Mt. Holly Nursing Center v. Crowdus, No. 2007-CA-001708-MR.
| Decision Date | 25 July 2008 |
| Docket Number | No. 2007-CA-001708-MR. |
| Citation | 281 S.W.3d 809 |
| Parties | MT. HOLLY NURSING CENTER; Beverly Health and Rehabilitation Services, Inc.; Golden Livingcenter-Mt. Holly; GGNSC Louisville Mt. Holly, LLC; Beverly Enterprises, Inc.; and Beverly California Corporation, aka Beverly Enterprises, Inc., d/b/a Health and Rehabilitation Services, Inc., Appellants, v. Karen CROWDUS, Power of Attorney and Next Friend of Mary A. McGaughey, Appellee. |
| Court | Kentucky Court of Appeals |
Before COMBS, Chief Judge; KELLER, Judge; HENRY,1 Senior Judge.
Mt. Holly Nursing Center; Beverly Health and Rehabilitation Services, Inc.; Golden Livingcenter-Mt. Holly; GGNSC Louisville Mt. Holly, LLC; Beverly Enterprises, Inc.; and Beverly California Corporation, AKA Beverly Enterprises, Inc., D/B/A Health and Rehabilitation Services, Inc. (hereinafter collectively referred to as Mt. Holly) appeal from the Jefferson Circuit Court's order denying their motion to enforce an arbitration agreement. Mt. Holly argues that Karen Crowdus (Crowdus) signed an arbitration agreement on behalf of and as an agent of Mary A. McGaughey (McGaughey) and that McGaughey is bound by that agreement. Crowdus argues that she was not McGaughey's agent when she signed the arbitration agreement and that, for a number of reasons, the arbitration agreement is not valid and therefore not enforceable. For the reasons set forth below, we affirm.
The parties do not dispute the underlying facts. Crowdus is a friend of McGaughey and, although not related to McGaughey, Crowdus referred to McGaughey as her aunt. McGaughey, who lived with her elderly mother, suffered from physical problems related to a cervical fusion, diabetes, arthritis, and hypertension. In 1999, Crowdus began helping McGaughey by running errands for her and driving her to her physician's appointments and to the store. At that time, Crowdus did not assist McGaughey with any of her business affairs, and she had no knowledge of McGaughey's finances.
In February of 2001, McGaughey designated Crowdus as her health care surrogate. McGaughey and Crowdus discussed whether McGaughey should provide Crowdus with a general power of attorney; however, they decided that was not necessary.
In October of 2005, McGaughey's mother telephoned Crowdus and said that McGaughey was "sick." Crowdus told McGaughey's mother to call an ambulance, which she did. Crowdus then went to McGaughey's house to get McGaughey's insurance cards and to Jewish Hospital to help McGaughey "sign in." During her deposition, Crowdus could not remember if she signed any documents related to McGaughey's admission to Jewish Hospital. However, Crowdus did remember that hospital personnel advised her that McGaughey would need care in a nursing home when she was discharged. To assist with that placement, hospital personnel provided Crowdus with the names of several nursing homes. Crowdus discussed the options with McGaughey, and they chose Mt. Holly because it was the one closest to Crowdus's home.
On October 31, 2005, McGaughey was discharged from Jewish Hospital and transported to Mt. Holly by ambulance. When Crowdus arrived at Mt. Holly, which was sometime after McGaughey, a Mt. Holly employee asked Crowdus if she could sign "admission papers" for McGaughey. According to Crowdus's testimony, no one from Mt. Holly explained to her the various documents she was signing. Crowdus did not read the documents, which she believed were "admission papers and ... to bill [McGaughey's] insurance ..." Crowdus simply flipped through the documents and signed where indicated.
Crowdus testified that no one from Mt. Holly asked her if she had a power of attorney, if she had been appointed McGaughey's guardian, or if she had the authority to sign documents on behalf of McGaughey. She was simply asked if she could sign the admission documents.
In January of 2006, McGaughey left Mt. Holly and returned home. However, in March of 2006, McGaughey was readmitted to Mt. Holly. Crowdus testified that she again signed the "admission papers." As with the initial admission, Crowdus testified that no one explained to her what the documents were, and she did not read them.
Maggie Stearman (Stearman), Director of Admissions at Mt. Holly, testified that, as part of her job duties, she assists patients and family members with the completion of documents necessary to effectuate admission to Mt. Holly. Stearman is also required to explain those documents.
Stearman did not remember going through the admission process with either Crowdus or McGaughey. However, she testified that she generally asks the patient to review and sign the admission documents. If the patient is unable or unwilling to do so, Stearman asks the patient to provide the name of someone who is authorized to sign the admission documents. Stearman then reviews the documents with that person, and obtains that person's signature. To determine if a person is authorized to sign on behalf of a patient, Stearman asks "if she is the person who signs for" the patient. Generally, Stearman asks to see a power of attorney and, if provided, keeps a copy for the patient's file.
As to the arbitration agreement, Stearman testified that she generally
put[s][it] in front of the family so that they can read it and understand it. [She] tell[s] them that it is an arbitration agreement, that if there's ever any problems or concerns, they can always come to the director of nursing or executive director. But if it cannot be resolved, they are agreeing to go to arbitration instead of filing a lawsuit.
