Court Opinion

ID: 4217267
Source: CourtListenerOpinion
Date Created: 2017-11-02 15:12:19.261986+00
Date Added: 2024-06-11T14:15:29.457414
License: Public Domain

RENDERED: NOVEMBER 2, 2017
                                                       .TO BE PUBLISHED

              cSupr:em:e filnurf nf ~:enfuekv
                               2013-SC-000431-r

  KINDRED NURSING CENTERS LIMITED                                   APPELLANT
. PARTNERSHIP D/B/A WINCHESTER
  CENTRE FOR HEALTH AND
  REHABILITATION N/K/ A FOUNTAIN
  CIRCLE HEALTH AND REHABILITIATION;
  KINDRED NURSING CENTERS EAST, LLC;
  KINDRED HOSPITALS LIMITED
  PARTNERSHIP; KINDRED HEALTHCARE,
  INC.; AND KINDRED HEALTHCARE
. OPERATING, INC.

         ON REMAND FROM THE UNITED STATES SUPREME COURT
V.                    CASE NO. 2016-SC-000032-1
              CIRCUIT COURT CLERK CASE NO. 10-CI-00471

  BEVERLY WELLNER, INDIVIDUALLY AND                                  APPELLEE
  ON BEHALF OF THE ESTATE OF JOE P.
· WELLNER, DECEASED, AND ON BEHALF
  OF THE WRONGFUL DEATH
  BENEFICIARIES
  OF JOE P. WELLNER

              OPINION OF THE COURT BY JUSTICE VENTERS

      This matter is before the Court on remand pursuant to the opinion of the

United States Supreme Court in Kindred Nursing Centers Ltd. Partnership v.

Clark, 137 S. Ct. 1421 (2017). The case.initially came to this Court as three

separate actions which we consolidated into a single opinion styled Extendicare .
 Homes, Inc. v. Whisman, 478 S.W.3d 306 (Ky. 2015).I Extendkare Homes,

 Inc., did not seek review by the United Stated Supreme Court, and so our

 disposition of its case, No. 2013-SC-000426-1, Extendicare !fomes, Inc. v.

 Whisman became final. Without Extendicare Homes as a partjr to the United

 States Supreme Court action, the case went forward With Kindred identified as .

 the Appellant. To avoid confusion, we refer to the final decision of this Court

 as "Extendicare' and the decision of the United States Supreme Court as

 "Kindr:ed." ·

        Among other holdings, Extendicare held that an attorney-in-fact did not

 have the authority to bind his principai to a pre-dispute arbitration agreement

 unfoss that authority was dearly stated in the power-of-attorney document. In

 Kindred, the Supreme Court dubbed this the "clear statement rule," and for .

· convenience and consistency we accept that term     a~    a useful name. As

 articulated in Extendicare, we set forth the clear statement rule as a more

 specific application of the general rule stated in Pbig v. _Beverly Enterprises,

 Inc., 376 S.W.3d 581 (Ky. 2012).2 We said in Extendicare:

         [Ping] cautioned ... that given the 'significant legal consequences'
         arising from an agreement waiving ¢.e principal's rights of access
         to the courts and to trial by jury, 'authotjty to make such a waiver
         is not to be inferred lightly.' Our holdings throughout ~is opinion,
         as in Ping itself, serve to highlight our reservation about casually
       . inferring a power laden with such consequences.

       1 The three cases are: No. 2013-SC-000426-I, Extendicare Homes, Inc., v.
 Whisman; No. 2013-SC-000430-I, Kindred Nursing Centers Limited Partners/Up v.
 Clark, and No. 2013-SC-000431-I, Kindred Nursing Centers Limited Partnership v.
 Wellner.
       2    Cert. denied,_ U.S._, 133 S. Ct. 1996 (2013).

                                           2
478 S.W.3d at 327 (quoting Pi.ng, 376 S.W.3d at 593).

