LP Louisville E., LLC v. Patton
| Decision Date | 20 August 2020 |
| Docket Number | 2019-SC-0016-DG AND 2019-SC-0211-DG |
| Citation | 651 S.W.3d 759 |
| Parties | LP LOUISVILLE EAST, LLC d/b/a Signature HealthCARE of East Louisville and Brian Mueller, Appellants/Cross-Appellees v. Kenneth R. PATTON, Administrator of the Estate of Tommy Robert Patton, Appellee/Cross-Appellant |
| Court | United States State Supreme Court — District of Kentucky |
651 S.W.3d 759
LP LOUISVILLE EAST, LLC d/b/a Signature HealthCARE of East Louisville and Brian Mueller, Appellants/Cross-Appellees
v.
Kenneth R. PATTON, Administrator of the Estate of Tommy Robert Patton, Appellee/Cross-Appellant
2019-SC-0016-DG AND 2019-SC-0211-DG
Supreme Court of Kentucky.
August 20, 2020
Modified: April 29, 2021
COUNSEL FOR APPELLANTS/CROSS-APPELLEES: John David Dyche, Louisville, Leigh Vandiver Graves.
COUNSEL FOR APPELLEE/CROSS-APPELLANT: Vanessa B. Cantley, Patrick E. Markey.
OPINION OF THE COURT BY JUSTICE HUGHES
Kenneth R. Patton, as Administrator of the Estate of Tommy Robert Patton, initiated a negligence and wrongful death action against LP Louisville East, LLC, doing business as Signature HealthCARE of East Louisville (Signature). Because Kenneth had signed an Arbitration Agreement at the time his father, Tommy Patton, was admitted to Signature's long-term care facility, Signature moved the circuit court to compel Kenneth to arbitrate the claims. The trial court denied the motion and the Court of Appeals affirmed in part and reversed in part.
On discretionary review of the Court of Appeals’ decision, we affirm in part and reverse in part. Kenneth signed the Arbitration Agreement in both his representative and individual capacities and, consequently, we affirm the Court of Appeals’ decision that the Arbitration Agreement is enforceable as to Kenneth's individual wrongful death claim. We reverse, however, the Court of Appeals’ decision that the Arbitration Agreement is not enforceable as to the Estate's claims, concluding that the power of attorney which Tommy granted his son fully authorized execution of the Arbitration Agreement at issue.
FACTUAL AND PROCEDURAL BACKGROUND
Signature is a long-term care facility located in Louisville to which Tommy Robert Patton was admitted as a resident in early 2017. According to Kenneth R. Patton, his father was placed in Signature's care because Tommy was not able to care for himself due to physical limitations. To secure Tommy's admittance, Kenneth signed an Arbitration Agreement as Tommy's authorized representative.
The agreement is entitled "AGREEMENT TO INFORMALLY RESOLVE AND ARBITRATE ALL DISPUTES" (Arbitration Agreement), and begins with Signature's statement that it requires all new residents and/or their legal representatives to read, agree, and sign the Agreement as a condition of the applicant's admission to its facility. The Arbitration Agreement has eleven enumerated provisions, prefaced "Resident, facility, and other person signing this document understand and agree ...." The first provision reads, "If a dispute or legal claim of any kind (including a class or representative action or claim) arises between the parties signing the agreement (collectively a dispute)," the parties will arbitrate the dispute if it cannot first be resolved informally or through mediation. The sixth provision states, "We agree [this agreement] will be upheld and enforced against our heirs, beneficiaries, estates, estate representatives, successors, statutory wrongful death beneficiaries, and assigns." The eleventh provision states in part, "I understand and agree that the Resident and his/her agents, heirs, beneficiaries, estate, and assigns are intended beneficiaries of, and will be bound by, this agreement." Immediately before the signature block, a bolded, all-capitalized statement provides that the signee has had the opportunity to read the Arbitration Agreement, ask questions
and consult an attorney; that he understands that the agreement is required for admission; and that the consent is voluntarily given. Immediately below the signature line for the resident's authorized representative is the notation "Resident's Authorized Representative/Individual* Signature" and the asterisk's explanation, "*Representative understands and agrees s/he is signing in both representative and individual capacities."
Kenneth provided to Signature the "Durable Power of Attorney for Finance of Tommy R. Patton" (POA) designating him as Tommy's attorney-in-fact and agent. Article IV of the POA entitled "Powers" begins "My Agent shall have all powers of an absolute owner over my assets and liabilities, ... including, without limitation, the following power and authority." The power and authority under Article IV is stated under six subheadings: A) Power relating to real property transactions; B) Power relating to banking and other financial institution transactions; C) Power relating to insurance transactions; D) Power relating to estate, trust, and other beneficiary transactions; E) Power relating to claims and litigation; and F) Power relating to benefits from Social Security, Medicare, Medicaid, or other governmental programs or from military service.
