Bookman v. Britthaven, Inc.

NO. COA13-948
NORTH CAROLINA COURT OF APPEALS
Filed: 15 April 2014
TERRI DEW BOOKMAN, Administratrix
of the Estate of CARTHINA ROBERSON
DEW,
Plaintiff,
v. Wilson County
No. 2011 CVS 1575
BRITTHAVEN, INC., D/B/A BRITTHAVEN
OF WILSON, DAVITA RX, LLC, WILSON
MEDICAL CENTER, MORGAN JONES, and
COURTNEY LASSITGER,
Defendants.
Appeal by defendant from order entered 10 May 2013 by Judge
Milton F. Fitch, Jr. in Wilson County Superior Court. Heard in
the Court of Appeals 21 January 2014.
Taylor Law Office, by W. Earl Taylor, Jr., for plaintiff-
appellee.
Williams Mullen, by Brian C. Vick and Elizabeth D. Scott,
for defendant-appellant.
HUNTER, Robert C., Judge.
Defendant Britthaven, Inc. d/b/a Britthaven of Wilson
(“Britthaven”) appeals from the trial court’s order denying its
motion to compel arbitration. On appeal, Britthaven argues that
apparent authority existed to bind the principal to the
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arbitration agreement, and therefore, the trial court erred by
ruling that the arbitration agreement is unenforceable.
After careful review, we reverse the trial court’s order
and remand for further proceedings.
Background
On 24 August 2010, Carthina Dew (“Mrs. Dew”) was admitted
into Britthaven after being discharged from Wilson Medical
Center following surgery on her broken femur. Mrs. Dew was
awake, alert, lucid, and responsive to questions when she
arrived at Britthaven. However, she did not sign any of the
legal documents needed to admit her into the facility. Her
husband, Frederick Dew (“Mr. Dew”), and her daughter, Terri Dew
Bookman (“Mrs. Bookman”), signed all relevant documents. They
met with Janet Watson (“Ms. Watson”), Britthaven’s admission
coordinator. Ms. Watson filed an affidavit with the trial court
averring that Mr. Dew and Mrs. Bookman presented themselves as
having authority to sign all documents needed on Mrs. Dew’s
behalf prior to her admission into Britthaven. Ms. Watson
presented Mr. Dew and Mrs. Bookman with twelve documents,
including one titled “RESIDENT AND FACILITY ARBITRATION
AGREEMENT – READ CAREFULLY” (“the arbitration agreement”). When
it came time to sign the documents, Mr. Dew had Mrs. Bookman
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sign his name, “Fred Dew,” on the arbitration agreement and all
other admission documents. Mrs. Bookman primarily signed Mr.
Dew’s name on signatory lines intended for either the resident’s
signature or the signature of the resident’s representative or
responsible party. For example, on the “Facility Resident
Directory Opt Out Instructions,” Mrs. Bookman signed “Fred Dew”
on the line reserved for the “Signature of Resident or Legal
Representative.”
Mrs. Dew was discharged from Britthaven on or about 7
September 2010. She died on 3 November 2010, allegedly due to
complications with large pressure ulcers. On 28 September 2011,
Mrs. Bookman filed a wrongful death action against Britthaven
and four other defendants in her capacity as Administratrix of
Mrs. Dew’s estate (“plaintiff”).1 Britthaven moved to compel
arbitration pursuant to the arbitration agreement bearing Mrs.
Bookman’s signature of Mr. Dew’s name. At the hearing on
Britthaven’s motion, plaintiff challenged the validity of the
arbitration agreement by arguing that neither Mrs. Bookman nor
Mr. Dew had actual authority to execute the arbitration
agreement on Mrs. Dew’s behalf. The trial court agreed,
entering an order denying Britthaven’s motion to compel
1
Britthaven is the only defendant that is a party to this
appeal.
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arbitration, but did not determine whether Mr. Dew or Mrs.
