Court Opinion

ID: 3141255
Source: CourtListenerOpinion
Date Created: 2015-10-22 17:53:39.459469+00
Date Added: 2024-06-11T12:28:05.570899
License: Public Domain

No. 3--10--0260

_________________________________________________________________
Filed December 7, 2010
                              IN THE

                    APPELLATE COURT OF ILLINOIS

                          THIRD DISTRICT

                            A.D., 2010

MARILEE CURTO, an Administrator ) Appeal from the Circuit Court
of the Estate of Charles Curto, ) of the 10th Judicial Circuit,
Deceased                        ) Tazewell County, Illinois,
     Plaintiff-Appellee,        )
                                )
     v.                         ) No. 09--L--116
                                )
ILLINI MANORS, INC., an         )
Illinois Corporation, and       )
PEKIN MANORS,                   ) Honorable
                                ) Michael E. Brandt,
     Defendant-Appellant.       ) Judge, Presiding.
_________________________________________________________________

     JUSTICE LYTTON delivered the judgment of the court, with
opinion.
     Justices O'Brien and Wright concurred in the judgment and
opinion.
                             OPINION
_________________________________________________________________

     Plaintiff, Marilee Curto, filed a complaint against defendant,

Illini Manors, Inc., and Pekin Manors (Pekin Manors),1 under the

Illinois Nursing Home Care Act (Nursing Home Care Act) (210 ILCS

45/1-101 et seq. (West 2008)) for personal injuries her husband

suffered while a resident at Pekin Manors and his wrongful death.

Defendant moved to dismiss the complaint and compel arbitration.

     1
         The correct name of defendant is "UDI #10, LLC."
The trial court denied the motion, and we affirm.

     On August 9, 2007, Marilee entered into a contract with Pekin

Manors, a residential nursing home, to admit and care for her

husband, Charles.      The contract named Charles as the resident and

Marilee as the "Guardian/Responsible Party."              Marilee signed the

form on the preprinted signature line which designated her as the

"Legal Representative."         Charles did not sign the contract.

     The     parties   also     entered      into   a   separate   arbitration

agreement, which provided that "any and all disputes arising

hereunder shall be submitted to binding arbitration and not to a

court for determination." In the arbitration agreement, each party

waived   its   right   to   a    trial    by   jury.     Marilee   signed   the

arbitration agreement above the line that stated "Signature of

Resident Representative."         Charles did not sign the arbitration

agreement.

     On August 13, 2009, Marilee filed a complaint against Pekin

Manors pursuant to the Nursing Home Care Act for personal injuries

Charles sustained while he was a resident.                The complaint also

sought damages suffered by Charles' next of kin under the Wrongful

Death Act (740 ILCS 180/1 et seq. (West 2008)).            It further alleged

that Charles suffered pain and anguish, which subjected defendant

to liability under the Survival Act (755 ILCS 5/27-6 (West 2008)),

and that his heirs incurred expenses, which they were entitled to

recover under the Rights of Married Persons Act (Family Expense

                                         2
Act) (750 ILCS 65/15 (West 2008)).

     Pekin    Manors    filed     a   motion        to   dismiss    and     to   compel

arbitration, asserting that the estate was contractually bound by

the arbitration agreement Marilee signed when Charles was admitted.

After    a   thorough     examination          of   authority      supporting      both

positions, the trial judge denied the motion. The judge found that

"the spouse is not an agent for the other spouse for purposes of an

agreement    to   arbitrate."         He   concluded       that    the    arbitration

agreement was not valid and enforceable because there was no

indication that Marilee had the authority to bind Charles to the

mandatory arbitration terms of the contract.

                               STANDARD OF REVIEW

     Initially,     the    parties      dispute      the   standard       of     review.

Generally, the issue we are asked to consider on an interlocutory

appeal is whether there was a sufficient showing to sustain the

order of the trial court granting or denying the relief sought.

