Kindred Healthcare, Inc. v. Nichols, 2012-CA-001801-MR
| Decision Date | 16 September 2016 |
| Docket Number | NO. 2012-CA-001801-MR,2012-CA-001801-MR |
| Parties | KINDRED HEALTHCARE, INC; KINDRED NURSING CENTERS LIMITED PARTNERSHIP D/B/A HARRODSBURG HEALTH CARE CENTER; KINDRED NURSING CENTERS EAST, LLC; KINDRED HOSPITALS LIMITED PARTNERSHIP; KINDRED HEALTHCARE OPERATING, INC.; KINDRED REHAB SERVICES, INC. D/B/A PEOPLEFIRST REHABILITATION N/K/A REHABCARE; AND JOHN DOES 1 THROUGH 5, UNKNOWN DEFENDANTS APPELLANTS v. ADRIANNE NICHOLS, ADMINISTRATRIX OF THE ESTATE OF CHARLIE NICHOLS APPELLEE |
| Court | Kentucky Court of Appeals |
NOT TO BE PUBLISHED
APPEAL FROM MERCER CIRCUIT COURT
Kindred Healthcare, Inc.; Kindred Nursing Centers Ltd. Partnership d/b/a Harrodsburg Health Care Center; Kindred Nursing Centers East, LLC; Kindred Hospitals Limited Partnership; Kindred Healthcare Operating, Inc.; and Kindred Rehab Services, Inc. d/b/a Peoplefirst Rehabilitation n/k/a Rehabcare (collectively referred to herein as "the nursing home"), appeal from the September 27, 2012, order of the Mercer Circuit Court denying a motion to compel arbitration of the action commenced by Charlie Nichols, a resident of the nursing home, now deceased. The nursing home contends that the trial court erred by concluding that Anetha Nichols, the daughter of Charlie Nichols, lacked the necessary authority to bind her father to the terms of an alternative dispute resolution agreement that contained a provision requiring arbitration of the parties' disputes. After our review, we affirm.
On September 15, 2010, Charlie Nichols executed a general power-of-attorney instrument granting to Anetha Nichols broad authority to handle his affairs. Anetha was given the power "[t]o exercise any . . . right . . . relating to any person, item, transaction, thing . . . or matter whatsoever. . . ." The instrument was made effective as of December 15, 2010.
On August 9, 2011, Charlie Nichols was admitted to the nursing home. As his attorney-in-fact, Anetha signed an alternative dispute resolution (ADR) agreement presented to her by the nursing home. The agreement provided that the parties would submit to binding arbitration any and all unresolved causesof action arising out of or in any way relating to the resident's stay at the nursing home. In bold print, the front page of the agreement provided that "the parties are waiving their right to a trial, including their right to a jury trial, their right to trial by a Judge and their right to appeal the decision of the arbitrator(s)." The agreement declared that its execution was optional.
On June 25, 2012, Charlie Nichols commenced a civil action against the nursing home in Mercer Circuit Court. He alleged that he had sustained personal injuries as a result of the negligence of the nursing home.
On August 15, 2012, based upon the terms of the ADR agreement, the nursing home filed a motion seeking to compel arbitration. Citing the decision of the Supreme Court of Kentucky in Ping v. Beverly Enterprises, Inc., 376 S.W.3d 581 (Ky. 2012), cert. denied, ___ U.S. ___, 133 S.Ct. 1996, 185 L.Ed.2d 879 (2013), the trial court denied the motion by order entered on September 27, 2012. The trial court concluded that the broad authority granted to Anetha to act as Charlie Nichols's power of attorney did not encompass the authority to enter into a an arbitration agreement that waived his right to a jury trial.
Since an order denying a motion to compel arbitration is immediately appealable pursuant to the provisions of KRS1 417.220(1), the nursing home filed its notice of appeal on October 19, 2012. A few days later, Charlie Nichols passed away. Anetha Nichols was appointed administratrix of the estate and was ordered to substitute as the appellee in this appeal. Anetha passed away in October 2013.Adrianne Nichols, the successor administratrix of the estate of Charlie Nichols, was then ordered to substitute as the appellee.
If enforceable, the terms of the ADR agreement would govern the claims asserted against the nursing home in this action and would prohibit the underlying litigation. On appeal, the nursing home contends that the terms of the ADR agreement are wholly enforceable and that the trial court erred by concluding that the provisions of the power-of-attorney instrument did not authorize Anetha to execute the agreement. Based upon the holding of the Supreme Court of Kentucky in Extendicare Homes, Inc. v. Whisman, 478 S.W.3d 306 (Ky. 2015), we disagree and affirm the order of the circuit court.
"To create a valid, enforceable contract, there must be a voluntary, complete assent by the parties having capacity to contract." Id. at 321, citing Conners v. Eble, 269 S.W.2d 716, 717-18 (Ky. 1954). One's assent to a contract can be provided by an agent acting as an attorney-in-fact "if the authority to do so was duly conferred upon the attorney-in-fact by the power-of-attorney instrument." Id. Whether the principal's assent to the contractual agreement to arbitrate disputes was validly obtained is a question of law that "depends entirely upon the scope of authority set forth in the written power-of-attorney instrument." Whisman, supra, citing Ping v. Beverly Enterprises, Inc., 376 S.W.3d 581 (Ky. 2012), cert. denied, ___ U.S. ___, 133 S.Ct. 1996, 185 L.Ed.2d 879 (2013).
However, the Whisman Court unequivocally rejected a similar contention.
In Whisman, the Supreme Court held that an instrument granting an attorney-in-fact the power to "institute or defend suits concerning [the principal's] property rights" did not authorize execution of a pre-dispute arbitration agreement because arbitration is not a "suit" or legal action but instead a process designed to avoid litigation. Id. at 323. Additionally, it concluded that an agreement to arbitrate is not settlement of a claim. It is instead an alternative forum in which to pursue the controversy. "Settling a claim ends the controversy, whereas arbitrating a claim means fighting it out before an arbitrator rather than a judge and jury." Id. Based upon the analysis...
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