481 S.W.3d 825
Ky. Ct. App.2014Background
- Ferguson admitted to Rosewood on January 13, 2011; Rick Henson signed admission documents and the Optional ADR agreement at Ferguson's verbal request.
- Ferguson was present throughout, asked no questions, and did not express concerns about the documents.
- Rosewood employee Jones testified she normally explains documents and allows reading time; Rick contends he was rushed and not informed.
- Ferguson remained at Rosewood until August 2012; suit for negligence filed October 12, 2012 by Rick as Ferguson's next friend.
- Kindred moved to compel arbitration under the ADR agreement; trial court denied, citing Ping v. Beverly Enterprises as controlling framework.
- Appeal acknowledged KUAA/FAA regime; issue centered on whether Rick could bind Ferguson to arbitration; court affirmed trial court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority of Rick to bind Ferguson to ADR | Rick had actual/implied/adoption authority from Ferguson's directive. | Ping shows Rick lacked authority; verbal directive insufficient for arbitration clause. | Rick had no authority; no contract formed. |
| Applicability of Ping to verbal directives | Ping supports authority issues in health-care contexts; applicable framework. | Ping is not directly on point; persuasive but not controlling. | Ping persuasive but not controlling; authority still lacking. |
| FAA/Preemption relevance to arbitration in this context | Right to contract for arbitration is favored; FAA should not obstruct. | FAA not offended; focus is on contract validity, not arbitration policy. | No contract formed; preemption not invoked to create validity. |
Key Cases Cited
- Ping v. Beverly Enterprises, Inc., 376 S.W.3d 581 (Ky.2012) (authority under power of attorney must expressly cover dispute resolution)
- Conseco Finance Servicing Corp. v. Wilder, 47 S.W.3d 335 (Ky.App.2001) (interlocutory appeal of arbitration denial)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009) (FAA does not preempt state contract principles)
- Bottoms v. Bottom, 880 S.W.2d 559 (Ky.App.1994) (principal must authorize agent to bind by contract)
- Pardue v. Webb, 70 S.W.2d 665 (Ky.1934) (scrivener signatures generally bind the signer)
- Mill Street Church of Christ v. Hogan, 785 S.W.2d 263 (Ky.App.1990) (definition of actual/implied authority in agency)
- Smith v. Vilvarajah, 57 S.W.3d 839 (Ky.App.2000) (precedent on appellate review and authority)