Court Opinion

ID: 9375937
Source: CourtListenerOpinion
Date Created: 2023-03-01 15:04:27.532351+00
Date Added: 2024-06-11T17:17:02.934164
License: Public Domain

Cite as 2023 Ark. App. 121
                   ARKANSAS COURT OF APPEALS
                                       DIVISION I
                                      No. CV-22-121

PROGRESSIVE ELDERCARE
SERVICES-COLUMBIA, INC., D/B/A              Opinion Delivered   March 1, 2023
THE GREEN HOUSE COTTAGES OF
WENTWORTH PLACE;                            APPEAL FROM THE COLUMBIA
WENTWORTH, LLC, D/B/A THE                   COUNTY CIRCUIT COURT
GREEN HOUSE COTTAGES OF                     [NO. 14CV-19-282]
WENTWORTH PLACE; T. MARQUEL
(KELLY) PARK, ADMINISTRATOR OF              HONORABLE SPENCER G. SINGLETON,
THE GREEN HOUSE COTTAGES OF                 JUDGE
WENTWORTH PLACE; JOHN DOE I;
JOHN DOE II; JOHN DOE III; JOHN
DOE IV; AND JOHN DOE V                      AFFIRMED
                     APPELLANTS

V.

PATRICIA GRIFFIN, AS SPECIAL
ADMINISTRATOR OF THE ESTATE
OF DOSSIE LEE WILLIAMS,
DECEASED, AND ON BEHALF OF THE
WRONGFUL DEATH BENEFICIARIES
OF DOSSIE LEE WILLIAMS,
DECEASED
                        APPELLEE

                             KENNETH S. HIXSON, Judge

      Appellants Progressive Eldercare Services-Columbia, Inc., d/b/a The Green House

Cottages of Wentworth Place and numerous other associated parties (collectively

“Progressive”) bring this interlocutory appeal from an order denying their motion to compel
arbitration of a complaint filed by appellee Patricia Griffin, as special administrator of the

estate of Dossie Lee Williams, deceased, and on behalf of the wrongful-death beneficiaries

of Dossie Lee Williams, deceased. Progressive argues that the trial court erred in refusing to

enforce a valid arbitration agreement. For the following reasons, we affirm the trial court’s

order denying Progressive’s motion to compel arbitration.

       On September 26, 2016, Dossie Lee Williams was admitted to The Green House

Cottages of Wentworth Place for medical, nursing, and personal care. Dossie Lee Williams

did not sign any of the admission documents; instead, her daughter Pamela Green 1 signed

the documents necessary for Dossie’s admission. Among the documents signed by Pamela

was an admission agreement, which stated:

       The undersigned resident or resident’s representative (collectively, the “Resident”)
       hereby requests admission of /s/ Dossie Williams [Name of Resident] to Green
       House Cottages of Wentworth Place (The “Nursing Facility” or “Facility”) for
       medical, nursing, and personal care. The Nursing Facility and the Resident agree to
       the following terms for the Resident’s care.

       The admission agreement required Dossie to appoint a family member to act as the

“Responsible Party” in admission, care and treatment, and discharge decisions. Pamela was

listed as the responsible party. The admission agreement also asked two questions: “Do you

have a power of attorney?” and “Do you have a legal guardian?” Both questions were

answered no. Dossie did not sign the admission agreement, but Pamela signed as the

“Resident’s Representative.”

       1
           Pamela Green is appellee Patricia Griffin’s sister.

                                                  2
       That same day, Pamela also signed an arbitration agreement that was incorporated by

the admission agreement. The arbitration agreement was required to be signed as a

condition of admission to the nursing home.2 The arbitration agreement stated that “any

claim, dispute, or controversy (“claim”) between the parties shall be resolved by final and

binding arbitration.” The arbitration agreement contained a box next to the signature line

asking for the identity of the signatory; the options on the list of signatories were “Resident,”

“Guardian,” “Power of Attorney,” “Spouse,” and “Adult Children.” Pamela checked the

box for “Adult Children.” A separate line below the signature block read as follows: “____

(check if applicable): A copy of my guardianship papers, durable power of attorney or other

documentation, has been provided to the Facility and is attached.” The blank was not

checked. Pamela signed the arbitration agreement as the “Responsible Party.”

