Arredondo v. SNH SE Ashley River Tenant, LLC, Appellate Case No. 2017-001298
| Decision Date | 14 August 2019 |
| Docket Number | Appellate Case No. 2017-001298,Unpublished Opinion No. 2019-UP-293 |
| Parties | Thayer W. Arredondo, as Personal Representative of the Estate of Hubert Whaley, deceased, Respondent, v. SNH SE Ashley River Tenant, LLC; FVE Managers, Inc.; Five Star Quality Care, Inc.; SNH SE Tenant TRS, Inc.; Senior Housing Properties Trust; SNH TRS, Inc.; Candy D. Cure; John Doe; Jane Doe; Richard Roe Corporation; and Mary Doe Corporation, Defendants, Of which SNE SE Ashley River Tenant, LLC; FVE Managers, Inc.; Five Star Quality Care, Inc.; SNH SE Tenant TRS, Inc.; Senior Housing Properties Trust; SNH TRS, Inc.; and Candy D. Cure are the Appellants. |
| Court | South Carolina Court of Appeals |
THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.
Appeal From Charleston County
J. C. Nicholson, Jr., Circuit Court Judge
REVERSED
G. Mark Phillips and Robert William Whelan, both of Nelson Mullins Riley & Scarborough, LLP, of Charleston, for Appellants.
Kenneth Luke Connor and Christopher Caleb Connor, both of Connor & Connor LLC, of Aiken; and Laura Stewart Jordan, of Augusta, Georgia, for Respondent.
SNE SE Ashley River Tenant, LLC; FVE Managers, Inc.; Five Star Quality Care, Inc.; SNH SE Tenant TRS, Inc.; Senior Housing Properties Trust; SNH TRS, Inc.; and Candy D. Cure (collectively, Appellants) appeal the trial court's denial of their motion to compel arbitration. They assert the trial court erred in holding neither the General Durable Power of Attorney nor the Health Care Power of Attorney provided nursing home resident Hubert Whaley's daughter, Thayer W. Arredondo, with actual or apparent authority to execute the Arbitration Agreement. They also assert the trial court erred in finding the Arbitration Agreement was unconscionable. We reverse.
"Arbitrability determinations are subject to de novo review." Johnson v. Heritage Healthcare of Estill, LLC, 416 S.C. 508, 512, 788 S.E.2d 216, 218 (2016) (quoting Dean v. Heritage Healthcare of Ridgeway, LLC, 408 S.C. 371, 379, 759 S.E.2d 727, 731 (2014)). "Nevertheless, a circuit court's factual findings will not be reversed on appeal if any evidence reasonably supports the findings." Id. (quoting Simpson v. MSA of Myrtle Beach, Inc., 373 S.C. 14, 22, 644 S.E.2d 663, 667 (2007)). "The litigant opposing arbitration bears the burden of demonstrating that he has a valid defense to arbitration." Id. (citing Dean, 408 S.C. at 379, 759 S.E.2d at 731; Gen. Equip. & Supply Co. v. Keller Rigging & Constr., S.C., Inc., 344 S.C. 553, 556, 544 S.E.2d 643, 645 (Ct. App. 2001)). "The policy of the United States and South Carolina is to favor arbitration of disputes." Zabinski v. Bright Acres Assocs., 346 S.C. 580, 596, 553 S.E.2d 110, 118 (2001) (citing Tritech Elec., Inc. v. Frank M. Hall & Co., 343 S.C. 396, 399, 540 S.E.2d 864, 865 (Ct. App. 2000)).
1. We agree with Appellants' argument the trial court erred in holding the authority granted to Arredondo by the two Powers of Attorney did not authorize her to enter into the Arbitration Agreement because arbitration was not specifically listed among the powers.
The Federal Arbitration Act (FAA)1 "makes arbitration agreements 'valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.'" Kindred Nursing Ctrs. Ltd. P'ship v. Clark, 137 S. Ct. 1421, 1426 (2017) (quoting 9 U.S.C.A. § 2). "That statutory provision establishes an equal-treatment principle: A court may invalidate an arbitration agreement based on 'generally applicable contract defenses' like fraud or unconscionability, but not on legal rules that 'apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.'" Id. (quoting AT & T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011)). "[T]he decision to enter into an arbitration agreement primarily concerns the signatory's decision to waive his or her right of access to the courts and right to a trial by jury." Hodge v. UniHealth Post-Acute Care of Bamberg, LLC, 422 S.C. 544, 566-67, 813 S.E.2d 292, 304 (Ct. App. 2018), cert. denied, (S.C. Sup. Ct. Order dated Aug. 21, 2018) (quoting Dickerson v. Longoria, 995 A.2d 721, 736-37 (Md. 2010)).
