478 S.W.3d 306 (Ky. 2015), 2013-SC-000426-I, Extendicare Homes, Inc. v. Whisman

Docket Nº:2013-SC-000426-I, 2013-SC-000430-I, 2013-SC-000431-I
Citation:478 S.W.3d 306
Opinion Judge:VENTERS, JUSTICE
Party Name:EXTENDICARE HOMES, INC. D/B/A SHADY LAWN NURSING HOME; EXTENDICARE, INC.; EXTENDICARE HEALTH NETWORK, INC.; EXTENDICARE REIT; EXTENDICARE L.P.; EXTENDICARE HOLDINGS, INC.; EXTENDICARE HEALTH SERVICES, INC.; EXTENDICARE HEALTH FACILITY HOLDINGS, INC.; JOHN DOES 1 THROUGH 5; AND UNKNOWN DEFENDANTS, MOVANTS v. BELINDA WHISMAN AND TONY ADAMS, AS CO...
Attorney:FOR EXTENDICARE HOMES, INC. D/B/A SHADY LAWN NURSING HOME; EXTENDICARE, INC.; EXTENDICARE HEALTH NETWORK, INC.; EXTENDICARE REIT; EXTENDICARE L.P.; EXTENDICARE HOLDINGS, INC.; EXTENDICARE HEALTH SERVICES, INC.; EXTENDICARE HEALTH FACILITY HOLDINGS, INC.; JOHN DOES 1 THROUGH 5; AND UNKNOWN DEFENDA...
Judge Panel:Barber, Cunningham, and Keller, JJ., concur. Abramson, J., dissents by separate opinion in which Minton, C.J. and Noble, J., join. Noble, J., dissents by separate opinion in which Minton, C.J., joins. Barber, Cunningham, and Keller, JJ., concur. Abramson, J., dissents by separate opinion in which...
Case Date:September 24, 2015
Court:Supreme Court of Kentucky
 
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478 S.W.3d 306 (Ky. 2015)

EXTENDICARE HOMES, INC. D/B/A SHADY LAWN NURSING HOME; EXTENDICARE, INC.; EXTENDICARE HEALTH NETWORK, INC.; EXTENDICARE REIT; EXTENDICARE L.P.; EXTENDICARE HOLDINGS, INC.; EXTENDICARE HEALTH SERVICES, INC.; EXTENDICARE HEALTH FACILITY HOLDINGS, INC.; JOHN DOES 1 THROUGH 5; AND UNKNOWN DEFENDANTS, MOVANTS

v.

BELINDA WHISMAN AND TONY ADAMS, AS CO-ADMINISTRATORS OF THE ESTATE OF VAN B. ADAMS, DECEASED, RESPONDENTS

KINDRED NURSING CENTERS LIMITED PARTNERSHIP D/B/A WINCHESTER CENTRE FOR HEALTH AND REHABILITATION N/K/A FOUNTAIN CIRCLE HEALTH AND REHABILITATION; KINDRED NURSING CENTERS EAST, LLC; KINDRED HOSPITALS LIMITED PARTNERSHIP; KINDRED HEALTHCARE, INC.; AND KINDRED HEALTHCARE OPERATING, INC., MOVANTS

v.

JANIS E. CLARK, EXECUTRIX OF THE ESTATE OF OLIVE G. CLARK, DECEASED, AND ON BEHALF OF THE WRONGFUL DEATH BENEFICIARIES OF OLIVER G. CLARK, RESPONDENTS

KINDRED NURSING CENTERS LIMITED PARTNERSHIP D/B/A WINCHESTER CENTRE FOR HEALTH AND REHABILITATION N/K/A FOUNTAIN CIRCLE HEALTH AND REHABILITATION; KINDRED NURSING CENTERS EAST, LLC; KINDRED HOSPITALS LIMITED PARTNERSHIP; KINDRED HEALTHCARE, INC.; AND KINDRED HEALTH CARE OPERATING, INC., MOVANTS

v.

BEVERLY WELLNER, INDIVIDUALLY AND ON BEHALF OF THE ESTATE OF JOE P. WELLNER, DECEASED, AND ON BEHALF OF THE WRONGFUL DEATH BENEFICIARIES OF JOE P. WELLNER, RESPONDENTS

Nos. 2013-SC-000426-I, 2013-SC-000430-I, 2013-SC-000431-I

Supreme Court of Kentucky

September 24, 2015

Corrected: October 9, 2015.

