Tender Loving Care Management, Inc., d/b/a TLC Management LLC v. Randall Sherls, as Personal Representative of the Estate of Berdie Sherls
14 N.E.3d 67
| Ind. Ct. App. | 2014Background
- Birdie Sherls, incapacitated after a stroke, was admitted to a nursing facility; her adult son Oliver signed the facility Admission Agreement on her behalf.
- The Admission Agreement (signed by "Lincolnshire") contained a broad arbitration clause and a waiver of jury trial for disputes arising from care.
- Birdie died from complications alleged to be caused by negligent care; the Estate sued Tender Loving Care Management, LLC and related entities for wrongful death.
- Lincolnshire moved to compel arbitration under the written agreement; the trial court denied the motion, finding the agreement ambiguous as to which corporate entity was a party.
- The trial court nonetheless held Oliver had authority under Ind. Code § 16-36-1-5(a) to sign for Birdie and that the agreement was not an unconscionable adhesion contract.
- The Court of Appeals reviewed de novo, considered extrinsic evidence to resolve identity ambiguity, and directed the trial court to compel arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the admission agreement is ambiguous as to which corporate entity is a party | The Agreement is ambiguous because it generically refers to "Lincolnshire" and contains inconsistent logos/signatures, so it cannot bind any defendant | The parties’ intent is clear from extrinsic evidence (location, admissions personnel, complaint naming defendants) and the Agreement should be enforced | Court: Agreement was ambiguous on its face but extrinsic evidence resolves identity; arbitration enforceable |
| Whether Oliver had authority to waive Birdie’s jury-trial right by signing the Agreement | Waiving a constitutional jury right exceeds the authority granted by the health-care consent statute to an adult child | Under Ind. Code § 16-36-1-5(a), Oliver had authority to consent to health care and sign the admission agreement, including arbitration and waiver of jury trial | Court: Oliver had authority to enter the Agreement and waive jury trial |
| Whether the admission agreement is an unconscionable adhesion contract | The arbitration clause gives the facility unilateral forum advantage (AHLA) and is therefore unconscionable and unenforceable | The contract is standard admission paperwork; no evidence Oliver was unable to understand or was coerced; remedies exist for biased arbitration | Court: Agreement is not unconscionable; adhesion alone insufficient to void arbitration clause |
| Whether the trial court erred in denying motion to compel arbitration | Estate: ambiguity and other defects render arbitration clause unenforceable | Lincolnshire: arbitration clause is enforceable; extrinsic evidence clarifies parties | Court: Trial court erred to the extent it denied arbitration based on identity ambiguity; remanded to compel arbitration |
Key Cases Cited
- Brumley v. Commonwealth Bus. College Educ. Corp., 945 N.E.2d 770 (Ind. Ct. App. 2011) (standard of review for denial of motion to compel arbitration)
- Safety Nat. Cas. Co. v. Cinergy Corp., 829 N.E.2d 986 (Ind. Ct. App. 2005) (strong public policy favoring arbitration)
- Citimortgage, Inc. v. Barabas, 975 N.E.2d 805 (Ind. 2012) (contract interpretation begins with plain language and is reviewed de novo)
- University of Southern Indiana Found. v. Baker, 843 N.E.2d 528 (Ind. 2006) (extrinsic evidence may be used to resolve contract ambiguities)
- Sanford v. Castleton Health Care Ctr., LLC, 813 N.E.2d 411 (Ind. Ct. App. 2004) (representative may knowingly waive decedent’s jury-trial right via admission agreement)
- Droscha v. Shepherd, 931 N.E.2d 882 (Ind. Ct. App. 2010) (statutory grounds to vacate arbitration award for evident partiality or corruption)