The Estate of Solesbee v. Fundamental Clinical & Operational Servs.
| Decision Date | 25 January 2023 |
| Docket Number | 5963,Appellate Case 2019-001731 |
| Parties | The Estate of Mary Solesbee, by her personal representative, Connie Bayne, Respondent, v. Fundamental Clinical and Operational Services, LLC; Fundamental Administrative Services, LLC; THI of South Carolina at Magnolia Manor-Inman, LLC d/b/a Magnolia Manor-Inman; Inpatient Consultants of North Carolina, P.C.; and Angela Brown, ACNP, Defendants, Of which Fundamental Clinical and Operational Services, LLC; Fundamental Administrative Services, LLC; and THI of South Carolina at Magnolia Manor- Inman, LLC d/b/a Magnolia Manor-Inman are the Appellants. |
| Court | South Carolina Court of Appeals |
Submitted October 3, 2022
Appeal From Spartanburg County Grace Gilchrist Knie, Circuit Court Judge
Stephen Lynwood Brown, Russell Grainger Hines, Donald Jay Davis, Jr., and Gaillard Townsend Dotterer, III, all of Clement Rivers, LLP, of Charleston, for Appellants.
Warren H. Christian, Jr., and Matthew W. Christian, both of Christian & Christian, LLC, of Greenville, and Jordan Christopher Calloway, of McGowan Hood Felder & Phillips of Rock Hill, all for Respondent.
In this wrongful death and survival action alleging nursing home negligence, Fundamental Clinical and Operational Services LLC; Fundamental Administrative Services, LLC; and THI of South Carolina at Magnolia ManorInman, LLC d/b/a Magnolia Manor-Inman[1] (collectively, Appellants) appeal the trial court's denial of Magnolia's motion to compel arbitration. Appellants argue the trial court erred in (1) denying Magnolia's motion to compel arbitration and (2) denying Fundamental's[2] motions to stay this lawsuit pending arbitration of the claims against Magnolia. We affirm.
Magnolia operates a nursing facility located in Spartanburg County. Mary Solesbee became a resident at Magnolia on June 27, 2016. She was admitted to Magnolia by her son, Allen Dover, who executed the paperwork for her admission.[3] Among the contracts Dover entered into on behalf of Solesbee were an admission agreement (Admission Agreement) and an arbitration agreement (Arbitration Agreement). Solesbee was not present when Dover signed the documents.
The Admission Agreement governs the type of care Solesbee was to receive at Magnolia and Solesbee's financial obligation to pay for those services. On the Admission Agreement's final page, there is an "Entire Agreement" section indicating the twelve pages of the Agreement constitute "the entire agreement and understanding between the parties" concerning Solesbee's admission to Magnolia.
The Admission Agreement does not mention the Arbitration Agreement. Dover signed the Admission Agreement on the "Signature of Representative" line. Magnolia's representative did not ask Dover for proof of authority to act on Solesbee's behalf.[4]
The separate one-page Arbitration Agreement states:
It is further understood that in the event of any controversy or dispute between the parties arising out of or relating to Facility's Admission Agreement, or breach thereof, or relating in any way to Resident's stay at Facility, or to the provisions of care or services to Resident, including but not limited to any alleged tort, personal injury, negligence or other claim; or any federal or state statutory or regulatory claim of any kind; or whether or not there has been a violation of any right or rights granted under State law (collectively "Disputes"), and the parties are unable to resolve such through negotiation, then the parties agree that such Dispute(s) shall be resolved by arbitration, as provided by the South Carolina Alternate Dispute Resolution/Mediation Rules.
The Arbitration Agreement further states that "[b]y his/her signature below, the executing party represents that he/she has the authority to sign on Resident's behalf so as to bind the Resident as well as the Representative." Dover signed the Arbitration Agreement on the line labeled "Resident/Representative Signature."
On July 14, 2016, two weeks after her admission, Solesbee was transported to a hospital and died on August 1, 2016. Connie Bayne, as the personal representative for Solesbee's estate,[5] filed a wrongful death and survival action against Appellants alleging nursing home negligence.[6] The complaint alleged Solesbee's death was "a direct and proximate result of . . . sepsis resulting from [an] improperly treated leg wound and infection" that was not properly recognized and treated while she was a resident of Magnolia. It sought judgment against Appellants for actual and punitive damages.
