Fiala v. Bickford Senior Living Grp., LLC

• Citation: 32 N.E.3d 80
• Decision Date: 30 April 2015
• Docket Number: No. 2–14–1160.,2–14–1160.
• Parties: Edward M. FIALA, Jr., Plaintiff–Appellee, v. BICKFORD SENIOR LIVING GROUP, LLC, Defendant–Appellant.
• Court: United States Appellate Court of Illinois

32 N.E.3d 80

Edward M. FIALA, Jr., Plaintiff–Appellee

v.BICKFORD SENIOR LIVING GROUP, LLC, Defendant–Appellant.

No. 2–14–1160.

Appellate Court of Illinois, Second District.

April 30, 2015.

Mark R. Feldhaus, Matthew J. Eddy, Lashly & Baer, P.C., St. Louis, Missouri, for appellant.

Jeffrey S. Deutschman, Deutschman & Associates, P.C., Chicago, for appellee.

OPINION

Justice BIRKETT

delivered the judgment of the court, with opinion.

¶ 1 Defendant, Bickford Senior Living Group, LLC, appeals the judgment of the circuit court of Kane County denying its motion to dismiss the second amended complaint of plaintiff, Edward M. Fiala, Jr., and compel arbitration. Defendant argues that plaintiff's daughter, Susan Kahanic, acting as his attorney-in-fact under a health-care power of attorney, had the power to enter into a contract for plaintiff's medical care and to bind plaintiff to arbitrate disputes arising out of the agreement. Defendant also argues that the claims in plaintiff's complaint fall within the scope of the arbitration provision in question. We determine that plaintiff was validly bound to the arbitration provision by his attorney-in-fact and that his claims are within the scope of the arbitration provision, and thus we reverse the trial court's judgment.

¶ 2 I. BACKGROUND

¶ 3 On December 17, 2013, plaintiff filed a complaint against defendant alleging violations of the Nursing Home Care Act (210 ILCS 45/1–101 et seq.

(West 2012)) and common-law claims, including battery, false imprisonment, intentional infliction of emotional distress, and civil conspiracy. We summarize plaintiff's allegations.

¶ 4 From October 2012 through August 2013, plaintiff (along with his wife) resided in a long-term-care facility owned and operated by defendant and located in St. Charles. Plaintiff alleged that, because defendant's staff considered him to be a burdensome resident who required a lot of attention, he would be placed overnight into “Mary B's” area, where he would receive Paxil

and other unknown drugs. Plaintiff was experiencing a condition similar to Parkinson's disease, and Paxil was contraindicated for that condition. The administration of Paxil and other drugs was without his prior consent, and the placement apart from his wife was against his and her express wishes. Plaintiff alleged that the administration of the drugs, and Paxil in particular, violated the medical instructions in his chart. The drugs reduced his quality of life, caused him fear and confusion, and caused deterioration in his physical condition, and the manner in which they were administered (by removing plaintiff from his apartment) as well as the soporific effects caused a loss of society with his wife.

¶ 5 Plaintiff also alleged that one of defendant's employees entered his apartment without permission and stole items from him and his wife. According to plaintiff, defendant was aware of the employee's identity and actions (as the employee had not limited his activities to plaintiff's apartment), but defendant did nothing to stop the thief.

¶ 6 On March 10, 2014, defendant filed a motion to dismiss the complaint and to enforce the arbitration agreement included in the assisted-living establishment contract (establishment contract) that Kahanic executed on his behalf pursuant to the health-care power of attorney. In the motion to dismiss, defendant made the following pertinent allegations. On October 8, 2012, plaintiff executed an Illinois statutory short-form power of attorney for health care appointing Kahanic as his attorney-in-fact and agent authorized to make decisions for plaintiff. The power of attorney provided pertinently that Kahanic was appointed:

“as [his] attorney-in-fact ( [his] ‘agent’) to act for [him] and in [his] name (in any way [he] could act in person) to make any and all decisions for [him] concerning [his] personal care, medical treatment hospitalization, and health care and to require, withhold or withdraw any type of medical treatment or procedure, even though [his] death [may] ensue.”

Moreover, the power of attorney provided that it “shall become effective on * * * (a) the date of execution hereof.”