Onni v. Apartment Investment & Management Co., 344 Ill. App. 3d

1099 (2003).      However, where the trial court does not make any

factual findings, or the underlying facts are not in dispute and

the court’s decision is based on a purely legal analysis, we review

the trial court’s denial of a motion to stay the proceedings and

compel   arbitration      de    novo.          La   Hood   v.     Central      Illinois

Construction, Inc., 335 Ill. App. 3d 363 (2002).                    Here, the trial

court based its decision on the undisputed facts in the record.

                                           3
Thus, our review of the issue is de novo.     See La Hood, 335 Ill.

App. 3d at 364.

                             ANALYSIS

     Pekin Manors claims that Marilee was Charles' agent and thus

the agreement to arbitration is enforceable against him.          It

contends that the evidence permitted a finding of agency based on

(1) actual authority and (2) apparent authority.

                            I.   Agency

     Whether a nonsignatory party is bound to an arbitration

agreement is dictated by the ordinary principles of contract and

agency.   Johnson v. Noble, 240 Ill. App. 3d 731 (1992).        The

spouse's signature on an arbitration agreement may bind a nursing

home resident if the spouse has the authority to sign the document

as the resident's agent.   The status of the parties as husband and

wife, by itself, does not create an agency relationship.     Capital

Plumbing & Heating Supply Co. v. Snyder, 2 Ill. App. 3d 660 (1971).

The agency of the spouse is a question of fact to be proved by

direct or circumstantial evidence; there is no presumption that the

wife has authority to act for the husband.   Fettes, Love & Sieben,

Inc. v. Simon, 46 Ill. App. 2d 232 (1964).   The scope and extent of

an agency relationship depend on the terms of the agreement between

the principal and the agent and the intention of the parties.

Brown v. Kerber Packing Co., 342 Ill. App. 474 (1951).     The party

claiming an agency relationship must prove it by a preponderance of

                                 4
the evidence.     Granite Properties Ltd. Partnership v. Granite

Investment Co., 220 Ill. App. 3d 711 (1991).

                       A.   Actual Authority

       Pekin Manors first argues that Marilee had actual authority to

bind Charles to the arbitration agreement because she signed the

admission contract and the arbitration agreement as her husband's

"representative."

       In any agency relationship, the principal can be legally bound

by action taken by the agent where the principal confers actual

authority on the agent.     Granite Properties, 220 Ill. App. 3d at

714.     Actual authority may be express or implied.    Buckholtz v.

MacNeal Hospital, 337 Ill. App. 3d 163 (2003).     Express authority

is directly granted to the agent in express terms by the principal

and extends only to the powers the principal confers upon the

agent.    United States v. Schaltenbrand, 930 F.2d 1554 (11th Cir.

1991).    Such authority may be granted through a written contract,

a power of attorney or a court-ordered guardianship. Amcore Bank,

N.A. v. Hahnaman-Albrecht, Inc., 326 Ill. App. 3d 126 (2001) (power

of attorney explicitly listed powers given to the attorney-in-

fact); 755 ILCS 5/11a-17(a) (West 2006) (guardian has authority as

provided in court order under provisions of Probate Act).    Implied

authority, on the other hand, is actual authority circumstantially

proved.    Buckholtz, 337 Ill. App. 3d at 172.    It arises when the

conduct of the principal, reasonably interpreted, causes the agent

                                   5
to believe that the principal desires him to act on the principal's

behalf.     See Restatement (Second) of Agency §26 (1958).                 For

example,    implied       authority    may     be   established    from    the

circumstances of a case based on prior course of dealing of a

similar nature between the alleged agent and principal or from a

previous agency relationship.          Hartshorn v. State Farm Insurance

Co., 361 Ill. App. 3d 731 (2005); Linowiecki v. Wisniewski, 249

Ill. App. 474 (1928).

      In   this   case,    Marilee's   signature     on   the   nursing   home

documents did not confer express or implied authority on her.

