Courtyard Gardens Health & Rehabilitation, LLC v. Davis , 2016 Ark. App. LEXIS 647 ( 2016 )

Cite as 2016 Ark. App. 608ARKANSAS COURT OF APPEALS
DIVISION II
No.CV-15-746
COURTYARD GARDENS HEALTH Opinion Delivered: December 14, 2016
AND REHABILITATION, LLC,
ET AL. APPEAL FROM THE CLARK COUNTY
APPELLANTS CIRCUIT COURT
[NO. 10CV-14-38]
V.
HONORABLE ROBERT MCCALLUM,
ERICKA ANN DAVIS, SPECIAL JUDGE
ADMINISTRATOR OF THE
ESTATE OF JULIUS MARKS,
DECEASED
APPELLEE REVERSED AND REMANDED
RITA W. GRUBER, Judge
Appellant Courtyard Gardens Health and Rehabilitation, LLC, along with its
owners, administrators, and other related entities (collectively “Courtyard”), appeal from an
order denying their motion to compel arbitration. 1 We reverse and remand.
I.
In 2009, Julius Marks, the father of appellee Ericka Ann Davis, became a resident of
Courtyard’s nursing-home facility in Arkadelphia, Arkansas. Mr. Marks’s admission papers,
including an arbitration agreement, were signed on his behalf by Ms. Davis, pursuant to her
power of attorney.
1
An order denying a motion to compel arbitration is an appealable order. Ark. R.
App. P. –Civ. 2(a)(12) (2016).
Cite as 2016 Ark. App. 608The arbitration agreement provided, in essence, that any claims related to
Courtyard’s provision of services or health care would be resolved exclusively by binding
arbitration. The agreement also provided that arbitration would be conducted in accordance
with the National Arbitration Forum (“NAF”) Code of Procedure, which was incorporated
into the agreement.
Mr. Marks remained at Courtyard until shortly before his death in October 2013. In
April 2014, Ms. Davis, as special administrator of her father’s estate, filed suit against
Courtyard in Clark County Circuit Court, alleging negligence and medical malpractice in
her father’s care and treatment. Courtyard moved to compel arbitration of the claim in
accordance with the above-referenced arbitration agreement. However, Davis responded
that the arbitration agreement was legally impossible to perform because the NAF, whose
procedural code was incorporated into the agreement, no longer conducted consumer
arbitrations. The court agreed and ruled that the arbitration agreement was impossible to
perform due to the unavailability of the NAF. Courtyard filed a timely appeal.
II.
Courtyard argues that the parties’ arbitration agreement remained enforceable,
despite the NAF’s unavailability as an arbitration forum. We agree.
The NAF’s absence from consumer-arbitration cases stems from an action filed by
Minnesota’s Attorney General in 2009. The action alleged that the NAF had violated various
consumer-protection laws while handling consumer arbitration claims. See Green v. U.S.
Cash Advance Ill., LLC, 724 F.3d 787 (7th Cir. 2013); Meskill v. GGNSC Stillwater Greeley,
LLC, 862 F. Supp.2d 966 (D. Minn. 2012); Miller v. GGNSC Atlanta, LLC, 746 S.E.2d
2Cite as 2016 Ark. App. 608680 (Ga. Ct. App. 2013). To settle the case, the NAF signed a consent decree barring it
from accepting consumer arbitration cases. As a result, a legal dilemma arose with regard to
arbitration agreements that, like the one here, invoked the NAF procedures. See Meskill,
supra. The issue that would soon be addressed by numerous courts was whether the NAF’s
unavailability rendered such arbitration agreements legally impossible to perform.
The courts split on this question, but our supreme court recently resolved the issue
for our State in Courtyard Gardens Health & Rehabilitation, LLC v. Arnold, 2016 Ark. 62, 485
S.W.3d 669. The Arnold court held that, based on the language of the parties’ arbitration
agreement and the applicable law, the absence of the NAF did not render performance of
the arbitration agreement impossible. Specifically, the court determined that the agreement’s
reference to the NAF was ancillary to, rather than integral to, the parties’ agreement to
arbitrate. We reach the same conclusion, based on the holding in Arnold.
Our decision is rooted in the fact that Arnold is identical in many respects to the case
before us. Arnold involved, as does the present case, Courtyard’s appeal from a ruling by the
Clark County Circuit Court that an arbitration agreement was impossible to perform due
to the unavailability of the NAF. Of greater importance, the arbitration agreement in Arnold
is the same for all practical purposes as the arbitration agreement in this case—a crucial
consideration in light of the supreme court’s reliance on the particular language of the
agreement. Further, the parties’ arguments in Arnold, as here, focus on the legal concept of
impossibility of performance and the effect of the NAF’s unavailability. The supreme court’s
analysis of these arguments in Arnold was thorough and meticulous, and there is no need to
expound on that analysis.
3
Cite as 2016 Ark. App. 608Given these factual and legal similarities between Arnold and the case at bar, there
remains little, if any, room for a different outcome. We therefore see no reason to deviate
from Arnold’s holding that arbitration must go forward, despite the NAF’s unavailability.
Davis attempts to distinguish Arnold, but her efforts are unavailing. In particular, she
contends that Arnold did not address certain parts of the NAF Code, such as Rules 48(D)
and (E), which, she contends, warrant a denial of arbitration. Without delving into the
substance of these rules, we observe that another recent supreme court case, GGNSC
Holdings, LLC v. Lamb, 2016 Ark. 101, 487 S.W.3d 348, rejected these Rule 48 arguments.
The Lamb court stated the following:
As a separate point of appeal, GGNSC takes issue with the circuit court’s finding that
Rules 48(D) and (E) permit the residents to assert their claims in court. In response,
Lamb argues that the circuit court correctly ruled that the arbitration agreement does
not require the residents to arbitrate their disputes, but that Rule 48 allows the
residents to sue in court. Further, Lamb argues that “it is impossible for the NAF to
arbitrate this dispute as a result of the consent judgment with the Minnesota Attorney
General.” Thus, despite this argument being addressed as a separate point on appeal,
the crux of Lamb’s argument involves impossibility. As explained below, we reject
Lamb’s argument for the reasons set forth in Courtyard Gardens Health & Rehabilitation,
LLC v. Arnold, 2016 Ark. 62, 11-12, 485 S.W.3d 669.
2016 Ark. 101, at 12, n. 3, 487 S.W.3d 348, at 356, n. 3. The court then went on to hold
that, for the reasons stated in Arnold, the parties’ arbitration agreement was not impossible
to perform.
We reverse and remand for entry of an order compelling arbitration. See Arnold,
supra.Reversed and remanded.
HARRISON and HOOFMAN, JJ., agree.
4
Cite as 2016 Ark. App. 608Kutak Rock LLP, by: Mark W. Dossett, Samantha B. Leflar, and Luke Burton, for
appellants.
Appellate Solutions, PLLC, by: Deborah Truby Riordan; The Edwards Firm, P.L.L.C.,
by: Robert H. Edwards; and Wilkes & McHugh, P.A., by: William P. Murray III, for appellee.
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