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ON REVIEW FROM COURT OF APPEALS. CASE NO. 2012-CA-001936-I. TRIGG CIRCUIT COURT NO. 12-CI-00100.

ON REVIEW FROM COURT OF APPEALS. CASE NO. 2012-CA-002113-I. CLARK CIRCUIT COURT NO. 10-CI-00469.

ON REVIEW FROM COURT OF APPEALS. CASE NO. 2012-CA-002112-I. CLARK CIRCUIT COURT NO. 10-CI-00472.

FOR EXTENDICARE HOMES, INC. D/B/A SHADY LAWN NURSING HOME; EXTENDICARE, INC.; EXTENDICARE HEALTH NETWORK, INC.; EXTENDICARE REIT; EXTENDICARE L.P.; EXTENDICARE HOLDINGS, INC.; EXTENDICARE HEALTH SERVICES, INC.; EXTENDICARE HEALTH FACILITY HOLDINGS, INC.; JOHN DOES 1 THROUGH 5; AND UNKNOWN DEFENDANTS, APPELLANTS: Edmund John Benson, Kathryn Todd Martin, Benson Law Offices; Jason Patrick Renzelmann, William James George, Frost Brown Todd, LLC.

FOR BELINDA WHISMAN AND TONY ADAMS, AS CO-ADMINISTRATORS OF THE ESTATE OF VAN B. ADAMS, DECEASED, APPELLEES: Cameron C. Jehl, Carey Lynn Acerra; Robert Earl Salyer, Wilkes & McHugh, P.A.

FOR KINDRED NURSING CENTERS LIMITED PARTNERSHIP D/B/A WINCHESTER CENTRE FOR HEALTH AND REHABILITATION N/K/A FOUNTAIN CIRCLE HEALTH AND REHABILITATION; KINDRED NURSING CENTERS EAST, LLC; KINDRED HOSPITALS LIMITED PARTNERSHIP; KINDRED HEALTHCARE, INC.; AND KINDRED HEALTHCARE OPERATING, INC., APPELLANTS: Donald Lee Miller, II, Kristin M. Lomond, James Peter Cassidy, III, Quintairos, Prieto, Wood & Boyer P.A.

FOR JANIS E. CLARK, EXECUTRIX OF THE ESTATE OF OLIVE G. CLARK, DECEASED, AND ON BEHALF OF THE WRONGFUL DEATH BENEFICIARIES OF OLIVER G. CLARK AND BEVERLY WELLNER, INDIVIDUALLY AND ON BEHALF OF THE ESTATE OF JOE P. WELLNER, DECEASED, AND ON BEHALF OF THE WRONGFUL DEATH BENEFICIARIES OF JOE P. WELLNER, APPELLEES: James T. Gilbert, Coy, Gilbert & Gilbert, Richard Eric Circeo, Robert Earl Salyer, Wilkes & Mchugh, P.A.

Barber, Cunningham, and Keller, JJ., concur. Abramson, J., dissents by separate opinion in which Minton, C.J. and Noble, J., join. Noble, J., dissents by separate opinion in which Minton, C.J., joins.

OPINION

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VENTERS, JUSTICE

This decision consolidates three cases accepted by this Court for discretionary review pursuant to CR 65.09. By way of motions for interlocutory relief under CR 65.09, Extendicare Homes, Inc. d/b/a/ Shady Lawn Nursing Home (" Extendicare" ), and its affiliated entities,1 and Kindred Nursing Centers Limited Partnership d/b/a Winchester Centre For Health and Rehabilitation n/k/a Fountain Circle Health and Rehabilitation (" Kindred" ) and its affiliated entities,2 seek relief from orders of the Court of Appeals refusing to compel arbitration of disputes pending in Clark Circuit Court and the Trigg Circuit Court.

