Case: 3:22-cv-00029-GFVT Doc #: 1-2 Filed: 05/19/22 Page: 1 of 12 - Page ID#: 7
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`
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`Exhibit 1
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`

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`108DEF3B-C293-4B24-B75C-64CE74717815 : 000001 of 000012
`
`Presiding Judge: HON. PHILLIP J. SHEPHERD (648260)
`
`COM : 000001 of 000009
`000001 of 000009
`
`Case: 3:22-cv-00029-GFVT Doc #: 1-2 Filed: 05/19/22 Page: 2 of 12 - Page ID#: 8
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`COMMONWEALTH OF KENTUCKY
`FRANKLIN CIRCUIT COURT
`CASE NO. _________
`DIVISION ____
`
`
`
`
`
`
`
`
`PETITIONERS
`
`
`
`
`
`PETITION TO VACATE ARBITRATION AWARD
`
`RESPONDENT
`
`
`LIFEPOINT CORPORATE SERVICES GENERAL
`PARTNERSHIP AND LAKE CUMBERLAND
`REGIONAL HOSPITAL, LLC,
`
`
`
`
`v.
`
`
`WELLCARE HEALTH INSURANCE CO. OF KENTUCKY
`
`
`SERVE: WellCare Insurance Co. of Kentucky
`
`
`c/o C T Corporation System
`
`
`306 W. Main Street
`
`
`Suite 512
`
`
`Frankfort, KY 40601
`
`
`* * * * *
`
`
`
`
`Through its counsel of record, and pursuant to the Federal Arbitration Act (“FAA”), 9
`
`U.S.C. § 10, and alternatively the Kentucky Uniform Arbitration Act (“KUAA”), Ky. Rev. Stat.
`
`§ 417.160, Petitioners LifePoint Corporate Services General Partnership and Lake Cumberland
`
`Regional Hospital, LLC respectfully move this Court to vacate the arbitration award issued in
`
`LifePoint Corporate Services General Partnership v. Wellcare Health Insurance Co. of Kentucky,
`
`AAA Case No. 01-20-0014-7102, on May 18, 2022. In support of this Petition, Petitioners state:
`
`PARTIES, JURISDICTION, AND VENUE
`
`1.
`
`Petitioner LifePoint Corporate Services General Partnership facilitates the
`
`operation of a national hospital system. It is a Delaware general partnership with its main offices
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`located at 330 Seven Springs Way, Brentwood, Tennessee 37027.
`
`1
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`

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`108DEF3B-C293-4B24-B75C-64CE74717815 : 000002 of 000012
`
`Presiding Judge: HON. PHILLIP J. SHEPHERD (648260)
`
`COM : 000002 of 000009
`000002 of 000009
`
`Case: 3:22-cv-00029-GFVT Doc #: 1-2 Filed: 05/19/22 Page: 3 of 12 - Page ID#: 9
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`2.
`
`Petitioner Lake Cumberland Regional Hospital, LLC is hospital owned by
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`LifePoint located at 305 Langdon Street, Somerset, Kentucky 42503. Lake Cumberland Regional
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`Hospital is a Delaware limited liability company.
`
`3.
`
`Respondent WellCare Health Insurance Co. of Kentucky is a managed care
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`organization that provides managed care services for the Commonwealth of Kentucky Department
`
`of Medicaid Services. WellCare is a Kentucky corporation located at 13551 Triton Park
`
`Boulevard, Suite 1800, Louisville, Kentucky 40223.
`
`4.
`
`This Court has jurisdiction over this action because it arises from a contractual
`
`dispute affecting interstate commerce and is therefore subject to and governed by the Federal
`
`Arbitration Act. See, e.g., Ford v. E*TRADE Sec., Inc., No. 2003-CA-001480-MR, 2004 WL
`
`2071411, at *2 (Ky. Ct. App. Sept. 17, 2004) (Minton, J.) (holding that Kentucky trial court had
`
`jurisdiction to consider petition to vacate arbitration award under the FAA because underlying
`
`contract affected interstate commerce). Moreover, the parties’ Participating Provider Agreement
`
`(to be filed separately under seal) expressly states that federal law, if applicable, governs any
`
`matters arising out of or in connection with the Agreement. See Participating Provider Agreement
`
`§ 9.1.
`
`5.
`
`Alternatively, even if the FAA did not apply, jurisdiction would be proper under
`
`the KUAA. See Ky. Rev. Stat. §§ 417.160, 417.200.
`
`6.
`
`Venue is proper in this Court because the parties’ Participating Provider
`
`Agreement, as amended, specifies this Court as a proper venue for claims involving matters arising
`
`out of or in connection with the Agreement. See Participating Provider Agreement § 9.1. The
`
`parties also agreed to be subject to the jurisdiction and venue of this Court on any such claim. Id.
`
`2
`
`

