Wednesday, March 24, 2021

The Limits on What Is and Is Not Practicing Law

The Limits on What Is and Is Not Practicing Law

     A corporation, LLC or other legal entity, with a limited exception for small claims court, may appear in a Kentucky court only through an attorney.  A member or manager who is not an attorney may not argue the LLC’s case, and an officer of a corporation who is not an attorney may not argue the corporation’s case.  A recent decision from the Kentucky Court of Appeals considered what is, inter alia, arguing the corporation’s case.  Cabinet for Health and Family Services v. Appalachian Hospice Care, Inc., No. 2020-C-0684-MR, 2021 WL 407081 (Ky. App. Feb 5, 2021).

        Appalachian Hospice Care was assessed for Medicaid overpayments.  After exchanging information that resulted in a reduction in the alleged overpayment, and in response to an invitation from the Cabinet, Sharon Branham, Appalachian’s President, requested an “Administrative Hearing” as to the matters in dispute; that was on April 12, 2018..  The Cabinet reminded Appalachian that it needed to represented by an attorney at the hearing, and Appalachian hired counsel to do so.  A pre-hearing conference was held on August 1, 2018, in which Appalachian’s attorney participated.  The Administrative Hearing was then scheduled for February 25-27, 2019. But then, on January 15, 2019, the Cabinet:

[F]iled a motion to dismiss.  The Cabinet claimed that a non-lawyer may not request an administrative hearing on behalf of a corporation because it constitutes the unauthorized practice of law. The Cabinet argued that because Ms. Branham, Appellee’s CEO, was not a lawyer, it was unlawful for her to request a hearing. If the hearing request was unlawful, the Cabinet’s jurisdiction had not been timely invoked and the appeal of the alleged overpayment should be dismissed.

Id., *2. Not surprisingly Appalachian disagreed, but the hearing officer and then the Cabinet dismissed the overpayment appeal on the basis that the request for the hearing was not properly made, i.e., through an attorney.  On Appalachian’s appeal to the Franklin Circuit Court those determinations were rejected. 

On October 21, 2019, … the Franklin Circuit Court reversed the final order entered by the Secretary. The court held that simply requesting a hearing was not the practice of law, and it was proper for Appellee’s CEO to request the hearing. The court also held that the Cabinet should be estopped from seeking dismissal because it did not inform Appellee an attorney was required to request a hearing. The court also noted that it had presided over appeals of Medicaid decisions in the past and took judicial notice that the Cabinet had never before taken the position that an attorney for a corporation must be the one to request a hearing. This appeal followed. 

Id. Affirming the Franklin Circuit Court, the Court of Appeals reviewed and distinguished the authorities relied upon by the Cabinet in its argument that requesting a hearing is the practice of law. Rather:

After examining the above cases and KBA opinion, as well as the definition for the practice of law, we conclude that Appellee’s CEO was not engaged in the practice of law when she requested a hearing. Writing and sending the letter did not require any special legal knowledge and did not give out any legal advice. Any adult with the ability to read and write could have requested a hearing. The request did not need to be in any special format, other than to be in writing, or be written on a specific form. The request was not sent to a court of law and was not required to follow the rules of civil procedure. The Cabinet informed Appellee that all it needed to do to request a hearing was to send a letter to specific Cabinet departments. It then freely gave the necessary mailing addresses to Appellee. Sending this request required no special skill; therefore, it cannot be considered the practice of law.

Id., *5.

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