Hickory Heights Health & Rehab, LLC v. Wesley Smith, as Special Administrator of the Estate of Bettye Jean Smith , 2022 Ark. App. 190 ( 2022 )

Cite as 2022 Ark. App. 190ARKANSAS COURT OF APPEALS
DIVISION II
No. CV-21-392
Opinion Delivered April 27, 2022
HICKORY HEIGHTS HEALTH AND
REHAB, LLC; CENTRAL ARKANSAS
NURSING CENTERS, INC.; HICKORY
MANOR, LLC; AND MICHAEL S.
APPEAL FROM THE PULASKI
MORTON
COUNTY CIRCUIT COURT,
ELEVENTH DIVISION
[NO. 60CV-20-2846]
APPELLANTS
V.
WESLEY SMITH, AS SPECIAL
ADMINISTRATOR OF THE ESTATE
HONORABLE PATRICIA JAMES,
OF BETTYE JEAN SMITH, DECEASED,
JUDGE
AND ON BEHALF OF THE
WRONGFUL DEATH BENEFICIARIES
OF BETTYE JEAN SMITH
APPELLEE
AFFIRMED
WAYMOND M. BROWN, Judge
Appellants Hickory Heights Health and Rehab, LLC; Central Arkansas Nursing
Centers, Inc.; Hickory Manor, LLC; and Michael S. Morton bring this interlocutory appeal
of an order of the Pulaski County Circuit Court denying their motion to compel arbitration
of a negligence complaint filed by appellee Wesley Smith as special administrator of the
estate of Bettye Jean Smith. Appellants argue that the circuit court erred in failing to enforce
a valid arbitration agreement. We find no error and affirm.
On February 19, 2018, Wesley assisted with Bettye’s admission to Hickory Heights
Health and Rehab, LLC (Hickory Heights), for medical, nursing, and personal care.1 The
facility required signatures on necessary documents. Wesley signed the admission form for
his mother as the responsible party.2 However, Bettye’s name was not anywhere on the
admission agreement. That same day, Wesley also signed an arbitration agreement that was
required as a condition of Bettye’s admission to the facility. Wesley signed the arbitration
agreement as the responsible party and indicated that his relationship to Bettye was “son.”
Bettye’s name was printed on the resident line in the arbitration agreement in what appeared
to be the handwriting of the facility’s representative. A separate line below the signatures
read as follows: “_______ (Check if applicable): A copy of my guardianship papers, durable
power of attorney or other documentation has been provided to the Facility and is attached.”
The blank was not checked.
1
Wesley had been appointed medical power of attorney (POA) by Bettye in December
2005.
2
Responsible party was defined in the admission agreement as “the Resident’s legal
guardian, if one has been appointed, the Resident’s attorney-in-fact, if the Resident executed
a power of attorney, or some other individual or family member who agrees to assist the
Facility in providing for the Resident’s health, care and maintenance.” The definition also
included someone who “manages, uses, controls, or otherwise has legal access to Resident’s
income or resources that legally may be used to pay Resident’s share of cost or other charges
not paid by the Arkansans Medicaid Program or any other source.”
2
Bettye was a resident at Hickory Heights from February 19, 2018, until October 11,
2019. Bettye died on November 9, 2019. Wesley was appointed special administrator of
Bettye’s estate on December 31. He filed the negligence complaint against appellants on
May 5, 2020. He stated that as result of appellants’ negligence, Bettye suffered numerous
physical and emotional injuries: falls, medication errors, right scapula fracture, pelvic ring
fracture, severe pain and suffering, and death. He contended that Bettye’s injuries led to
degradation, mental anguish, distress, unnecessary hospitalizations and treatment, and
emotional trauma and eventually caused her death. Appellants filed an answer on June 3
asserting the existence of an arbitration agreement and denying the material allegations of
Wesley’s complaint.
Appellants filed a motion to compel arbitration on August 21. They contended that
Wesley executed the arbitration agreement when Bettye was admitted to Hickory Heights,
and at the time the agreements were signed, Wesley had authority under a medical POA
executed by Bettye on December 28, 2005. Appellants maintained that by signing the
agreements, Wesley bound Bettye and her estate to the terms of the arbitration agreement.
