Escareno v. Kindred Nursing Ctrs. W., L.L.C.
| Decision Date | 26 January 2016 |
| Docket Number | No. 2 CA–CV 2015–0046.,2 CA–CV 2015–0046. |
| Citation | 366 P.3d 1016 |
| Parties | Aristeo ESCARENO, Personal Representative of the Estate of Maria Escareno, on Behalf of the Estate of Maria Escareno; and Aristeo Escareno, Personal Representative, for and on Behalf of Maria Escareno's Statutory Beneficiaries Pursuant to A.R.S. § 12–612(A), Plaintiff/Appellant, v. KINDRED NURSING CENTERS WEST, L.L.C., A Delaware Limited Liability Company, DBA Hacienda Rehabilitation and Care Center, NKA Kindred Nursing and Rehabilitation–Hacienda; Kindred Healthcare Operating, Inc., A Delaware Corporation; Kindred Healthcare, Inc., A Delaware Corporation; Joseph Chesney, Administrator; and Patrick Kinney, Administrator, Defendants/Appellees. |
| Court | Arizona Court of Appeals |
Law Office of Scott E. Boehm, P.C. By Scott E. Boehm and Wilkes & McHugh, P.A. By Melanie L. Bossie and Mary Ellen Spiece, Phoenix, Counsel for Plaintiff/Appellant.
Quintairos, Prieto, Wood & Boyer, P.A. By Anthony J. Fernandez, Vincent J. Montell, and Rita J. Bustos, Phoenix, Counsel for Defendants/Appellees.
OPINION
¶ 1 Aristeo Escareno, as personal representative of the Estate of Maria Escareno and on behalf of the decedent's statutory beneficiaries, appeals from the trial court's order compelling arbitration of his claim brought under the Adult Protective Services Act (APSA) against Kindred Nursing Centers West, L.L.C., Kindred Healthcare Operating, Inc., Kindred Healthcare, Inc., Joseph Chesney, and Patrick Kinney (collectively, Kindred). On appeal, Aristeo argues the arbitration agreement relied on by Kindred was unenforceable against Maria's estate because it was not signed by Maria and he was not authorized to sign the agreement on her behalf as her agent.1 For the reasons set forth below, we reverse the court's order and remand for further proceedings.
¶ 2 We view the facts in the light most favorable to upholding the trial court's order compelling arbitration.2 Estate of Decamacho ex rel. Guthrie v. La Solana Care and Rehab, Inc., 234 Ariz. 18, n. 1, 316 P.3d 607, 608 n. 1 (App.2014). Maria Escareno moved from Oklahoma to Arizona with her adult son, Aristeo, in 2006 or 2007. While in Arizona, Maria suffered a stroke
and began to develop cognitive disabilities. Aristeo then assumed some of her responsibilities, paying her bills and signing medical documents on her behalf. However, Maria's capacity to live independently continued to deteriorate, and she ultimately was diagnosed with encephalopathy, cognitive deficits, and "a severe case of dementia." At the height of her disability, Maria was coherent at times but had difficulty remembering who Aristeo was, could not "participate in a conversation," and was "childlike."
¶ 3 In May 2009, Arizona Adult Protective Services (APS) opened a case regarding Maria's care because she had little assistance or supervision while Aristeo worked during the day. APS "gave [Aristeo] an ultimatum: Either [he] put her in a home ... to take care of her or [he] could also face ... jail time." He then had Maria admitted to three different assisted-living facilities between October 2009 and April 2010, ultimately choosing Kindred because "there was no other facilities around that would be able to take her because of her dementia."3 At each facility, Aristeo signed the admission documents on behalf of Maria. And, at Kindred, he also signed the alternative dispute resolution (ADR) agreement at issue in this case. It states, in relevant part:
Any and all claims or controversies arising out of or in any way relating to this Agreement or the Resident's stay at the Facility including disputes regarding the interpretation of this Agreement, whether arising out of State or Federal law, whether existing or arising in the future, whether for statutory, compensatory or punitive damages and whether sounding in breach of contract, tort or breach of statutory duties ..., irrespective of the basis for the duty or of the legal theories upon which the Claim is asserted, shall be submitted to alternative dispute resolution as described in this Agreement.
¶ 4 Maria died in April 2011, and, the following year, Aristeo filed the underlying civil action alleging wrongful-death and APSA claims against Kindred. Kindred filed a motion to dismiss and to compel arbitration pursuant to the ADR agreement signed by Aristeo. In his response, Aristeo argued inter alia that he lacked authority to sign the agreement for Maria and that the wrongful-death claim was brought on behalf of Maria's beneficiaries, none of whom had signed the ADR agreement in their own capacity. In response to his agency argument, Kindred countered that "Aristeo's custom of acting on [Maria's] behalf [was] enough to prove agency as a matter of law."