Based on the Arbitration Agreement Dover signed for Solesbee, Magnolia filed a motion to dismiss Bayne's complaint, compel arbitration, and stay proceedings pending the outcome of arbitration. Fundamental filed motions to stay any requirement to file further responsive pleadings, as well as any requirement to respond to any motions or discovery filed or served by Bayne, until such time as this court made a final decision on the validity of the arbitration agreement. Magnolia filed a memorandum in support of its motion.
After a hearing, the court denied Magnolia's motion to compel arbitration. In its order, the court found Dover did not have the actual or apparent authority to sign the Arbitration Agreement on behalf of Solesbee. The court stated this case was very similar to Coleman v. Mariner Health Care, Inc., 407 S.C. 346, 755 S.E.2d 450 (2014); Hodge v. UniHealth Post-Acute Care of Bamberg, LLC, 422 S.C. 544, 813 S.E.2d 292 (Ct. App. 2018); and Thompson v. Pruitt Corporation, 416 S.C. 43, 784 S.E.2d 679 (Ct. App. 2016). The court noted that in these cases, our appellate courts found: (1) the arbitration agreements to be unenforceable when a family member signed an arbitration agreement near the time of admission to a skilled nursing facility for the decedent and did not have any actual authority; (2) that no implied authority existed; and (3) no estoppel applied. As the Thompson and Hodge courts noted, there was no evidence the resident being admitted to the nursing home took any action to create an agency relationship with the person who signed the arbitration agreement. See Thompson, 416 S.C. at 55, 784 S.E.2d at 686 (); Hodge, 422 S.C. at 572, 813 S.E.2d at 307 (quoting Thompson). The court stated this case was nearly identical to those cases.
Therefore, the court held there was no valid Arbitration Agreement in this case. The court also held that even if the Arbitration Agreement was generally valid, it could not be enforced for the wrongful death claim brought for the benefit of Solesbee's statutory beneficiaries. Further, the court rejected Magnolia's request for leave to conduct discovery before the court ruled on its motion, finding it had the opportunity to use the South Carolina Rules of Civil Procedure to conduct discovery related to arbitration. This appeal followed.
"The question of the arbitrability of a claim is an issue for judicial determination, unless the parties provide otherwise." Zabinski v. Bright Acres Assocs., 346 S.C. 580, 596, 553 S.E.2d 110, 118 (2001). An "[a]ppeal from the denial of a motion to compel arbitration is subject to de novo review." New Hope Missionary Baptist Church v. Paragon Builders, 379 S.C. 620, 625, 667 S.E.2d 1, 3 (Ct. App. 2008). Also, "[w]hether an arbitration agreement may be enforced against a nonsignatory to the agreement is a matter subject to de novo review by an appellate court." Wilson v. Willis, 426 S.C. 326, 335, 827 S.E.2d 167, 172 (2019). Under this standard of review, "a [trial] court's factual findings will not be reversed on appeal if any evidence reasonably supports those findings." Id.
Appellants argue the trial court erred in denying Magnolia's motion to compel arbitration. We disagree.
South Carolina's policy is to favor arbitration of disputes. Zabinski, 346 S.C. at 596, 553 S.E.2d at 118. "Arbitration agreements, like other contracts, are enforceable in accordance with their terms." Munoz v. Green Tree Fin. Corp., 343 S.C. 531, 539, 542 S.E.2d 360, 364 (2001). "To decide whether an arbitration agreement encompasses a dispute, a court must determine whether the factual allegations underlying the claim are within the scope of the broad arbitration clause, regardless of the label assigned to the claim." Zabinski, 346 S.C. at 597, 553 S.E.2d at 118. "Unless a court can say with positive assurance that an arbitration clause is not susceptible to any interpretation that covers the dispute, arbitration should generally be ordered." Gissel v. Hart, 382 S.C. 235, 240-41, 676 S.E.2d 320, 323 (2009). "A broadly-worded arbitration clause applies to disputes that do not arise under the governing contract when a 'significant relationship' exists between the asserted claims and the contract in which the arbitration clause is contained." Zabinski, 346 S.C. at 598, 553 S.E.2d at 119 (quoting Long v. Silver, 248 F.3d 309, 316 (4th Cir. 2001)).
"However arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed to submit." Gissel, 382 S.C. at 241, 676 S.E.2d at 323. "[T]he presumption in favor of arbitration applies to the scope of an arbitration agreement; it does not apply to the existence of such an agreement or to the identity of the parties who may be bound to such an agreement." Wilson, 426 S.C. at 337, 827 S.E.2d at 173 (emphasis omitted) (quoting Carr v. Main Carr Dev., LLC, ...
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