National Geographic Society v. Joseph Grieshop ( 2016 )

IMPORTANT NOTICE
NOT TO BE PUBLISHED OPINION
THIS OPINION IS DESIGNATED "NOT TO BE PUBLISHED."
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PROMULGATED BY THE SUPREME COURT, CR 76.28(4)(C),
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RENDERED: MARCH 17, 2016
NOT TO BE PUBLISHED
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NATIONAL GEOGRAPHIC SOCIETY;
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NGC NETWORK, LLC APPELLANTS
ON APPEAL FROM COURT OF APPEALS
V. CASE NO. 2015-CA-000648-I
HARLAN CIRCUIT COURT NO. 15-CI-00012
JOSEPH GRIESHOP; MARVIN J. LIPFIRD APPELLEES
MEMORANDUM OPINION OF THE COURT
VACATING AND REMANDING
In defending against a defamation claim, the National Geographic Society
sought to enforce the terms of an arbitration agreement that it claimed
governed the claim. The trial court refused to compel arbitration on the ground
that no valid contract had been formed. The Court of Appeals denied
interlocutory relief without addressing the contract-formation question on the
ground that National Geographic had failed to allege, much less prove,
irreparable injury. May an appellate court refuse to grant interlocutory relief in
such circumstances without examining the trial court's conclusion that there
was no valid contract? It may not. Our authorities are clear that irreparable
injury is proven if the trial court erred in finding no valid contract. For that
reason, the Court of Appeals' order is vacated and this matter is remanded for
further proceedings.
I. Background
In 2013, National Geographic was filming a "reality" television show titled
Kentucky Justice about law-enforcement in Harlan County, Kentucky. At the
time, Joseph Grieshop was the Harlan County Judge/Executive. On April 18,
2013, he signed a document titled "Location and Personal Release" allowing
National Geographic to film at the "courtroom at the Harlan County
Courthouse to include the roof."
Although Grieshop claims he informed National Geographic's agent at
that time that he did not want to be filmed, the release also grants National
Geographic permission to "photograph and record [his] likeness and activities"
and "to use and re-use, publish and re-publish, and modify or alter the
Image(s) taken during the Shoot in the Assignment." Among other things,
Grieshop agreed to "waive [his] right to inspect or approve any editorial text or
advertising that is used in connection with the Images," and to "release and
discharge [National Geographic] ... from any and all claims arising out of use of
the Images for the purposes described above, including any claims for
misappropriation of property, libel, invasion of property, or other tortious act."
The release also stated: "In addition, neither I nor any other party having an
interest in the Location or Shoot shall have any claim or right of action for
injunctive relief and/or money damages against [National Geographic] or
[National Geographic's] agent arising out of the use of the Images."
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Although National Geographic did not sign the release, at least two
provisions placed obligations on it. Specifically, National Geographic "agree[d]
that it will not use the Images to defame or show the Location in a false light."
It also agreed to "use reasonable care to prevent damage to the Location and ...
[to] indemnify [Grieshop] should any damage be caused to the Location by the
negligent act or omission of [National Geographic] or its agents, employees or
invitees."
Some time after the release was executed, then-Harlan County Sheriff
Marvin Lipfird executed an arrest warrant, signed by a trial commissioner, on
Grieshop at his office in the basement of the courthouse. The arrest was filmed
by National Geographic. The charges against Grieshop were later dismissed for
lack of probable cause. Grieshop claims that National Geographic was given
notice of this fact. Nevertheless, footage of the arrest was used in an episode of
Kentucky Justice that first aired on January 24, 2014. The episode was
originally titled "Law Gone Bad" and, after Grieshop complained, was re-titled
"Arresting the Law."
On February 15, 2015, Grieshop filed a defamation action against
National Geographic and Lipfird. National Geographic moved to compel
arbitration under an arbitration clause in the release. That clause reads as
follows:
The parties agree that they will attempt in good faith to settle any
and all disputes arising out of, under, or in connection with this
Agreement, including without limitation the validity, interpretation,
performance and breach hereof, through a process of mediation in
Washington, D.0 under the supervision of a mutually agreed upon
mediator. In the event that mediation fails to settle such a dispute,
the parties agree to proceed to binding arbitration in Washington,
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D.C. pursuant to the then existing rules of the American
Arbitration Association. Judgment upon the award rendered may
be entered in any court having jurisdiction thereof. In the event of
arbitration, the non-prevailing party will be responsible to pay all
costs, the prevailing party's attorney's fees, costs and other
disbursements, plus legal interest on the award.
