Progressive Eldercare Services-Chicot, Inc. v. Long
449 S.W.3d 324
Ark. Ct. App.2014Background
- Marion L. “Sugar” Long was admitted to Lake Village Rehabilitation and Care Center on July 7, 2010; his wife Sue signed admission paperwork, including an arbitration agreement, because Marion was incapacitated and could not understand or sign the forms.
- Sue signed the arbitration agreement on a signature line labeled “Patient or Legal Representative.” She had no power of attorney or other legal authority to act as Marion’s agent.
- The arbitration agreement provided that disputes between the facility and the patient or legal representative would be resolved by arbitration and described the arbitrator selection process and fees.
- Marion resided at the facility until about September 1, 2010, when Progressive Eldercare Services assumed operation of the facility.
- After Marion’s death, Sue (as administrator of his estate) sued Progressive for negligence and wrongful death; Progressive moved to compel arbitration, asserting Marion was a third-party beneficiary of the arbitration agreement Sue signed.
- The trial court denied the motion to compel, holding Sue lacked actual or apparent authority to sign and that Marion was not a third-party beneficiary; Progressive appealed only the third-party-beneficiary ruling.
Issues
| Issue | Plaintiff's Argument (Long) | Defendant's Argument (Progressive) | Held |
|---|---|---|---|
| Whether Marion is a third-party beneficiary of the arbitration agreement Sue signed | Sue argued Marion is not bound because she lacked authority and therefore no valid agreement binds him | Progressive argued the third-party-beneficiary doctrine applies: a valid agreement existed between facility and Sue as representative and it clearly intended to benefit Marion | Court held Marion was not a third-party beneficiary because there was no valid underlying agreement between two parties (Sue signed as an unauthorized representative) |
Key Cases Cited
- Andrews v. Victor Metal Prods. Corp., 239 Ark. 763, 394 S.W.2d 123 (Ark. 1965) (discusses requirements for third-party-beneficiary claims under Arkansas law)
- Perry v. Baptist Health, 358 Ark. 238, 189 S.W.3d 54 (Ark. 2004) (addresses clear intent requirement to benefit a third party)
- Courtyard Gardens Health & Rehab., LLC v. Quarles, 2013 Ark. 228, 428 S.W.3d 437 (Ark. 2013) (interlocutory appeals permitted for denials of motions to compel arbitration)