`

`108DEF3B-C293-4B24-B75C-64CE74717815 : 000003 of 000012
`
`Presiding Judge: HON. PHILLIP J. SHEPHERD (648260)
`
`COM : 000003 of 000009
`000003 of 000009
`
`Case: 3:22-cv-00029-GFVT Doc #: 1-2 Filed: 05/19/22 Page: 4 of 12 - Page ID#: 10
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`FACTUAL BACKGROUND
`
`7.
`
`Several LifePoint-affiliated hospitals (“LifePoint Facilities”), including Lake
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`Cumberland Regional Hospital, brought a civil action in Jefferson Circuit Court against WellCare
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`challenging its failure to pay claims for emergency services pursuant to provider agreements
`
`between the LifePoint Facilities and WellCare. The action was styled Bourbon Community
`
`Hospital, LLC, et al. v. WellCare Health Insurance Company of Illinois, Inc. d/b/a WellCare of
`
`Kentucky, Inc., Case No. 18-CI-00 1136 (Jefferson Cir. Ct.).
`
`8.
`
`The LifePoint Facilities and WellCare executed a Settlement Agreement and
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`Release resolving the claims. Because the Settlement Agreement is confidential, a true and correct
`
`copy will be provided separately under seal.
`
`9.
`
`The Settlement Agreement materially relied upon certain information regarding
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`governing rates to be provided by WellCare. Because Petitioners did not have access to this
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`information, they had to rely upon WellCare providing accurate information.
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`10. WellCare provided incorrect information and this information was included in the
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`Settlement Agreement.
`
`11.
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`Following execution of the Settlement Agreement, WellCare sent a letter to Lake
`
`Cumberland seeking to recover an overpayment to which it claimed it was entitled to pursuant to
`
`the Settlement Agreement. Because Respondent’s letter seeking recoupment from Lake
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`Cumberland relies upon the confidential Settlement Agreement, a true and correct copy will be
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`provided separately under seal.
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`12.
`
`In seeking recoupment, WellCare relied on the incorrect information it provided in
`
`the Settlement Agreement.
`
`3
`
`

`

`108DEF3B-C293-4B24-B75C-64CE74717815 : 000004 of 000012
`
`Presiding Judge: HON. PHILLIP J. SHEPHERD (648260)
`
`COM : 000004 of 000009
`000004 of 000009
`
`Case: 3:22-cv-00029-GFVT Doc #: 1-2 Filed: 05/19/22 Page: 5 of 12 - Page ID#: 11
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`13.
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`Petitioners responded to WellCare’s notice of recoupment by correspondence dated
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`January 13, 2020, and disputed the recoupment amount.
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`14.
`
`15.
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`The Settlement Agreement requires disputes to be resolved by binding arbitration.
`
`The Parties’ Participating Provider Agreement, as amended, provides that the
`
`agreements shall be governed by, and construed in accordance with, the laws of the state in which
`
`the facility providing services is located, except where Federal law applies.
`
`16.
`
`Petitioners initiated arbitration in September of 2020, captioned LifePoint
`
`Corporate Services General Partnership v. Wellcare Health Insurance Co. of Kentucky, AAA
`
`Case No. 01-20-0014-7102. Because the arbitration was confidential, true and correct copies of
`
`the arbitration documents referenced herein will be provided separately under seal.
`
`17.
`
`Petitioners asserted that the Parties agreed to certain terms in the Settlement
`
`Agreement and WellCare memorialized incorrect information either by mistake or fraud and
`
`WellCare cannot now rely on this incorrect information to seek recoupment.
`
`18.
`
`19.
`
`Both Petitioners and WellCare moved for summary judgment.
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`In short, Petitioners argued that the information WellCare provided was incorrect
`
`based on a mutual mistake and that the Settlement Agreement should be reformed on that ground.
`
`Petitioners also alternatively argued that WellCare fraudulently misrepresented information
`
`memorialized in the Settlement Agreement, Petitioners reasonably relied on that information, and
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`the Settlement Agreement should be reformed to reflect the Parties’ agreement.
`
`20.
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`In further support of these arguments, Petitioners cited to binding Kentucky law
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`permitting reformation of contracts based upon mutual mistake or unilateral mistake involving
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`fraudulent or intentional misrepresentation. Petitioners also submitted evidence in the form of
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`deposition testimony and affidavits to support fraud and mistake.
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`4
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`

