596 S.W.3d 536
Ark. Ct. App.2020Background:
- Mary Young was a resident of Hickory Heights from Oct 10 to Nov 8, 2016; she did not sign the facility admission or arbitration agreements.
- Mary’s son, Mikeal Taylor, signed both the admission agreement and an arbitration addendum on the form line labeled “Resident’s Responsible Party” and wrote “Son” as his relationship.
- The arbitration form requested proof of representative authority (a checked box and attached POA/guardianship), but that box was left unchecked.
- Mary executed a durable power of attorney appointing Mikeal and Delores as co-attorneys-in-fact after the arbitration form was signed; Delores later sued Hickory Heights (Nov. 2017) alleging negligence, breach of contract, and deceptive trade practices.
- Hickory Heights moved to compel arbitration, arguing Mikeal signed in his individual capacity (or as a third-party beneficiary) and that the admission agreement (which incorporates arbitration) binds Delores; the trial court denied the motion and found no valid agreement to arbitrate.
- Hickory Heights appealed; the Court of Appeals affirmed, holding no enforceable arbitration agreement existed because Mikeal lacked authority to bind Mary and the form showed no proof of representative authority.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a valid arbitration agreement binds Mary | Taylor: Mary never agreed to arbitrate; no authority shown when Mikeal signed | Hickory Heights: Mikeal signed as “Responsible Party” in individual capacity or to benefit Mary as third-party beneficiary | Held: No — no valid agreement; Mikeal lacked authority and form showed no representative proof |
| Whether Mikeal signed in representative vs. individual capacity | Taylor: signature was representative (if at all) but no evidence he had authority then | Hickory Heights: he signed in his individual capacity (or at least created a binding agreement) | Held: Signature was not shown to be validly representative; absent proof, cannot bind resident |
| Whether suing on the admission agreement waives objection to arbitration | Taylor: bringing breach claim doesn’t prove assent to arbitration she never agreed to | Hickory Heights: plaintiff cannot both sue under the admission contract and avoid its arbitration clause | Held: Taylor can sue; incorporation of arbitration into admission agreement does not create assent when no valid arbitration agreement was formed |
| Whether federal arbitration policy or FAA preempts state-law defenses | Taylor: generally applicable contract defenses may invalidate arbitration clauses | Hickory Heights: federal law favors arbitration and preempts state rulings | Held: Concepcion and the FAA do not rescue an agreement that never formed; general contract defenses apply |
Key Cases Cited
- Hickory Heights Health & Rehab, LLC v. Cook, 557 S.W.3d 286 (Ark. App. 2018) (family member lacking POA cannot bind resident to arbitration; third-party-beneficiary theory requires clear intent)
- Pine Hills Health & Rehab, LLC v. Talley, 546 S.W.3d 492 (Ark. App. 2018) (similar facts: child signed without POA or documentation; arbitration unenforceable)
- Courtyard Gardens Health & Rehab., LLC v. Quarles, 428 S.W.3d 437 (Ark. 2013) (arbitration is a contract question; courts apply ordinary contract principles to arbitration clauses)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (arbitration agreements are enforceable like other contracts, but may be invalidated by generally applicable contract defenses)