The trial court denied the motion, concluding that there was no valid
underlying agreement to which the arbitration agreement could apply and thus
no valid arbitration agreement. The court stated that "an arbitration agreement
presupposes the existence of another agreement," and that the release, the
purported other agreement, was "not a contract, for the basic reason that it
lacks mutuality; stated differently, it is devoid of any consideration whatsoever
passing to Grieshop." The court further stated that the release contained only
unilateral promises by Grieshop "without as much as a recital of
consideration," and that the promises by National Geographic only ran to the
"Location," namely, "the old Harlan County Court House, which Grieshop does
not own."
National Geographic then moved the Court of Appeals for interlocutory
relief under Civil Rule 65.07 and North Fork Collieries, LLC v. Hall, 322 S.W.3d
98 (Ky. 2010). The Court of Appeals denied the motion, noting that relief under
those authorities is essentially injunctive and requires proof of irreparable
injury, and concluding that National Geographic "has not asserted, much less
proven, any irreparable injury resulting from the trial court."
National Geographic appealed to this Court under Civil Rule 65.09.
II. Analysis
As this Court has stated several times in the past, an order denying a
motion to compel arbitration based on an arbitration agreement is one of the
few interlocutory trial orders that may be reviewed immediately by an appellate
court. If the arbitration agreement in question is governed by the Kentucky
Uniform Arbitration Act, interlocutory review is provided by statute. See KRS
417.220(1)(a) ("An appeal may be taken from ... [a]n order denying an
application to compel arbitration made under KRS 417.060...."). If that act does
not apply and the agreement is governed by other law, such as the Federal
Arbitration Act, "CR 65.07 and CR 65.09 [are] appropriate avenues for the
review of trial court orders denying motions to compel arbitration." North Fork
Collieries, 322 S.W.3d at 101. Those rules, of course, allow interlocutory review
of orders granting or denying injunctive relief.
The rationale behind this is not that motions to compel arbitration are
precisely motions for injunctive relief but because they "are in some ways akin
to motions for injunctions under CR 65.04." Id. at 102. We have also noted that
"they are significantly different as well." Id. Unlike a traditional request for an
injunction, which would require the trial court "to weigh the equities of the
situation, to assess the merits of the underlying controversy, [and] to determine
whether litigation would or would not 'irreparably harm' the movant," a motion
to compel arbitration seeks only "specific performance of the asserted
contractual right," and the trial court's "task ... is simply to decide under
ordinary contract law whether the asserted arbitration agreement actually
exists between the parties and, if so, whether it applies to the claim raised in
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the complaint." Id. And whereas an ordinary request for "injunctive relief is
said to be within the sound discretion of the trial court, in this context that
discretion extends no further than the correct application of the law, and
accordingly we have held that the improper denial of a motion to compel
arbitration warrants relief under CR 65.09." Id. "The trial court's factual
findings, if any, are reviewed for clear error, but its construction of the
contract, a purely legal determination, is reviewed de novo." Id.
Despite the differences between an ordinary injunction action and
interlocutory review of the denial of a motion to compel arbitration, both
require a showing that "the movant will suffer irreparable injury or the final
judgment will be rendered ineffectual." Id. The Court of Appeals reached its
decision by applying this point of law to National Geographic's claim and
concluding that it had neither alleged nor proven irreparable injury.
That approach, however, ignored that North Fork Collieries went on to
hold expressly that "in this context irreparable injury arises from an improper
denial of a motion to compel arbitration and that the principal question on
review is simply whether the trial court correctly decided the contract issue."
Id. at 103. In other words, irreparable injury is proven by showing that the trial
court erred in denying the motion to compel arbitration.
The Court of Appeals simply failed to engage in the required analysis,
namely, whether the trial court correctly decided the contract-formation
question. That error alone satisfies the requirement that the movant show
extraordinary cause as required by Civil Rule 65.09(1) and requires that the
Court of Appeals' order be vacated.
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III. Conclusion
Because the Court of Appeals failed to apply North Forth Collieries in its
entirety and denied National Geographic's request for interlocutory relief
without examining whether the trial court correctly determined there was no
contract, the Court of Appeals' order denying interlocutory relief is vacated.
This matter is remanded to that court for determination of the contract-
formation question.
All sitting. All concur.
COUNSEL FOR APPELLANTS:
Susan Grogan Faller
Frost Brown Todd, LLC
3300 Great American Tower
301 East Fourth Street
Cincinnati, Ohio 45202
Barry Douglas Hunter
Frost Brown Todd, LLC
250 West Main Street, Suite 2800
Lexington, Kentucky 40507-1749
COUNSEL FOR APPELLEE, JOSEPH GRIESHOP:
Russell Darren Alred
PO Box 288
Harlan, Kentucky 40831
COUNSEL FOR APPELLEE, MARVIN J. LIPFIRD:
Jonathan C. Shaw
Porter, Schmitt, Banks & Baldwin
327 Main Street
PO Drawer 1767
Paintsville, Kentucky 41240-1767
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