Covenant Health v. Estate of Moulds

• Decision Date: 19 August 2008
• Docket Number: No. 2007-CA-01250-COA.,2007-CA-01250-COA.
• Citation: 14 So.3d 736
• Parties: COVENANT HEALTH & REHABILITATION OF PICAYUNE, LP and Covenant Dove, Inc., Appellants, v. ESTATE OF Mittie M. MOULDS, By and Through James BRADDOCK, Administrator for the use and Benefit of the Estate and Wrongful Death Beneficiaries of Mittie M. Moulds, Appellee.
• Court: Mississippi Court of Appeals

14 So.3d 736

COVENANT HEALTH & REHABILITATION OF PICAYUNE, LP and Covenant Dove, Inc., Appellants, v. ESTATE OF Mittie M. MOULDS, By and Through James BRADDOCK, Administrator for the use and Benefit of the Estate and Wrongful Death Beneficiaries of Mittie M. Moulds, Appellee.

No. 2007-CA-01250-COA.

Court of Appeals of Mississippi.

August 19, 2008.

Rehearing Denied December 9, 2008.

John L. Maxey, Paul Hobart Kimble, Jackson, attorneys for appellants.

F.M. Turner, Hattiesburg, attorney for appellee.

Before KING, C.J., GRIFFIS, ISHEE and CARLTON, JJ.

ISHEE, J., for the Court.

¶ 1. James Braddock, on behalf of his deceased mother, Mittie M. Moulds, filed suit against Covenant Health and Rehabilitation of Picayune (Covenant Health) for wrongful death relating to his mother's stay at one of their facilities, the Picayune Convalescent Center. Covenant Health subsequently sought to compel arbitration based on the arbitration clause found in the admissions agreement governing Moulds's stay in that facility. The circuit court refused to compel arbitration, finding that Braddock lacked the power to enter into an arbitration agreement on behalf of Moulds and that the admissions agreement, as a whole, was substantively unconscionable. Aggrieved, Covenant Health appeals, seeking enforcement of the arbitration provision.

¶ 2. In response, Braddock asks this Court to refuse to compel arbitration because: (1) he did not have the legal capacity to bind his mother to arbitration; (2) the arbitration clause in the admissions agreement was not supported by consideration; (3) the arbitration clause is void due to fraud in the inducement; (4) the admissions agreement, as a whole, is substantively unconscionable; and (5) the designated arbitral forum is unavailable.

¶ 3. Finding error, we reverse the judgment of the circuit court and remand this case with instructions to enforce the arbitration clause of the admissions agreement and compel arbitration.

FACTS

¶ 4. Moulds was admitted to the Picayune Convalescent Center on November 16, 2000. At that time, she was suffering from Alzheimer's disease, dementia, and depression. Due to these illnesses, her son, Braddock, signed the admissions agreement on her behalf as her healthcare surrogate. The admissions agreement contained an arbitration clause requiring both parties to submit to binding arbitration in the event of any dispute.

¶ 5. Moulds left the Picayune Convalescent Center on September 20, 2004, and was admitted to a local hospital shortly thereafter. She died in the hospital on October 2, 2004. Braddock sued Covenant Health on behalf of his mother's estate for wrongful death, claiming that the injuries she suffered while in the care of the Picayune Convalescent Center contributed to her death. After the initiation of the lawsuit, Covenant Health sought to stay proceedings in the circuit court and moved to compel arbitration pursuant to the arbitration clause in the admissions agreement. The circuit court denied the motion, and it is from that ruling that Covenant Health now appeals.

DISCUSSION

¶ 6. This Court reviews an order denying a motion to compel arbitration de novo. Vicksburg Partners, L.P. v. Stephens, 911 So.2d 507, 513(¶ 9) (Miss.2005). Although not directly raised by either party in this case, as a threshold issue this Court must determine whether the Federal Arbitration Act (FAA) controls the arbitration agreement presented here.

¶ 7. Our supreme court has previously held that "singular agreements between care facilities and care patients, when taken in the aggregate, affect interstate commerce." Id. at 515(¶ 16). In this case, as in Vicksburg Partners, "since the arbitration clause is a part of a contract (the nursing home admissions agreement) evidencing in the aggregate economic activity affecting interstate commerce, the Federal Arbitration Act is applicable...." Id. at 515-16(¶18).

¶ 8. Having made the determination that the arbitration agreement in this case is governed by the FAA, we must next determine if that arbitration agreement is valid. Again we are guided by the supreme court, which has stated that "[i]n determining the validity of a motion to compel arbitration under the Federal Arbitration Act, courts generally conduct a two-pronged inquiry. The first prong has two considerations: (1) whether there is a valid arbitration agreement and (2) whether the parties' dispute is within the scope of the arbitration agreement." East Ford, Inc. v. Taylor, 826 So.2d 709, 713(¶ 9) (Miss.2002). The second prong involves an inquiry into "whether legal constraints external to the parties' agreement foreclosed arbitration of those claims." Id. at 713(¶ 10) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985)).

