Jacob v. Dripchak
2011 Ky. App. LEXIS 8
| Ky. Ct. App. | 2011Background
- Dr. Jacob and Bluegrass Orthopaedic Group had a 2003 employment agreement that required arbitration for all claims arising under the agreement.
- The 1997 employment agreement, superseded by the 2003 agreement upon its term, did not itself contain an arbitration provision for claims arising thereunder.
- In 2006 a dispute over compensation under the 2003 agreement led to circuit court proceedings; the court ordered arbitration under the 2003 agreement.
- Bluegrass demanded arbitration in January 2007 and identified an arbitrator; Dr. Jacob served a demand for arbitration in February 2007 related to those claims.
- Arbitration occurred June 6, 2007; an award dated November 10, 2007 (and clarified January 28, 2008) split damages between Jacob and Bluegrass related to both the 1997 and 2003 agreements.
- Jefferson Circuit Court confirmed the arbitration awards in May 2008; Jacob appealed challenging arbitration scope and the inclusion of claims from the 1997 agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Arbitrator jurisdiction over 1997 claims | Jacob argues the arbitrator lacked authority to decide 1997 claims because the 2003 agreement superseded and did not provide for those claims. | Bluegrass contends the arbitrator properly addressed 1997 claims because the same transaction involved both agreements and there would be efficiency in one forum. | Arbitrator exceeded powers; 1997 claims are not subject to arbitration. |
| Authority to award damages under the 1997 agreement | Because the 1997 agreement was superseded, damages under it should not have been awarded. | Damages under the 1997 agreement were within the arbitrator’s purview due to the same transactions and overlapping parties. | Circuit court erred in confirming damages awarded under the 1997 agreement; reversed and remanded. |
| Effect of arbitration notice and demand adequacy | Notice/demand for arbitration was insufficient to trigger arbitration for 1997 claims varying from the 2003 clause. | Bluegrass's notice satisfied the arbitration clause and triggered arbitration per the 2003 agreement. | Not necessary to address further; issue moot after partial reversal. |
Key Cases Cited
- Oakwood Mobile Homes, Inc. v. Sprowls, 82 S.W.3d 193 (Ky. 2002) (arbitration governed by contract law; arbitration agreements interpreted as contracts)
- Jones v. City of Paducah, 142 S.W.2d 365 (Ky. 1940) (recitals and preamble are not essential parts of operative contract terms)
- Conagra Poultry Co. v. Grissom Transp., Inc., 186 S.W.3d 243 (Ky. App. 2006) (interpretation of contract is a matter of law)
- Frear v. P.T.A. Indus., Inc., 103 S.W.3d 99 (Ky. 2003) (contract interpretation is reviewed de novo)
- First Commonwealth Bank of Prestonsburg v. West, 55 S.W.3d 829 (Ky. App. 2000) (contract interpretation standard applied; de novo review)
- Conseco Fin. Serv. Corp. v. Wilder, 47 S.W.3d 335 (Ky. App. 2001) (arbitration issues evaluated with contract-law framework)