Quarles v. Courtyard Gardens Health & Rehab., LLC

• Decision Date: 17 March 2016
• Docket Number: No. CV–15–711,CV–15–711
• Parties: Kenny Quarles, as Special Administrator of the Estate of Bennie Jean Quarles, Deceased, and on Behalf of the Wrongful Death Beneficiaries of Bennie Jean Quarles, Deceased, Appellant v. Courtyard Gardens Health and Rehabilitation, LLC a/k/a Courtyard Gardens Health and Rehabilitation ; Arkadelphia Holdings, LLC; SLC Operations Master Tenant, LLC; SLC Operations, LLC ; SLC Professionals of Arkansas, LLC; SLC Administrative Services of Arkansas, LLC; Capital Seniorcare Ventures, LLC; SLC Properties, LLC; 2701 Twin Rivers Drive, LLC ; Senior Vantage Point, LLC; Senior Living Communities of Arkansas, LLC; EOR Group, Ltd; EOR, LLC ; EOR–Ark, LLC; VAJ, LLC; Quality Review, LLC; Angela Marlar, in her capacity as administrator/executive Director of Golden Livingcenter—Arkadelphia n/k/a Courtyard Gardens Health and Rehabilitation, LLC ; and Deborah Thornton, in her capacity as administrator of Courtyard Gardens Health and Rehabilitation, LLC f/k/a Golden Livingcenter—Arkadelphia, Appellees
• Court: Arkansas Supreme Court

2016 Ark. 112
488 S.W.3d 513

Kenny Quarles, as Special Administrator of the Estate of Bennie Jean Quarles, Deceased, and on Behalf of the Wrongful Death Beneficiaries of Bennie Jean Quarles, Deceased, Appellant
v.
Courtyard Gardens Health and Rehabilitation, LLC a/k/a Courtyard Gardens Health and Rehabilitation ; Arkadelphia Holdings, LLC; SLC Operations Master Tenant, LLC; SLC Operations, LLC ; SLC Professionals of Arkansas, LLC; SLC Administrative Services of Arkansas, LLC; Capital Seniorcare Ventures, LLC; SLC Properties, LLC; 2701 Twin Rivers Drive, LLC ; Senior Vantage Point, LLC; Senior Living Communities of Arkansas, LLC; EOR Group, Ltd; EOR, LLC ; EOR–Ark, LLC; VAJ, LLC; Quality Review, LLC; Angela Marlar, in her capacity as administrator/executive Director of Golden Livingcenter—Arkadelphia n/k/a Courtyard Gardens Health and Rehabilitation, LLC ; and Deborah Thornton, in her capacity as administrator of Courtyard Gardens Health and Rehabilitation, LLC f/k/a Golden Livingcenter—Arkadelphia, Appellees

No. CV–15–711

Supreme Court of Arkansas.

Opinion Delivered: March 17, 2016
Rehearing Denied April 21, 2016

Wilkes & McHugh, P.A., Little Rock, by: Carl R. Wilander, John V. O'Grady, and William P. Murracy III; and Appellate Solutions, PLLC d/b/a Riordan Law Firm, by: Deborah Truby Riordan, Little Rock, for appellant.

Kutak Rock LLP, by: Mark W. Dossett, Fayetteville, Scott Jackson, and Samantha B. Leflar, Fayetteville, for appellees.

COURTNEY HUDSON GOODSON, Associate Justice

Appellant Kenny Quarles, as Special Administrator of the Estate of Bennie Jean Quarles, deceased, and on behalf of the wrongful-death beneficiaries of Bennie Jean Quarles, deceased (the Estate) appeals the order entered by the Circuit Court of Clark County granting the motion for summary judgment filed by appellees Courtyard Gardens Health and Rehabilitation, LLC, and others (Courtyard Gardens). For reversal, the Estate contends that the circuit court erred in granting summary judgment and by failing to grant its motion for reconsideration. We affirm.

I. Factual Background

The record reflects that Bennie Jean Quarles, the decedent, was a resident of Courtyard Gardens, a long-term-care facility in Arkadelphia, from June 2009 to March 2010, when she transferred to another nursing home. On June 4, 2010, Bennie Jean purportedly executed a durable power of attorney in favor of her son, Kenny Quarles. On January 27, 2011, Kenny, as “Power of Attorney for Bennie Jean Quarles, an incapacitated person,” filed suit against Courtyard Gardens alleging claims of negligence, medical malpractice, and violations of the Arkansas Long–Term Care Residents' Rights Act.¹ Kenny filed an amended complaint in that same capacity on May 3, 2011.

On June 27, 2011, Courtyard Gardens filed a motion to compel arbitration of the

488 S.W.3d 517

claims contained in the amended complaint. Subsequently, on July 8, 2011, Kenny filed a “Statement of Fact of Death” giving notice that Bennie Jean had died on May 17, 2011. On July 20, 2011, the circuit court entered an order substituting as the nominal plaintiff “Kenny Quarles, as Special Administrator of the Estate of Bennie Jean Quarles, deceased, and on behalf of the wrongful death beneficiaries of Bennie Jean Quarles, deceased.”

