comment on its

absence as a signatory in ruling the agreement to arbitrate enforceable by Conseco.

We therefore find unpersuasive Appellee’s insistence that in Conseco, “the

purchase agreement specifically listed the defendant’s predecessor as the

assignee[.]” (Appellee’s Brief, at p. 13.) To the contrary, Conseco’s predecessor-

in-interest was named, while the agreement was held enforceable by and as to

Conseco, an unnamed successor to Green Tree.

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 In the instant case, although Section 1 of the Agreement defines the

“facility” as “Georgetown Manor [handwritten] including its officers, employees

[sic] agents, administrators, and directors” (Agreement, para. 1.2., R. 774), Section

6 additionally provides:

6. SUCCESSORS AND ASSIGNS

This Agreement binds and benefits the Parties, their
respective heirs, administrators, executors,
representatives, attorneys, trustees, employees, agents,
subsidiaries, successors and assigns.

(R. 778) (emphasis added). Arbitration agreements are placed on equal footing

with other contracts under the law. See Ping, 376 S.W.3d at 589 (“The thrust of

both [the FAA and the KUAA] is to ensure that arbitration agreements are

enforced no less rigorously than are other contracts and according to the same

standards and principles.”). “In the absence of ambiguity, a written instrument will

be enforced strictly according to its terms, and a court will interpret the contract’s

terms by assigning language its ordinary meaning and without resort to extrinsic

evidence.” Dunaway, 490 S.W.3d at 694 (internal quotation marks and citations

omitted). See also North Fork Collieries, LLC v. Hall, 322 S.W.3d 98, 105 (Ky.

2010) (“Generally, of course, in construing contracts courts endeavor to give effect

to the parties’ intent as expressed by the ordinary meaning of the language they

employed.”).

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 Here, the Operating Transfer Agreement between AHF and Landmark

provides:

To the extent assignable, AHF shall transfer, convey and
assign to [Landmark], at Closing, . . . any existing
agreements with residents and guarantors thereof (the
“Resident Agreements”). AHF and [Landmark] shall
cooperate with each other and take such steps as may be
necessary in order for [Landmark] to receive the benefits
under such . . . Resident Agreements.

(OTA, para. 4, Appendix 4 to Appellants’ Brief, R. 798.) We are not convinced by

Appellee’s argument that when ownership of the facility changed hands, the

Arbitration Agreement was rendered unenforceable because the “facility” as

defined in the Agreement ceased to exist. An assignment of a right “is a

manifestation of the assignor’s intention to transfer it by virtue of which the

assignor’s right to performance by the obligor is extinguished in whole or in part

and the assignee acquires a right to such performance.” RESTATEMENT (SECOND)

OF CONTRACTS § 317(1) (1981). It is “well settled that a contract is generally

assignable, unless forbidden by public policy or the contract itself, or its provisions

are such as to show that one of the parties reposes a personal confidence in the

other, which he would have been unwilling to repose in any other person.” Pulaski

Stave Co. v. Miller’s Creek Lumber Co., 138 Ky. 372, 385-86, 128 S.W. 96, 101

(1910). The Arbitration Agreement, far from precluding assignment of the rights

between Ms. Gill and Georgetown Manor, specifies that the parties agree that their

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assigns are bound thereto. (Agreement, sec. 6, R. 778.) Appellee points to no

authority stating that such an assignment of the rights and duties between AHF and

Ms. Gill is invalid per se.

Focusing on the language of the OTA stating, “[t]o the extent

assignable[,]” Appellee asserts that the Arbitration Agreement was unassignable as

a contract for personal services. (OTA, para. 4, Appendix 4 to Appellants’ Brief,

R. 798; Appellee’s Brief, at p. 11.) Paragraph 7 of the Operating Transfer

Agreement provides that AHF would terminate the employment “of all employees

providing services at the Facility effective as of the Closing,” and that Landmark

“shall determine, in its sole discretion, which of the Current Employees shall be

offered employment with [Landmark].” (OTA, para. 7(a)-(b), Appendix 4 to

Appellants’ Brief, R. 798.) Appellee does not assert that Ms. Gill’s admission to

Georgetown Manor, and Mr. Gill’s assent on her behalf to the Arbitration

Agreement, were premised upon the facility’s employment of any specific

individual from whom it was anticipated that Ms. Gill would receive personal

services. Nor does Mr. Gill assert that any such integral employee, in whom Mr.