Bookman had apparent authority to sign the arbitration agreement
on Mrs. Dew’s behalf. That order was appealed to this Court,
where the case was remanded by unpublished opinion for findings
of fact and conclusions of law relating to the issue of apparent
authority. See Bookman v. Britthaven, Inc., No. COA12-663, 2013
WL 1314965 (N.C. Ct. App. April 2, 2013) (“Bookman I”).2
On remand, Britthaven’s request to present further evidence
on the issue of apparent authority went unanswered by
plaintiff’s counsel and the trial court. The trial court
entered a new order drafted by plaintiff’s counsel without
conducting an evidentiary hearing or considering any further
evidence. It concluded that neither Mr. Dew nor Mrs. Bookman
had “legal authority, expressed authority, actual authority,
2
Plaintiff contends that under the doctrine of the law of the
case, the Bookman I Court determined that “the [trial court’s]
additional findings fully support the conclusion of law that
neither Mr. Dew nor Mrs. Bookman had apparent authority to
execute the Arbitration Agreement on behalf of Mrs. Dew and that
Defendant-Britthaven’s Motion to Compel Arbitration must be
denied.” However, the Bookman I Court explicitly stated that
“[n]othing in this opinion is intended to express any view on
the merits of the apparent agency issue,” and “[w]e do not
address plaintiff’s arguments regarding the merits of the
apparent agency argument because that issue must be considered
in the first instance by the trial court.” Bookman I, at *1,
*4. Thus, plaintiff’s argument is overruled. See Goldston v.
State, 199 N.C. App. 618, 624, 683 S.E.2d 237, 242 (2009)
(“[T]he law of the case applies only to issues that were decided
in the former proceeding.”).
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implied authority, or apparent authority” to sign the
arbitration agreement on Mrs. Dew’s behalf, and thus it denied
Britthaven’s motion to compel arbitration. Britthaven filed
timely notice of appeal from the order.
Discussion
I. Apparent Authority
Britthaven’s sole argument on appeal is that the trial
court erred by denying its motion to compel arbitration because
Mr. Dew and Mrs. Bookman had apparent authority to sign the
arbitration agreement on Mrs. Dew’s behalf. After careful
review, we reverse and remand.
Britthaven’s appeal from the trial court’s order denying
its motion to compel arbitration is interlocutory. Appeals may
be taken from interlocutory orders in two circumstances:
First, the trial court may certify that
there is no just reason to delay the appeal
after it enters a final judgment as to fewer
than all of the claims or parties in an
action. N.C.G.S. § 1A–1, Rule 54(b) [2013].
Second, a party may appeal an interlocutory
order that “affects some substantial right
claimed by the appellant and will work an
injury to him if not corrected before an
appeal from the final judgment.”
Dep’t of Transp. v. Rowe, 351 N.C. 172, 174–75, 521 S.E.2d 707,
709 (1999) (citation omitted), cert. denied, 534 U.S. 1130, 151
L. E. 2d 972 (2002). This Court has previously held that “[t]he
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right to arbitrate a claim is a substantial right which may be
lost if review is delayed, and an order denying arbitration is
therefore immediately appealable.” U.S. Trust Co., N.A. v.
Stanford Grp. Co., 199 N.C. App. 287, 289-90, 681 S.E.2d 512,
514 (2009) (citation and quotation marks omitted). Thus, we
hold that Britthaven’s appeal is properly before us.
“When a party disputes the existence of a valid arbitration
agreement, the trial judge must determine whether an agreement
to arbitrate exists.” Sciolino v. TD Waterhouse Investor
Servs., Inc., 149 N.C. App. 642, 645, 562 S.E.2d 64, 66, disc.
review denied, 356 N.C. 167, 568 S.E.2d 611 (2002). “The trial
court’s findings regarding the existence of an arbitration
agreement are conclusive on appeal where supported by competent
evidence, even where the evidence might have supported findings
to the contrary.” Ellision v. Alexander, 207 N.C. App. 401,
404, 700 S.E.2d 102, 106 (2010). “Accordingly, upon appellate
review, we must determine whether there is evidence in the
record supporting the trial court’s findings of fact and if so,
whether these findings of fact in turn support the conclusion
that there was no agreement to arbitrate.” Sciolino, 149 N.C.
App. at 645, 562 S.E.2d at 66.
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“The law of contracts governs the issue of whether an
agreement to arbitrate exists.” Brown v. Centex Homes, 171 N.C.
App. 741, 744, 615 S.E.2d 86, 88 (2005). In order to hold an
alleged principal contractually liable to a third party for the
acts of his agent, the third party has the burden of proving
that
a particular person was at the time acting
as a servant or agent of the [principal]. An
agent’s authority to bind his principal
cannot be shown by the agent’s acts or
declarations. This can be shown only by
proof that the principal authorized the acts
to be done or that, after they were done, he
ratified them. One who seeks to enforce
against an alleged principal a contract made
by an alleged agent has the burden of
proving the existence of the agency and the
authority of the agent to bind the principal
by such contract.