¶ 5 The parties submitted a stipulated set of exhibits, and, after hearing oral argument, the trial court denied the motion as to the wrongful-death claim, but ordered that the parties submit the APSA claim to arbitration and stayed the action pending that claim's resolution.4 This appeal followed.5 We have jurisdiction pursuant to A.R.S. § 12–2101(A)(1). See S. Cal. Edison Co. v. Peabody W. Coal Co., 194 Ariz. 47, ¶¶ 16–20, 977 P.2d 769, 774–75 (1999).
¶ 6 Aristeo argues the trial court erred by compelling arbitration of the APSA claim because he "had no authority to sign the ADR agreement" on behalf of Maria. "Generally, whether agency exists is a question of fact, but when the material facts are not in dispute, the existence of such a relationship is a question of law for the court to decide." Goodman v. Physical Res. Eng'g, Inc., 229 Ariz. 25, ¶ 12, 270 P.3d 852, 856 (App.2011) ; see Salvation Army v. Bryson, 229 Ariz. 204, ¶ 23, 273 P.3d 656, 663 (App.2012). In this case, the parties do not dispute the material facts found in their stipulated set of exhibits, but rather, they dispute the legal significance of those facts. Our review therefore is de novo. See Decamacho, 234 Ariz. 18, ¶ 8, 316 P.3d at 609.
¶ 7 " ‘[T]he fundamental prerequisite to arbitration is the existence of an actual agreement or contract to arbitrate.’ " Id. ¶ 10, quoting Schoneberger v. Oelze, 208 Ariz. 591, ¶ 17, 96 P.3d 1078, 1082 (App.2004) ; see A.R.S. § 12–1501 ().6 Thus, a defendant seeking to compel arbitration must show that the plaintiff accepted the arbitration agreement.See Nationwide Res. Corp. v. Massabni, 134 Ariz. 557, 562, 658 P.2d 210, 215 (App.1982) ; see also Decamacho, 234 Ariz. 18, ¶ 11, 316 P.3d at 610 (). Similarly, if the defendant asserts that an agent of the plaintiff signed the agreement, the defendant bears the burden to show the person in fact was the plaintiff's agent and, thus, had authority to do so. See Goodman, 229 Ariz. 25, ¶ 11, 270 P.3d at 856 ; see also Restatement (Third) of Agency § 6.01 (2006) (describing agency relationship).7
¶ 8 An agent may have authority to act on behalf of a principal through either actual or apparent authority. Best Choice Fund, LLC v. Low & Childers, P.C., 228 Ariz. 502, ¶ 26, 269 P.3d 678, 686–87 (App.2011). "Actual authority ‘may be proved by direct evidence of express contract of agency between the principal and agent or by proof of facts implying such contract or the ratification thereof.’ " Ruesga v. Kindred Nursing Ctrs., L.L.C., 215 Ariz. 589, ¶ 29, 161 P.3d 1253, 1261 (App.2007), quoting Corral v. Fid. Bankers Life Ins. Co., 129 Ariz. 323, 326, 630 P.2d 1055, 1058 (App.1981). Apparent authority, in contrast, arises when "the principal has intentionally or inadvertently induced third persons to believe that such a person was his agent although no actual or express authority was conferred on him as agent." Reed v. Gershweir, 160 Ariz. 203, 205, 772 P.2d 26, 28 (App.1989). In this case, Kindred conceded below that, when Maria arrived at its nursing facility, she did not have the capacity to "intentionally or inadvertently induce[ ]" the staff into believing Aristeo was her agent. Id. Thus, apparent authority cannot apply here. See Ruesga, 215 Ariz. 589, ¶ 30, 161 P.3d at 1261–62. Instead, the parties focus their arguments on whether Maria had granted Aristeo actual authority prior to her admission at the Kindred facility.
¶ 9 Kindred relies exclusively on Ruesga, 215 Ariz. 589, ¶¶ 29–36, 161 P.3d at 1261–63, to support its position. In Ruesga, the plaintiff admitted her husband, who was incapacitated at the time, to an assisted-living facility and signed an ADR agreement on his behalf. Id. ¶¶ 2–5. The plaintiff later filed multiple claims against the facility on behalf of her husband's estate, and the facility moved to dismiss and compel arbitration. Id. ¶ 6. The trial court initially denied the motion, "concluding that ‘[t]he arbitration agreement [wa]s not a valid contract because it [had not been] signed by Mr. Ruesga or his authorized agent.’ " Id. (alterations in Ruesga ). However, later discovery revealed several medical records indicating "a history of [the plaintiff] acting and making decisions on [her husband's] behalf." Id. ¶¶ 7, 35. Based on these documents, the court granted the facility relief from the previous ruling and ordered the parties to resolve the claims through arbitration. Id. ¶ 7.
¶ 10 On special-action review, this court affirmed. Id. ¶¶ 36, 40. As an initial matter, we noted " ‘the degree of proof required to establish and define the agency relationship’ " between spouses is lower than with non-spouses. Id. ¶ 33, quoting State Farm Mut. Auto. Ins. Co. v. Long, 16 Ariz.App. 222, 225, 492 P.2d 718, 721 (1972). We then determined that the newly discovered medical records "not only...
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