Gill as agent for his mother reposed personal trust, was not rehired by Landmark

following the closing between AHF and Landmark under the OTA. Therefore, we

do not view the Arbitration Agreement attendant with Ms. Gill’s admission to the

nursing facility as an unassignable contract for personal services. See, e.g., Bd. of

-9-
Trustees of Michigan State Univ. v. Rsch. Corp., 898 F. Supp. 519, 522 (W.D.

Mich. 1995)6 (holding that contract which did “not specify any particular

individuals, and . . . reflect[ed] that no particular persons were specified as

essential to the Contract” was not a personal service contract).

Appellee additionally asserts that Section 6 of the Arbitration

Agreement, providing the parties’ assigns are bound thereto, is unenforceable

because Section 7 of the Agreement required Landmark to obtain an additional

signed writing from Mr. Gill upon its purchase of the business. We disagree.

Section 7 of the Arbitration Agreement provides, in relevant part:

7. FULL AGREEMENT

This Agreement supersedes all prior agreements
understandings and representations, whether written or
oral to or between the parties with respect to its subject
matter (including any representations made at the time of
admission) and constitutes a complete and exclusive
statement of the terms of the Agreement between the
Parties with respect to its subject matter.

This Agreement may not be amended, supplemented, or
otherwise modified except by a written agreement signed
by both Parties. . . .

The foregoing language constitutes a contractual merger or integration clause.

Such a clause is intended to bar the admission of parol evidence “to vary the terms

of [the] writing.” Radioshack Corp. v. ComSmart, Inc., 222 S.W.3d 256, 260 (Ky.

6
The foregoing is cited as persuasive or illustrative case law only, not as mandatory authority.

-10-
App. 2007). Instead, “[w]hen the negotiations are completed by the execution of

the contract, the transaction, so far as it rests on the contract, is merged in the

writing.” Id. “The parol evidence rule is not a procedural device but, rather, a

substantive rule of law that prevents the introduction of oral statements into

evidence to alter a written agreement, per force lending integrity to writings.” Id.

at 261.

Section 7 lends no support to Appellee’s assertion that a subsequent

written modification was a predicate to assignability of the contract because the

Agreement already contained a provision under which the parties explicitly agreed

that their assigns were bound. Enforcement of the assignment clause is consistent

with, not in derogation of, the plain language of Section 7. As noted previously,

the Conseco Court upheld enforcement of the arbitration agreement by a successor

to the financing company without reference to any requirement that the Wilders

have signed a new agreement specifically naming the successor, Conseco. (See

supra at p. 6-7; Agreement, sec. 6, R. 778.) See also Managed Health Care

Assocs., Inc. v. Kethan, 209 F.3d 923, 927-28 (6th Cir. 2000) (internal quotation

marks omitted) (emphasis added) (in applying Kentucky law and determining that

noncompetition agreement executed by employee of group purchasing

organization for hospitals was enforceable following assignment, holding that

“assignments and modifications are completely different concepts, and . . .

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assignability is not impacted by boilerplate modification provisions”; “the terms of

Kethan’s employment were not modified by the assignment of his contract and the

substitution of [the assignee]. Following the assignment, Kethan’s contractual

rights and duties as an employee did not change. The only thing that changed was

the entity now entitled to enforce the terms and conditions that Kethan had

previously agreed to when he entered into his employment agreement.”); see

generally RESTATEMENT (SECOND) OF CONTRACTS § 317(2)(a) (1981) (“A

contractual right can be assigned unless . . . the substitution of a right of the

assignee for the right of the assignor would materially change the duty of the

obligor, or materially increase the burden or risk imposed on him by his contract,

or materially impair his chance of obtaining return performance, or materially

reduce its value to him.”).

