New Meadowview Health & Rehab. Ctr., LLC v. Booker
550 S.W.3d 56
| Ky. Ct. App. | 2018Background
- Mona Hardin was admitted to Meadowview in 2012 and died in 2016; her husband William had a durable POA executed in 2007 that became effective upon Mona's incapacity.
- After Mona's death the Estate and William sued Meadowview for negligence, statutory violations, and wrongful death; William asserted loss of consortium.
- Meadowview moved to compel arbitration, relying on a signed signature page of an "Alternative Dispute Resolution Agreement" signed by William as "Family Member." The rest of the agreement was not in Meadowview's file.
- Meadowview submitted an affidavit by counsel saying the signature page matched a four-page ADR form used in 2012 and an unexecuted copy of that form, but no executed complete agreement was produced.
- The Estate argued Meadowview failed to show (1) a complete arbitration agreement was executed, (2) Mona was incapacitated when William signed, and (3) William had authority to bind Mona to arbitration. The trial court denied the motion; Meadowview appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a valid arbitration agreement | Meadowview failed to produce the complete contract; partial signature insufficient | Meadowview relies on signed signature page and affidavit that the page matched its ADR form | No valid, enforceable arbitration agreement shown; partial page + affidavit insufficient |
| Authority under POA to sign arbitration on Mona's behalf | POA effective only upon incapacity; no written physician determination shown | Meadowview argues POA authorized William to enter contracts and to litigate/settle claims | POA not shown effective because statutory requirement for two-physician written determination was not met; William lacked shown actual authority |
| Apparent authority/reliance | Estate: no manifestation by Mona or William that William was acting as attorney-in-fact; signature shows "Family Member" only | Meadowview claims it reasonably relied on William's apparent authority | No evidence Meadowview reasonably believed POA was in effect or that William acted as attorney-in-fact; apparent authority not established |
| Use of extrinsic evidence to prove missing contract | Estate: habit/practice evidence insufficient to prove a particular executed agreement | Meadowview: affidavit and unexecuted form show the signature page belonged to standard ADR agreement | Extrinsic evidence of practice and counsel belief insufficient to prove the existence of a complete executed arbitration agreement |
Key Cases Cited
- Conseco Finance Servicing Corp. v. Wilder, 47 S.W.3d 335 (Ky. App.) (order denying arbitration is immediately appealable)
- Ping v. Beverly Enterprises, Inc., 376 S.W.3d 581 (Ky.) (party seeking arbitration bears initial burden; apparent authority principles)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (U.S.) (FAA does not displace state contract-formation principles)
- Dutschke v. Jim Russell Realtors, Inc., 281 S.W.3d 817 (Ky. App.) (burden-shifting on prima facie showing of arbitration agreement)
- Mt. Holly Nursing Home v. Crowdus, 281 S.W.3d 809 (Ky. App.) (habit/practice evidence insufficient to prove a particular executed agreement)
- Mill Street Church of Christ v. Hogan, 785 S.W.2d 263 (Ky. App.) (principles on apparent authority binding principals to agents' transactions)