      Kindred Nursing Centers chS.llenged the "clear statement rule" by

petitioning the United States Supreme Court for a writ of certi.orari. The writ

was granted and the Supreme Court ultimately concluded that our adoption of

the clear statement rule, insofar as it affected Kindred's pre-dispute arbitration

agreement,   ~pinged   upon the supremacy of the Federal Arbitration Act. Our

rilling in the case of Kindred Nursing Centers Ltd. Partnership v. Clark turned

exclusively upon the clear statement rule, and so the Supreme Court's decision

reversed it. However, our ruling in the associated case of Kindred Nursing

Centers Ltd. Partnership v. Wellner also rested upon alternative grounds.

Uncertain about whether we had incorporated the clear statement rule into the

alternative basis for the Wellner decision, the Supreme Court remanded that

case for us to determine whether the alternate grounds for our holding with

respect to the Wellner POA was "wholly independent" of the clear statement

rule. The Supreme Court said:

      The Kentucky Supreme Court began its opinion by stating that the
       Wellner power of attorney was insufficiently broad to give Beverly
       the authority to execute· an arbitration agreement for Joe. If that
       interpretation of the document is wholly independent of the court's
       clear-statement rule, then nothing we have said disturbs it. But if
       that rule at all influenced the construction of the Wellner power of
     · attorney, theri the court must evaluate the document's meaning
       anew. The court's opinion leaves u~ uncertain as to whether ·such
     ·an impermissible taint occurred .. On remand, the court should
      determine whether it adheres, in the absence of its clear-statement
      rule, to its.prior reading of the Wellner power of attorney [POA]. ~

                                        3
Kindred, 137 $. Ct. at 1429 (internal citations omitted) (emphasis added). So,

the question that Kindred presents to us on remand is this:

        Was our interpretation that the Wellner POA did not authorize
        attorney-in-fact Beverly Wellner to execute Kinctred's pre-
       .dispute arbitration agreement wholly independent of, and not
        impermissibly tainted by, the clear statement rule?

       The Supreme Court directed on remand that we "evaluate the

document's meaning anew" only if our original construction of the Wellner POA

was "impermissibl[Y] taint[ed]" by, or not "wholly independent of," our

subsequent adoption of the "clear statement rule." It follows that if our.

construction of the Wellner POA was "wholly independent of [the] clear-

statement rule, then nothing [in Kindred] disturbs it." Id.3

       Our .ruling in Extendicare relating to Kindred's demand for arbit;ration of

_the Wellner claim was based upon two alternative grounds. First, we

concluded that neither of the two POA provisions relied upon by Kindred gave

the agent, Beverly Wellner, the authority to execute on 'behalf of her principal,

Joe Wellner, a pre-dispute arbitration agreement. Second, we applied the ill-

fated clear statement rule. The Supreme Court was "uncertain" about whether

       a Kindred Nursing Centers did not cJ:iallenge our construction of the Wellner .
 POA beyond its criticism of the clear statement rule. Kindred's petition for a rehearing
 and its petition for a writ of certiorari instead focused exclusively on the clear
 statement rule, which it described as "a newly-created rule of law disfavoring
 enforcement of agent-created arbitration agreements." The failure .of any party to.
 challenge our construction of the Wellner POA except in the special. circumstance
 identified by the Supreme Court precludes further de novo reconsideration.
 Accordingly, we do not review our original interpretation of the Wellner POA ab initio.
 By the explicit terms of the Supreme Court's mandate, if our original interpretation of
.the Wellner POA was wholly independent of the clear statement rule, then it must
 stand as the final decision of this Court.

                                            4
the second alternative unduly influenced our reasoning in deciding the first

alternative. The premise behind the Supreme Court's uncertainty seems to be

its perception that our application of .the clear statement rule, rather th~ the

manifestation of our profound respect for the right of access to the Coilrt of

Justice explicitly guaranteed by the Kentucky Constitution· and the right to

trial by jury designated as "sacred" by Section 1 of the Kentucky Constitution,

demonstrated instead a hostility to federal policies implicit in the Federal

Arbitration Act and a resulting aversion to any implication of ~uthority to make

an arbitration agreement.