"A power of attorney is an instrument in writing by which one person, as principal, appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal." Watson v. Underwood, 407 S.C. 443, 454, 756 S.E.2d 155, 161 (Ct. App. 2014) (quoting In re Thames, 344 S.C. 564, 569, 544 S.E.2d 854, 856 (Ct. App. 2001)). The United States Supreme Court rejected the Kentucky Supreme Court's application of its "clear statement rule," which provided a power of attorney could not entitle a representative to enter into an arbitration agreement without specific language granting that authority. Kindred Nursing Ctrs. Ltd. P'ship, 137 S. Ct. at 1426-27. The Supreme Court explained, "Because that rule singles out arbitration agreements for disfavored treatment, we hold that it violates the FAA." Id. at 1425. Under South Carolina law, an act does not have to be specifically enumerated in a power of attorney in order for the agent to be authorized to perform the act on behalf of the principal. See First S. Bank v. Rosenberg, 418 S.C. 170, 181, 790 S.E.2d 919, 925-26 (Ct. App. 2016) (). Applying the equal treatment principal, we hold a power of attorney does not need to explicitly refer to arbitration in order to grant the agent authority to execute an arbitration agreement as long as the powers granted are broad enough to includesuch an act. Thus, we find the trial court erred in imposing a more restrictive requirement for authority to execute an arbitration agreement.
We turn to the language of the Powers of Attorney to determine whether they provided authority for Arredondo to execute the Arbitration Agreement on behalf of her father.
"Our courts have looked to contract law when reviewing actions to set aside or interpret a power of attorney." Stott v. White Oak Manor, Inc., 426 S.C. 568, 577, 828 S.E.2d 82, 87 (Ct. App. 2019), cert. pending, (citing In re Thames, 344 S.C. at 571, 544 S.E.2d at 857; Watson, 407 S.C. at 454, 756 S.E.2d at 161). "The cardinal rule of contract interpretation is to ascertain and give effect to the intention of the parties, and, in determining that intention, the court looks to the language of the contract." Id. (quoting Watson, 407 S.C. at 454-55, 756 S.E.2d at 161). "Whe[n] the language of a contract is plain and capable of legal construction, that language alone determines the instrument's force and effect." Id. (quoting Watson, 407 S.C. at 455, 756 S.E.2d at 161).
We disagree with Arredondo's argument her authority under the General Durable Power of Attorney was limited solely to business affairs. The broad language of this Power of Attorney granted Arredondo authority to execute all instruments concerning all types of property, including "choses in action." Furthermore, this authority extended to "any other property, right or thing." Likewise, the Health Care Power of Attorney was not limited to health care decisions as Arredondo contends. It also authorized Arredondo to pursue legal action and to grant any waiver required by health care providers such as Appellants. But c.f., Hodge, 422 S.C. at 567, 813 S.E.2d at 304 (noting courts in other jurisdictions have held "the decision to sign an arbitration agreement was not a health care decision . . . [when] signing the arbitration agreement was not a prerequisite to admission to a health care facility" (quoting Dickerson, 995 A.2d at 738). Thus, we hold the Powers of Attorney authorized Arredondo to waive the right to jury trial and execute an agreement selecting the forum in which any legal action would be taken.
2. We agree with Appellants' argument the trial court erred in finding the Arbitration Agreement was unconscionable.
Although a court may invalidate an arbitration agreement on the defense of unconscionability, it may not invalidate such an agreement "under state laws applicable only to arbitration provisions." Zabinski, 346 S.C. at 593, 553 S.E.2d at 116. "In South Carolina, unconscionability is defined as the absence of meaningfulchoice on the part of one party due to one-sided contract provisions, together with terms that are so oppressive that no reasonable person would make them and no fair and honest person would accept them." Smith v. D.R. Horton, Inc., 417 S.C. 42, 49, 790 S.E.2d 1, 4 (2016) (quoting Simpson, 373 S.C. at 24-25, 644 S.E.2d at 668). "In analyzing claims of unconscionability of arbitration agreements, . . . [courts should] focus generally on whether the arbitration clause is geared towards achieving an unbiased decision by a neutral decision-maker." One Belle Hall Prop. Owners Ass'n, Inc. v. Trammell Crow Residential Co., 418 S.C. 51, 60, 791 S.E.2d 286, 291 (Ct. App. 2016) (quoting Simpson, 373 S.C. at 25, 644 S.E.2d at 668).
"Absence of meaningful choice on the part of one party generally speaks to the fundamental fairness of the bargaining process in the contract at issue." Simpson, 373 S.C. at 25, 644 S.E.2d at 669. "In determining whether a contract was 'tainted by an absence of meaningful choice,' courts should take into account the nature of the injuries suffered by the plaintiff; whether the plaintiff is a substantial business concern; the relative disparity in the parties' bargaining power; the parties' relative sophistication; whether there is an element of surprise in the inclusion of the challenged clause; and the...
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