We next turn to the circuit court’s ruling that the Agreement is

unenforceable because it contains a provision “purport[ing] to limit Ms. Gill’s full

access to damages[,]” particularly punitive damages. (See Agreement, sec. 3, R.

777-78.) Under Kentucky law, a contract is not necessarily unconscionable or

unenforceable simply because it contains an unenforceable provision.7 See

generally Edleson v. Edleson, 179 Ky. 300, 200 S.W. 625, 629 (1918) (“Where a

7
To be clear, we do not reach and do not determine today the enforceability of Section 3 of the
Agreement.

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contract . . . consists of several covenants and agreements with regard to different

subjects, and one of the covenants is illegal and vicious, the general rule which

prevails is that, if the illegal covenant of the contract can be eliminated from it

without impairing its symmetry as a whole, the courts will . . . eliminate the

obnoxious feature and enforce the remainder of the contract . . . .); Schnuerle v.

Insight Commc’ns Co., L.P., 376 S.W.3d 561, 565 (Ky. 2012) (holding that a

contractual “provision imposing a confidentiality requirement upon the litigants to

arbitration proceedings is void and is severable from the remaining portions of the

agreement”).

Applying Mortgage Electronic Registration Systems, Inc. v. Abner,

260 S.W.3d 351 (Ky. App. 2008), as the Appellee desires does not result in an

unconscionable contract because the clause limiting damages located at Section 3

of the Agreement neither causes it to be so, nor is it unseverable under Section 5.

(Agreement, sec., 3, R. 777-78; Appellee’s Brief, at p. 18; infra at p. 16-19.)

In Abner, this Court affirmed the circuit court’s denial of a motion to

compel arbitration of a foreclosure matter. The arbitration clause at issue in Abner

was located within the mortgage contract, providing that the arbitrator could award

damages limited to “actual and direct damages,” and that in no event could the

awarded damages “include consequential, punitive, exemplary or treble damages.”

260 S.W.3d at 352. Our Court held that “an arbitration clause that contains a

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substantial waiver of a parties’ [sic] rights is unenforceable[,]” id. at 354,

emphasizing the arbitration agreement itself unconscionably limited the plaintiffs’

rights to statutory and punitive damages. However, subsequent to Abner, the

United States Supreme Court made clear that the FAA requires arbitration

agreements be “put . . . on an equal plane with other contracts.” Kindred Nursing

Centers Ltd. Partnership v. Clark, ___ U.S. ___, 137 S. Ct. 1421, 1425, 197 L. Ed.

2d 806 (2017).8 The inquiry therefore is whether ordinary contract principles

support enforcement of a contract containing a (purportedly) invalid limitation of

damages provision. But at this juncture, “the Court need not consider whether the

limitation . . . is itself enforceable if . . . the clause is severable from the agreement

to arbitrate.” Brookdale Senior Living Inc. v. Stacy, 27 F. Supp. 3d 776, 789 (E.D.

Ky. 2014).9

An arbitration agreement containing a severable clause limiting the

defendants’ liability for damages was determined enforceable in Brookdale, supra.

There, the United States District Court explained that the limitation of damages

provision held unconscionable in Abner was inextricably “intertwined” with the

arbitration clause itself; it opined that “Abner does not stand for the proposition

8
See also N. Kentucky Area Dev. Dist. v. Snyder, 570 S.W.3d 531, 535 (Ky. 2018) (quoting
Kindred Nursing, 137 S. Ct. at 1426) (the FAA “displaces any rule that covertly accomplishes
the same objective by disfavoring contracts that (oh so coincidentally) have the defining features
of arbitration agreements.”).
9
Brookdale is cited herein as persuasive, not mandatory, authority.

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that all arbitration agreements are unenforceable simply because the contract

contains a separate and unconscionable provision.” 27 F. Supp. 3d at 789-90. The

Court distinguished Abner on its facts because in that case, “the arbitration clause

itself directly limited the arbitrator’s ability to award damages and expressly

prohibited it from modifying the terms of the contract.” Id. at 790. Thus, in

Abner, “[t]here was no way for an arbitrator to sever the unconscionable clause

from the rest of the agreement.” Id. See also Francis v. Cute Suzie, LLC, No.