       So, we explain that aspect of our Extendicare decision to demonstrate its ,

purity from the taint of anti-arbitration bias. As a frame of reference for

whether our interpretation of the breadth and scope of the Wellner POA was

unduly influ~nced by the clear statement rule, we begin with a glance at the

Clark POA. We concluded that the universally broad and vague language

employed in. the Clark POA, 4 without any express reference to the waiver of the

rights of access to the courts and jury trials, nevertheless did indeed vest the

principal's attorney-in-fact with authority to execute a pre-dispute arbitration

agreement. We held that the Clark POA authorized the agent's execution of

Kindred's pre-dispute arbitration agreement despite the absence of a clear

statement to that effect; only the application of the clear s~tement rule avoided

      4 The Clark.POA granted the powers "to transact, handle, and dispose of all
matters affecting me an.d/ or my estate in any possible way" and "generally to do and
perform for me in my name all that I might if present."

                                           5
that result. Obviously, nothing even close to a "clear statement" was needed in

the Clark POA to authorize the agent to waive her principal's fundamental

constitutional right of.access to the courts and a jury trial. That power, we

said, would be implied from the "vague and all-encompassing language of the

Clark POA. The concern that, because of some residual influence of the clear
       .         .
statement rule, we are averse to inferring the authority to execute an

arbitration agreement dissolves upon recognizing that we inferred e:xactly that
   .                                                 .
authority in the Clark matter: See Extendic;are, 478 S.W.3d·at 327.

           Turning now to our interpretation of the Wellner POA's specific language,

we note again that Kindred relied upon only two provisions of tb.e Wellner POA

as authority for Beverly Wellner's execution of Kindred's pre-dispute ·arbitration

agreement: 1) th,e power "to demand, sue for,.collect, recover and receive all

d~bts,     monies, interest and demands whatsoever now due or that may

hereafter be or become due to       me (including the right to institute legal
proceedings therefor)"; and, 2) the power "to make, execute and deliver deeds,

releases, conveyances and contracts of every .natUre in relation to both real and

personal property, including stocks, bonds, and insurance." Id. at 325.5

           At this point it is worth recalling that the "act" of Wellner's agent which

required authorizing language from the POA document was not the

enforcement, through legal proceedings or otherwise, of something then due ~r

       5 Whether other provisions of the Wellner POA would support Kindred's position

is beyond the scope of appellate review. Garland v. ·commonwealth, 458 S.W.3d 781,
785 (Ky. 2015) ("Arguments not pursued on appeal are deemed waived.").

                                             6
 to become due to Joe Wellner; nor wa~- it the making of a contract or

 instrument pertaining to any of Joe Wellner's property. The "act" that required

 authorization was signing an agreement which makes no reference at all to

Joe's property and instead pertains exclusively to his constitutional rights.

       Our constrilction of _the two cited provisions of the Wellner POA issues

·was clear and logical and, in opposition to the clear statement rule, expressed a

willingness to infer in proper cases the power to commit to arbitration even

where that express authority was lacking. With respect to the powers to

"demand, sue for, collect, recover and receive all ... demands whatsoever" and

"to institute legal proceedings," ii should be noted that our Wellner analysis

incorporated by direct reference our analysis of the similar language of the

Whisman POA. We said without reservation that "the power to 'institute or

defend suits concerning my property rights' would necessarily encompass the

power to make litigation-related decisions within the context of a suit so ·

. instituted~ includi1J9 the decision to submit the pending dispute to mediation or

arbitration."
          .
              Id. at 323 (emphasis added) .. Despite the lack of a. clear statement

authoriZing the.waiver of the principal's fundamental rights of access to the

co~ and to a jury _trial, we expressly held that the power to bind existing

claims to arbitration would be inferred from the "institute suits" provision of

the Wellner POA. Far from being tainted by an association with the clear

statement rule, that holding is antithetical to the clear statement rule.

