GOLDEN GATE NATIONAL SENIOR CARE, LLC, D/B/A GOLDEN LIVING; GGNSC FRANKFORT, LLC D/B/A GOLDEN LIVINGCENTER - FRANKFORT; GGNSC ADMINISTRATIVE SERVICES, LLC D/B/A GOLDEN VENTURES; GGNSC HOLDINGS, LLC D/B/A GOLDEN HORIZONS; GGNSC EQUITY HOLDINGS, LLC; GGNSC EQUITY HOLDINGS II, LLC; GOLDEN GATE ANCILLARY, LLC D/B/A GOLDEN INNOVATIONS; GGNSC CLINICAL SERVICES, LLC D/B/A GOLDEN CLINICAL SERVICES; GPH FRANKFORT, LLC; CHRISTY KING, IN HER CAPACITY AS ADMINISTRATOR OF GOLDEN LIVINGCENTER - FRANKFORT; WAYNE KARCZEWSKI, IN HIS CAPACITY AS ADMINISTRATOR OF GOLDEN LIVINGCENTER, FRANKFORT; AND CHRISTOPHER THOMAS JACKSON, IN HIS CAPACITY AS ADMINISTRATOR OF GOLDEN LIVINGCENTER - FRANKFORT APPELLANTS
BARBARA RUCKER, AS EXECUTRIX OF THE ESTATE OF LORAINE BROWN APPELLEE
FROM FRANKLIN CIRCUIT COURT HONORABLE PHILLIP J. SHEPHERD,
JUDGE ACTION NO. 14-CI-01439.
FOR APPELLANTS: Marcia L. Pearson, Edward M. O'Brien,
FOR APPELLEE: Brian M. Jasper, Robert E. Salyer, Lexington,
BEFORE: CLAYTON, CHIEF JUDGE; DIXON AND LAMBERT, JUDGES.
appeal is from an order of the Franklin Circuit Court holding
that the Appellants' (collectively, Golden Living
Center's) arbitration agreement is invalid and denying
the motion to dismiss or stay the Appellee's claims. We
Brown was admitted to Golden Living Center in October 2008.
At that time, her daughter, Barbara Rucker, as power of
attorney (POA), executed a number of admissions documents.
Included in the packet was a three-page arbitration
agreement, signed by Rucker. Brown was eventually discharged
from Golden Living and remained in her personal residence for
January 2014, Brown was again admitted to the facility. This
time, when presented with the packet of admission documents,
she chose not to sign the arbitration agreement. Important to
note are two facts: The document, underneath its title
("Alternate Dispute Resolution Agreement")
contained the sentence, "This agreement is not
a condition of admission to or continued residence in the
facility"; and, on the signature line, it specifically
noted that "[t]he Alternative Dispute Resolution
Agreement above set forth is hereby DECLINED," and this
was signed by "Barbara B. Rucker POA." (Emphases
original.) Golden Living Center's agent also signed this
agreement, acknowledging that Brown had declined it.
remained at Golden Living, except for times when she was
hospitalized, until April 29, 2014. She filed a lawsuit
against the appellants on December 1, 2014, with claims
against them for negligence, medical negligence, corporate
negligence, and violations of the Long-Term Care Residents
Rights Act, Kentucky Revised Statute (KRS) 216.510 et.
seq. Brown alleged numerous injuries caused by the
wrongful conduct of Golden Living Center during her brief
2014 stay there. These injuries, she claimed, resulted in
"accelerated deterioration of her health and physical
condition beyond that caused by the normal aging
thereafter, Golden Living Center filed a "Motion to
Dismiss or, in the Alternative, to Stay the Lawsuit Pending
Arbitration Proceedings." The parties briefed their
respective stances on the motion. On March 12, 2015, the
circuit court held a hearing, and the order denying Golden
Living Center's motion was entered on August 14, 2015. A
notice of appeal was timely filed. The matter was held in
abeyance in this Court (pending relevant decisions in state
and federal courts) and was returned to the active docket in
late 2018. The parties were allowed supplemental briefing to
address new case law applicable to these issues.
Brown passed away on December 31, 2017. By agreement of the
parties, Rucker (as executrix for the estate of her mother)
was substituted as a party plaintiff by order entered May 4,
2018. See KRS 395.278.
begin by stating our standard of review in appeals from
orders denying motions 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,
1902, 173 ...