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605 S.W.3d 291
Ark. Ct. App.
2020
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Background

  • Plaintiff Anita Moss (individually and as special administratrix for Ruby Muhammad) sued Arbor Oaks and its owners for multiple tort claims arising from Muhammad’s care.
  • On January 29, 2013, Moss signed resident-admission paperwork that included a broad arbitration agreement covering disputes over $15,000 arising from the resident’s stay.
  • The same day Muhammad executed a handwritten notation on a December 2012 power-of-attorney form revoking the prior agent and appointing Moss for “financial & healthcare power of attorney,” signed by Muhammad and two witnesses.
  • Appellants (the nursing home and owners) moved to compel arbitration, arguing Moss had authority under the handwriting-created power of attorney to bind Muhammad to arbitration.
  • The Hot Spring County Circuit Court denied the motion to compel arbitration; appellants appealed. The appellate court reviewed de novo whether a valid agreement to arbitrate existed.
  • The Court of Appeals held the handwritten power-of-attorney wording (limited to “financial & healthcare”) did not, as a matter of law, grant authority to agree to arbitration; therefore there was no mutual assent and no enforceable arbitration agreement. The denial of the motion to compel was affirmed.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether a valid arbitration agreement existed because Moss, as agent under a Jan. 29, 2013 power of attorney, could bind Muhammad to arbitration Moss argued the handwriting did not grant authority to waive court rights or agree to arbitration; the generic "financial & healthcare" language is insufficient Appellants argued the handwritten revocation/appointment created a valid power of attorney under Ark. Code § 28-68-105, giving Moss authority to sign the arbitration agreement The power-of-attorney wording did not confer authority to agree to arbitration; absence of mutual assent = no valid arbitration agreement; motion to compel arbitration properly denied

Key Cases Cited

  • Country Club Gardens, LLC v. Alexander, 599 S.W.3d 363 (Ark. App. 2020) (de novo review and two-threshold questions for motions to compel arbitration)
  • Courtyard Gardens Health & Rehab., LLC v. Williamson, 509 S.W.3d 685 (Ark. App. 2016) (agent lacked authority to sign arbitration when statutory POA categories did not include claims and litigation)
  • In re Estate of Garrett, 100 S.W.3d 72 (Ark. App. 2003) (definition and nature of power of attorney; authority determined from instrument’s plain language)
  • Vogelgesang v. U.S. Bank, N.A., 211 S.W.3d 575 (Ark. App. 2005) (principal’s subjective intent yields to the plain meaning of words in the instrument)
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Case Details

Case Name: Malvern Operations, LLC, D/B/A Arbor Oaks Healthcare and Rehabilitation Center; Sub-Ten Holdings, LLC; Jej Investments, LLC; John Ponthie; Ross Ponthie; Mark Thompson; And John and Jane Does A–z v. Anita Moss, Individually and as Special Administratrix of the Estate of Ruby Muhammad, and on Behalf of the Wrongful Death Beneficiaries of Ruby Muhammad
Court Name: Court of Appeals of Arkansas
Date Published: Aug 26, 2020
Citations: 605 S.W.3d 291; 2020 Ark. App. 355
Court Abbreviation: Ark. Ct. App.
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    Malvern Operations, LLC, D/B/A Arbor Oaks Healthcare and Rehabilitation Center; Sub-Ten Holdings, LLC; Jej Investments, LLC; John Ponthie; Ross Ponthie; Mark Thompson; And John and Jane Does A–z v. Anita Moss, Individually and as Special Administratrix of the Estate of Ruby Muhammad, and on Behalf of the Wrongful Death Beneficiaries of Ruby Muhammad, 605 S.W.3d 291