       The distinction we made -with   respe~t   to the pre-dispute arbitration .

agreement was not based at all on any aversion to an implied, rather than an

                                          7
express, power to waive constitutional rights. Beverly Wellner did not.execute

Kindred's optional (ree standing pre-dispute arbitration agreement within the

context of a lawsuit or claim for the recovery of anything belonging to Joe

Wellner. The act that required supporting authorization was her execution of

the pre-dispute arbitration agre~ment in the context of admitting him· to a

nursing home. 6 That act was in no way connected to the. pursuit of any claim
  -
of Joe's. Rather than an insistence upon a clear statement, we rejected

Kindred's argument simply because the act of executing a pre-dispute

arbitration agreement
                   .
                      upon admission to a nursing home
                                                  .
                                                       had nothing at all to

do with "demand[ing], su[ing] for, collect[ing], recover[ing] and receiv[ingJ all ...

demands whatsoever" and "institut[ing] legal proceedings," and even settling

existing claims by arbitration or litigation. Id. at   32~.

      As to our construction of the power to make contracts "in relation to both

real and personal property," we explicitly recognized that "a personal injury ·

Claim is a chose-in-action, and therefore constitutes personal property." Id. at

325-326 .. Notwithstanding the absence of a clear statement authorizing

arbitration, we straightforwardly held that the power to make contracts relating

to personal property authorizes the agent to arbitrate        th~   principal's personal.·

injury claim. Here, too, our disagreement with     ~ndred      has nothing to do with

the concept of the clear statement rule that the authority to waive the

      6 We note that Kind.red's optional pre-dispute arbitration agreement was· a
completely f.ree-standillg instrument, fully independent of and not conditioned upon
the separate nursing home admission contracts. See Extendicare, 478 S'.W.3d at 318_.

                                          8
    constitutional rights of another person must be clearly stated. Rather than any ·

    reliance upon the clear statement rule, our decision with respect to this

    ·provision of the POA was based exclusively upon the clear fact that Kindred's

    pre-dispute arbitration contract did not relate to any property rights of Joe

    Wellner. It did not buy, sell, give, trade, alter, repair, destroy, divide, or

    otherwise affect or dispose of in any way any of Joe Wellner's     person~

    property. By executing Kindred's pre-dispute arbitration agreement, Beverly

    did not "make, execute and deliver deeds, releases, conveyances and contracts

    of [any] nature in relation to [Joe's] property." The only "thing" of Joe Wellner's

    affected by the pre-dispute arbitration agreement was his constitutional rights,

    which no one contends to be his real or person~ property. Id.

          Not a scintilla of our o~ginal analysis of the Wellner POA rested UJ=>on the

    premise that the authority to waive constitutional rights (or the corresponding

    authority to arbitrate a claim) must be clearly stated. Moreover, our analysis ·

    clearly expressed the opposite-that whenever reasonably consistent with the

    principal's. expressed grant of authority, we would infer without a clear

~
    statement the power. to bind him to an arbitration    agreement~   Kindred's

    agreement failed, not because the Wellner POA lacked a clear statement

    referencing the authority to waive Joe's fundarriental constitutional rights; it

    failed because, by its own specific terms it was not executed in relation to any·

    of Joe Wellner's property, and it was n~t a document pertaining to the

    enforcement of any of Joe's existing claims.

                                              9
      As established by the rationale plainly stated in Extendicare, our

conclusion that the· Wellner POA was insufficient to vest Beverly Wellner with

the power to execute a pre-dispute arbitration agreement as part of Joe
                                             '

Wellner's admission to a nursing home was wholly independent of the clear

statement rule decried by the Unit.ed States     Supr~me   Court. Therefore, as

stated by the United States Supreme Court, that aspect of the Extendicare

decision remains undisturbed.

      All sitting. Cunningham, Keller, and Wright, JJ., concur. Hughes, J.,

dissents by separate opinion in which, Minton, C.J., and VanMeter, J., join.