3:10-CV-00704, 2011 WL 2174348, at *4 (W.D. Ky. Jun. 2, 2011) (granting

motion to compel arbitration and distinguishing Abner because “[i]f, upon

submission of this matter to arbitration, the arbitrator determines that the limitation

of damages provision . . . is unconscionable or otherwise unenforceable, he would

have the power to disregard it pursuant to the [contract’s] severability clause.”).

At issue here is Section 5 of the Agreement, which provides, in

pertinent part:

5. NONSEVERABILITY

5.1 If the [arbitration] Panel or a proper court determines
that any of the Terms and conditions of this Agreement
are unenforceable for any reason, and an award is made
inconsistent with it or in violation of it, the Party adversely
affected has the right to terminate this Agreement by
serving upon the Arbitrators and opposing Party or that
Party’s attorney, a Notice of Termination within 10
business days of the date of the Arbitration decision or
court decision. If a Party fails to timely serve the Notice

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 of Termination, the Arbitration decision and award will
become final, binding, and enforceable. . . .

(R. 778) (emphasis added). The circuit court determined that the “[A]greement

contained only one exception to the nonseverability provision which pertained to

the Patient Bill of Rights10 and does not apply here” (R. 796), a reference to the

third paragraph of Section 7 of the Agreement, which provides:

If any Term or Condition is determined to violate the
Patient Bill of Rights, that Term or Condition, including
any Dispute or Claim, will be excluded so as not to violate
the Patient Bill of Rights, and any remaining Terms and
Conditions, including any surviving Disputes or claims,
will remain in force and subject to private, binding
Arbitration, as this Agreement provides.

(R. 779.)

We conclude the circuit court erred by failing to consider all

provisions of the Agreement as a whole in ruling on the severability issue. It is

true that Section 7 contains the foregoing provision addressing severability of any

term or condition found violative of KRS 216.515, the nursing home “Patient Bill

of Rights.” But Section 5 permits any unenforceable term or condition to be

severed from the remainder of the Agreement.11

10
See KRS 216.515.
11
We further note that Section 2.1.3 of the Agreement grants the arbitration panel authority to
address disputes “about enforceability, severability, [and] unconscionability” of the Agreement.
(R. 775.)

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 We find persuasive the decision in ManorCare Health Services, Inc.

v. Stiehl, 22 So.3d 96 (Fla. Dist. Ct. App. 2009). There, the Court construed an

arbitration agreement similar to the Agreement at issue here. In ManorCare, the

agreement contained remedial limitations capping the plaintiff’s “non-economic

damages at $250,000 and eliminat[ing] punitive damages.” Id. at 98. The

ManorCare agreement was a voluntary, stand-alone agreement, as in our case. Id.

at 97-98. It contained a section entitled “Nonseverability,” which again, similar to

the instant case, provided that “[i]n the event any provision of this agreement is

determined by a court of competent jurisdiction, an arbitrator or arbitrator panel to

be unenforceable for any reason, either party may thereafter cancel this agreement

by giving written notice to such effect within 10 days after such

determination. . . .” Id. at 98. The Court reversed the trial court’s determination

that the agreement was unenforceable because of the remedial limitation provision,

explaining:

[L]anguage contained within the nonseverability clause
anticipates that certain provisions of the Agreement may
be deemed invalid and severed, in which case the parties
would have the option of either proceeding with
arbitration or withdrawing from the [a]greement.
Additionally, we do not find that the remedial limitation is
so interrelated and interdependent that it cannot be severed
by the arbitrator if necessary: the essence of the contract
is an agreement to submit disputes to binding arbitration.
We therefore conclude that the validity of the remedial
limitations may be considered by the arbitrator and, if the
limitations are found invalid, severed from the Agreement.