Simmons v. Morton, 1 N.C. App. 308, 310, 161 S.E.2d 222, 223
(1968) (citations omitted).
Here, the trial court was to determine whether Mr. Dew or
Mrs. Bookman had apparent authority to bind Mrs. Dew as their
principal to the arbitration agreement.
Apparent authority is that authority which
the principal has held the agent out as
possessing or which he has permitted the
agent to represent that he possesses. Under
the doctrine of apparent authority, a
principal’s liability in any particular case
must be determined by what authority the
third person in the exercise of reasonable
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care was justified in believing that the
principal had, under the circumstances,
conferred upon his agent.
Munn v. Haymount Rehab. & Nursing Ctr., 208 N.C. App. 632, 639,
704 S.E.2d 290, 295 (2010) (citation and quotation marks
omitted). Furthermore, “the principal cannot restrict his
liability for acts of his agent within the scope of his apparent
authority by limitations thereon of which the person dealing
with the agent has not notice.” Morpul Research Corp. v.
Westover Hardware, Inc., 263 N.C. 718, 721, 140 S.E.2d 416, 419
(1965).
The law of apparent authority usually
depends upon the unique facts of each
case[.] . . . Thus, in a case where the
evidence is conflicting, or susceptible to
different reasonable inferences, the nature
and extent of an agent’s authority is a
question of fact to be determined by the
trier of fact. Where different reasonable
and logical inferences may not be drawn from
the evidence, the question is one of law for
the court.
Foote & Davies, Inc. v. Arnold Craven, Inc., 72 N.C. App. 591,
595, 324 S.E.2d 889, 893 (1985) (citations omitted).
On remand, the trial court found as fact that:
13. Neither Frederick Washington Dew nor
Terri Dew Bookman discussed with Carthina
Roberson Dew anything with regards to
consenting to any arbitration on her behalf
on August 24, 2010 or at anytime relevant
hereto.
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. . .
15. Carthina Roberson Dew did not delegate
to Terri Dew Bookman or Frederick Washington
Dew the right and/or authority to agree to
any arbitration agreement on her behalf on
August 24, 2010 or at anytime relevant
hereto.
. . .
18. Carthina Roberson Dew did not give the
authority either expressed or implied to
Terri Dew Bookman or Frederick Washington
Dew to execute the Resident and Facility
Arbitration Agreement.
19. Carthina Roberson Dew did not hold Terry
Dew Bookman nor Frederick Washington Dew out
to Britthaven, Inc., as having or possessing
the right and/or authority to execute or
agree to any arbitration agreement on her
behalf on August 24, 2010 or at anytime
relevant hereto, nor did she make or
indicate any manifestations of such
authority to Britthaven, Inc.
. . .
21. At no time during the admission
procedure on August 24, 2010 or at anytime
relevant hereto did Carthina Roberson Dew
hold Terry Dew Bookman or Frederick
Washington Dew out as possessing the right
to agree or enter into any arbitration
agreement on her behalf.
22. At no time during the admission
procedure on August 24, 2010 or at anytime
relevant hereto did Carthina Roberson Dew
permit Terry Dew Bookman or Frederick
Washington Dew to represent that they
possessed the right or authority to agree or
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enter into any arbitration agreement on her
behalf. (Emphasis added.)
Based on these findings of fact, the trial court concluded that
neither Mr. Dew nor Mrs. Bookman had apparent authority to sign
the arbitration agreement on Mrs. Dew’s behalf and that any
belief on Britthaven’s part of apparent authority was
unreasonable and unjustified under the circumstances. Even
assuming that the trial court’s findings of fact are supported
by competent evidence and are thus binding on appeal, Ellision,
207 N.C. App. at 404, 700 S.E.2d at 106, they are insufficient
to support the trial court’s conclusion that no apparent
authority existed to bind Mrs. Dew to the arbitration agreement.
Significantly, the trial court made no factual findings as
to whether Mrs. Dew conferred authority on Mrs. Bookman or Mr.
Dew to conduct the admission process in general on her behalf.
Thus, its analysis as to the arbitration agreement is
incomplete. Ms. Watson averred that both Mr. Dew and Mrs.
Bookman “presented themselves as having full authority to act on
behalf of Mrs. Dew, and to sign and execute any and all
necessary documents on her behalf.” Indeed, not only does
plaintiff not challenge the enforceability of any of the eleven
other contracts signed by Mrs. Bookman and Mr. Dew on Mrs. Dew’s
behalf, Mrs. Bookman averred that she signed documents in Mr.