First, nothing in the record suggests that Charles gave Marilee

express authority to make legal decisions on his behalf. The terms

of the admission contract and the arbitration agreement did not

give Marilee authority to act as Charles' agent, nor did Charles

execute a power of attorney appointing Marilee as his agent for

that purpose.      Second, Pekin Manors failed to demonstrate any

implied authority.     No evidence indicates that Charles was present

and directed Marilee to sign the arbitration agreement as his

representative, nor is there any indication in the record that

Charles knew Marilee signed the agreement and agreed to or adopted

her   signature   as   his    own.     Thus,    Marilee’s   signature     as   a

representative does not establish that she had actual authority to

sign the arbitration agreement on Charles’ behalf.

      We recognize that this issue is one of first impression in

                                       6
Illinois.   However, several other jurisdictions have addressed the

authority of a spouse to bind a nursing home resident to an

arbitration agreement and have reached similar dispositions.                        In

Dickerson   v.     Longoria,         995   A.2d   721   (Md.    2010),    a   personal

representative signed an arbitration agreement on the resident's

behalf when he was admitted to the nursing home.                         The Maryland

Court of Appeals held that the representative, Dickerson, did not

have actual authority to sign the arbitration agreement. The court

concluded that Dickerson's reference to herself as the resident's

"legal power of attorney" did not expand her authority absent some

evidence    that    the    resident,         Bradley,   authorized,       adopted   or

acquiesced to the statement.               The court specifically noted: "The

fact that Dickerson signed the arbitration agreement at issue in

this case certainly does not alter Dickerson's authority, as there

is no evidence suggesting that Bradley authorized Dickerson to make

this type of decision on his behalf."               Dickerson, 995 A.2d at 740.

     The    majority      of    jurisdictions       have   followed       Dickerson's

reasoning and have concluded that a spouse or other family member

did not have actual authority to sign an arbitration agreement on

the resident's behalf.           Koricic v. Beverly Enterprises-Nebraska,

Inc., 773 N.W.2d 145 (Neb. 2009) (decedent's son did not possess

authority necessary to sign arbitration agreement); Mississippi

Care Center of Greenville, LLC v. Hinyub, 975 So. 2d 211 (Miss.

2008)   (daughter    did       not    have    authority    to   enter     arbitration

                                             7
agreement where there was no declaration of resident's inability to

manage his affairs and no power of attorney in the record); Mt.

Holly Nursing Center v. Crowdus, 281 S.W.3d 809 (Ky. Ct. App. 2008)

(spouse   lacked    authority     to       bind   resident   to    arbitration

agreement); Goliger v. AMS Properties, Inc., 19 Cal. Rptr. 3d 819

(Cal. Ct. App. 2004) (daughter was not acting as mother's agent

when she signed arbitration agreement without some evidence of

authority beyond merely signing admission contracts).                  See also

Compere's Nursing Home, Inc. v. Estate of Farish, 982 So. 2d 382

(Miss. 2008); Sennett v. National Healthcare Corp., 272 S.W.3d 237

(Mo. Ct. App. 2008); Ashburn Health Care Center, Inc. v. Poole, 648

S.E.2d 430 (Ga. Ct. App. 2007); Flores v. Evergreen at San Diego,

LLC, 55 Cal.     Rptr. 3d 823 (Cal. Ct. App. 2007); Landers v.

Integrated Health Services of Shreveport, 39,739-CA (La. App. 2

Cir. 5/11/05) 903 So. 2d 609; Pagarigan v. Libby Care Center, Inc.,

120 Cal. Rptr. 2d 892 (Cal. Ct. App. 2002).

     Even where a health care power of attorney was present, courts

have concluded     that   the   spouse      lacked   authority    to   sign   the

arbitration agreement.      Those cases have held that a health care

power of attorney granted for medical decisions does not confer

authority to sign an arbitration agreement waiving legal rights.

See Life Care Centers of America v. Smith, 681 S.E.2d 182 (Ga. App.

2009) (power of attorney granted to daughter for medical decisions

did not grant authority to waive legal rights under arbitration

                                       8
agreement); Lujan v. Life Care Centers of America, 222 P.3d 970

(Colo. Ct. App. 2009) (health care proxy's decision to agree to

arbitrate was unauthorized); Texas Cityview Care Center, L.P. v.

