172 So. 3d 155
Miss.2015Background
- Nilene Junker was admitted to the Nichols Center after knee surgery; her daughter (power of attorney) signed the facility’s admission agreement containing a broad arbitration clause.
- While being placed in a room at the facility, Junker fell and was injured; she later sued the Nichols Center.
- The admission agreement required disputes to be resolved by binding arbitration, stating arbitration would follow AAA procedural rules but expressly disclaimed an agreement to have the AAA administer or provide arbitrators.
- Junker opposed the facility’s motion to compel arbitration, arguing the clause was unenforceable because the AAA no longer administered pre-dispute healthcare cases, making the designated forum unavailable and leaving no workable mechanism to select an arbitrator.
- The circuit court denied the motion, finding the agreement provided no method to select an arbitrator if the parties could not agree. The Nichols Center appealed.
- The Mississippi Supreme Court reversed and remanded, holding the trial court erred: the clause invoked the Federal Arbitration Act (FAA), which authorizes court appointment of an arbitrator under Section 5 if parties cannot agree, and the agreement expressly limited AAA involvement, so AAA’s refusal to administer did not render arbitration unavailable.
Issues
| Issue | Junker (Plaintiff) | Nichols Center (Defendant) | Held |
|---|---|---|---|
| Enforceability because AAA won’t administer healthcare cases | Agreement is unenforceable because AAA’s refusal makes the forum unavailable | Agreement does not require AAA administration; parties agreed only to use AAA rules as a guideline | Arbitration agreement not invalid merely because AAA might not administer; AAA’s refusal does not make arbitration unavailable |
| Who selects arbitrator if parties can’t agree | Contract fails because it requires mutual selection and contains no fallback method | FAA §5 governs (agreement invokes FAA), so court can appoint an arbitrator if parties can’t agree | Court may appoint an arbitrator under FAA §5; agreement’s FAA choice-of-law provides that mechanism |
| Whether Junker can avoid arbitration by refusing to participate | Junker can avoid arbitration because mutual-selection clause is illusory/unworkable | A party cannot unilaterally repudiate a pre-dispute arbitration agreement; Junker must attempt to follow procedures | Party cannot evade a valid arbitration agreement by later refusing to arbitrate; Junker must attempt to comply (nominate/consider arbitrators) |
| Trial court’s proper inquiry on a motion to compel arbitration | Trial court correctly found arbitration invalid due to lack of an available forum | Court must apply the two-prong test (valid agreement; scope) and not decide appointment issues prematurely | Trial court erred by deciding forum unavailability/arbitrator selection without evidence of good-faith attempts to select an arbitrator; remanded for determination of validity and further proceedings |
Key Cases Cited
- United Credit Corp. v. Hubbard, 905 So. 2d 1176 (Miss. 2004) (jurisdiction over denial of motion to compel arbitration)
- Tupelo Auto Sales, Ltd. v. Scott, 844 So. 2d 1167 (Miss. 2003) (interlocutory appeals from denial of arbitration)
- Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (U.S. 1983) (federal policy favors arbitration and doubts resolved in favor of arbitration)
- Adams Community Care Center, LLC v. Reed, 37 So. 3d 1155 (Miss. 2010) (nursing-home admission agreements affect interstate commerce and are governed by the FAA)
- Covenant Health & Rehab. of Picayune, LP v. Estate of Moulds, 14 So. 3d 695 (Miss. 2009) (an agreement designating the AAA as the administrator may be unenforceable if AAA refuses to administer)
- Slater-Moore v. Goeldner, 113 So. 3d 521 (Miss. 2013) (parties cannot revoke pre-dispute arbitration agreements by later filing suit)
- Trinity Mission Health & Rehab. of Clinton v. Estate of Scott, 19 So. 3d 735 (Miss. Ct. App. 2008) (AAA’s refusal to administer does not necessarily preclude arbitration when agreement provides alternate selection methods)