ROBINSON NURSING AND REHABILITATION CENTER, LLC, D/B/A ROBINSON NURSING AND REHABILITATION CENTER; CENTRAL ARKANSAS NURSING CENTERS, INC.; NURSING CONSULTANTS, INC.; AND MICHAEL MORTON APPELLANTS
ANDREW PHILLIPS, AS PERSONAL REPRESENTATIVE OF THE ESTATE OF DOROTHY PHILLIPS, AND ON BEHALF OF THE WRONGFUL DEATH BENEFICIARIES OF DOROTHY PHILLIPS; AND ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED APPELLEES
FROM THE PULASKI COUNTY CIRCUIT COURT [NO. 60CV-14-4568]
HONORABLE TIMOTHY DAVIS FOX, JUDGE
Hardin, Jesson & Terry, PLC (Little Rock), by: Jeffrey W.
Hatfield, Kynda Almefty, and Carol Ricketts; and Hardin,
Jesson & Terry, PLC (Fort Smith), by: Kirkman T.
Dougherty and Stephanie I. Randall, for appellants.
Campbell Law Firm, P.A., by: H. Gregory Campbell; and Reddick
Moss, PLLC, by: Brian D. Reddick, for appellees.
COURTNEY RAE HUDSON, ASSOCIATE JUSTICE
interlocutory appeal, appellants Robinson Nursing and
Rehabilitation Center, LLC, d/b/a Robinson Nursing and
Rehabilitation Center; Central Arkansas Nursing Centers,
Inc.; Nursing Consultants, Inc.; and Michael Morton
(collectively "Robinson") appeal from the Pulaski
County Circuit Court's order denying motions to compel
arbitration of a class-action complaint filed by appellees
Andrew Phillips, as personal representative of the estate of
Dorothy Phillips, and others (collectively
"Phillips"). For reversal, Robinson argues that the
circuit court erred in refusing to enforce valid arbitration
agreements. We affirm in part and reverse and remand in part.
September 4, 2015, Phillips filed a first amended
class-action complaint against Robinson alleging claims that
Robinson had breached its admissions and provider agreements,
violated the Arkansas Deceptive Trade Practices Act
("ADTPA"), committed negligence and civil
conspiracy, and been unjustly enriched. He sought
compensatory, economic, and punitive damages, as well as
attorney's fees, interest, and costs. Phillips filed an
amended motion for class certification on September 10, 2015,
requesting that a class be certified of all residents and
estates of residents who resided at Robinson from June 11,
2010, to the present.
September 24, 2015, Robinson filed an answer to the complaint
in which it denied the allegations and asserted, among other
defenses, that the claims of putative class members were
barred from being litigated in a court of law by virtue of
arbitration agreements. Robinson also filed a response to the
motion for class certification.
circuit court entered an order granting class certification
on March 4, 2016, and Robinson appealed to this court. We
affirmed the grant of class certification with respect to
Phillips's breach-of-contract, ADTPA, and
unjust-enrichment claims, but reversed with respect to the
negligence claim. Robinson Nursing & Rehab. Ctr., LLC
v. Phillips, 2017 Ark. 162, 519 S.W.3d 291.
September 1, 2017, Robinson filed a motion to compel
arbitration with regard to nine class members/residents with
arbitration agreements that had been signed by the
residents' legal guardians. This motion was later
supplemented to add one additional class member. Robinson
also filed separate motions to compel arbitration as to 105
residents who had signed the agreements on their own behalf
and as to 158 residents whose agreements had been signed by a
person with power of attorney over that resident. On
September 5, 2017, Robinson filed a fourth motion to compel
arbitration as to 271 residents who had "responsible
parties" execute arbitration agreements on their behalf.
The individual arbitration agreements, admission agreements,
and any other accompanying documents were attached to the
motions to compel.
September 7, 2017, Phillips filed an unopposed motion for
extension of time to respond to Robinson's motions to
compel arbitration. The motion was granted, and the circuit
court extended the time for response until October 17, 2017.
However, before Phillips filed a response, the circuit court
summarily ruled at a September 22, 2017 hearing that all four
of Robinson's motions to compel arbitration were denied.