Fryer, 227 S.W.3d 345 (Tex. Ct. App. 2007) (medical power of

attorney did not indicate that it was intended to confer authority

to sign arbitration agreement). See also Monticello Community Care

Center, LLC v. Estate of Martin, 17 So. 3d 172 (Miss. Ct. App.

2009); Moffett v. Life Care Centers of America, 187 P.3d 1140

(Colo. App. 2008); Blankfield v. Richmond Health Care, Inc., 902

So. 2d 296 (Fla. Dist. Ct. App. 2005).               But see Owens v. National

Health   Corp.,   263   S.W.3d    876       (Tenn.    2007)   (attorney-in-fact

authorized to enter into arbitration agreement as part of contract

admitting nursing home resident).

     As the trial court said in denying the motion to compel

arbitration: "[T]he agreement to submit to binding arbitration is

ultra vires of a power       of attorney for health care and the

duty/power to provide for the nursing home spouse's medical needs."

     These cases support our conclusion that a spouse's signature

on an arbitration agreement as the resident's representative does

not demonstrate actual authority to bind a nursing home resident to

the agreement. An actual agency relationship is controlled by the

express authorization of the principal or implied conduct of the

principal   and   agent.    The   principal's          conduct   is   crucial   to

establish actual authority.       Such authority is not dictated by an

                                        9
independent act or signature of the agent.                 Thus, absent some

evidence that the resident gave the agent spouse authority to sign

the agreement to arbitrate on his behalf, the resident is not bound

by its terms.      By our decision today, we join the majority of

states reviewing this issue.

       Nevertheless, Pekin Manors urges us to consider the decisions

of a minority of courts that have enforced nursing home arbitration

agreements signed by a family member.                Those cases follow the

reasoning of Sovereign Healthcare of Tampa, LLC v. Estate of

Huerta, 14 So. 3d 1033 (Fla. Dist. Ct. App. 2009).                 In Sovereign

Healthcare, the Florida appellate court held that a daughter-in-law

had    the   authority   to   sign   a    contract   for   admission    on   the

resident's behalf, including the arbitration agreement, in reliance

on a durable power of attorney.           The durable power of attorney in

that case included a catch-all provision giving the attorney-in-

fact the authority "to sign any and all releases or consent

required." Sovereign Healthcare, 14 So. 3d at 1035; see also Triad

Health Management of Georgia, III, LLC v. Johnson, 298 S.E.2d 785

(Ga. 2009) (signature of patient's son on arbitration agreement was

enforceable where son had general power of attorney executed by

father); Five Points Heath Care, Ltd v. Mallory, 998 So. 2d 1180

(Fla. Dist. Ct. App. 2008) (daughter had durable power of attorney

to    prosecute,   defend     and   settle    all   actions   or   other   legal

proceedings and to "do anything" regarding resident’s estate).

                                         10
These cases, however, are distinguishable.          In each case, there is

at least some evidence of actual authority granting general powers

of attorney to the spouse or family representative.             Here, Pekin

Manors    has   produced   neither   a    general   or   property   power   of

attorney, nor an order of guardianship authorizing Marilee to

administer her husband's legal affairs.              Thus, Marilee lacked

actual authority to sign the arbitration agreement on Charles'

behalf.

                    B.     Apparent Authority

     Pekin Manors also claims that the arbitration agreement is

valid because Marilee acted as her husband's apparent agent at the

time of his nursing home admission. Pekin Manors argues that since

Marilee made a health care decision for her husband to be placed in

the nursing home and Charles remained in the nursing home, Charles

consented to Marilee's authority to sign the arbitration agreement.

     In the absence of actual authority, a principal can be bound

by the acts of a purported agent when that person has apparent

authority to act on behalf of the principal.         Amcore Bank, 326 Ill.

App. 3d at 137. Apparent authority arises when a principal creates

a reasonable impression to a third party that the agent has the

authority to perform a given act.         Crawford Savings & Loan Ass'n v.

