Curto v. Illini Manors Inc.

• Decision Date: 07 December 2010
• Docket Number: No. 3–10–0260.,3–10–0260.
• Parties: Marilee CURTO, an Administrator of the Estate of Charles Curto, Deceased, Plaintiff–Appellee,v.ILLINI MANORS, INC., an Illinois Corporation, and Pekin Manors, Defendant–Appellant.
• Court: United States Appellate Court of Illinois

405 Ill.App.3d 888

940 N.E.2d 229

346 Ill.Dec. 229

Marilee CURTO, an Administrator of the Estate of Charles Curto, Deceased, Plaintiff–Appellee,

v.ILLINI MANORS, INC., an Illinois Corporation, and Pekin Manors, Defendant–Appellant.

No. 3–10–0260.

Appellate Court of Illinois, Third District.

Dec. 7, 2010.

Kevin M. Miller (argued), Jennifer L. Morris (argued), Quinn, Johnston, Henderson, Pretorius & Cerulo, Peoria, for UDI # 10, LLC.Matthew C. Friedman (argued), James G. Bonebrake, Friedman & Bonebrake, P.C., Chicago, for Marilee Curto.

OPINION

Justice LYTTON delivered the judgment of the court, with opinion.

Plaintiff, Marilee Curto, filed a complaint against defendant, Illini Manors, Inc., and Pekin Manors (Pekin Manors),¹ under the Illinois Nursing Home Care Act (Nursing Home Care Act) ( 210 ILCS 45/1–101 et seq. (West 2008)) for personal injuries her husband suffered while a resident at Pekin Manors and his wrongful death. Defendant moved to dismiss the complaint and compel arbitration. The trial court denied the motion, and we affirm.

On August 9, 2007, Marilee entered into a contract with Pekin Manors, a residential nursing home, to admit and care for her husband, Charles. The contract named Charles as the resident and Marilee as the “Guardian/Responsible Party.” Marilee signed the form on the preprinted signature line which designated her as the “Legal Representative.” Charles did not sign the contract.

The parties also entered into a separate arbitration agreement, which provided that “any and all disputes arising hereunder shall be submitted to binding arbitration and not to a court for determination.” In the arbitration agreement, each party waived its right to a trial by jury. Marilee signed the arbitration agreement above the line that stated “Signature of Resident Representative.” Charles did not sign the arbitration agreement.

On August 13, 2009, Marilee filed a complaint against Pekin Manors pursuant to the Nursing Home Care Act for personal injuries Charles sustained while he was a

[346 Ill.Dec. 232 , 940 N.E.2d 232]

resident. The complaint also sought damages suffered by Charles' next of kin under the Wrongful Death Act (740 ILCS 180/1 et seq. (West 2008)). It further alleged that Charles suffered pain and anguish, which subjected defendant to liability under the Survival Act (755 ILCS 5/27–6 (West 2008)), and that his heirs incurred expenses, which they were entitled to recover under the Rights of Married Persons Act (Family Expense Act) (750 ILCS 65/15 (West 2008)).

Pekin Manors filed a motion to dismiss and to compel arbitration, asserting that the estate was contractually bound by the arbitration agreement Marilee signed when Charles was admitted. After a thorough examination of authority supporting both positions, the trial judge denied the motion. The judge found that “the spouse is not an agent for the other spouse for purposes of an agreement to arbitrate.” He concluded that the arbitration agreement was not valid and enforceable because there was no indication that Marilee had the authority to bind Charles to the mandatory arbitration terms of the contract.

STANDARD OF REVIEW

Initially, the parties dispute the standard of review. Generally, the issue we are asked to consider on an interlocutory appeal is whether there was a sufficient showing to sustain the order of the trial court granting or denying the relief sought. Onni v. Apartment Investment & Management Co., 344 Ill.App.3d 1099, 279 Ill.Dec. 912, 801 N.E.2d 586 (2003). However, where the trial court does not make any factual findings, or the underlying facts are not in dispute and the court's decision is based on a purely legal analysis, we review the trial court's denial of a motion to stay the proceedings and compel arbitration de novo. La Hood v. Central Illinois Construction, Inc., 335 Ill.App.3d 363, 269 Ill.Dec. 788, 781 N.E.2d 585 (2002). Here, the trial court based its decision on the undisputed facts in the record. Thus, our review of the issue is de novo. See La Hood, 335 Ill.App.3d at 364, 269 Ill.Dec. 788, 781 N.E.2d 585.

ANALYSIS

Pekin Manors claims that Marilee was Charles' agent and thus the agreement to arbitration is enforceable against him. It contends that the evidence permitted a finding of agency based on (1) actual authority and (2) apparent authority.