       Dossie was a resident of the nursing home from September 26, 2016, through March

6, 2018, and she passed away on March 11, 2018. Patricia Griffin was thereafter appointed

special administrator of Dossie’s estate. Patricia filed a complaint against Progressive alleging

multiple causes of action, including negligence, medical negligence, and violations of the

Arkansas Long-Term Care Residents’ Rights statute. Progressive filed an answer denying all

liability and reserving the right to enforce the arbitration agreement.

       2
         The agreement contained a ten-day right of rescission, which included language
stating that the resident would not be discharged from the facility if the resident exercised
his or her right to rescission.

                                               3
       Progressive subsequently filed a motion to compel arbitration, contending that the

arbitration agreement encompassed the claims in Patricia’s complaint. Progressive argued

that there was a valid contract between Progressive and Pamela (who had signed both the

admission agreement and the arbitration agreement) and that Dossie was a third-party

beneficiary to the contract. Progressive also cited the supreme court’s decision in Jorja

Trading, Inc. v. Willis, 2020 Ark. 133, 598 S.W.3d 1, and argued that the Federal Arbitration

Act (“FAA”)3 preempts our line of third-party-beneficiary arbitration cases because those

cases employ arbitration-specific rules with respect to third-party beneficiaries rather than

general contract law. Patricia filed a response denying the enforceability of the arbitration

agreement and asserting that Pamela lacked the authority to execute the agreement on

Dossie’s behalf.

       The trial court held a hearing on Progressive’s motion to compel arbitration. After

hearing arguments of counsel, the trial court denied the motion. In so doing, the trial court

stated that the motion herein presented the same issues that the trial court had recently

rejected in Courtyard Rehabilitation & Health Center, LLC v. Estate of Tice.4

       3
           9 U.S.C. §§ 1–16.
       4
         At the time of the hearing below and the entry of the trial court’s order denying
arbitration, Tice was pending before our court on appeal. We have since affirmed that case,
holding that the trial court did not err in denying the motion to compel arbitration.
Courtyard Rehab. & Health Ctr., LLC v. Estate of Tice, 2022 Ark. App. 327. The trial court
herein was correct in stating that Tice and the instant case involve the same issues.

                                               4
       In this appeal, Progressive challenges the trial court’s order denying the motion to

compel arbitration. Progressive argues that there was a valid agreement to arbitrate that

encompasses the parties’ dispute; that Dossie was bound to the arbitration agreement under

the third-party-beneficiary doctrine; and that the trial court erred in applying an arbitration-

specific rule to the third-party-beneficiary doctrine.

       An order denying a motion to compel arbitration is immediately appealable pursuant

to Arkansas Rule of Appellate Procedure–Civil 2(a)(12) (2002). We review a trial court’s

denial of a motion to compel arbitration de novo on the record. Robinson Nursing & Rehab.

Ctr., LLC v. Phillips, 2019 Ark. 305, 586 S.W.3d 624. While we are not bound by the trial

court’s decision, in the absence of a showing that the trial court erred in its interpretation of

the law, we will accept its decision as correct on appeal. Progressive Eldercare Servs.-Morrilton,

Inc. v. Taylor, 2021 Ark. App. 379.

       The FAA governs the agreements at issue. The FAA establishes a national policy

favoring arbitration when the parties contract for that mode of dispute resolution. Reg’l Care

of Jacksonville, LLC v. Henry, 2014 Ark. 361, 444 S.W.3d 356. Likewise, in Arkansas,

arbitration is strongly favored as a matter of public policy and is looked upon with approval

as a less expensive and more expeditious means of settling litigation and relieving docket

congestion. Id. Despite an arbitration provision being subject to the FAA, we look to state

contract law to decide whether the parties’ agreement to arbitrate is valid. Phillips, supra.

The same rules of construction and interpretation apply to arbitration agreements as apply

to agreements in general. Id. In deciding whether to grant a motion to compel arbitration,

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two threshold questions must be answered: (1) Is there a valid agreement to arbitrate between

the parties? and (2) If such an agreement exists, does the dispute fall within its scope? Id. In

answering these questions, doubts about arbitrability must be resolved in favor of arbitration.