Neither party presented argument in support of, or in
opposition to, the motions or objected to the timing of the
circuit court's ruling at the hearing. The court also
denied Robinson's request for findings of fact and
conclusions of law. A written order generally denying the
motions to compel was entered on October 19, 2017, and
Robinson filed a timely notice of appeal from the order.
appeal, Robinson argues that the circuit court erred in
denying its motions to compel arbitration. Robinson contends
that the 544 arbitration agreements at issue were valid and
enforceable, that the claims asserted by Phillips were within
the scope of the agreements, and that the circuit court's
ruling was contrary to this court's strong policy in
favor of arbitration.
order denying a motion to compel arbitration is immediately
appealable pursuant to Arkansas Rule of Appellate
Procedure-Civil 2(a)(12) (2018). We review a circuit
court's denial of a motion to compel arbitration de novo
on the record. Courtyard Gardens Health & Rehab., LLC
v. Arnold, 2016 Ark. 62, 485 S.W.3d 669. When a circuit
court denies a motion to compel arbitration without expressly
stating the basis for its ruling, as it did here, that ruling
encompasses the issues presented to the circuit court by the
briefs and arguments of the parties. Reg'l Care of
Jacksonville, LLC v. Henry, 2014 Ark. 361, 444 S.W.3d
356; Asset Acceptance, LLC v. Newby, 2014 Ark. 280,
437 S.W.3d 119.
parties do not dispute that the Federal Arbitration Act
("FAA"), 9 U.S.C. §§ 1-16, governs the
agreements at issue. The FAA establishes a national policy
favoring arbitration when the parties contract for that mode
of dispute resolution. Henry, supra.
Likewise, in Arkansas, arbitration is strongly favored as a
matter of public policy and is looked upon with approval as a
less expensive and more expeditious means of settling
litigation and relieving docket congestion. Arnold,
supra; Henry, supra.
an arbitration provision being subject to the FAA, we look to
state contract law to decide whether the parties'
agreement to arbitrate is valid. Henry,
supra. The same rules of construction and
interpretation apply to arbitration agreements as apply to
agreements in general. Newby, supra. In
deciding whether to grant a motion to compel arbitration, two
threshold questions must be answered: (1) Is there a valid
agreement to arbitrate between the parties? and (2) If such
an agreement exists, does the dispute fall within its scope?
preliminarily argues in his response brief that the motions
to compel arbitration were barred by the law-of-the-case
doctrine and that Robinson also waived its right to
arbitrate. Phillips claims that Robinson's failure to
attempt to exclude residents who were subject to arbitration
agreements from the proposed class in its prior appeal from
class certification now bars it from seeking to compel those
class members to participate in arbitration. He further
contends that Robinson waived its right to arbitrate by
waiting for more than two years to request it. As Robinson
asserts, however, these arguments are not properly preserved
for our review. Phillips did not file a response to the
motions to compel, nor did he raise these issues to the
circuit court at the hearing. Further, because the circuit
court's general denial constituted a ruling only on the
arguments that were raised by the parties, Phillips has
failed to secure a ruling on either the law-of-the-case
doctrine or waiver. Newby, supra. We
therefore decline to address them and instead discuss only
the issues raised by Robinson in its motions to
compel-namely, whether there was a valid agreement to
arbitrate between the parties and whether the claims fell
within the scope of the agreements.
Whether There Is a Valid Agreement to Arbitrate Between the
first determine the threshold inquiry of "whether a
valid agreement to arbitrate exists; that is, whether there
has been mutual agreement, with notice as to the terms and
subsequent assent." Henry, 2014 Ark. 361, at 6,
444 S.W.3d at 360. We have held that, as with other types of
contracts, the essential elements for an enforceable
arbitration agreement are (1) competent parties, (2) subject
matter, (3) legal consideration, (4) mutual agreement, and
(5) mutual obligations. Id. at 6-7, 444 S.W.3d at
360. As the proponent of the arbitration agreements, Robinson
has the burden of proving these essential elements.
DaimlerChrysler Corp. v. Smelser, 375 Ark. 216, 289
S.W.3d 466 (2008).
