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Courtyard Gardens Health and Rehabilitation, LLC v. Williamson

Court of Appeals of Arkansas, Divisions II, III

December 14, 2016

COURTYARD GARDENS HEALTH AND REHABILITATION, LLC, ET AL. APPELLANTS
v.
ANNETTE WILLIAMSON, PERSONAL REPRESENTATIVE OF THE ESTATE OF JERLINE KENNEL, DECEASED, AND ON BEHALF OF THE WRONGFUL DEATH BENEFICIARIES OF JERLINE KENNEL APPELLEE

         APPEAL FROM THE CLARK COUNTY CIRCUIT COURT [NO. 10CV-13-78] HONORABLE ROBERT MCCALLUM, JUDGE

         AFFIRMED

          Kutak Rock LLP, by: Mark W. Dossett, Samantha B. Leflar, and Luke Burton, for appellants.

          Appellate Solutions, PLLC, by: Deborah Truby Riordan; The Edwards Firm, P.L.L.C., by: Robert H. Edwards; and Wilkes & McHugh, P.A., by: William P. Murray III, for appellee.

          RITA W. GRUBER, Judge.

         Courtyard Gardens Health & Rehabilitation, LLC, and related entities (collectively "Courtyard") appeal from an order denying their motion to compel arbitration.[1] We affirm.

         I. Background

         Courtyard operates a nursing-home facility in Arkadelphia, Arkansas. Ms. Jerline Kennel, the mother of appellee Annette Williamson, became a resident of the facility in 2005, when it was owned by another company. When Courtyard assumed ownership in 2009, it presented the facility's residents with an admission agreement and an optional arbitration agreement. The arbitration agreement provided, in essence, that any claims related to Courtyard's provision of services or health care would be resolved exclusively by binding arbitration. It also stated that arbitration would be conducted in accordance with the National Arbitration Forum ("NAF") Code of Procedure.

         The admission agreement and arbitration agreement were signed by Ms. Kennel's son, L.E. Kennel, Jr., pursuant to a power of attorney she had given him in 2005. Thereafter, Ms. Kennel remained at the Courtyard facility until shortly before her death in September 2012.

         In July 2013, appellee Annette Williamson, who had been appointed personal representative of Ms. Kennel's estate, sued Courtyard in Clark County Circuit Court. Williamson alleged that Courtyard had committed negligence, medical malpractice, conspiracy, and violations of the Arkansas Residents' Rights Act, Ark. Code Ann. §§ 20-10-1201 to -1209 (Repl. 2014), while caring for her mother. Courtyard moved to dismiss the complaint and to compel arbitration pursuant to the arbitration agreement signed by L.E. Kennel, Jr., in 2009. Williamson resisted arbitration on three grounds: 1) L.E. lacked the authority to agree to arbitration on his mother's behalf; 2) enforcement of the arbitration agreement was impossible because the NAF was no longer authorized to conduct arbitration proceedings; and 3) the arbitration agreement was unconscionable.

         Following a hearing, the circuit court ruled that the arbitration agreement was not unconscionable, and that ruling is not at issue on appeal. The court also made the following rulings, from which this appeal is brought:

1. The Arbitration Agreement was not validly formed. The Arbitration Agreement was signed by L.E. Kennel on Ms. Jerline Kennel's behalf, pursuant to a 2005 Power of Attorney granted to him. On its face and without considering any extrinsic evidence, the 2005 Power of Attorney did not encompass the signing of Arbitration Agreements, and thus Mr. Kennel did not have the authority to enter the Arbitration Agreement on Ms. Kennel's behalf. Accordingly, no valid arbitration agreement was formed, and the Court denies the Defendants' Motion to Compel Arbitration.
2. In the alternative, the Arbitration Agreement is unenforceable because it incorporates the National Arbitration Forum ("NAF") Code of Procedure. The selection of the NAF is an integral term of the Arbitration Agreement, and it is impossible to perform due to the unavailability of the NAF.

         Courtyard argues that both of the above rulings were in error and that the court should have compelled arbitration of Williamson's claims. Our standard of review is de novo. LegalZoo ...


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