      HUGHES, J., DISSENTING: I respectfully dissent because I believe that

the majority has failed to follow the United States Supreme Court's directive in

the penultimate paragraph of its decision forcefully reversing the original

majority opinion in this case. That directive states:
                         \

      The Kentucky Supreme Court began its opinion by stating that the
      Weliner power of attorney was insufficiently broad to give Beverly
      the authority to execute an· arbitration agreement for Joe. See
      supra, at 3. If that interpretation of the document is wholly
      independent of the court's clear-statement rule, then nothing we
      have said disturbs it. But if that rule at all influenced the
      construction of the Wellner power of attorney, then the court must
      evaluate the docitment's meaning anew. .The court's opinion leaves
      us uncertain as to whether such an impermissible-taint occurred.
      We therefore vacate the judgment below and return the case to the
      state court for further consideration~ See Marmet Health Care
      Center, Inc. v. Brown, 565 U.S. 530, 534 (2012) (per curiam)
      (vacating and remanding another arbitration decision because we
      could not tell "to what degree [an] alternative holding was
      influenced by" the state court's erroneous, arbitration-specific
      rule). On remand, the court should determine whether it adheres,
      in the absence of its clear-statement rule, to its prior reading of the
      Welfuer power of attorney.                                        .

                                        10
Kindred Nursing Ctrs, Ltd Partnership v. Clark,· 581 U.S. __, 137 S. Ct. 1421,

1429 (2017) (emphasis supplied). Prior to issuing this directive, the Supreme

Court noted that this Court had "fl.outed the FAA's command to place

[arbitration] agreements on an equal footing with all other contracts." Id. This

Court's distinction between pre-dispute· arbitration agreements as not

pertaining to a principal's property rights but r~ther only his constitutional

jury right vis-a-vis post-dispute (or perhaps active dispute) arbitrat:ion

agreements, which they concede neces.sarily affect property rights, is simply

another attempt to single out arbitration for "hostile" treatment under the guise

of Kentucky contract and agency law.

      An arbitration agreement, regardless of when signed or whether

characterized as pre- or post-dispute, has absolutely no reason to exist unless

there is a current or potential claim to be pursued or defended against; If there

is never a claim, the agreement has no purpose--it just sits there as an

executed document/contract clause of no real consequence. An arbitration

agreement, whether freestanding or part of a broader contract, derives its .

entire meaning from the fact that the signatories may have or do. have a

dispute and they agree on the forum for disposing ·or that claim, whenever it

arises. Indeed, the first sentence of the arbitration agreement at issue

("Arbitration Agreement") states:

      Any and all claims or controversies arising out of or in any way .
      relating to this ADR Agreement ("Agreement") or the Resident's stay·
      at the Facility including disputes regarding interpretation of this
      Agreement, whether arising out of State or Federal law, whether
      existing or arising in the future, :whether for statutocy,

                                         11
         compensatory or punitive damages and whether sounding in
         breach of contract, tort or breach of statutory duties (including,
         without limitation, any claim based on violation of rights,
         negligence medical malpractice, any other departure from the
         accepted standards of health care or safety or the Code of Federal
         Regulations or unpaid nursing home charges), irrespective of the
        ·basis for the duty or of the legal theories upon which the claim is
         asserted, shall be submitted to alternative dispute resolution as
         described in this Agreement.

The subjects of this first sentence are plainly "claims an4 controversies."

        The   p~cular    provision of the Wellner POA that, in my view, authorizes

the agent to sign a.n·arbit:iation agreement, even pre-dispute, is the power "to

make, execute and deliver deeds, releases, conveyances and contracts of every

 nature in relation to both real and .personal property, including stocks, bonds,
         .

· and insurance." In the original opinion of this Court (" Extendicarej, the

majority noted that property in Kentuclqr has been broadly construed to

include things that are tangible and intangible, visible or invisible, '"real or

personal, choses in action as well as in possession, everything whi.ch has an

exchangeable value, or which goes to make up one's wealth or estate.:" 4 78
S.W.3d at 326 (emphasis in original) citing Commonwealth v. Kentucky

Distilleries & Warehouse Co., 136 S.W.1032, 1037 (Ky. 1911). The Court

acknowledged     ~at   a personal.injury
                         .
                                         claim is a chose-in-action and therefore
                                                                          .

constitutes   person~    property. Id. at 325-26 citing Button v. Drake, 302 Ky.

st 7,   195 S.W.2d 66, 69 (1946). The majority then reasoned that, nonetheless,

a pre-dispute arbitration agreement is not about property rights but rather .

constitutional rights.