`

`108DEF3B-C293-4B24-B75C-64CE74717815 : 000005 of 000012
`
`Presiding Judge: HON. PHILLIP J. SHEPHERD (648260)
`
`COM : 000005 of 000009
`000005 of 000009
`
`Case: 3:22-cv-00029-GFVT Doc #: 1-2 Filed: 05/19/22 Page: 6 of 12 - Page ID#: 12
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`21.
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`The Arbitrator denied Petitioners’ motion for summary judgment and granted
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`WellCare’s motion for summary judgment on the issue of contract liability.
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`22.
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`In granting WellCare’s motion, the Arbitrator ignored Petitioners’ material
`
`evidence and disregarded well-established Kentucky law.
`
`23.
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`The Arbitrator did not conduct a hearing on the merits of liability, despite making
`
`findings of fact in the Arbitrator’s Order.
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`24.
`
`Petitioners filed a Motion to Revise the Arbitrator’s Interlocutory Order on
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`Claimants’ and Respondent’s Motions for Summary Disposition, reiterating that Kentucky allows
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`reformation of fully integrated written contracts to correct both mutual mistakes of fact and
`
`unilateral mistakes coupled with fraud, even when the written contract contains an integration or
`
`merger clause.
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`25.
`
`In the Motion to Revise, Petitioners also reiterated material evidence they provided
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`in support of their motion for summary judgment which the Arbitrator did not consider.
`
`26.
`
`Petitioners argued that, at the very least, these facts established a genuine issue of
`
`material fact regarding whether the Settlement Agreement accurately reflected the parties’ mutual
`
`intent at the time of contracting because the incorrect information at least reflected a mistake,
`
`thereby precluding summary judgment in favor of WellCare.
`
`27.
`
`28.
`
`The Arbitrator summarily denied the Motion to Revise without any explanation.
`
`The Parties submitted a joint stipulation regarding the amount of damages, thereby
`
`resolving the only remaining issue left for hearing, but preserving Petitioners’ ability to seek
`
`vacatur of the Arbitrator’s award.
`
`29.
`
`On May 18, 2022, the Arbitrator entered an arbitration award in WellCare’s favor.
`
`A copy of the Arbitrator’s award will be filed separately under seal.
`
`5
`
`

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`108DEF3B-C293-4B24-B75C-64CE74717815 : 000006 of 000012
`
`Presiding Judge: HON. PHILLIP J. SHEPHERD (648260)
`
`COM : 000006 of 000009
`000006 of 000009
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`Case: 3:22-cv-00029-GFVT Doc #: 1-2 Filed: 05/19/22 Page: 7 of 12 - Page ID#: 13
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`GROUNDS FOR VACATUR
`
`COUNT I: VACATUR OF THE ARBITRATION AWARD UNDER
`THE FEDERAL ARBITRATION ACT
`
`Petitioners adopt by reference the paragraphs set forth above.
`
`The FAA authorizes a court to vacate an arbitrator’s award if the arbitrator exceeds
`
`30.
`
`31.
`
`its powers by manifestly disregarding the law. See 9 U.S.C. § 10(a)(4).
`
`32.
`
`The Arbitrator’s Order was in manifest disregard of the law, and flies in the face of
`
`clearly established precedent holding that contracts can be reformed based on mutual mistake or a
`
`unilateral mistake plus fraud.
`
`33.
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`The Arbitrator refused to adhere to that clearly defined legal principle by holding
`
`that the review was limited to the four-corners of the contract despite allegations supported by
`
`evidence showing that the Settlement Agreement was predicated on either mutual mistake or a
`
`unilateral mistake plus fraud and granting summary judgment to WellCare.
`
`34.
`
`An arbitrator’s award can also be vacated under the FAA where the arbitrator
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`refuses to hear evidence pertinent and material to the controversy or any other misbehavior by
`
`which the rights of any party have been prejudiced. See 9 U.S.C. § 10(a)(3).
`
`35.
`
`In granting summary judgment to Wellcare on the issue of contract liability, the
`
`Arbitrator refused to consider evidence that was material to this controversy.
`
`36.
`
`The Arbitrator granted WellCare’s motion for summary judgment on liability
`
`without conducting a hearing on the merits.
`
`37.
`
`38.
`
`This refusal to consider this evidence prejudiced Petitioners.
`
`In granting WellCare’s motion for summary judgment despite material evidence to
`
`the contrary, making findings of fact in WellCare’s favor without conducting a hearing, and
`
`6
`
`

