Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Genesis Healthcare, LLC v. Stevens

Court of Appeals of Kentucky

September 22, 2017

GENESIS HEALTHCARE, LLC; HBR PADUCAH, LLC, D/B/A PADUCAH CARE AND REHABILITION CENTER; HBR KENTUCKY, LLC; HARBORSIDE HEALTHCARE, LLC; SUNBRIDGE HEALTHCARE, LLC; SUN HEALTHCARE GROUP, INC; GENESIS ELDERCARE REHABILITATION SERVICES, INC. APPELLANTS
v.
MABLE STEVENS, AS EXECUTRIX OF THE ESTATE OF REBA KATHRYN PRICE APPELLEE

         APPEAL FROM MCCRACKEN CIRCUIT COURT HONORABLE CRAIG Z. CLYMER, JUDGE ACTION NO. 14-CI-00338

          BRIEF FOR APPELLANTS: Donald L. Miller, II Jan G. Ahrens Kristin M. Lomond Louisville, Kentucky

          BRIEF FOR APPELLEE: Carl J. Wilander Robert E. Salyer Lexington, Kentucky

          BEFORE: KRAMER, CHIEF JUDGE; MAZE AND STUMBO, JUDGES.

          OPINION

          MAZE, JUDGE:

         Genesis Healthcare, LLC, and affiliated entities (Genesis) appeals from an order of the McCracken Circuit Court denying its motion to compel arbitration of claims brought by Mable Stevens, as Executrix of the Estate of Reba Kathryn Price. Genesis argues that the trial court erred in finding the arbitration agreement to be unenforceable due to the unavailability of the designated arbitrator. We conclude that the trial court erred by addressing this issue without considering whether Stevens had the authority to execute the arbitration agreement on Price's behalf. However, we further conclude that the power of attorney did not authorize Stevens to execute an arbitration agreement. Since there was no valid arbitration agreement, the trial court properly denied Genesis's motion to compel arbitration. Hence, we affirm the trial court's order and remand for additional proceedings on the merits of the case.

         The relevant facts of this case are not in dispute. On April 1, 2010, Reba Price was admitted as a resident of Paducah Care & Rehabilitation Center, which is owned and operated by Genesis and affiliated entities. Price remained a resident there until her death in 2015.[1] Prior to her admission, Price executed a durable power of attorney (POA) appointing her sister, Mable Stevens, as her attorney-in-fact. Price's POA granted Stevens:

full power for me and in my name and stead to make contracts, lease, sell, convey or mortgage any real or personal property that I may now or hereafter own and to execute bills of sale and to execute and acknowledge on my behalf any mortgages, bills of sale, and general warranty deeds, upon such terms and conditions that my attorney-in-fact deems advisable, and any sale of my real estate may be either public sale or private sale, in the discretion of such attorney-in-fact, that is necessary to carry out the power herein given; to receive and receipt for any money which may now or hereafter be due me; to retain or release all liens on real or personal property belonging to me; to draw, make, endorse and sign any and all checks on my account of any bank for me and to pay all of my current bills and write and sign all necessary checks in connection therewith; to invest and reinvest my money for me; and generally to do and perform for me and in my name, all that I might do if present.
The rights under this Power of Attorney specifically include, among others, the right to sell, assign, transfer and make gifts of securities, and to execute and deliver all instruments, deeds and contracts. The rights also specifically entitle the attorney-in-fact to make all necessary decisions and sign all necessary documents regarding any health care decisions to be made for me, including but not limited to medical treatment and long-term care.

         During the admissions process, Stevens, as POA, signed all of the admissions documents on Price's behalf. The admission documents included a document styled, "Long Term Care Arbitration Agreement" (the Agreement). The Agreement provided for binding arbitration of "[a]ny and all claims or controversies arising out of or in any way relating to this Agreement…" (Emphasis in original). The Agreement explained that the parties agreed that they were "giving up and waiving their right to have any dispute decided in a court of law before a judge and/or jury." However, the resident was permitted to cancel the Agreement upon thirty days' notice, but any acts occurring prior to the cancellation date would still be subject to arbitration. In addition, the Agreement specified that any arbitration would be subject to the National Arbitration Forum's (NAF) Code of Procedure.

         On March 25, 2014, the McCracken District Court appointed Stevens as Price's guardian. Shortly thereafter, Stevens filed this action, claiming damages for personal injury, including violations of the long-term care resident's rights statute, KRS[2] 216.515, caused by negligent care to Price. Genesis filed a motion to compel arbitration under the terms of the Agreement. Stevens asserted two grounds against enforcement of the Agreement. First, Stevens argued that the POA did not authorize her to enter into an arbitration agreement. And second, Stevens argued that the Agreement was impossible to perform because it explicitly mandated arbitration by the NAF, but the NAF no longer conducts consumer arbitration.[3]

         Addressing only the latter issue, the trial court determined that the application of the NAF's Code of Procedure is an integral term of the Agreement. The court also noted that Genesis failed to submit any evidence showing that another arbitrator would be willing or able to use those rules. Given these circumstances, the trial court concluded that the Agreement is now impossible to perform, and is therefore unenforceable. Consequently, the trial court denied the motion to compel arbitration.

         Genesis now appeals from the trial court's order denying its motion to compel arbitration. Ordinarily, such orders are interlocutory and are not immediately appealable. However, an order denying a motion to compel arbitration is immediately appealable. KRS 417.220(1). See also Conseco Finance Servicing Corp. v. Wilder, 47 S.W.3d 335, 340 (Ky. App. 2001). The enforcement and effect of an arbitration agreement is governed by the Kentucky Uniform Arbitration Act (KUAA), KRS 417.045 et seq., and the Federal Arbitration Act, (FAA) 9 U.S.C.[4] §§ 1 et seq. "Both Acts evince a legislative policy favoring arbitration agreements, or at least shielding them from disfavor." Ping v. Beverly Enterprises, Inc., 376 S.W.3d 581, 588 (Ky. 2012).

         But under both Acts, a party seeking to compel arbitration has the initial burden of establishing the existence of a valid agreement to arbitrate. Id. at 589. That question is controlled by state law rules of contract formation. Id. at 590. The FAA does not preempt state law contract principles, including matters concerning the authority of an agent to enter into a contract and which parties may be bound by that contract. Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630-31, 129 S.Ct. 1896, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.