                                          12
        Joe's personal injury claim was personal property and Beverly had
        the authority to make contracts relating to it. · But the Kindred pre-
        dispute arbitration agreement was not a contract made "iil
        relation" to a property claim. The agreement did nothing to affect
        any of Joe's property or his property rights. The arbitration
        agreement does not even purport to be a "contract ... in relation
        to both real and personal property." As clearly expressed within
       the agreement.itself, the agreement was made in relation to Joe's
        constitutional right to access the courts and to trial by jury~
      . Constitutional rights are decisively not "personal property" as we
        have defined the term. They are not "money, goods, chattels,
       things in action, and evidences of debt;" nor do they have "an
       exchangeable value, or which goes to make up one's wealth or
       estate."

(Footnote omitted). Id.

      But, of course, an arbitration agreement is abm,1.t property rights because

without a claim regarding such rights it has no meaning or purpose. See the

first sentence of the Arbitration Agreement quoted supra. The majority's view

of arbitration as contrary to the "sacred" right to a jury trial (a point which it

continues to exµphasize in the current majority) clearly underlies its willingness

to divorce an arbitration agreement from the reality of what it is and what it

does. An arbitration agreement is plainly a contract "in relation to ... personal

property."

      The current majority opinion attempts to show its "purity from the taint

of anti-arbitration bias" by noting that the Clark POA had "vague and all-

encompassing language" and, consequently, the Extendicare majority
                                                                            ,,
concluded that Clark's agent was vested with authority to execute even a pre-

dispute arbitration agreement. So, a power "to transact, handle and dispose of

all matters affecting me and/ or my estate in any possible way" and "generally

                                         13
to do and perform for me in my name all that I might if presep.t" is sufficient.

But under the former and current majo~ty's view a broad power "to make ....

contracts of every nature in relation to both real and personal property" is

insufficient. This is the exact language from the Wellner POA and so is the

following:

      · I hereby further grant unto my Attorney-in-Fact full power in and
       concerning the above premises and to do any and all acts as set
       forth above as fully as I could do if I were personally present, and
       at my decease to pay, transfer and deliver over to my personal
       representative, all principal and income then ip. his possession and
       con.trol_, and I do ratify and confirm whatever my said Attorney-in-
       Fact shall_ lawfully do under these presents, provided however, that
       my aitorn~y shall not bind me as surety, guarantor for
       accommodation nor give away any of my estate, whatsoever, nor
       shall my attorney be authorized to accept service of process for or
       on my behalf....

-478 S.W.3d at 319-20.7

       The only response offered to this language, language that is both specific

as to contracts of every nature affecting property and broad as to general

powers, is the unfounded premise that an arbitration agreement is not about

property rights, just the waiver of a constitUtional right. Given how that

premise ignores the reality of what an arbitration agreement is, why it exists ·

and what it relates to, I firmly believe the analysis of the Wellner POA is

impermissibly tainted by the same anti-arbitration bias as the so-called "clear

statement rule."

       7To state the obvious, it would be vecy diffi.cuit for an agent to discern the
limits on his or her authority that today's majority readopts and restates.

                                            14
       . Addressing the clear statement rule in Kindred Nursing       Cen~ers,   137 S ..

 Ct. 1427, the U.S. Supreme Court held that it was "too tailor-made to

 arbitration agreements ... to survive the FAA's edict against singling out those

 contracts for disfavored treatment." Justice Kagan noted wryly tliat the

 Kentucky Constitution protects property rights and speech rights but no one

 was   ~uggesting   that the   "b~oader"   constitutional rule adopted by the

 Extendicare majority would realistically apply to prevent an agent from selling

·her principal's furniture or signing a non-disclosure agreement unless those

 particular constitutional rights were addressed expressly in the POA. Id. The

 ensuing short passage deserves careful consideration:

        fT]he {Kentucky Supreme] court hypothesized a slim set of both
        patently objectionable and utterly fanciful contracts that would be
        subject to its rule: No longer could a representative lacking explicit
        authorization waive her "principal's right to worship freely" or
        "consent to an arranged marriE1.ge" or "bind {her] principal to
        personal seryitude." Placing arbitration.agreements within that
        class reveals the kind of "hostility to arbitration" that led Congress
        to ~nact the FM. And doing so only makes clear the arbitration-
        specific character of the rule, much as if 1t wer~ made applicable to
        arbitration agreements and black swans. ·