`

`108DEF3B-C293-4B24-B75C-64CE74717815 : 000007 of 000012
`
`Presiding Judge: HON. PHILLIP J. SHEPHERD (648260)
`
`COM : 000007 of 000009
`000007 of 000009
`
`Case: 3:22-cv-00029-GFVT Doc #: 1-2 Filed: 05/19/22 Page: 8 of 12 - Page ID#: 14
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`grossly misapplying clearly established law, the Arbitrator exhibited evident partiality in
`
`WellCare’s favor. See 9 U.S.C. § 10(a)(2)
`
`39.
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`Accordingly, the Court should vacate the arbitration award issued in the Arbitration
`
`pursuant to 9 U.S.C. § 10(a)(2), (3), & (4).
`
`COUNT II: VACATUR OF THE ARBITRATION AWARD UNDER
`THE KENTUCKY UNIFORM ARBITRATION ACT
`
`Petitioners adopt by reference the allegations set forth above.
`
`If the FAA does not apply, under the KUAA, an arbitrator’s award can also be
`
`40.
`
`41.
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`vacated if the arbitrator exceeds its powers. See Ky. Rev. Stat. 417.160(1)(c).
`
`42.
`
`The Arbitrator’s Order exceeded its authority because it was in manifest disregard
`
`of the law such that the award was not fairly and honestly made.
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`43.
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`The law of reformation of fully integrated written contracts to correct mutual
`
`mistakes of fact and unilateral mistakes coupled with fraud is clearly defined and not subject to
`
`reasonable debate.
`
`44.
`
`The Arbitrator refused to adhere to that clearly defined legal principle by holding
`
`that the review was limited to the four-corners of the contract despite evidence showing that the
`
`Settlement Agreement was predicated on either mutual mistake or a unilateral mistake plus fraud
`
`and granting summary judgment to WellCare.
`
`45.
`
`An arbitrator’s award can also be vacated under the KUAA where the arbitrator
`
`refuses to hear evidence material to the controversy or otherwise conducted the hearing contrary
`
`to the KUAA’s hearing requirements as to prejudice substantially the rights of a party. See Ky.
`
`Rev. Stat. § 417.160(1)(d).
`
`46.
`
`The Arbitrator refused to consider evidence that was material to this controversy.
`
`7
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`

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`108DEF3B-C293-4B24-B75C-64CE74717815 : 000008 of 000012
`
`Presiding Judge: HON. PHILLIP J. SHEPHERD (648260)
`
`COM : 000008 of 000009
`000008 of 000009
`
`Case: 3:22-cv-00029-GFVT Doc #: 1-2 Filed: 05/19/22 Page: 9 of 12 - Page ID#: 15
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`47.
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`The Arbitrator granted WellCare’s motion for summary judgment on liability
`
`without conducting a hearing on the merits.
`
`48.
`
`49.
`
`This refusal to consider this evidence prejudiced Petitioners.
`
`In granting WellCare’s motion for summary judgment despite material evidence to
`
`the contrary, making findings of fact in WellCare’s favor without conducting a hearing, and
`
`grossly misapplying clearly established law, the Arbitrator exhibited evident partiality in
`
`WellCare’s favor. See Ky. Rev. Stat. 417.160(1)(b).
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`50.
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`Accordingly, the Court should vacate the arbitration award issued in the Arbitration
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`pursuant to Ky. Rev. Stat. 417.160(1)(b), (c), & (d).
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`
`
`WHEREFORE, Petitioners respectfully requests that the Court:
`
`A.
`
`B.
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`Set a schedule for the parties to submit briefing on the issues raised in this Petition;
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`Issue an order vacating the arbitration award dated May 18, 2022, and either resolve
`
`the issues presented or direct the Arbitrator to conduct rehearing; and
`
`C.
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`Award Petitioners such other and further relief as this Court deems just and proper.
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`
`
`
`
`8
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`

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`108DEF3B-C293-4B24-B75C-64CE74717815 : 000009 of 000012
`
`Presiding Judge: HON. PHILLIP J. SHEPHERD (648260)
`
`COM : 000009 of 000009
`000009 of 000009
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`Case: 3:22-cv-00029-GFVT Doc #: 1-2 Filed: 05/19/22 Page: 10 of 12 - Page ID#: 16
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`Respectfully submitted,
`
`BRADLEY ARANT BOULT CUMMINGS LLP
`
`
`
`By: s/ Edmund S. Sauer
` Russell B. Morgan (No. 85355)
`
`Edmund S. Sauer (No. 90392)
`
`1600 Division Street, Suite 700
` Nashville, Tennessee 37203
`
`Tel: (615) 252-2311
`
`Fax: (615) 252-6311
`
`rmorgan@bradley.com
`
`esauer@bradley.com
`
`
`Attorneys for Petitioners
`
`
`
`
`
`9
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`

