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Jerald Marion Oldham v. Extendicare Homes

May 3, 2013

JERALD MARION OLDHAM PLAINTIFF
v.
EXTENDICARE HOMES, INC. D/B/A SHADY LAWN NURSING HOME DEFENDANT



MEMORANDUM OPINION

This matter comes before the Court on the Defendant's motion to compel arbitration. (Def.'s Mot., Docket Number ("DN") 9.) The Plaintiff responded. (Pl.'s Resp., DN 15.) The Defendant replied. (Def.'s Reply, DN 16.) Fully briefed, this matter is now ripe for adjudication. For all of the following reasons the Defendant's motion is GRANTED.

I.

The facts giving rise to this action are largely undisputed. Plaintiff Jerald Oldham ("Jerald") was a resident at Shady Lawn Nursing Home ("Shady Lawn") between November 22 and December 3, 2011. During this short stay he fell and injured his knee at the facility. Jerald alleges that Shady Lawn's negligence caused his injury.

Long before the events giving rise to this action occurred, Jerald executed a power of attorney in which he appointed Delores Oldham ("Delores") his attorney-in-fact.*fn1 In that role, Delores signed and executed a number of documents relating to Jerald's admission to Shady Lawn in November of 2011. Jerald did not execute any of the documents on his own behalf. Among the various documents signed by Delores is an Alternative Dispute Resolution Agreement ("arbitration agreement"). (Agreement, DN 9-1.) Pursuant to its terms the parties "voluntarily agree[d] that any dispute covered by this Agreement (herein after referred to as 'Covered Disputes') that may arise between the Parties shall be resolved exclusively by an ADR process that shall include mediation and, where mediation does not successfully resolve the dispute, binding arbitration." (Id.) Paragraph Four lists the "Covered Disputes" that are subject to arbitration:

This Agreement applies to any and all disputes arising out of or in any way relating to this Agreement or to the Resident's stay at the Center that would constitute a legally cognizable cause of action in a court of law sitting in the Commonwealth of Kentucky and shall include, but not be limited to, all claims in law or equity arising from one Party's failure to satisfy a financial obligation to the other Party; a violation of a right claimed to exist under federal, state, local law or contractual agreement between the Parties; tort; breach of contract; fraud; misrepresentation; negligence; gross negligence; malpractice; death or wrongful death and any alleged departure from any applicable federal, state, or local medical, health care, consumer or safety standards. (Id. at p. 2.) In its present motion, Shady Lawn seeks to compel arbitration of Jerald's allegations arising in tort, negligence, and gross negligence, all of which are "Covered Disputed" under the terms of the arbitration agreement.

Three other provisions in the agreement are worthy of note. First, Paragraph Fourteen reflects the "Resident's Understanding" and states:

The Resident understands that he/she has the right to seek advice of legal counsel and to consult with a Center representative concerning this Agreement. The Resident understands that this Agreement is not a condition of admission to or continued residence in the Center.

THE PARTIES UNDERSTAND, ACKNOWLEDGE, AND AGREE THAT BY ENTERING INTO THIS AGREEMENT THEY ARE GIVING UP THEIR CONSITUTIONAL RIGHT TO HAVE THEIR DISPUTES DECIDED BY A COURT OF LAW OR TO APPEAL ANY DECISION OR AWARD OF DAMAGES RESULTING FROM THE ADR PROCESS EXCEPT AS PROVIDED HEREIN. THIS AGREEMENT GOVERNS IMPORANT LEGAL RIGHTS. YOUR SIGNATURE BELOW INDICATES YOUR UNDERSTANDING OF AND AGREEMENT TO THE TERMS SET OUT ABOVE. PLEASE READ IT COMPLETELY, THROUGHLY AND CAREFULLY BEFORE SIGNING. Initial: _______ Resident (Id. at p. 4). This paragraph was initialed by Delores. (Id.) Second, immediately before the signature block, the arbitration agreement provides:

BY SIGNING THIS AGREEMENT, the Parties acknowledge that (a) they have read this Agreement; (b) have had an opportunity to seek legal counsel and to ask questions regarding this Agreement; and (c) they have executed this Agreement voluntarily intending to be legally bound there to this 22nd day of November, 2011 (the "Effective Date"). (Id. at p. 5.) Following this acknowledgment, the agreement is signed by Delores, as Jerald's legal representative, and by Shady Lawn. (Id.) Finally, Paragraph Thirteen granted Jerald thirty days to revoke, but the "Agreement, if not revoked within that time frame, shall remain in effect for all care and services rendered to the Resident at or by the Center . . . ." (Id. at 4.) Jerald does not claim that he revoked the arbitration agreement within thirty days of execution.

In response to Shady Lawn's motion to compel arbitration, Jerald argues that the arbitration agreement is not binding on him because the power of attorney did not vest Delores with the authority to enter into the agreement on his behalf. The power of attorney provides, in relevant part, that Delores is granted authority to:

[1] make contracts, lease, sell, and convey any real or personal property that I may now have or hereafter own; . . . [2] draw, make and sign any and all checks, contracts, or agreements; . . . [3] institute or defend suits concerning my property or gifts; [and 4] generally to do and perform for me and in my name all that I might do if present, and I hereby adopt and ratify all of the acts of my said attorney done in pursuance of the power hereby granted, as fully as if were present acting in my own person . . . . (Power of Attorney, DN 9-2, p. 1.) Resolution of the current motion turns on the interpretation given to these provisions in the analysis below.

II.

The terms of the arbitration agreement explicitly state that it is governed by both the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and theKentucky Uniform Arbitration Act, KRS § 417.045 et seq. (Agreement, DN 9-1, p. 2.) The Acts are substantially similar and both provide that a provision in a written contract to submit a controversy arising from the terms of that contract to arbitration will be "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2; KRS § 417.050.

The federal act was designed to "override judicial reluctance to enforce arbitration agreements, to relieve court congestion, and to provide parties with a speedier and less costly alternative to litigation." Stout v. J.D. Byrider, 228 F.3d 709, 714 (6th Cir. 2000) (citations omitted). In the face of a motion to compel arbitration, "a federal court must determine whether the parties agreed to arbitrate the dispute at issue." Id. (citation omitted). To do so, courts "examine the language of the contract in light of the strong federal policy in favor of arbitration." Id. (citation omitted). Where ...


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