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 We have decided the single gateway issue presented on
appeal: whether a valid agreement to arbitrate exists
between [the plaintiff] and [the facility]. Because the
validity of the remedial limitations may be determined by
the arbitrator, we do not proceed any further.

Id. at 100-01. See also Francis, 2011 WL 2174348, at *4 (in applying Kentucky

law, holding that an arbitration agreement was not substantively unconscionable

under Abner, notwithstanding a limitation of liability clause, because under the

terms of the contract, “[i]f upon submission of this matter to arbitration, the

arbitrator determines that the limitation of damages provision . . . is

unconscionable or otherwise unenforceable, he would have the power to disregard

it pursuant to the . . . severability clause.”).

This Court will not “construe a contract at variance with its plain and

unambiguous terms.” Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d

381, 385 (Ky. App. 2002). Moreover, we cannot disregard portions of the

Arbitration Agreement as written, but instead must read the contract as a whole,

attempting to harmonize its provisions and “giving effect to all parts and every

word in it if possible.” City of Louisa v. Newland, 705 S.W.2d 916, 919 (Ky.

1986); see also Cantrell, 94 S.W.3d at 384-85. Thus, reading the Agreement as a

whole and harmonizing all provisions therein, we do not find that it fails for

unconscionability because if the limitation on liability provision is unconscionable,

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an issue we do not reach today, the arbitration panel may sever that unconscionable

provision from the enforceable terms of the Agreement.

Appellee additionally claims the Agreement is unconscionable

because Section 2.1.2 provides:

By submitting all Disputes to binding Arbitration, each
Party has its right to file a lawsuit and to have a trial
by jury for an action seeking monetary damages arises
out of a Dispute, claim or other matter covered by this
Agreement, except as this Agreement provides.

(R. 775) (emphasis original). Appellee asserts the foregoing provision is

misleading because it “disingenuously and inaccurately informs Ms. Gill in bold

print that she maintains her right to file a lawsuit and to have a trial by jury[.]”

(Appellee’s Brief, at p. 18.) But the inclusion of the clause “except as this

Agreement provides” fairly places the reader on notice that the right to a jury trial

is waived for the claims set forth in the Agreement to arbitrate. (See Agreement,

Section 2.1.2, R. 775.)

In Francis, the plaintiff argued the arbitration provision was

procedurally unconscionable, in part, “because it was ‘buried’ within a

paragraph[.]” 2011 WL 2174348, at *3. Noting that “the presentation of the

clause is not a model of clarity,” the Court nonetheless rejected the plaintiff’s

position because the clause “was written in clear, legible type[,]” and the Court

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did “not agree that requiring a party to a contract to read four sentences into a

paragraph is so onerous or deceptive as to be procedurally unconscionable.” Id.

Having concluded that Landmark is entitled to enforce the Arbitration

Agreement as an assignee thereof unless it waived that right, and that the

arbitration panel may sever any provisions of the Agreement which are

unenforceable, we turn to the enforceability of the Agreement by the remaining

Appellants. Appellants do not acknowledge that they are disparately situated with

respect to their attempts to enforce the Arbitration Agreement. In other words,

only Landmark constitutes an “assign” under the Agreement owing to the OTA

under which it assumed the operation of the nursing home, including the

performance of contracts with its residents.

The circuit court ruled that the “defendants cannot enforce the

[A]greement as alleged third-party beneficiaries” because they have not “proven

that the agreement was made for [their] actual and direct benefit[.]” (R. 795-96.)

“Five theories for binding non-signatories to arbitration agreements have been

recognized: (1) incorporation by reference, (2) assumption, (3) agency, (4) veil-

piercing/alter ego, and (5) estoppel.” Olshan Foundation Repair and

Waterproofing v. Otto, 276 S.W.3d 827, 831 (Ky. App. 2009) (citation omitted).

As the parties seeking to compel arbitration, Appellants bore the burden of

showing they constitute non-signatories who may enforce the Agreement. Ping,

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376 S.W.3d at 590. Although we have determined that Landmark, absent waiver,

is a non-signatory entitled to enforce the Agreement under the contractual

assignment clause, the circuit court correctly noted the dearth of evidence that Mr.