 Id. at 1427-28 (citations and footnote omitted). In my view, today's holding

 returns to black swan territory by a different' route. The narrow focus on the

. constitutional jury right to the exclusion of the reality of an arbitration

 agreement retlirns us to the realm of "utterly fancjful contracts" where

 arbitration agreements exist in a vacuum independent of disputes and property

 rights.

        Arbitration has received its fair share of criticism and some of it is fully

ju,stified but adopting the majority's artificial distinctions regarding language in
                                               15
POAs is a dangerous way to combat the perceived dangers of arbitration .. What

happens after the issuance of this majority opinion in the following everyday

scenarios?

      An aging principal let it be known that he did not want to leave his home

of forty years, a multi-level residence that cannot accommodate his current

needs. His daughter, as agent under his POA, 'Yants to enter into a

construction contract to make the needed modifications so he can stay in his

home but all the local contractors' construction contracts have arbitration

clauses. Can she sign such an agreement with a pre-dispute arbitration

clause? If she does and a dispute arises with the contractor, is the arbitration

clause enforceable by either party to the contract? If the arbitration clause is

not enforceable, does it invalidate the entire construction contract? The

daughter is also looking for around-the-clock care, including the provision of

meals, for her father. Alf_the local in-home care agencies require a signed

contract. Those contracts also have arbitration clauses. Can she execute one

and, if she does·, what happens if there is a dispute as to billing or quality of

care? These contracts, for construction and in-home care, were signed pre-

dispute and under the majority's view the arbitration clauses were never about

property rights but rather solely cons·titutional rights not covered by the power

to "make . . . contracts of every nature in relation to both real and personal

property." So, what happens?

      Another principal is a shareholder in a closely-held, third generation

family business. She, her siblings and several cousins own all the stock. Her

                                         16
son is agent under h~r POA and, due to her incapacity, he has been

approached by his aunt and uncle (his mother's sister and brother) about

signing a voting and buy-sell agreement with them and' one of the cousins.

They are worried about the direction two out-of-state shareholders (als9 the

· principal's cousins) seem to be charting and they know if they vote together

and agree to offer their stock to each other if and when they decide to sell, the

company can stay on the track earlier generations intended. Can the son sign

the agreement if it contains an arbitration clause requiring the signatories to

arbitrate any disputes among themselves as to, say, the value of the stock? · If

he does sign, is it at all enforceable? Suppose everyone looks the other way at
                              .
the legality and they proceed to arbitration. After the principal's death, can the

executor challenge the son's actions and the arbitration award as not

authorized?

      These scenarios are not even the. more likely instances where confusion
                                                                          I

will occur from the majority's holding; The principal's homeowner's insurance

policy needs to be renewed. The principal tents an apartment and her lease is

due for renewal. The principal has few assets but unexpectedly receives a

sizeable inheritance, so the agent wants to open   an account with a conservative
stock brokerage company. All these contracts have arbitration clauses. If the

agents execute them, are the contracts themselves invalid or just the

arbitration clause? Perhaps the majority wouid conclude that none of these

pose a problem because the arbitration clause is embedded in a "contract in

relation to" either real or personal property. If that's the case, are only

                                         17
freestanding pre-dispute arbitration agreements verboten under the POA? And

why is that? The fre~standing arbitration a~eement, liked the embedded

clause, has no purpose other than to identify the forum for the parties to settle

disputes about property interests. It is a "contract ... in relation to ...