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Dew’s name so that Mrs. Dew could be “admitted” into Britthaven.
The complaint itself states that Mrs. Dew was “admitted” into
Britthaven, and the trial court found as fact that “[Mrs. Dew]
was admitted as a resident” of Britthaven. Ms. Watson averred
that the paperwork signed by Mrs. Bookman and Mr. Dew is
“necessary” for a resident to be admitted into Britthaven.
Therefore, the trial court’s finding of fact that Mrs. Dew was
“admitted” and plaintiff’s own concession that Mrs. Dew was
“admitted” tends to show that at the very least, there may have
been actual or apparent authority conferred on Mr. Dew or Mrs.
Bookman to execute some or all of the contracts that were needed
in order to complete the admission process.
If such authority did exist, the issue regarding the
apparent authority to enter into the arbitration agreement would
become one of scope. The North Carolina Supreme Court has
established that “[t]he principal is liable upon a contract duly
made by his agent with a third person . . . when the agent acts
within the scope of his apparent authority, unless the third
person has notice that the agent is exceeding his actual
authority.” Morpul Research Corp., 263 N.C. at 721, 140 S.E.2d
at 418. Throughout the admission process, Mrs. Bookman and Mr.
Dew signed twelve contracts with Britthaven on Mrs. Dew’s
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behalf. Of those twelve contracts, they now challenge the
enforceability of only one – the arbitration agreement. Mrs.
Bookman signed Mr. Dew’s name on signatory lines reserved for
Mrs. Dew or her “Legal Representative,” “Responsible Party,” and
“Agent or Representative.” Ms. Watson averred that neither Mr.
Dew nor Mrs. Bookman “raised any objection to agreeing to or
signing any of the documents that I presented them” and that
“[a]t no time during the admission process, did Mr. Dew or his
daughter make any statement or take any action to suggest that
their authority to act on behalf of Mrs. Dew was limited in any
way or that either lacked the authority to sign any of the
paperwork on her behalf.” Given that Mrs. Bookman and Mr. Dew
may have had authority to conduct the admission process for Mrs.
Dew, and Ms. Watson averred that she was unaware of any
limitation on this authority if it existed, there remains
evidence which the trial court failed to address in its findings
of fact and conclusions of law “that would allow, but not
require, a finding of apparent authority” to enter into the
arbitration agreement. Bookman I, at *4.
Rather than allowing Britthaven, the party bearing the
burden of proof, to put on further evidence as to these matters
after remand from Bookman I, the trial court entered new
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findings of fact taken verbatim from plaintiff’s proposed order.
Such findings are only supported by affidavits from Mrs. Bookman
and Mr. Dew that were initially presented to the trial court in
support of plaintiff’s argument that there was no actual
authority to bind Mrs. Dew to the arbitration agreement.
Plaintiff presented no evidence for the purpose of resolving the
issue of apparent authority. Thus, because the trial court
denied Britthaven the opportunity to carry its burden of
establishing apparent authority and failed to address all issues
raised by the evidence it had before it, we conclude that it did
not fully comply with the Bookman I Court’s mandate to enter
“further findings of fact and conclusions of law regarding
whether either Mr. Dew or [Mrs.] Bookman had apparent authority
to enter into the arbitration agreement in this case.” Bookman
I, at *4; see Small v. Small, 107 N.C. App. 474, 477, 420 S.E.2d
678, 681 (1992) (“In a trial without a jury, it is the duty of
the trial judge to resolve all issues raised by the pleadings
and the evidence by making findings of fact and drawing
therefrom conclusions of law upon which to base a final order or
judgment.”).
Because the trial court failed to enter findings of fact or
conclusions of law resolving: (1) whether Mr. Dew or Mrs.
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Bookman had authority to bind Mrs. Dew to the other admission
contracts; (2) whether the arbitration agreement fit into the
scope of this potential authority; (3) whether there was any
limitation on this potential authority; and (4) whether
Britthaven was aware of any limitation on this authority if one
existed, we must reverse the trial court’s order and remand. We
further instruct the trial court to conduct an evidentiary
hearing as needed to resolve these outstanding issues.
Conclusion
For the reasons stated above, we reverse the trial court’s
order denying Britthaven’s motion to compel arbitration and
remand for further proceedings.
REVERSED AND REMANDED.
Judges MCGEE and ELMORE concur.