Colonel Glenn Health & Rehab, LLC v. Aldrich, 2020 Ark. App. 222, 599 S.W.3d 344. We are

also guided by the legal principle that contractual agreements are construed against the

drafter. Id.

       We must first determine whether a valid agreement to arbitrate exists. Phillips, supra.

We have held that, as with other types of contracts, the essential elements for an enforceable

arbitration agreement are (1) competent parties, (2) subject matter, (3) legal consideration,

(4) mutual agreement, and (5) mutual obligations. Id. As the proponent of the arbitration

agreement, appellants have the burden of proving these essential elements. Id.

       Progressive argues that Dossie was a third-party beneficiary to the arbitration

agreement signed by Pamela. Two elements are necessary in order for the third-party-

beneficiary doctrine to apply under Arkansas law: (1) there must be an underlying valid

agreement between two parties, and (2) there must be evidence of a clear intention to benefit

a third party. Ashley Operations, LLC v. Morphis, 2021 Ark. App. 505, 639 S.W.3d 410. The

critical question is whether Pamela signed the arbitration agreement while acting in her

individual capacity such that it created an enforceable contract between Pamela and

Progressive, with a clear intention to benefit Dossie. Patricia argues that this is not the case

because Pamela signed the agreement only as Dossie’s representative and not in her

individual capacity. We agree with Patricia’s argument.

                                               6
       When Pamela signed the admission and the arbitration agreements, she is identified

as the “Representative” and “Responsible Party,” not as a party to the contact itself. The

following statement was located above Pamela’s signature in the arbitration agreement: “If I

am acting as the Resident’s Responsible Party and am not the Resident’s Guardian or hold

power of Attorney for the Resident, I affirm that I have been given the authority to enter

into this Arbitration Agreement by the resident and to act on his/her behalf.” The language

in the arbitration agreement itself contemplated someone signing it with representative

authority, not in the person’s individual capacity. However, there was no evidence that when

the agreements were signed, Dossie authorized Pamela to bind her or act on her behalf. Both

agreements contained specific provisions asking whether Pamela had a power of attorney to

act on Dossie’s behalf or if she was appointed her guardian. In both documents, these

provisions were left blank, and such documentation was never provided. There was no

evidence that Pamela had such authority. Because there was no valid agreement between

Progressive and Pamela or between Progressive and Dossie, the trial court correctly denied

the motion to compel arbitration. See Tice, supra; Morphis, supra.

       Progressive’s remaining argument is that the supreme court’s holding in Jorja Trading,

supra, conflicts with the trial court’s decision and preempts our line of third-party-beneficiary

arbitration cases because those cases applied an arbitration-specific rule to the third-party-

beneficiary doctrine. Progressive asserts that, in Jorja Trading, the supreme court held that a

court may invalidate an arbitration agreement, including one governed by the FAA, based

                                               7
on generally applicable contract defenses, but not on legal rules that apply only to arbitration

or that derive their meaning from the fact that an agreement to arbitrate is at issue.

       We observe that this precise argument was recently raised and rejected by this court

in both Morphis, supra, and Tice, supra. In Morphis, we wrote:

               To the extent that [appellant] argues that the supreme court’s ruling in Jorja
       Trading, Inc. v. Willis somehow disposes of our need to resort to state law when
       determining whether a party is bound by the third-party-beneficiary doctrine, that
       argument is misplaced. Jorja did away with the court’s authority to invalidate a
       provision in an arbitration agreement unless it would likewise invalidate it under
       Arkansas contract law in general. Here, before a party can bind another as a third-party
       beneficiary in any contract, he or she must be clothed with the authority to do so. Therefore,
       the circuit court’s ruling in this case does not contradict the supreme court’s holding
       in Jorja.

Morphis, 2021 Ark. App. 505, at 10, 639 S.W.3d at 416 (emphasis added). In Tice, we stated,

“These exact arguments were extensively briefed and rejected by this court in [Morphis], and

we find no reason to depart from its conclusion.” Tice, 2022 Ark. App. 327, at 7. Likewise,

we find no reason here to depart from Morphis or Tice.

       Affirmed.

       VIRDEN and MURPHY, JJ., agree.

       Kutak Rock LLP, by: Samantha Blasingame and Caleb S. Sugg, for appellants.

       David A. Hodges and Eric Buchanan, for appellee.

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