¶ 7 Upon being admitted to defendant's assisted-living facility, plaintiff, through Kahanic as attorney-in-fact, executed the establishment contract, setting forth the obligations and duties of plaintiff and defendant during plaintiff's residence at the facility. The establishment contract obligated defendant:

“[t]o provide designated services to [plaintiff], as delineated in the Service Agreement. These services provided by certified and trained assistants shall include: three meals per day including snacks, housekeeping services, laundry services and maintenance services. Also available to [plaintiff] is oversight/supervision of medications, assistance with bathing, (Residents get a standard of 2 baths per week), dressing

assistance with ambulation and ambulatory devices, and transferring from wheelchairs when such assistance is needed. Skilled Nursing services are excluded. However, arrangements may be made for these to be provided by a Medicare certified Home Health agency.”

¶ 8 The establishment contract also included a “Binding Arbitration Provision.” The arbitration provision provided:

“Any controversy, claim or dispute arising out of or relating to this Establishment Contract or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its rules and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The award of the arbitrator(s) shall be final and binding upon the parties without the right of appeal to the courts. The arbitrators will have no authority to award punitive damages or any other damages not measured by the prevailing party's actual damages, and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of the Contract. The parties shall each bear its own costs and expenses and an equal share of the arbitrators' and administrative fees of arbitration.”

We note that the arbitration provision was an integral part of the establishment contract. In other words, a prospective resident's agreement to the arbitration provision (and the other provisions of the establishment contract) was required in order to secure admission into defendant's facility.

¶ 9 Included with the motion to dismiss was an affidavit purporting to state facts that showed that the establishment contract involved interstate commerce. Defendant suggests that the affidavit was included to bring the establishment contract within the Federal Arbitration Act (9 U.S.C. § 1 et seq. (2000)

), which, according to defendant, would provide an additional and independent basis to enforce the contract.

¶ 10 On May 29, 2014, the trial court denied defendant's motion to dismiss. In doing so, the trial court noted that the power of attorney that was attached as an exhibit to defendant's motion was not complete. The trial court also determined that the contract was insufficient because it did not appear to have been executed on behalf of plaintiff; rather, Kahanic endorsed the contract in a way that indicated that she had read it but not executed it.

¶ 11 On June 4, 2014, defendant filed a motion to reopen the proofs on its motion to dismiss. Defendant attached the complete power of attorney executed by plaintiff and Kahanic, which included the portion omitted from the original exhibit attached to the motion to dismiss. On September 12, 2014, the trial court allowed defendant to supplement the record with the complete power of attorney.

¶ 12 On October 27, 2014, the parties again argued the motion to dismiss. Following the argument, the trial court denied the motion to dismiss. This time, the trial court determined that Kahanic was plaintiff's agent pursuant to the health-care power of attorney. The establishment contract included in its provisions a rental agreement and a service agreement that included medical services. The court further determined that the establishment contract also included the arbitration provision, which required that “[a]ny controversy, claim or dispute arising out of or relating to” the establishment contract “be settled by arbitration.” The court held that Kahanic “did have the authority,” under the power of attorney, “to sign the Establishment Contract and the included arbitration agreement here in question and the arbitration agreement would be binding on the principal, provided the agreement were invoked in relation to the contract itself, or breach of the contract, or on issues of payment.”

¶ 13 Having set the stage, the trial court held that the “language in this particular arbitration agreement does not provide broadly * * * that the parties shall submit ‘all disputes against each other’ or ‘any disputes concerning whether any statutory provisions relating to the Resident's rights under Illinois law were violated,’ ” citing Carter v. SSC Odin Operating Co., 237 Ill.2d 30, 340 Ill.Dec. 196, 927 N.E.2d 1207 (2010)

. The trial court additionally held that the language of the arbitration provision did not “provide for arbitration of ‘any dispute arising out of the diagnosis, treatment, or care of the Resident,’ ” citing Fosler v. Midwest Care Center II, Inc., 398 Ill.App.3d 563, 340 Ill.Dec. 282, 928 N.E.2d 1 (2009). Thus, the trial court held that the arbitration provision was not a broad and generic provision with a wide scope but was limited narrowly to the terms of the establishment contract. Applying this holding, the trial court reasoned that “the arbitration agreement was validly made, at least on those issues on which the agent under a [health-care power of attorney] has authority, i.e., issues related to arranging for health care and residential placement in a health care facility and the payment therefor.” The trial court then held that Kahanic “did not have the authority...