personal property. "8

       Additionally, the majority places great emphasis on "pre-dispute" _as

indicative of the fact that an arbitration agreement such as the one at issue

here is onJy about constitutional rights. In their view, the "futureness" of the

dispute between the parties means that the agreement is not about property at

all, just the jury trial right under Section 7 of the Kentucky Constitution. Aside

from _the repeatedly noted fact about the very, indeed only, reason for an

arbitration agreement, where does the emphasis on the futureness of

something lead? When a principal, such as Mr. Wellner, gives his agent

authority under a POA to collect debts, that authority manifestly includes

future debts owed him by others, s:uch as a tenant's rental payment or a former

employer's final payments under an_ employment contract or pursuant to a

pension plan. The authority to make "contracts of every nature in relation to

both real and personal property" includes future property of the principal

        s Again, in our original Extendicare opinion, the majority acknowledged that a
personal injury.claim is a chose in action and therefore personal property. 478
S.W.3d at 326. The dissent noted that a chose in action is defined "generally as '[a]
proprietary right in personam, such as a debt owed by another person, a share in a
joint-stock company, or a claim for damages in tort' and _also as 'the right to bring an
.action to recover a debt, money or thing. m 478 S.W.3d at 348, citing BLACK'S LAW
DICTIONARY, 275 (9th ed. 2009).

                                            18
 whether a stock dividend,. a check for a property insur~ce claim, an

 unexpected inheritance or a run-of-the mill refund in a consumer class action.

 All these future things are encompassed by the POA because that is the nature

 of the instrument,
              .     i.e., to deal with the principal's affairs in the manner
                                                                      .      stated

 whether or not a particular thing, event, type of property was in existence or ·

 even envisioned at the time of the execution of the POA. The majority's

 position would presumably respect the agent's authority in all these future

 matters but not the future matter of a potential legal claim (a chose in action

 and therefore personal property) and whether or not to agree to arbitration.

       Finally, recent emphasis on arbitration, and its increasing prevalence in

 various facets· of everyday life, has heightened the bar's awareness of the need

 to consider carefully what the principal wishes to authorize the agent to do on .

 that score. Many attorneys now inquire whether the prjncipal wishes.for his or

 her agent to agree to arbitration, and the POA so states that preference. Going

· forward, I believe we can expect more clarity in POA instruments regarding the

 specific preferences of the principal, and that is obviously a desirable result.

 However, as for the many POAs that are currently in existence we musf take

 them as we find them and construe them in a straightforward manner, not

 through a lens that disfavors arbitration in violation of the Supremacy Clause

 and not with artificial distinctions that cannot withstand scrutiny.

       Because ·the majority's construction of the Wellner POA was and is

 clearly affected, "impermissiblfy] taint[ed]," 137 S. Ct. at 1429, by the same

 negative view of arbitration that underlay its clear statement rule, we should

                                         19
acknowledge that fact. We must "evaluate the document's meaning anew" and

determine not to "adhere ... to [the] prior reading of the Wellner power of

attorney." Id. For these reasons, I respectfully and strongly dissent.

      Minton, C.J.; and VanMeter, J., join.

                                       20
COUNSEL FOR APPELLANT KINDRED NURSING C~NTERS LIMITED
PARTNERHSHIP, D/B/A WINCHESTER CENTRE
FOR HEALTH AND REHABILITATION N/K/A FOUNTAIN CIRCLE HEALTH AND
REHABILITATION; KINDRED NURSING CENTERS EAST, LLC; KINDRED
HOSPITALS LIMITED PARTNERSHIP; KINDRED HEALTHCARE, INC.;
KINDRED HEALTHCARE OPERATING, INC.:

Donald Lee Miller II
Kristin M. Lomond
James Peter Cassidy III
Quintairos, Prieto, Wood & Boyer P.A.

COUNSEL FOR APPELLEE BEVERLY WELLNER, INDIVIDUALLY AND ON
BEHALF OF THE ESTATE OF JOE P.· WELLNER, DECEASED, AND ON
BEHALF OF THE WRONGFUL DEATH BENEFICIARIES OF JOE P. WELLNER:

James T. Gilbert
Coy, Gilbert, Shepherd & Wilson

Richard Eric Circeo
Robert Earl Salyer
Wilkes & McHugh, P.A.

                                        ·2