Appellants attached a copy of the medical POA to their motion to compel arbitration. The
authority granted in the medical POA was to “kick in” if it was determined that Bettye was
incapacitated to provide informed consent for medical treatment and surgical and diagnostic
procedures. The document permitted Wesley to “make health care decisions and to provide,
withhold, or withdraw consent on [Bettye’s] behalf for medical treatment and surgical and
diagnostic procedures, to apply for public benefits to defray the costs of health care, and to
3
authorize [Bettye’s] admission to or transfer from a health care facility.” Wesley filed a
response on September 1 contending that he signed the necessary documents as Bettye’s son
and not under any legal authority to bind Bettye, who he noted was not identified in the
admission agreement. He stated that the line outlining his legal authority was left blank on
the arbitration agreement because he did not hold legal authority to bind Bettye to the
agreement. Wesley also said that the medical POA executed in his favor did not include the
power to waive Bettye’s right to a jury trial for personal-injury claims.3 Appellants filed a
reply on September 14, contending that Wesley signed the documents as Bettye’s attorney-
in-fact and that the lack of a checkmark does not destroy the authority Wesley had. They
also argued that Wesley had the authority to consent to the arbitration agreement on Bettye’s
behalf because the arbitration agreement was in connection with Bettye’s admission to
Hickory Heights. Wesley filed a supplemental response on September 22, again contending
that his authority under the medical POA was limited to health-care decisions and was not
adequate to bind Bettye or her estate to arbitration.
The circuit court held a hearing on appellants’ motion to compel on March 16, 2021.
Appellants maintained that the arbitration agreement was incorporated into the admission
agreement, which fell under the authority granted to Wesley in the medical POA. Wesley
argued that the medical POA did not give him the authority to bind Bettye to arbitration.
3
Appellants also made other contentions; however, they are not relevant to the issue
on appeal.
4
The circuit court did not make an oral ruling but informed the parties that it wished to go
over all the evidence and exhibits before deciding. The circuit court filed an order on April
23 denying appellants’ motion to compel arbitration upon a finding that “the power of
attorney at issue in this matter did not give [Wesley] the right to bind his Mother to
arbitration.” Appellants filed a timely notice of appeal on May 21.
An order denying a motion to compel arbitration is immediately appealable pursuant
to Arkansas Rule of Appellate Procedure–Civil 2(a)(12).4 We review a circuit court’s denial
of a motion to compel arbitration de novo on the record. 5 While we are not bound by the
circuit court’s decision, in the absence of a showing that the circuit court erred in its
interpretation of the law, we will accept its decision as correct on appeal.6
Generally, the terms of an arbitration contract do not apply to those who are not
parties to the contract.7 In Arkansas, the presumption is that the parties contract only for
themselves; thus, a contract will not be construed as having been made for the benefit of a
third party unless it clearly appears that such was the intention of the parties. 8 When a third
party signs an arbitration agreement on behalf of another, as was done in this case, the court
4
(2021).
5
Robinson Nursing & Rehab. Ctr., LLC v. Phillips, 2019 Ark. 305, 586 S.W.3d 624.
6
Progressive Eldercare Services-Morrilton, Inc. v. Taylor, 2021 Ark. App. 379.
7
Innisfree Health & Rehab, LLC v. Titus, 2021 Ark. App. 403, 636 S.W.3d 781.
8
Id.5
must determine whether the third party was clothed with authority to bind the other person
to arbitration.9 Here, Hickory Heights bore the burden of proof.10
In denying appellants’ motion to compel, the circuit court found that the authority
granted to Wesley in the medical POA was not sufficient to allow him to bind Bettye to the
terms of the arbitration agreement. We agree. Appellants argue that since the arbitration
agreement was part of the admissions process, Wesley had the authority to bind Bettye to
arbitration based on the medical POA’s language giving Wesley the right to authorize Bettye’s
admission into a health-care facility. This argument is without merit.11 The nature of an
agent’s authority must be ascertained from the power-of-attorney instrument.12 Our court
has found that a power of attorney that included authority to make health-care decisions did
not include the authority to agree to arbitrate.13 Here, there is no indication that Wesley
had power beyond making health-care decisions for Bettye. The medical POA did not
include the right for Wesley to make litigation decisions for Bettye, nor did it authorize
Wesley to sign the arbitration agreement on Bettye’s behalf. Accordingly, we hold that
Wesley lacked the authority to bind Bettye to the arbitration agreement, and there is no valid
9
Innisfree Health & Rehab, LLC v. Jordan, 2020 Ark. App. 518.
10
Pine Hills Health & Rehab., LLC v. Talley, 2018 Ark. App. 131, 546 S.W.3d 492.
11
Bettye’s name was not found anywhere in the admission agreement.
12
Courtyard Gardens Health & Rehab., LLC v. Williamson, 2016 Ark. App. 606, 509
S.W.3d 685.
13
Id.6
arbitration agreement to enforce. We affirm the circuit court’s denial of appellants’ motion
to compel arbitration.
Affirmed.
BARRETT and VAUGHT, JJ., agree.
Hardin, Jesson & Terry, PLC, by: Jeffrey W. Hatfield, Kynda Almefty, Carol Ricketts,
Kirkman T. Dougherty, and Stephanie I. Randall, for appellants.
Rainwater, Holt & Sexton, P.A., by: Jeff R. Priebe; and Appellate Solutions, PLLC, by:
Deborah Truby Riordan, for appellee.
7