Lynn v. Lowndes Cnty. Health Servs., LLC.

• Decision Date: 09 March 2020
• Docket Number: A19A2057
• Citation: 840 S.E.2d 623,354 Ga.App. 242
• Parties: LYNN v. LOWNDES COUNTY HEALTH SERVICES, LLC.
• Court: Georgia Court of Appeals

354 Ga.App. 242

840 S.E.2d 623

LYNN

v.LOWNDES COUNTY HEALTH SERVICES, LLC.

A19A2057

Court of Appeals of Georgia.

March 9, 2020

Christopher Caleb Connor, Augusta, Kenneth Luke Connor, Scott Edward Gwartney, Anne Katharine Moore, Augusta, for Appellant.

Alphonso Avery Howell IV, Gregory Tyson Talley, Valdosta, for Appellee.

Miller, Presiding Judge.

Elnora Lynn, in her capacity as administratrix of the estate of her son Curtis Leon Thomas, appeals from the trial court’s final order confirming her arbitration award against Lowndes County Health Services, LLC ("Lowndes County") and denying her motion to tax costs against Lowndes County. Lynn argues that (1) the trial court erred by compelling arbitration because she had no authority to enter into an arbitration agreement on Thomas’ behalf, and (2) that the trial court erred by denying her motion for litigation fees because she was entitled to compensation for litigation expenses as the prevailing party in the arbitration proceeding under OCGA § 9-15-1. Because we conclude that Lynn did not have authority to sign the arbitration agreement on Thomas’ behalf, we reverse the trial court’s order compelling arbitration and we also reverse the trial court’s order confirming the arbitration award. Because we reverse the trial court’s order compelling arbitration, we do not address Lynn’s claim concerning the denial of her motion to tax costs.

"We review a trial court’s order granting or denying a motion to compel arbitration de novo. Additionally, the construction of an arbitration agreement, like any other contract, presents a question of law, which is subject to de novo review." (Citations and punctuation omitted.) Web IV, LLC v. Samples Construction, LLC , 349 Ga. App. 607, 824 S.E.2d 107 (2019). Moreover, "[t]he [appellee], as the part[y] seeking arbitration, bear[s] the burden of proving the existence of a valid and enforceable agreement to arbitrate." (Citations and punctuation omitted.) United Health Svcs. of Ga., Inc. v. Alexander , 342 Ga. App. 1, 2 (2), 802 S.E.2d 314 (2017).

So viewed, the record shows that Thomas was born with down syndrome

, was mentally retarded, had cataracts, was blind in his right eye, and was only able to communicate by facial expressions and vocalizations. Thomas subsequently developed seizures, which required him to have 24-hour care, and he began living at various medical facilities at the age of 13. Lynn contacted the Parkwood Development Center ("the Center")¹ so that she could move Thomas to a facility closer to her home. Lynn moved Thomas to the Center on February 13, 2013. During the admission process, Lynn signed an arbitration agreement as Thomas’ representative. The agreement stipulated that as to all disputes governed by the agreement, each party waived the right to a jury trial and agreed that all disputes between the parties would "be resolved through binding arbitration."

According to Lynn, Thomas, who was 50-years-old at the time he was moved to the Center, began to deteriorate after his arrival. Thomas allegedly began to experience episodes of vomiting and lost more than ten percent of his body weight. Thomas also allegedly developed a pressure wound

on his right hip, lost his ability to walk and feed himself, and became very weak. Thomas was discharged and sent to another medical facility in August 2013 and later passed away on March 30, 2016. Lynn was subsequently appointed as the administratrix of Thomas’ estate.

Lynn filed the instant complaint against Lowndes County, alleging claims of negligence and violations of the Bill of Rights for Residents of Long-term Care Facilities. Lowndes County filed a motion to compel arbitration pursuant to the agreement Lynn signed upon Thomas’ admission to the Center. Lynn challenged the motion on the basis that she had no authority to sign the arbitration agreement for Thomas. The trial court granted Lowndes County’s motion to compel arbitration after concluding that Lynn had both actual and apparent authority to sign the arbitration agreement on Thomas’ behalf, and that the agreement was enforceable because Lynn ratified the agreement after she was appointed as the administratrix of Thomas’ estate.

An arbitration panel rendered a verdict in Lynn’s favor and awarded $125,000 in compensatory damages. Lynn then filed a motion to confirm the arbitration award and to tax costs against Lowndes County under OCGA § 9-15-1. The trial court denied Lynn’s motion to tax costs against Lowndes County, and this appeal followed.

1. Before we reach the merits of the appeal, we address, sua sponte, Lynn’s standing as the administratrix of her son’s estate to appeal the order confirming the arbitration award as the prevailing party in the arbitration proceeding. See U-haul Co. of Arizona v. Rutland , 348 Ga. App. 738, 743 (1) n. 3, 824 S.E.2d 644 (2019) (stating that appellate courts may raise standing issue sua sponte).

