403 P.3d 1014
Wyo.2017Background
- Ninety-three-year-old Aletha Boyd was admitted to Kindred Nursing & Rehabilitation—Wind River in 2010; her daughter Leanna Putnam had a durable general and medical power of attorney signed in 2001.
- At admission Putnam signed an optional Alternative Dispute Resolution (ADR) Agreement providing mediation then binding arbitration for disputes arising from Aletha’s care; the agreement stated it was not a condition of admission.
- Aletha was discharged in May 2014 and died shortly thereafter; her other daughter, Susan Boyd, was later appointed personal representative and filed a wrongful-death action alleging negligent care.
- Kindred moved to compel arbitration under the ADR agreement; district court denied the motion without stated reasons and Kindred appealed.
- Key disputed legal points: (1) whether Putnam had authority under the durable power of attorney to execute the ADR agreement; (2) whether the ADR agreement was unconscionable; (3) whether incorporation of the National Arbitration Forum (NAF) rules rendered the agreement lacking mutual assent or consideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority of agent to sign ADR | Power of attorney limited to health/property matters; signing ADR exceeded scope | Durable POA broadly grants "any act...including...contract" and allows third-party reliance | Putnam had actual authority under the durable general power of attorney to sign the ADR agreement |
| Procedural unconscionability | Putnam was emotionally distraught, pressured, and unaware; ADR presented among admission papers | Agreement was optional, prominently labeled optional, and no evidence Putnam lacked meaningful choice | No evidence of procedural or substantive unconscionability; claim fails |
| Mutual assent re: incorporation of NAF rules | "Then in effect" made terms indefinite; parties didn’t know what rules they agreed to | Agreement allowed selection of a qualified administrator and permitted written opt-out to different process; essentials are ascertainable | Agreement has mutual assent; NAF provision not an essential term and is severable |
| Consideration / illusory promise | Binding to rules subject to change provides no adequate consideration | Parties exchanged mutual promises to forbear court remedies and use ADR, creating a new legal relationship | Mutual promises supplying forbearance of court rights constitute sufficient consideration |
Key Cases Cited
- Fox v. Tanner, 101 P.3d 939 (Wyo. 2004) (arbitration agreements evaluated under state contract law principles)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (courts apply ordinary state-law contract principles to arbitration clauses)
- Thorkildsen v. Belden, 247 P.3d 60 (Wyo. 2011) (contract interpretation and construction are questions of law when language is unambiguous)
- Roussalis v. Wyoming Medical Center, Inc., 4 P.3d 209 (Wyo. 2000) (standards for substantive and procedural unconscionability)
- Ohio Cas. Ins. Co. v. W.N. McMurry Const. Co., 230 P.3d 312 (Wyo. 2010) (agency authority and when questions are factual versus legal)
- Dumais v. American Golf Corp., 299 F.3d 1216 (10th Cir. 2002) (arbitration provisions may be illusory if one side can unilaterally modify them)