¶ 9. With respect to the first prong of the analysis outlined above, "[t]o determine whether the parties agreed to arbitration, we simply apply contract law." Terminix Int'l, Inc., Ltd. P'ship v. Rice, 904 So.2d 1051, 1055(¶ 9) (Miss.2004). Regarding this prong of our inquiry, Braddock asserts that he lacked the capacity to consent to arbitration as his mother's health-care surrogate or, in the alternative, that the arbitration clause is void because it lacked sufficient consideration. We address each of these issues below.

1. Braddock possessed the capacity to bind his mother to arbitration.

¶ 10. Braddock asserts that he did not have the capacity to bind his mother to arbitration while acting as her health-care surrogate under the Uniform Health-Care Decisions Act. Miss.Code Ann. §§ 41-41-201 to -229 (Rev.2005). Braddock does not dispute that he was, in fact, acting as his mother's health-care surrogate for the purposes of the Uniform Health-Care Decisions Act when she was admitted to the Picayune Convalescent Center.

¶ 11. Our supreme court recently addressed this very issue in Covenant Health Rehab. of Picayune, L.P. v. Brown, 949 So.2d 732 (Miss.2007). In Brown, the plaintiffs, as administrators of the estate of their deceased mother, filed a wrongful death suit against the nursing home in which their mother resided prior to her death. Id. at 735(¶ 1). An adult daughter of the decedent signed the admissions agreement as the "responsible party" for her mother upon admission to the facility. Id. The defendants filed a motion to compel arbitration based on the admissions agreement, and the trial court denied that motion. On appeal, the supreme court held that the adult daughter of the patient, acting as a health-care surrogate, had the authority to contractually bind her mother in health-care matters under our Uniform Health-Care Decisions Act. Id. at 736-37(¶ 10).

¶ 12. In reversing the trial court's denial of the motion to compel arbitration in Brown, the supreme court implicitly held that the surrogate's authority to bind the patient extended to the arbitration clause in the admissions agreement. In this case, because Braddock does not dispute that he was acting as his mother's health-care surrogate for the purposes of the Uniform Health-Care Decisions Act, we see no reason to depart from the supreme court's holding in Brown. Therefore, we find that a health-care surrogate, acting under the provisions of the Uniform Health-Care Decisions Act, is capable of binding his or her patient to arbitration. Accordingly, we find that Braddock's argument on this issue is without merit.

2. The arbitration clause does not fail for lack of consideration.

¶ 13. Braddock also asserts that the arbitration clause should fail for lack of consideration. He relies solely on the affidavit of Keri Ladner, the facility administrator for Covenant Health, in making this argument. Braddock points to Ladner's statement that his mother would not have been refused admission to the facility had he objected to the arbitration agreement as evidence that the arbitration clause lacked consideration; therefore, the arbitration clause should have been stricken from the admissions agreement.

¶ 14. We first note that Ladner's statements are irrelevant to the issue of consideration. The only thing her statements represent is an admission that, in retrospect, Braddock could have entered into a more beneficial contract for his mother had he bargained for it. Simply because one party to a contract later admits that the other party could have successfully bargained for more beneficial terms at the time the contract was formed does not mean that the element of the contract not bargained for is void for lack of consideration. In any contract, "[a]ll that is needed to constitute a valid consideration to support an agreement or contract is that there must be either a benefit to the promissor or a detriment to the promisee. If either of these requirements exist, there is a sufficient consideration." Theobald v. Nosser, 752 So.2d 1036, 1040(¶ 15) (Miss.1999).

¶ 15. Second, even if Ladner's statements were relevant to this issue, this Court would be prevented from considering them by the parol evidence rule. It is a well-settled principle of contract law that "as an evidentiary matter, parol evidence to vary the terms of a written contract is inadmissible." Carter v. Citigroup, Inc., 938 So.2d 809, 818(¶ 41) (Miss.2006) (quoting Stephens v. Equitable Life Assurance Soc'y of the United States, 850 So.2d 78, 82(¶ 14) (Miss.2003)). Although parol evidence is sometimes admissible when there has been, among other things, a showing that a contract contains ambiguous language, here there has been no such showing. Neither party has even suggested that there is any ambiguity in the agreement.

¶ 16. Without such a showing, we must look to the agreement of the parties in order to determine whether there was sufficient consideration. Again, in any contract, "[a]ll that is needed to constitute a valid consideration to support an agreement or contract is that there must be either a benefit to the promissor or a detriment...