On July 6, 2012, the circuit court issued an order denying Courtyard Gardens' motion to compel arbitration. Courtyard Gardens appealed that decision, and the Estate also filed a cross-appeal of the circuit court's order. This court affirmed on direct appeal and considered the cross-appeal moot. Courtyard Gardens Health & Rehab., LLC v. Quarles , 2013 Ark. 228, 428 S.W.3d 437. We held that the arbitration agreement failed because the evidence did not establish that Bennie Jean's son, Ronald Quarles, who had signed the agreement, had the actual authority to bind her to arbitration.

Following our decision, the parties engaged in discovery, and the circuit court set trial dates but granted several continuances. The court entered a scheduling order on August 27, 2014, setting a two-week trial to begin on June 22, 2015. In addition, this order required the parties to participate in mediation. The record also reflects that Courtyard Gardens deposed Kenny and his wife, Oleater Quarles, on October 9, 2014. It also took the deposition of Dr. Ferdinand Roda, Bennie Jean's treating physician, on December 22, 2014.

On January 30, 2015, the day scheduled for mediation, Courtyard Gardens filed the motion for summary judgment that is the subject of this appeal. Citing Rhuland v. Fahr, 356 Ark. 382, 155 S.W.3d 2 (2004), Courtyard Gardens asserted that the complaint and the amended complaint filed by Kenny under the power of attorney given to him by Bennie Jean were ities because the power of attorney executed in June 2010 was invalid. According to Courtyard Gardens, the power of attorney was invalid for two reasons. First, based on Bennie Jean's medical records, and the depositions of Dr. Roda, Kenny, and Oleater, it argued that Bennie Jean did not possess the legal capacity to execute the power of attorney. Courtyard Gardens also claimed that the Estate was barred by principles of judicial estoppel from contesting Bennie Jean's incapacity because the Estate had maintained in previous filings with the circuit court, as well as those filed with this court on appeal of the arbitration matter, that Bennie Jean lacked the capacity to delegate authority to her son to execute the arbitration agreement. Second, citing Jones v. Owen, 2009 Ark. 505, 342 S.W.3d 265,² Courtyard Gardens argued that the power of attorney had not been properly acknowledged. In support of these assertions, Courtyard Gardens included as exhibits Bennie Jean's medical records from April, May, and June 2010 showing that she suffered from advanced Alzheimer's disease and Parkinson's disease. An assessment dated March 16, 2010, reflected a diagnosis of dementia, and all of the boxes on the form were marked “no” for the categories of “able to understand,” “able to communicate,”

488 S.W.3d 518

“memory recall,” and “alert and oriented.” Courtyard Gardens also relied on excerpts from Dr. Roda's deposition to say that Bennie Jean's dementia rendered her incapacitated during her residency. In addition, Courtyard Gardens pointed to Kenny's deposition in which he stated that, when Bennie Jean executed the power of attorney, he placed the pen in Bennie Jean's hand and that he held her arm and “helped her arm” sign the document. Finally, it relied on Oleater's deposition testimony that she took the signed power of attorney to the notary public for acknowledgment after Bennie Jean had purportedly signed the instrument. Courtyard Gardens maintained that the circuit court should dismiss the action with prejudice because the statute of limitations on the Estate's claims had expired.

In response, the Estate argued that the provisions of Rule 17(a) of the Arkansas Rules of Civil Procedure required that it be allowed a reasonable time to ratify the complaints or to substitute the real party in interest. It maintained that these things had already been accomplished when Kenny, as the duly appointed special administrator of the estate, had been substituted as the real party in interest prior to the expiration of the statute of limitations. Further, the Estate argued that Rhuland, supra, did not apply because it was based on the requirements of the wrongful-death statute as to who could bring suit. The Estate also argued that the doctrine of judicial estoppel was not applicable because it had not taken inconsistent positions. Alternatively, the Estate asserted that the doctrine of equitable estoppel barred Courtyard Gardens' argument because it had waited four years to question Kenny's standing to bring suit. In addition, it contended that the question whether Bennie Jean had sufficient capacity to execute the power of attorney was a disputed question of fact that was not suited for summary disposition.

In reply, Courtyard Gardens argued that the substitution of Kenny as the special administrator was of no consequence because Rule 17 does not apply to complaints that are ities, citing Brewer v. Poole, 362 Ark. 1, 15, 207 S.W.3d 458, 466 (2005) (“Where the original complaint is a ity, Rules 15 and 17 are inapplicable because the original complaint never existed.”). It also argued that principles of estoppel did not bar it from challenging Kenny's standing to file suit because it could not have raised the issue before the arbitration question was resolved without risking the waiver of its claimed right to arbitrate. It also asserted that it had promptly raised the issue when problems concerning the execution of the power of attorney came to light from the depositions of Kenny, Oleater, and Dr. Roda taken in October and December 2014.

The circuit court held a hearing on April 30, 2015. On May 6, 2015, the circuit court entered its order granting Courtyard Gardens' motion for summary judgment. The order recites,

On April 30, 2015, counsel presented oral arguments regarding the Defendants' Motion for Summary Judgment. Based upon the argument of counsel, the pleadings, submitted briefs and exhibits, the court finds that the Defendants' arguments are persuasive and correct. Defendants' Motion for Summary Judgment is granted.

On May 15, 2015, the Estate filed a motion for new trial and reconsideration. In...