Dvorak, 40 Ill. App. 3d 288 (1976).          To prove apparent authority,

the proponent must show that (1) the principal consented to or

knowingly acquiesced in the agent's exercise of authority, (2)

                                     11
based on the actions of the principal and agent, the third party

reasonably concluded that the agent had authority to act on the

principal behalf, and (3) the third party justifiably relied on the

agent's apparent authority to his detriment. Career Concepts, Inc.

v. Synergy, Inc., 372 Ill. App. 3d 395, 404 (2007) (company's sales

manager had apparent authority to sign contract with employee-

placement agency where company authorized manager to enter other

contracts and interview potential employees).                     In establishing

apparent authority, it is critical to find some words or conduct by

the principal that could reasonably indicate consent.                    Emmenegger

Construction Co. v. King, 103 Ill. App. 3d 423 (1982).                   An agent's

authority    may   be     presumed    by   the    principal's     silence      if   the

principal knowingly allows another to act for him as his agent.

Elmore v. Blume, 31 Ill. App. 3d 643, 647 (1975).

       The record before us demonstrates that Charles never acted or

conducted himself in a way that would indicate to Pekin Manors that

Marilee was his apparent agent for purposes of the arbitration

agreement.    There is no evidence showing that Charles was present

when Marilee signed the agreement or that Charles understood

Marilee was signing an agreement waiving his legal rights.                          The

record   contains        no   words   or   conduct    by    Charles     that    would

reasonably indicate consent. Thus, Pekin Manor failed to establish

that   Marilee     had    apparent    authority      to    sign   the   arbitration

agreement on her husband's behalf.               As a result, Marilee cannot be

                                           12
required to arbitrate Charles' claims against the nursing home.

     Pekin Manors attempts to analogize this case to Strino v.

Premier Healthcare Associates, P.C., 365 Ill. App. 3d 895 (2006).

In that case,    parents of a newborn filed a medical negligence case

against the obstetrician that delivered the baby Cesarian section.

The jury found the mother was contributorily negligent due to the

father's decision to decline the use of forceps for a vaginal

delivery.       On   appeal,    the   parents   claimed   that   the   agency

instruction was error.         The reviewing court disagreed, finding an

agency relationship based on the father's blatant refusal to allow

the doctor to use forceps, the mother's presence in the operating

room and her silence when the doctor requested her permission to

use forceps.     Strino, 365 Ill. App. 3d at 902.

     The facts in this case are dissimilar.           The record does not

indicate that Charles was present when Marilee signed the contracts

on his behalf.       And neither party suggests that the nursing home

staff asked Charles to agree to the terms of the arbitration

agreement. Without some evidence of an agency relationship, he

cannot be bound by the arbitration agreement.

                     II.   Marilee's Personal Claims

     In the alternative, Pekin Manors argues that Marilee is

obligated to arbitrate her personal claims for wrongful death and

medical expenses because she had the authority to bind herself to

the agreement.       We disagree.

                                       13
      Marilee     signed    the     arbitration     agreement        as   "Resident

Representative."          Marilee   did    not   sign   the   agreement     in   her

individual capacity.        She signed the agreement as a representative

of the beneficiary, Charles.         Thus, Marilee's signature carries no

legally binding weight regarding the arbitration of her personal

claims against the nursing home under the Wrongful Death Act or the

Family Expense Act.         See Ward v. National Healthcare Corp., 275

S.W.3d 236 (Mo. 2009) (arbitration clause signed by daughter did

not preclude daughter's personal wrongful death claim); Goliger,

19 Cal. Rptr. 3d at 821.

                                    CONCLUSION

      Because Marilee lacked authority to enter into the arbitration

agreement on behalf of Charles, the arbitration agreement is

invalid.       Therefore, Marilee is not required to arbitrate her

claims against Pekin Manors.          In light of our holding on the issue

of   agency,    it   is   unnecessary     for    this   court   to    address    the

remaining issues raised on appeal.

      The judgment of the circuit court of Tazewell County denying

the motion to dismiss and compel arbitration is affirmed.                        The

cause is remanded to the circuit court for further proceedings

consistent with this opinion.

      Affirmed and remanded.

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