It is a bedrock principle of appellate litigation that "[a] party generally may not appeal a ruling that benefitted him or her." Landry v. Walsh , 342 Ga. App. 283, 288 (3) n. 4, 801 S.E.2d 553 (2017). We have held, however, that "a claim that a contract dispute is not subject to arbitration constitutes an attack on the subject matter jurisdiction of the arbitrator." Yates v. CACV of Colorado, LLC , 303 Ga. App. 425, 432 (1), 693 S.E.2d 629 (2010). We note that in the trial court proceedings below, Lynn maintained the position that she had no authority to sign the arbitration agreement on Thomas’ behalf. Accordingly, although Lynn prevailed in the arbitration proceeding, because she attacks the subject matter jurisdiction of the arbitrator, we will address the merits of the appeal. See also id. at 430 (1), 693 S.E.2d 629 ("[A] party cannot be required to submit to arbitration any dispute which [she] has not agreed so to submit.") (citation omitted).

2. Lynn argues that the trial court erred by entering an order compelling arbitration because she lacked actual and apparent authority to sign the arbitration agreement on Thomas’ behalf.

We agree.²

[T]he validity of an arbitration agreement is generally governed by state law principles of contract formation.³ Under Georgia law, to constitute a valid contract, there must be, among other things, the assent of the parties to the terms of the contract. Thus, a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.

(Citations and punctuation omitted.) United Health Svcs. of Ga., Inc., supra, 342 Ga. App. at 2 (2), 802 S.E.2d 314.

In the instant case, Thomas did not personally assent to the arbitration agreement. Nevertheless, "traditional principles of agency law may bind a nonsignatory to an arbitration agreement." (Citation omitted.) Coleman v. United Health Svcs. of Ga., Inc. , 344 Ga. App. 682, 683 (1), 812 S.E.2d 24 (2018). "[T]he relation of principal and agent arises wherever one person, expressly or by implication, authorizes another to act for him or subsequently ratifies the acts of another in his behalf." (Citation and punctuation omitted.) United Health Svcs. of Ga., Inc. , supra, 342 Ga. App. at 3 (2), 802 S.E.2d 314. Therefore, "a contract of agency signed by both parties is not essential to the creation of the principal-agent relationship." (Citation and punctuation omitted.) Id. at 3 (2) (a), 802 S.E.2d 314.

(a) Actual Authority

Here, there is no evidence in the record that Lynn had actual authority to sign the arbitration agreement for Thomas. As the admissions director at the facility admitted in her affidavit, Lynn did not possess a power of attorney or any other document authorizing Lynn to sign the arbitration agreement or to take any action on Thomas’ behalf.

Still, Lowndes County contends that Lynn had actual authority to sign the arbitration agreement for Thomas because the admissions director spoke with Lynn during the admissions process, the director averred that Lynn confirmed her authority to execute the agreement, and Lynn testified in her deposition that she had authority to sign the arbitration agreement. To support this argument, Lowndes County relies on our previous decisions in Augusta Roofing & Metal Works, Inc. v. Clemmons , 97 Ga. App. 576, 103 S.E.2d 583 (1958), Stone v. First Nat. Bank of Atlanta , 159 Ga. App. 812, 285 S.E.2d 207 (1981), and Salters v. Pugmire Lincoln-Mercury, Inc. , 124 Ga. App. 414, 184 S.E.2d 56 (1971). None of these cases, however, supports Lowndes County’s argument.

It is true that in Augusta Roofing & Metal Works, Inc. , we noted that sworn testimony of an agent is competent evidence of such agency. Id. at 578 (2), 103 S.E.2d 583. In Stone , this Court said that "[t]he bare assertion or denial of the existence of an agency relationship is a statement of fact when made by one of the purported parties to the relationship[.]" (Citation omitted.) Stone , supra, 159 Ga. App. at 814 (4), 285 S.E.2d 207. Similarly, in Salters , we stated that "[i]t has long been the Georgia rule that one who is a party to the relationship (the principal or agent) may testify as a fact as to the existence or non-existence of the relationship and that such testimony would not be subject to the objection that the statement was a conclusion or the ultimate fact." Salters , supra, 124 Ga. App. at 415 (1), 184 S.E.2d 56.

These opinions merely stood for the proposition that a principal or an agent may testify as to their status as the principal or agent of the other without objection. None of these opinions can be interpreted for the proposition that such sworn testimony by a principal or an agent was sufficient by itself to prove that a principal-agent relationship did, in fact, exist, even in the presence of evidence that would negate such a relationship. Indeed, in subsequent decisions from this Court, we have been clear that although a principal or an agent may testify as a fact of their status as a principal or an agent of the other, such testimony must have some...