Each of the three cases originated with the filing of an action in the circuit court asserting claims against the nursing home for personal injuries suffered by the nursing home resident, violations of KRS 216.510 et seq.,3 and for wrongful death of the resident. In each case, at the time of the resident's admission to the nursing home, an attorney-in-fact for the resident executed a written document providing that any claims or disputes arising out of the relationship between the resident and the nursing home would be submitted to arbitration, rather than adjudication in the courts. Upon the commencement of each case in circuit court, the defendant nursing home facility moved the court to dismiss the action and compel the parties to submit the claims to a formal arbitration proceeding. In each case, citing our opinion in Ping v. Beverly Enterprises, Inc., 376 S.W.3d 581 (Ky. 2012), cert. denied, 133 S.Ct. 1996, 185 L.Ed.2d 879 (2013), the circuit court denied the motion on the grounds that the respective power-of-attorney instruments did not authorize the resident's attorney-in-fact to waive the resident's right to access to the courts for the resolution of disputes.

Kindred and Extendicare each sought interlocutory relief in the Court of Appeals pursuant to CR 65.07. The Court of Appeals declined to grant the requested relief. Kindred and Extendicare then sought relief in this Court.

The central issue is whether, based upon the language of the particular power-of-attorney instrument, an arbitration agreement was validly formed between the respective nursing home facility and the resident whose interests were thereby affected. For the reasons set forth below, we conclude in two of the cases, Extendicare Homes, Inc., et al, v. Whisman (Case No. 2013-SC-426-I) and Kindred Nursing Centers Limited Partnership, et al., v. Wellner (Case No. 2013-SC-431-I), that the authority to enter into a pre-dispute arbitration agreement was not among the powers granted to respective attorney-in-fact and, therefore the arbitration agreements were not formed with the assent of the party to be bound thereby. Lacking

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the essential element of assent, we conclude that the arbitration agreements in those cases were never validly formed.

We further conclude that without a clear and convincing manifestation of the principal's intention to do so, we will not infer the delegation to an agent of the authority to waive a fundamental personal right so constitutionally revered as the " ancient mode of trial by jury." 4 Consequently, because none of the power-of-attorney instruments involved in these cases provide a manifestation of the principal's intent to delegate that power to his agent, we conclude that the agent was not so authorized, and that the principal's assent to the waiver was never validly obtained. Accordingly, we deny the motions for interlocutory relief. In so doing, we affirm the orders of the Court of Appeals.

At the outset, however, it is appropriate that we direct our attention specifically to the cause of action pled in each case for wrongful death. We held in Ping, and we reiterate today: the decedent whose death becomes the basis of a wrongful death claim had no authority during his lifetime, directly or through the actions of his attorney-in-fact, to prospectively bind the beneficiaries of the wrongful death claim to an arbitration agreement.

I. THE WRONGFUL DEATH BENEFICIARIES ARE NOT BOUND BY THE ARBITRATION AGREEMENTS IN ISSUE HERE

In Ping, 376 S.W.3d at 597-600, we squarely confronted the question of whether a decedent, by her own action or through the action of her attorney-in-fact, could enter into contracts of any kind that would bind the rights of the beneficiaries of wrongful death claims made in connection with her own death. Based upon well-settled precedent and upon the constitutional and statutory structure of Kentucky's wrongful death law, we determined that a wrongful death claim does not " derive from any claim on behalf of the decedent, and [the wrongful death beneficiaries] do not succeed to the decedent's dispute resolution agreements." Id. at 600.

Section 241 of the Kentucky Constitution declares: The General Assembly may provide how the recovery [from a wrongful death action] shall go and to whom belong." In KRS 411.130(2), the General Assembly designated the persons to whom such claims belong. In Ping, we quoted Moore v. Citizens Bank of Pikeville, 420 S.W.2d 669, 672 (Ky. 1967), holding that the wrongful death action is not derivative . . . [It] is distinct from any [cause] that the deceased may have had if he had survived." Id. We recently reaffirmed that holding in Pete v. Anderson :

Under the plain language of the statute, the cause of action 'belongs' to the beneficiaries of the wrongful death claim, as the amount recovered in a wrongful death action 'shall be for the benefit of and go to the kindred of the deceased[.]' KRS 411.130(2) . . . . With no interest in the recovery, the personal representative is a " nominal" party, as the 'real parties in interest are the beneficiaries whom [the personal representative] represents.'" (citing Vaughn's Administrator, 297 Ky. 309, 179 S.W.2d 441, 445. (1944)).

413 S.W.3d 291, 299 (Ky. 2013). Moreover, Pete expressly and explicitly noted that " Ping. . . puts to rest any dispute as to whether the statutory beneficiaries are the real parties in interest to a wrongful death action." Pete...

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