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`Case: 3:22-cv-00029-GFVT Doc #: 1-2 Filed: 05/19/22 Page: 11 of 12 - Page ID#: 17
`AOC-E-105           Sum Code: CI
`22-CI-00391
`Case #:
`Rev. 9-14
`CIRCUIT
`FRANKLIN
`
`Court:
`
`County:
`
`Commonwealth of Kentucky
`Court of Justice Courts.ky.gov
`
`108DEF3B-C293-4B24-B75C-64CE74717815 : 000010 of 000012
`
`Presiding Judge: HON. PHILLIP J. SHEPHERD (648260)
`
`CI : 000001 of 000001
`000001 of 000001
`
`CR 4.02; Cr Official Form 1
`
`CIVIL SUMMONS
`
`Plantiff, LIFEPOINT CORPORATE SERVICES GP ET AL VS. WELLCARE HEALTH IN, Defendant
`
`TO: WELLCARE HEALTH INSURANCE CO. OF KENTUCKY
`13551 TRITON PARK BLVD.
`SUITE 1800
`LOUISVILLE, KY 40223
`
`Memo: Registered Agent of Service exists.
`
`The Commonwealth of Kentucky to Defendant:
`
` You are hereby notified that a legal action has been filed against you in this Court demanding relief as shown on
`the document delivered to you with this Summons.  Unless a written defense is made by you or by an attorney
`on your behalf within twenty (20) days following the day this paper is delivered to you, judgment by default may be
`taken against you for the relief demanded in the attached complaint.
`
`The name(s) and address(es) of the party or parties demanding relief against you or his/her (their) attorney(s) are shown on the
`document delivered to you with this Summons.
`
`Franklin Circuit Clerk
` Date: 5/18/2022
`
`This Summons was:
`
`o
`
`Served by delivering a true copy and the Complaint (or other initiating document)
`
`Proof of Service
`
`To:
`o Not Served because:
`
`Date:
`
`, 20
`
`Summons ID: @00001076350 ,
`CIRCUIT: 22-CI-00391 Sheriff Service
`LIFEPOINT CORPORATE SERVICES GP ET AL VS. WELLCARE HEALTH IN
`
`Page 1 of 1
`
`Served By
`
`Title
`
`

`

`Case: 3:22-cv-00029-GFVT Doc #: 1-2 Filed: 05/19/22 Page: 12 of 12 - Page ID#: 18
`AOC-E-105           Sum Code: CI
`22-CI-00391
`Case #:
`Rev. 9-14
`CIRCUIT
`FRANKLIN
`
`Court:
`
`County:
`
`Commonwealth of Kentucky
`Court of Justice Courts.ky.gov
`
`108DEF3B-C293-4B24-B75C-64CE74717815 : 000011 of 000012
`
`Presiding Judge: HON. PHILLIP J. SHEPHERD (648260)
`
`CI : 000001 of 000001
`000001 of 000001
`
`CR 4.02; Cr Official Form 1
`
`CIVIL SUMMONS
`
`Plantiff, LIFEPOINT CORPORATE SERVICES GP ET AL VS. WELLCARE HEALTH IN, Defendant
`
`TO: CT CORPORATION SYSTEM
`306 W. MAIN STREET
`SUITE 512
`FRANKFORT, KY 40601
`
`Memo: Related party is WELLCARE HEALTH INSURANCE CO. OF KENTUCKY
`
`The Commonwealth of Kentucky to Defendant:
`WELLCARE HEALTH INSURANCE CO. OF KENTUCKY
`
` You are hereby notified that a legal action has been filed against you in this Court demanding relief as shown on
`the document delivered to you with this Summons.  Unless a written defense is made by you or by an attorney
`on your behalf within twenty (20) days following the day this paper is delivered to you, judgment by default may be
`taken against you for the relief demanded in the attached complaint.
`
`The name(s) and address(es) of the party or parties demanding relief against you or his/her (their) attorney(s) are shown on the
`document delivered to you with this Summons.
`
`Franklin Circuit Clerk
` Date: 5/18/2022
`
`This Summons was:
`
`o
`
`Served by delivering a true copy and the Complaint (or other initiating document)
`
`Proof of Service
`
`To:
`o Not Served because:
`
`Date:
`
`, 20
`
`Summons ID: @00001076351 ,
`CIRCUIT: 22-CI-00391 Sheriff Service
`LIFEPOINT CORPORATE SERVICES GP ET AL VS. WELLCARE HEALTH IN
`
`Page 1 of 1
`
`Served By
`
`Title
`
`