I. Agency

Whether a nonsignatory party is bound to an arbitration agreement is dictated by the ordinary principles of contract and agency. Johnson v. Noble, 240 Ill.App.3d 731, 181 Ill.Dec. 464, 608 N.E.2d 537 (1992). The spouse's signature on an arbitration agreement may bind a nursing home resident if the spouse has the authority to sign the document as the resident's agent. The status of the parties as husband and wife, by itself, does not create an agency relationship. Capital Plumbing & Heating Supply Co. v. Snyder, 2 Ill.App.3d 660, 275 N.E.2d 663 (1971). The agency of the spouse is a question of fact to be proved by direct or circumstantial evidence; there is no presumption that the wife has authority to act for the husband. Fettes, Love & Sieben, Inc. v. Simon, 46 Ill.App.2d 232, 196 N.E.2d 700 (1964). The scope and extent of an agency relationship depend on the terms of the agreement between the principal and the agent and the intention of the parties. Brown v. Kerber Packing Co., 342 Ill.App. 474, 97 N.E.2d 117 (1951). The party claiming an agency relationship must prove it by a preponderance of the evidence.

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Granite Properties Ltd. Partnership v. Granite Investment Co., 220 Ill.App.3d 711, 163 Ill.Dec. 139, 581 N.E.2d 90 (1991).

A. Actual Authority

Pekin Manors first argues that Marilee had actual authority to bind Charles to the arbitration agreement because she signed the admission contract and the arbitration agreement as her husband's “representative.”

In any agency relationship, the principal can be legally bound by action taken by the agent where the principal confers actual authority on the agent. Granite Properties, 220 Ill.App.3d at 714, 163 Ill.Dec. 139, 581 N.E.2d 90. Actual authority may be express or implied. Buckholtz v. MacNeal Hospital, 337 Ill.App.3d 163, 271 Ill.Dec. 511, 785 N.E.2d 162 (2003). Express authority is directly granted to the agent in express terms by the principal and extends only to the powers the principal confers upon the agent. United States v. Schaltenbrand, 930 F.2d 1554 (11th Cir.1991). Such authority may be granted through a written contract, a power of attorney or a court-ordered guardianship. Amcore Bank, N.A. v. Hahnaman–Albrecht, Inc., 326 Ill.App.3d 126, 259 Ill.Dec. 694, 759 N.E.2d 174 (2001) (power of attorney explicitly listed powers given to the attorney-in-fact); 755 ILCS 5/11a–17(a) (West 2006) (guardian has authority as provided in court order under provisions of Probate Act). Implied authority, on the other hand, is actual authority circumstantially proved. Buckholtz, 337 Ill.App.3d at 172, 271 Ill.Dec. 511, 785 N.E.2d 162. It arises when the conduct of the principal, reasonably interpreted, causes the agent to believe that the principal desires him to act on the principal's behalf. See Restatement (Second) of Agency § 26 (1958). For example, implied authority may be established from the circumstances of a case based on prior course of dealing of a similar nature between the alleged agent and principal or from a previous agency relationship. Hartshorn v. State Farm Insurance Co., 361 Ill.App.3d 731, 297 Ill.Dec. 724, 838 N.E.2d 211 (2005); Linowiecki v. Wisniewski, 249 Ill.App. 474 (1928).

In this case, Marilee's signature on the nursing home documents did not confer express or implied authority on her. First, nothing in the record suggests that Charles gave Marilee express authority to make legal decisions on his behalf. The terms of the admission contract and the arbitration agreement did not give Marilee authority to act as Charles' agent, nor did Charles execute a power of attorney appointing Marilee as his agent for that purpose. Second, Pekin Manors failed to demonstrate any implied authority. No evidence indicates that Charles was present and directed Marilee to sign the arbitration agreement as his representative, nor is there any indication in the record that Charles knew Marilee signed the agreement and agreed to or adopted her signature as his own. Thus, Marilee's signature as a representative does not establish that she had actual authority to sign the arbitration agreement on Charles' behalf.

We recognize that this issue is one of first impression in Illinois. However, several other jurisdictions have addressed the authority of a spouse to bind a nursing home resident to an arbitration agreement and have reached similar dispositions. In Dickerson v. Longoria, 414 Md. 419, 995 A.2d 721 (2010), a personal representative signed an arbitration agreement on the resident's behalf when he was admitted to the nursing home. The Maryland Court of Appeals held that the representative, Dickerson, did not have actual authority to sign the arbitration agreement. The court concluded that Dickerson's reference to herself

[346 Ill.Dec. 234 , 940 N.E.2d 234]

as the resident's “legal power of attorney” did not expand her authority absent some evidence that the resident, Bradley, authorized, adopted or acquiesced to the statement. The court specifically noted: “The fact that Dickerson signed the arbitration agreement at issue in this case certainly does not alter Dickerson's authority, as there is no evidence suggesting that Bradley authorized Dickerson to make this type of decision on his behalf.” Dickerson, 995 A.2d at 740.

The majority of jurisdictions have followed Dickerson's reasoning and have concluded that a spouse or other family member did not have actual authority to sign an arbitration agreement on the resident's behalf. Koricic v. Beverly Enterprises–Nebraska, Inc., 278 Neb. 713, 773 N.W.2d 145 (2009) (decedent's son did not...