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Regional Care of Jacksonville, LLC v. Henry

Supreme Court of Arkansas

September 11, 2014

REGIONAL CARE OF JACKSONVILLE, LLC, D/B/A WOODLAND HILLS HEALTHCARE AND REHABILITATION OF JACKSONVILLE; WOODLAND HILLS HEALTHCARE AND REHABILITATION OF JACKSONVILLE, LLC; CORNERSTONE HEALTH CARE, INC.; CHRISTIAN HEALTH CARE HOSPICE, INC.; AND ANGELA HERD, IN HER CAPACITY AS ADMINISTRATOR OF WOODLAND HILLS HEALTHCARE AND REHABILITATION OF JACKSONVILLE, APPELLANTS
v.
SHIRLEY HENRY, AS SPECIAL ADMINISTRATOR OF THE ESTATE OF LUCILLE BETNCOURT, DECEASED, APPELLEE

APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT. NO. 60CV-13-3149. HONORABLE TIMOTHY DAVIS FOX, JUDGE.

Davis, Clark, Butt, Carithers & Taylor, PLC, by: Constance G. Clark and Kelly Carithers, for appellants.

Reddick Moss, PLLC, by: Brian D. Reddick, Robert W. Francis, and Matthew D. Swindle; and Appellate Solutions, PLLC, by: Deborah Trudy Riordan, for appellees.

OPINION

COURTNEY HUDSON GOODSON, Associate Justice.

Page 357

Appellants Regional Care of Jacksonville, LLC, d/b/a Woodland Hills Healthcare and Rehabilitation of Jacksonville; Woodland Hills Healthcare and Rehabilitation of Jacksonville, LLC; Cornerstone Health Care, Inc.; Christian Health Care Hospice, Inc.; and Angela Herd, in her capacity as administrator of Woodland Hills Healthcare and Rehabilitation of Jacksonville (collectively " Woodland Hills" ), appeal the order entered by the Pulaski County Circuit Court denying their motion to dismiss and to compel arbitration of the claims asserted against them by appellee Shirley Henry, as special administrator of the Estate of Lucille Betncourt, deceased (Henry). For reversal, Woodland Hills contends that the circuit court erred by not requiring arbitration of Henry's claims. We affirm the circuit court's decision.

The record reflects that Lucille Betncourt was a resident of Woodland Hills, a nursing-home facility, on eight separate occasions between January 2008 and her death in December 2012. Woodland Hills provided an admission agreement to its residents for execution upon entering the facility. Betncourt signed admission agreements on January 4, 2008, March 10, 2008, and May 20, 2010. She signed the latter two agreements with an " X." Dewey Brockwell, Betncourt's husband, executed an admission agreement as the " Responsible Party" on September 8, 2010. Henry, Betncourt's daughter, signed the last four admission agreements as the " Responsible Party" on November 15, 2011, June 4, 2012, June 28, 2012, and September 26, 2012. All of the admission agreements contained an arbitration clause.

On August 12, 2013, Henry filed a complaint against Woodland Hills asserting causes of action for negligence, medical malpractice, breach of the admission agreement, violations of the Arkansas Long-Term Care Residents' Right Act, breach of the Medicare/Medicaid provider agreement, and for violating the Arkansas Deceptive Trade Practices Act. Woodland

Page 358

Hills subsequently filed a motion to dismiss and to compel arbitration of these claims. In its supporting brief, Woodland Hills relied on the arbitration clauses, which are identical, found in each of the admission agreements executed after 2008. This clause states as follows:

Arbitration. By signing this Admission Agreement, Resident, Responsible Party, and Guarantor agree with the Facility that any dispute between the Parties, other than a dispute over billing or collecting for services, but including any services rendered prior to the date this Admission Agreement was signed, and any dispute arising out of the diagnosis, treatment, or care of the Resident, including the scope of this arbitration clause and the arbitrability of any claim or dispute, against whomever made (including, to the fullest extent permitted by applicable law, third parties who are not signatories to this Admission Agreement) shall be resolved by binding arbitration. The Parties hereby agree and intend that this Admission Agreement and the Resident's stay at the Facility substantially involve interstate commerce, and stipulate that the Federal Arbitration Act (" FAA" ) in effect as of November 1, 2008 and federal case law interpreting such version of the FAA shall apply to this Admission Agreement, shall preempt any inconsistent state law and shall not be reverse preempted by the McCarran-Ferguson Act: United States Code Title 15, Chapter 20, or other law. Any amendment to such version of the FAA is hereby expressly waived. This Admission Agreement binds all parties whose claims may arise out of or relate to treatment or service provided by the Facility, including any spouse or heirs of the resident. This provision for arbitration may be revoked by written notice delivered to the Facility within twenty-one (21) days of signature. Resident, Responsible Party and Guarantor understand that the result of this arbitration agreement is that claims, other than those dealing with billing or collection matters, but including malpractice claims Resident, Responsible Party, and Guarantor may have against the Facility and its employees and agents, cannot be brought as a lawsuit in court before a judge or jury, and agree that all such claims will be resolved as described in this section. The arbitrator(s) shall apply the Federal Rules of Evidence and Federal Rules of Civil Procedure except where otherwise stated in this Admission Agreement. Also, the arbitrator(s) shall apply, and the arbitration award shall be consistent with, the state substantive law (including any and all statutory damage caps) for the state in which the Facility is located, except as otherwise stated in this Admission Agreement or where preempted by the FAA. Any award of the arbitrator(s) may be entered as a judgment in any court having jurisdiction over the Parties. In the event an arbitrator(s) or a court having jurisdiction finds any portion of this Admission Agreement unenforceable, that portion shall not be effective and the remainder of the Admission Agreement shall remain in full force and effect. This Arbitration provision shall remain in full force and effect notwithstanding the termination, cancellation, or natural expiration of this Admission Agreement and/or the death of Resident.

(Bold typeface in original.) Woodland Hills argued that the arbitration clause in question was enforceable because it contained mutual obligations to arbitrate. It also asserted that the admission agreements signed by Henry were binding on Betncourt's estate because Henry was clothed with apparent authority to act on

Page 359

Betncourt's behalf. Alternatively, Woodland Hills argued that the estate was bound by the admission agreements executed by Henry because Betncourt was a third-party beneficiary of the agreements. In response, Henry contended that, in executing the agreements, she did not possess the authority necessary under the law of agency to bind Betncourt; that the arbitration clause failed for lack of mutuality of obligation; and that the arbitration clause at issue was unconscionable. She also contended that Betncourt lacked the mental capacity to enter into the admission agreement executed in May 2010 and that Betncourt did not make a ...


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