Gill, in the process of admitting his mother to the facility and in acting as her

agent, intended to benefit any or all of the non-signatory Appellants such that an

equitable theory of enforcement applies. See Sexton v. Taylor Cty., 692 S.W.2d

808, 810 (Ky. App. 1985) (rejecting third party beneficiary argument where

“[t]here [was] simply no evidence appearing in the record tending to show that the

parties made the contract for the benefit of appellant. Nor does it appear from the

record that there was ever any intent, expressed or otherwise, on their part to do

so.”).

Appellants rely heavily on the theory of equitable estoppel in asserting

that each of them may enforce the Agreement. In North Fork Collieries, LLC v.

Hall, 322 S.W.3d 98 (Ky. 2010), Hall and his company, Traveler Coal, LLC,

obtained a business loan from Community Trust Bank secured by “various

mortgages and other liens as well as by the personal guarantees of Hall and his

wife[.]” Id. at 100. North Fork subsequently purchased Traveler, and the parties

executed an Asset Purchase Agreement contemporaneous with an Assumption

Agreement under which North Fork and Traveler “both promised the Bank . . . to

jointly and severally assume [or remain] and be bound as . . . joint and several

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primary obligor along with [the other].” Id. at 101 (internal quotation marks

omitted). The former contract contained an arbitration clause, while the latter

agreement did not. Id. North Fork defaulted on the loan, and Hall, his wife, and

Traveler brought suit against North Fork and the Bank. North Fork moved for

dismissal of the complaint or to compel arbitration. Id. Noting that the Asset

Purchase Agreement, and not the Assumption Agreement, would determine the

rights between North Fork and Hall,12 the Court held that because “Hall and his

wife are claiming the direct benefit of the Asset Purchase Agreement’s loan

assumption and indemnity provisions[,]” they were “estopped from disavowing the

Agreement’s arbitration provision.” Id. at 106.

In Olshan, the Ottos purchased a home from Jansen, who had

contracted with Olshan Foundation Repair and Waterproofing to “to undertake . . .

work on the foundation . . . .” 276 S.W.3d at 828. Prior to Jansen’s contracting

with Olshan, the previous owner of the home, Schnelle, also contracted with

Olshan for repairs on the home’s foundation. Id. Following flooding of the

basement, “the Ottos contacted Olshan,” claiming a right to performance under the

“fully-transferrable lifetime warranty” provided by Olshan to both Schnelle and

12
The Court held that the Assumption Agreement, “in short, concerns North Fork’s and Hall’s
relationship with the . . . Bank, not with each other. It has nothing to say about which of them, if
either, is responsible to the other for the Bank debt and thus it cannot resolve the issue Hall seeks
to litigate.” Id. at 103.

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Jansen. Id. The Court noted the “fundamental tenet of contract law” that “the

parties must enter into a meeting of the minds in order to form an enforceable

contract.” Id. at 831. Although the Ottos, as non-signatories to the contract, did

not have a meeting of the minds with Olshan, the Court concluded that “[t]hird

parties such as the Ottos . . . may seek to enforce the terms of the contract by

showing that the parties to the contract intended by their agreement to benefit third

parties directly. Such intent need not be expressed in the agreement itself; it may

be evidenced by the terms of the agreement, the surrounding circumstances, or

both.” Id. (citation omitted). The Court determined that “uncontroverted

documentary evidence in the form of warranty certificates” supported the Ottos’

claim that they were third party direct beneficiaries, particularly because the

warranties expressly provided coverage “to all future owners of this home[.]” Id.

Thus, the Ottos, who were attempting to enforce the contracts and obtain

performance thereunder as third-party beneficiaries, were estopped from denying

the validity of the provisions requiring arbitration of their claims. Id. at 832

(“[W]hile the Ottos may not be bound to the agreements under contract law

principles, their decision to seek warranty repairs as third party direct beneficiaries

under the contracts brings with it the obligation to resolve disputes in accordance

with the contracts’ terms”).

