GGNSC Holdings Inc. v. Chappel
2014 Ark. 545
| Ark. | 2014Background
- Appeal from Ouachita County Circuit Court denial of motion to compel arbitration by GGNSC and related entities against multiple appellees.
- Appellees include Dianne Roche, Nellie Lamb, Betty Huebner, Greg Brown, and Leon Robinson (as guardians/administrators/attorneys).
- Plaintiffs allege DTDP Act, Long-Term Care Residents’ Rights Act, and breach of admission agreements; seek class certification and damages.
- GGNSC asserted arbitration agreements signed by residents or agents, seeking stay of court proceedings and referral to arbitration under a Resident and Facility Arbitration Agreement.
- Arbitration clause referenced the National Arbitration Forum (NAF) and its Code of Procedure, with NAF identified as exclusive administrator and to be governed by FAA.
- Circuit court denied motions to compel arbitration, citing impossibility of performance due to NAF unavailability and concluding NAF terms were integral and non-severable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there was a valid arbitration agreement between the parties | GGNSC argues agreement exists and is enforceable. | Appellees contend lack of valid assent and invalidity due to NAF unavailability and integral terms. | Remand to address threshold validity; circuit court failed to rule on existence. |
| Whether the NAF reference and Code of Procedure are integral or severable | NAF terms are not essential; they may be severed if problematic. | NAF terms are integral, binding, and non-severable. | Remand guidance; issue not resolved on appeal; must determine severability vs. integral terms. |
| Whether defenses (impossibility, lack of authority, unconscionability) negate arbitration | Defenses are inapplicable if a valid agreement exists. | Impossibility and authority issues, plus unconscionability, justify denying arbitration. | Remand; the court must evaluate threshold validity before addressing defenses. |
Key Cases Cited
- Bank of the Ozarks, Inc. v. Walker, 2014 Ark. 223 (Ark. 2014) (threshold validity ruling required before defenses)
- Asset Acceptance, LLC v. Newby, 2014 Ark. 280 (Ark. 2014) (blanket denial may imply ruling on threshold issues)
- Alltel Corp. v. Rosenow, 2014 Ark. 375 (Ark. 2014) (court not required to rule on all threshold issues if one addressed)
- DIRECTV, Inc. v. Murray, 2012 Ark. 366 (Ark. 2012) (Arkansas contract law governs validity of arbitration agreement)