APPEAL FROM MERCER CIRCUIT COURT HONORABLE DARREN W. PECKLER, JUDGE ACTION NO. 11-CI-00090
The opinion of the court was delivered by: Acree, Chief Judge:
RENDERED: APRIL 19, 2013; 10:00 A.M.
BEFORE: ACREE, CHIEF JUDGE; KELLER*fn1 AND MOORE, JUDGES.
Kindred Nursing Centers, LP*fn2 appeals the Mercer Circuit Court's denial of its motion to compel arbitration. We agree with the circuit court that the arbitration agreement upon which Kindred Nursing Centers relies is not valid. We affirm.
In August 2009, Jerry Leffew and Yvonne Leffew were named emergency custodians of Louis Leffew, their father and husband, respectively. The basis of their appointment was the district court's finding that Louis was mentally incapable of caring for his daily needs. The district judge completed Kentucky Administrative Office of the Courts Form 748, entitled "Order For Emergency Appointment of Fiduciary" and checked the boxes which gave Jerry and Yvonne the authority to conduct Louis's affairs as follows: to determine his living arrangements, to consent to medical procedures, and to handle his financial responsibilities. The district court did not check boxes which would have given them power to dispose of Louis's property, to execute instruments on his behalf, or to enter into contractual relationships.
On September 28, 2009, Jerry and Yvonne admitted Louis to the Harrodsburg Health Care Center, a facility operated by Kindred Nursing Centers in Harrodsburg, Kentucky. They signed a number of admission documents as Louis's guardians, including a document entitled, "Alternative Dispute Resolution Agreement Between Resident and Facility." That agreement provided in relevant part that any dispute arising from Louis's stay at Harrodsburg Health Care Center would be resolved by mediation and, if mediation was unsuccessful, through binding arbitration.
Jerry also presented to nursing home administrators a handwritten document dated June 23, 2007. The document noted that Louis had been "locked up [on] June 19[,] 2007[,]" and provided as follows: "I[,] Louis Leffew[,] give Jerry Leffew power of attorney rights to get all papers and statements written papers [sic] concerning charges[.]" It was signed by Louis and notarized.
Subsequent to Louis's admission, the Cabinet for Health and Family Services was appointed Louis's permanent guardian. The Cabinet chose to keep Louis in the Harrodsburg Health Care Center. His residence was interrupted only by brief periods of hospitalization. Following each stay in the hospital, a representative of the Cabinet signed a document entitled "Readmission Agreement" which permitted Louis to once again take up residence in the nursing home. In signing each Readmission Agreement, the Cabinet representative "agree[d] to the terms of the original agreement, and as applicable, additional agreement terms referenced in paragraph 5.4 of the Admissions Agreement[.]"*fn3
Louis died in March 2010, and Jerry, both individually and as executor of Louis's estate, filed suit on March 3, 2011, alleging the nursing home had negligently caused the death. Kindred Nursing Centers moved for dismissal or stay of the proceedings and requested an order compelling arbitration in accordance with the arbitration agreement.
The circuit court denied the motion, finding the agreement invalid because it was not executed by a person with the requisite ...