CL SNF, LLC v. Fountain
Decision Date | 21 June 2022 |
Docket Number | A20A0773 |
Citation | 364 Ga.App. 371,875 S.E.2d 370 |
Parties | CL SNF, LLC et al. v. FOUNTAIN. |
Court | Georgia Court of Appeals |
Karen Lea Smiley, Kevin Emmett Quirk, Atlanta, Kellie Turner Holt, for Appellant.
Gretchen Holt Wagner, Jennifer Lauren Peterson, Atlanta, Michael Brian Terry, Atlanta, Katherine G. Hughes, Bethany Lynn Schneider, for Appellee.
In CL SNF, LLC v. Fountain , 355 Ga. App. 176, 843 S.E.2d 605 (2020), we affirmed the denial of a motion to compel arbitration filed by CL SNF, LLC d/b/a Clinch Healthcare Center, RWC Healthcare, LLC, PWW Healthcare, LLC, and Beacon Health Management, LLC (collectively, "Clinch") in an action filed against them by Minnie Fountain on behalf of her nephew Leroy Wiggins.1 In that case, we held that Clinch had failed to establish that Fountain had the authority to sign the applicable arbitration agreement on behalf of Wiggins. Id. at 184 (1), 843 S.E.2d 605. But the Supreme Court of Georgia reversed our decision and remanded the case for further consideration in light of its opinion. CL SNF, LLC v. Fountain , 312 Ga. 416, 863 S.E.2d 116 (2021). Accordingly, we vacate our earlier opinion and adopt the opinion of the Supreme Court as our own. In addition, we address the trial court's determination that the arbitration agreement at issue was not enforceable because it was unconscionable as well as other challenges to that agreement. For the reasons that follow, we affirm in part and reverse in part.2
As set forth in our prior opinion, the record demonstrates that Wiggins was a mentally incapacitated adult, Fountain was appointed his guardian, and in November 2006, Letters of Guardianship of Adult Ward were issued by the Probate Court of Clinch County. In March 2014, Wiggins was admitted to Clinch Healthcare Center, a skilled nursing facility ("CHC"). In connection with Wiggins's admission, Fountain signed a Facility Admission Agreement, which contained an arbitration clause, and a separate Arbitration Agreement. The parties to the Arbitration Agreement were Clinch Healthcare, referred to as the Facility, and Fountain, referred to as the Resident or Resident's Representative. Wiggins did not sign the Arbitration Agreement.
In addition, the Arbitration Agreement provided that the "Resident has the right to seek legal counsel concerning this Agreement; [t]he signing of the Agreement is not a precondition to admission, expedited admission, or the furnishing of services to the Resident by the Facility; and [t]his Agreement may be revoked by written notice to the Facility from the Resident within thirty (30) days of signature."
Fountain, however, submitted an affidavit in which she averred that she was told that all of the documents she was given had to be signed in order for Wiggins to be admitted to the facility, that no one explained any of the documents to her, and that she was not informed that she had the right to contact an attorney if she had questions about any of the documents. She also averred that she did not discuss the document with Wiggins or seek his permission to sign it.
Fountain alleged in her complaint that while Wiggins was a resident of CHC, he was sexually battered and assaulted on multiple occasions by his roommate and Clinch failed to address the roommate's pattern of behavior, which also extended to sexual assaults against other residents. In response, Clinch answered and filed a motion to compel arbitration under the Arbitration Agreement and to stay proceedings. The trial court denied the motion to compel and concluded that the Arbitration Agreement was unenforceable because it was unconscionable.
Clinch appealed, challenged the trial court's determination that the Arbitration Agreement was unconscionable, and addressed other issues regarding the validity of the Arbitration Agreement that were raised by Fountain in the trial court. Those issues include the existence of consideration for the Arbitration Agreement, the impact of the federal Medicaid Act and its implementing regulations, the applicability of the Federal Arbitration Act, and whether the Arbitration Agreement precludes vindication of Wiggins's rights under Georgia's Bill of Rights for Residents of Long-Term Care Facilities.
Whether a valid and enforceable arbitration agreement exists is a question of law for the court, and we therefore review a trial court's order granting or denying a motion to compel arbitration de novo. OCGA § 13-2-1 ; McKean v. GGNSC Atlanta , 329 Ga. App. 507, 509 (1), 765 S.E.2d 681 (2014). And the validity of an arbitration agreement is "generally governed by state law principles of contract formation." Triad Health Mgmt. of Georgia, III v. Johnson , 298 Ga. App. 204, 206 (2), 679 S.E.2d 785 (2009) ; see also Lynn v. Lowndes County Health Svcs. , 354 Ga. App. 242, 245 (2), n.3, 840 S.E.2d 623 (2020) ( ).
1. We first address whether the trial court erred in determining that the Arbitration Agreement was unconscionable. We conclude that it did so err.
The Supreme Court of Georgia has defined an unconscionable contract as "one that ‘no sane man not acting under a delusion would make and that no honest man would take advantage of,’ one that is ‘abhorrent to good morals and conscience,’ and ‘one where one of the parties takes a fraudulent advantage of another.’ " (Punctuation omitted.) Innovative Images v. Summerville , 309 Ga. 675, 684 (3) (b), 848 S.E.2d 75 (2020), quoting NEC Technologies v. Nelson , 267 Ga. 390, 391 (1), n. 2, 478 S.E.2d 769 (1996).3 "We examine unconscionability from the perspective of substantive unconscionability, which looks to the contractual terms themselves, and procedural unconscionability, which considers the process of making the contract." (Citation and punctuation omitted.) Innovative Images , 309 Ga. at 684-685 (3) (b), 848 S.E.2d 75.
Focusing on the terms of the contract, the trial court determined that the Arbitration Agreement was substantively unconscionable. The trial court declared the agreement "decidedly one-sided" because it required residents, like Wiggins, to surrender their rights to a jury trial for any claim resulting from their stay at CHC whereas the facility retained its right to a jury trial in all disputes that did not involve nursing home fees. We do not read the scope of the agreement so narrowly.
The Arbitration Agreement provides that "any and all claims or controversies" arising out or relating to the Arbitration Agreement, the Facility Admission Agreement, Wiggins's stay at or the care or services provided by Clinch, including "any acts or omissions in connection with such care or services, ... shall be submitted for arbitration." It also details a list of claims that are specifically included, preceded by the phrase "including, without limitation." We read that phrase as a term of illustration or enlargement that provides examples of but does not entirely define the claims subject to arbitration. See Berryhill v. Georgia Community Support & Solutions, Inc. , 281 Ga. 439, 442, 638 S.E.2d 278 (2006) ( ); Bullock v. City of Dallas , 248 Ga. 164, 167 (2) (c), 281 S.E.2d 613 (1981) (). Thus, contrary to the trial court's holding, the terms of the Arbitration Agreement designating the claims subject to arbitration are not so one-sided as to be unconscionable. See generally R. L. Kimsey Cotton Co. v. Ferguson , 233 Ga. 962, 965 (3), 214 S.E.2d 360 (1975) ( ).
As for procedural unconscionability, Fountain contends that she felt coerced into signing the admissions documents, including the Arbitration Agreement, because she was desperate to find a place that would care for Wiggins, was told that she had to sign all of the admissions paperwork for him to be admitted, and felt like she could not take the time to read everything in detail or to ask questions. She also points to her lack of legal training or knowledge, including as to the meaning of arbitration, and the failure of anyone at CHC to explain the terms of the documents she was instructed to sign.
Although it would have been preferable for someone affiliated with Clinch to have explained the Arbitration Agreement in a form and manner that Fountain...
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