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 Both North Fork and Olshan are readily distinguishable from the

instant case.13 Here, Appellee, the party against whom enforcement is sought, is

not “claiming the direct benefit” of the Arbitration Agreement, unlike Hall and his

wife in North Fork, and unlike the Ottos in Olshan. Appellee is not attempting to

enforce the Arbitration Agreement, nor any contract, against the non-signatory

defendants; each of his claims sounds in tort, not in contract. (See Amended

Complaint, R. 397-406.) We cannot say, therefore, that he is estopped from

denying that Ms. Gill’s claims against all Appellants should be arbitrated based on

equitable principles.

However, as an assignee, Landmark stands in the shoes of its assignor,

AHF. See generally Hill v. Turner, 56 S.W. 642, 644 (Ky. 1900) (holding the

appellants, as assignees, “stand in the shoes of their assignor . . . and have the

same rights that he had, and no more”). Returning to Section 1.2 of the

Agreement, the “facility” is defined as including “Georgetown Manor’s” “officers,

employees [sic] agents, administrators, and directors.” The circuit court did not

reach the issue of whether any Appellant is entitled to enforce the Agreement, as a

13
The unpublished case of Palazzo v. Fifth Third Bank, No. 2011-CA-000034-MR, 2012 WL
3552633 (Ky. App. Aug. 17, 2012) (unpublished), also cited by Appellants, is likewise
unavailing because there, the plaintiff “treat[ed] Fifth Third Securities and [Fifth Third] Bank as
one entity[,]” alleging “that Fifth Third ‘breached its contracts with’ her[.]” Id. at *2. Citing
North Fork, 322 S.W.3d 98, the Court specifically held that “Palazzo cannot, on the one hand,
seek the benefit of those alleged contracts between her and Fifth Third Securities and the Bank,
and, on the other hand, disavow the arbitration provision that is part of those alleged contracts.”
Id.

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matter of contract, based upon the above language. Likewise, the circuit court

stated that “[b]ecause [it] finds that there is not an enforceable agreement, [it] does

not find it necessary to reach the issue of waiver.”14 (R. 796.) On remand, the

circuit court shall make additional findings as to which of the Appellants other than

Landmark, if any, are entitled to enforce the Arbitration Agreement under the

contractual provisions therein and whether Landmark and/or any Appellant waived

their rights to enforce the Agreement.15

Finally, we disagree with the circuit court’s assessment that

enforcement of the Agreement as to any Appellant “would mean that the contract

could continue into perpetuity” impermissibly. (R. 796.) As aptly noted by

Appellants, Ms. Gill’s residency at the nursing home could in no way continue into

perpetuity – it would necessarily continue only through her death or through her

discharge from the facility, and “[u]pon her discharge, no matter the [facility]

operator, the Agreement would have become irrelevant, other than for suits

brought on the basis of her residency.” (Appellants’ Brief, at p. 19.)

14
Appellee argued below that Appellants, including Landmark, waived their right to insist upon
arbitration by participating in the underlying civil action for a period of approximately eight
months, including propounding discovery and filing (and subsequently voluntarily remanding) a
motion to dismiss certain named defendants. See 9/16/20 Video Record, at 11:07:35 ff.
15
The circuit court may stay litigation while the arbitrable claims against the parties entitled to
enforce the Agreement are submitted to arbitration. See North Fork, 322 S.W.3d at 106.

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 IV. CONCLUSION

For the foregoing reasons, we affirm in part, reverse in part, and

remand for further proceedings consistent with this Opinion. We view any

remaining issues raised in the parties’ briefs as irrelevant or unnecessary to this

Opinion.

CETRULO, JUDGE, CONCURS.

TAYLOR, JUDGE, CONCURS IN RESULT ONLY.

BRIEFS FOR APPELLANTS: BRIEF FOR APPELLEE JOSEPH P.
GILL, JR.:
Donald L. Miller, II
Brandon C. R. Sword Lisa E. Circeo
Louisville, Kentucky Megan L. Adkins
Ashley L. Daily
Lexington, Kentucky

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