History
  • No items yet
midpage
642 S.W.3d 253
Ark. Ct. App.
2022
Read the full case

Background

  • Lucy Chancey was admitted to Paris Health & Rehab on Sept. 24, 2018; her son Thomas signed the admission agreement as Responsible Party under a durable power of attorney.
  • The admission contract contained a broad arbitration clause requiring arbitration of disputes except: any solely monetary claim under $25,000 was excluded from the Program.
  • Thomas (as guardian) sued Northport on Oct. 28, 2019 for negligence, medical negligence, and violations of long-term‑care residents’ rights.
  • Northport moved to compel arbitration; Thomas opposed, arguing the $25,000 carve‑out destroyed mutuality by shielding Northport’s likely claims while sending residents’ tort claims to arbitration.
  • The circuit court denied the motion, finding the arbitration agreement lacked mutuality under Arkansas precedent. Northport appealed.
  • The Court of Appeals affirmed, holding the agreement invalid and unenforceable for lack of mutuality of obligations under controlling Arkansas decisions.

Issues

Issue Plaintiff's Argument (Chancey) Defendant's Argument (Northport) Held
Whether the arbitration agreement is a valid, enforceable contract (mutuality of obligations) Carve‑out for solely monetary claims < $25,000 makes the clause one‑sided: residents’ tort claims go to arbitration while likely nursing‑home claims (collections, small monetary claims) remain in court, so no mutuality The clause binds both sides for disputes > $25,000; FAA governs and preempts stricter state scrutiny; Jorja Trading prohibits invalidating arbitration by speculating about benefit imbalance Agreement lacks mutuality and is unenforceable; denial to compel arbitration affirmed
Whether Jorja Trading altered the mutuality analysis or preempts prior Arkansas nursing‑home decisions N/A (Chancey relies on Arkansas mutuality precedent) Jorja Trading (Arkansas Supreme Court) shows some intra‑contract provisions need not be bilateral; Northport says that undermines prior rulings like Phillips/Adams/Alexander Court follows Phillips/Adams/Alexander precedent rather than expanding Jorja Trading; Jorja did not overrule Phillips, so Northport’s argument rejected

Key Cases Cited

  • Jorja Trading, Inc. v. Willis, 598 S.W.3d 1 (2020) (Ark. Supreme Court held certain non‑bilateral arbitration provisions did not destroy mutuality in an installment‑sales contract)
  • Robinson Nursing & Rehab. Ctr., LLC v. Phillips, 586 S.W.3d 624 (2019) (Ark. Supreme Court held nursing‑home arbitration clauses with a monetary threshold lacked mutuality)
  • Country Club Gardens, LLC v. Alexander, 599 S.W.3d 363 (2020) (Ark. Ct. App. affirmed denial to compel arbitration where clause had a monetary threshold)
  • Hickory Heights Health & Rehab, LLC v. Adams, 566 S.W.3d 134 (2018) (Ark. Ct. App. held arbitration clause shielding the facility from court litigation lacked mutuality)
  • Reg’l Care of Jacksonville, LLLC v. Henry, 444 S.W.3d 356 (2014) (Ark. Supreme Court precedent recognizing lack of mutuality where arbitration provisions favor one party)
  • E‑Z Cash Advance Inc. v. Harris, 60 S.W.3d 436 (2001) (Ark. Supreme Court case cited for mutuality doctrine in arbitration context)
Read the full case

Case Details

Case Name: Northport Health Services of Arkansas, LLC, D/B/A Paris Health and Rehab Center And Northport Health Services, Inc. v. Thomas Chancey, Guardian of the Estate and Person of Lucy Chancey, an Incapacitated Person
Court Name: Court of Appeals of Arkansas
Date Published: Mar 2, 2022
Citations: 642 S.W.3d 253; 2022 Ark. App. 103
Court Abbreviation: Ark. Ct. App.
Log In
    Northport Health Services of Arkansas, LLC, D/B/A Paris Health and Rehab Center And Northport Health Services, Inc. v. Thomas Chancey, Guardian of the Estate and Person of Lucy Chancey, an Incapacitated Person, 642 S.W.3d 253