Jennifer Willis Price (Price), Clinical Liaison for Mt. Holly, testified that she assumed the duties of director of admissions in the spring of 2006, when Stearman was on maternity leave. Price handled McGaughey's admission in March of 2006; however, like Stearman, Price could not remember it.
Price testified that, like Stearman, she generally attempts to get the patient to complete the admission documents. However, if the patient will not or cannot do so, Price will look to someone else. Price did not remember if McGaughey had authorized Crowdus to sign the admission documents; however, Price does not believe that Crowdus had a power of attorney when she signed the admission documents on behalf of McGaughey.
When reviewing the admission documents, Price usually "give[s] a general explanation of what the document is and then ask[s] them to read it and then to sign." Price explains the arbitration agreement as
an agreement between the facility and patient that if there is a problem or they feel like there is something that has been done wrong, that they have the right to try to solve the problem with the facility. And then if the problem cannot be solved, that they would go to an arbitration committee or person without having to obtain—either party obtain lawyers or go into any kind of court or trial.
Finally, Price reviewed the nursing notes dated near McGaughey's two admissions to Mt. Holly. Those notes indicate that McGaughey was alert and oriented, could understand others, and could make herself understood.
As noted above, the circuit court denied Mt. Holly's motion to compel arbitration. Before us, as they did before the circuit court, Mt. Holly argues that Crowdus had the apparent authority to bind McGaughey to the arbitration agreements; that McGaughey was a third-party beneficiary of those agreements and is therefore estopped from challenging their enforceability; and that Crowdus, who currently has a power of attorney from McGaughey, should be estopped from denying the validity of the arbitration agreements. Crowdus argues that the arbitration agreements are not binding on McGaughey because McGaughey did not sign them; Crowdus was not authorized to sign the agreements on McGaughey's behalf; McGaughey was not a third-party beneficiary to the arbitration agreements; and the arbitration agreements are not enforceable because they are unconscionable and/or were obtained through fraud.
The issues raised by Mt. Holly on appeal are primarily issues of law; therefore, our review is de novo. Carroll v. Meredith, 59 S.W.3d 484, 489 (Ky.App.2001); see also A & A Mechanical, Inc. v. Thermal Equipment Sales, Inc., 998 S.W.2d 505, 509 (Ky. App.1999); Aubrey v. Office of Attorney General, 994 S.W.2d 516, 518-19 (Ky.App. 1998); and Cinelli v. Ward, 997 S.W.2d 474, 476 (Ky.App.1998).
At the outset, we note that Kentucky law generally favors the enforcement of arbitration agreements. Kodak Mining Co. v. Carrs Fork Corp., 669 S.W.2d 917, 919 (Ky.1984). "[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration ...." Moses H. Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24-5, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983). However, "the existence of a valid arbitration agreement as a threshold matter must first be resolved by the court." General Steel Corp. v. Collins, 196 S.W.3d 18, 20 (Ky.App.2006) (emphasis omitted). The court must determine whether an arbitration agreement is "valid, enforceable, and irrevocable, [based] upon such grounds as exist at law for the revocation of any contract." Kentucky Revised Statutes (KRS) 417.050. Guided by the preceding, we will address whether the arbitration agreements signed by Crowdus are valid and enforceable against McGaughey.
Mt. Holly argues that Crowdus had the apparent authority to sign the arbitration agreements on behalf of McGaughey and that it was entitled to rely on Crowdus's signature as binding on McGaughey. Apparent authority ...
To continue reading
Request your trial
-
Brown v. Genesis HealthCare Corp.
...action on the resident's behalf—as nonsignatories—were not bound by arbitrate their claims. See generally, Mt. Holly Nursing Center v. Crowdus, 281 S.W.3d 809 (Ky.App.2008) (health care surrogate did not have apparent authority to consent to arbitration); Sennett v. National Healthcare Corp......
-
Extendicare Homes, Inc. v. Whisman
...an arbitration agreement can be addressed, it must be established that an arbitration agreement was formed. Mt. Holly Nursing Center v. Crowdus, 281 S.W.3d 809, 813 (Ky. App. 2008). Unless an arbitration agreement was validly formed, there is no arbitration agreement to be enforced. Questio......
-
State v. King
...See, e.g., Estate of Irons ex rel. Springer v. Arcadia Healthcare, L.C., 66 So.3d 396 (Fla.Dist.Ct.App.2011); Mt. Holly Nursing Ctr. v. Crowdus, 281 S.W.3d 809 (Ky.Ct.App.2008); Mississippi Care Ctr. of Greenville, LLC v. Hinyub, 975 So.2d 211 (Miss.2008); Covenant Health & Rehab. of Picayu......
-
Hodge v. Unihealth Post-Acute Care of Bamberg, LLC, Appellate Case No. 2015-001183
...was no declaration of resident's inability to manage his affairs and no power of attorney in the record); Mt. Holly Nursing Ctr. v. Crowdus , 281 S.W.3d 809 (Ky. Ct. App. 2008) (spouse lacked authority to bind resident to arbitration agreement); Goliger v. AMS Props., Inc. 19 Cal.Rptr.3d 81......
-
Arbitration in nursing home cases: trends, issues, and a glance into the future.
...did not hold power of attorney, on grounds daughter lacked authority to bind resident to arbitration); Mt. Holly Nursing Ctr. v. Crowdus, 281 S.W.3d 809 (Ky. Ct. App. 2008) (affirming denial of Motion to Compel Arbitration on grounds resident's "friend" who signed agreement did not have aut......