Validity of the 271 Arbitration Agreements Executed by
first challenges the validity of Robinson's motion to
compel with respect to the 271 arbitration agreements that
were not signed by the resident, a legal guardian of the
resident, or a person with a power of attorney over the
resident. These agreements were instead signed by the
resident's "responsible party" or "legal
representative." Phillips contends that these agreements
are invalid because the signors did not have legal authority
to act on the residents' behalf or to bind the residents
third party signs an arbitration agreement on behalf of
another, we must determine whether the third party was
clothed with the authority to bind the other person to
arbitration. Courtyard Gardens Health & Rehab., LLC
v. Sheffield, 2016 Ark. 235, 495 S.W.3d 69. The burden
of proving an agency relationship lies with the party
asserting its existence. Id. Not only must the agent
agree to act on the principal's behalf and subject to his
control, but the principal must also indicate that the agent
is to act for him. Courtyard Gardens Health & Rehab.,
LLC v. Quarles, 2013 Ark. 228, 428 S.W.3d 437.
admits that the "responsible parties" at issue here
did not have legal authority to act as agents on the
residents' behalf, as there were no documents presented
by these persons demonstrating such authority. Instead,
Robinson argues that the residents were bound by the
arbitration agreements by virtue of being third-party
beneficiaries. Two elements are necessary in order for the
third-party-beneficiary doctrine to apply under Arkansas law:
(1) there must be an underlying valid agreement between two
parties, and (2) there must be evidence of a clear intention
to benefit a third party. Perry v. Baptist Health,
358 Ark. 238, 189 S.W.3d 54 (2004); Hickory Heights
Health & Rehab, LLC v. Cook, 2018 Ark.App. 409, 557
S.W.3d 286; Broadway Health & Rehab, LLC v.
Roberts, 2017 Ark.App. 284, 524 S.W.3d 407.
critical question in determining whether the
third-party-beneficiary doctrine applies to the 271
arbitration agreements at issue is whether the
"responsible parties" were signing in their
individual capacity or in a representative capacity.
Cook, supra. Robinson asserts that these
persons were acting in their individual capacity such that it
created a valid and enforceable contract between those
persons and Robinson, with a clear intention to benefit the
nursing-home residents. Phillips, however, argues that these
persons signed the agreements only on behalf of, and as
representatives of, the residents.
are three different versions of the arbitration agreements
presented by Robinson, with each version using slightly
different terms to identify the parties to the agreement. Two
of the versions indicate that the arbitration agreement is
entered into between "the Facility" and the
"Resident and/or Legal Representative," with the
resident and legal representative collectively referred to as
the "Resident." The signature lines similarly
provide for a signature by the "Resident and/or Legal
Representative" and the facility's representative.
These arbitration agreements also contain a box that may be
checked if a copy of guardianship papers, a durable power of
attorney, or other documentation has been provided to the
facility, although as noted earlier, no such documentation
was provided for these 271 residents. The associated
admissions agreements refer either to the "resident or
resident responsible party" or to the "resident or
resident representative/agent," with "agent"
defined as "a person who manages, uses, controls, or
otherwise has legal access to Resident's income or
resources that legally may be used to pay Resident's
share of cost or other charges not paid by the Arkansas
Medicaid Program." The signature lines have a space for
the resident and for either the "Resident Responsible
Party" or the "Resident Representative/Agent"
to sign, depending on the version of the admissions
agreement, along with the facility representative.
third version of the arbitration agreement states that it is
between "the Facility," "the Resident,"
and "the Resident's Responsible Party."
"Responsible Party" is defined as "your legal
guardian, if one has been appointed, your attorney-in-fact,
if you have executed a power of attorney, or some other
individual or family member who agrees to assist the Facility
in providing for your health, care and maintenance." The
agreement has signature lines for the facility
representative, the "Resident," and the
"Responsible Party," and it also has a line to
indicate the "Responsible Party's Relationship to
Resident." These agreements also have the box to be
checked if documentation has been provided to Robinson
demonstrating a guardianship or power of attorney over the
resident. The admissions agreement associated with this
version of the arbitration agreement indicates that the
"Resident," the "Facility," and the
resident's "Responsible Party" agree to the
terms and conditions contained therein. The definition of
"Responsible Party" is consistent with that in the
arbitration agreement, with additional language stating this
"includes a person who manages, uses, controls, or
otherwise has legal access to Resident's income or
resources that legally may be used to pay Resident's
share of cost or other charges not ...