As to claims and litigation, Tommy empowered his attorney-in-fact to:
1. assert and prosecute before a court or administrative agency a claim, counterclaim, or offset and defend against an individual, a legal entity, or government, including suits to recover property or other thing of value, to recover damages sustained by the principal, to eliminate or modify tax liability, or to seek an injunction, specific performance, or other relief;
....
[and to]
5. submit to arbitration, settle, and propose or accept a compromise with respect to a claim or litigation;
....
As to Social Security, Medicare and other governmental programs, Tommy empowered his attorney-in-fact to "prepare, file, and prosecute a claim of the principal to a benefit or assistance, financial or otherwise, to which the principal claims to be entitled, under a statute or governmental regulation" and "prosecute, defend, submit to arbitration, settle, and propose or accept a compromise with respect to any benefits the principal may be entitled to receive."
The succeeding article, Article V, entitled "Purposes" states in full: "My Agent shall have all powers as are necessary or desirable to provide for my support, maintenance, health, emergencies, and urgent necessities." Consistent with the reference to "all powers" regarding "health," in Article VIII, Section I., Tommy provided: "I intend for my agent to be treated as I would be with respect to my rights regarding the use and disclosure of my individually identifiable health information or other medical records."
Shortly after Tommy's admittance to the facility, he suffered a fall which resulted in lacerations to his head. Tommy was transferred from Signature's care and he died within a few weeks. Kenneth, as Administrator of the Estate, without initiating mediation or arbitration, brought a "negligence/wrongful death" claim in Jefferson Circuit Court against Signature and Brian Mueller, identified as Signature's facility administrator (collectively "Signature").1
In lieu of filing an answer, Signature filed a motion to compel arbitration and stay, or alternatively, to dismiss the action on the grounds that the Arbitration Agreement was a valid and enforceable contract. Kenneth responded that the POA did not provide him with the authority to enter into the Arbitration Agreement. Kenneth also argued that the wrongful death claim, brought in his capacity as the Estate Administrator, is not subject to the Arbitration Agreement. The trial court denied Signature's motion in its entirety without issuing any findings of fact or conclusions of law.
Pursuant to Kentucky Revised Statute (KRS) 417.220, Signature appealed the trial court's denial of its motion to compel arbitration. The Court of Appeals concluded the Arbitration Agreement is not valid or enforceable against Tommy, his Estate, or the wrongful death beneficiaries not party to the Arbitration Agreement, but further concluded that Kenneth's wrongful death claim is arbitrable because he executed the Arbitration Agreement in his individual capacity. Finally, the Court of Appeals concluded that the trial court must enter a stay of the claims not subject to arbitration pending completion of arbitration of Kenneth's wrongful death claim against Signature. This Court granted both Signature's and Kenneth's motions for discretionary review.
Signature raises the issue whether the Court of Appeals misapplied Kindred Nursing Centers Ltd. Partnership v. Wellner , 533 S.W.3d 189 (Ky. 2017), as well as the United States Supreme Court decision from which it was remanded, Kindred Nursing Centers Ltd. Partnership v. Clark , 581 U.S. ––––, 137 S. Ct. 1421, 197 L.Ed.2d 806 (2017), when interpreting Article IV of Tommy's POA and concluding the Arbitration Agreement is not enforceable against Tommy's Estate. Applying the principles enunciated in Ping v. Beverly Enterprises, Inc. , 376 S.W.3d 581, 590 (Ky. 2012), we find that Article V of Tommy's POA authorized Kenneth to enter into the mandatory Arbitration Agreement when exercising his agency powers as to Tommy's "maintenance" and "health" by admitting him to a long-term care facility. We consequently reverse the Court of Appeals’ decision that the Arbitration Agreement is not enforceable against Tommy's Estate.2
As to Kenneth's primary appellate issue – whether the Court of Appeals erred by concluding that Kenneth's signature in his individual capacity on the Arbitration Agreement requires arbitration of his interest in a subsequent wrongful death recovery action – we disagree with Kenneth. We affirm the Court of Appeals’ decision that Kenneth's claim is arbitrable.
Thus, we conclude that both Tommy's Estate and Kenneth's individual claims are
subject to arbitration and remand this case to the trial court for further proceedings consistent with this Opinion. Due to this resolution, the Court of Appeals’ conclusion that Kenneth's wrongful death claim must be arbitrated before any further action occurs in circuit court is now moot.3
ANALYSIS
I. The Arbitration Agreement is valid and enforceable as to Tommy Patton's Estate claim.
The Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 et seq. , and...
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