Court Opinion

ID: 2725670
Source: CourtListenerOpinion
Date Created: 2014-09-08 20:52:06.535668+00
Date Added: 2024-06-11T12:39:42.359953
License: Public Domain

Pursuant to Ind.Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before
any court except for the purpose of
establishing the defense of res judicata,
collateral estoppel, or the law of the case.

ATTORNEYS FOR APPELLANTS:

JANET A. MCSHARAR
ALBERT BARCLAY WONG                                         Jan 30 2014, 7:30 am
JENNIFER L. STRANGE
Harrison & Moberly, LLP
Indianapolis, Indiana

                               IN THE
                     COURT OF APPEALS OF INDIANA

LINCOLNSHIRE HEALTHCARE OPERATIONS                  )
COMPANY, LLC, LINCOLNSHIRE HEALTH                   )
CARE CENTER, INC., and TENDER LOVING                )
CARE MANAGEMENT, INC.,                              )
                                                    )
       Appellants-Defendants,                       )
                                                    )
               vs.                                  )   No. 45A05-1306-CT-276
                                                    )
THE ESTATE OF DORA BERRY, by Personal               )
Representative RITA CLAXTON,                        )
                                                    )
       Appellee-Plaintiff.                          )

                        APPEAL FROM THE LAKE SUPERIOR COURT
                             The Honorable John M. Sedia, Judge
                               Cause No. 45D01-1301-CT-20

                                         January 30, 2014

                 MEMORANDUM DECISION - NOT FOR PUBLICATION

BAILEY, Judge
                                          Case Summary

       Lincolnshire Healthcare Operations Company, LLC (“Lincolnshire Operations”),

Lincolnshire Health Care Center, Inc. (“Lincolnshire Care Center”), and Tender Loving Care

Management, Inc. (“Tender Loving Management”) (collectively, “Lincolnshire”) were sued

by the Estate of Dora Berry (“the Estate”) for negligent nursing care resulting in wrongful

death. Lincolnshire moved to compel the Estate to participate in arbitration. The trial court

denied Lincolnshire’s motion. Lincolnshire now appeals.

       We reverse and remand for further proceedings.

                                                Issue

       Lincolnshire raises one issue for our review, which we restate as whether the trial

court erred when it concluded that the agreement between Lincolnshire and the decedent was

sufficiently ambiguous as to preclude Lincolnshire from enforcing the agreement’s

arbitration provision.

                                 Facts and Procedural History

       On February 16, 2011, Dora Berry (“Berry”), through her daughter, Rita Claxton1

(“Claxton”), entered into a Facility Admission Agreement (“the Agreement”) for nursing care

for Berry with an organization named in the Agreement only as Lincolnshire.2 In the period

1
 At the time of the Agreement’s execution, Claxton’s last name was Griggy. Because the Complaint and all
other documents filed in the trial court bear the name Claxton, we use that name in this opinion.

2
  Indiana Code section 16-36-1-5 provides that an adult child, among others, may serve as a health care
representative for purposes of consenting to care for an individual incapable of consenting to medical
treatment. The parties do not dispute that Claxton was acting in this capacity on Berry’s behalf.

                                                   2
between February 16, 2011 and August 11, 2011, Berry was a patient at Lincolnshire Care

Center, a nursing home Lincolnshire Operations operated.

          On August 11, 2011, Berry died.

          On January 16, 2013, the Estate filed suit against Lincolnshire, alleging that while

Berry was a patient at Lincolnshire Care Center, healthcare providers and other agents were

negligent in their provision of care to Berry, which negligence was the proximate cause of

various injuries to Berry and, eventually, Berry’s death. The Estate filed an amended

complaint on January 18, 2013.3 On February 27, 2013, the Estate filed its second amended

complaint, which further specified that Lincolnshire Care Center was operated by

Lincolnshire Operations. On March 8, 2013, the Estate further limited the scope of its

claims, voluntarily seeking the dismissal of a hospital from the lawsuit; the trial court granted

this motion on March 12, 2013.

          On March 14, 2013, Lincolnshire filed a motion to compel arbitration (“the motion to

compel”). In its motion, Lincolnshire argued that Berry, through her attorney-in-fact, had

agreed to mediation and/or arbitration of any claims. Lincolnshire thus requested that the

trial court stay the proceedings and order the Estate to engage in mediation and arbitration, as

provided for in the Agreement.

          On April 23, 2013, the trial court conducted a hearing on the motion to compel. After

the hearing and briefing from the parties, on June 4, 2013, the trial court entered its order

denying the motion to compel.

3
    The changes to the amended complaint are not material to this Court’s resolution of the instant appeal.

                                                       3
       This appeal ensued.

                                   Discussion and Decision

       In its appeal, Lincolnshire contends that the trial court erred when it denied the motion

to compel.

       The Indiana Code provides that written agreements to submit to arbitration are valid

and enforceable, except where grounds exist for revocation of any contract. Ind. Code § 34-

57-2-1(a). Arbitration is initiated by written notice by either party. I.C. § 34-57-2-2. If a

party seeks arbitration, and the other party refuses to arbitration, the party seeking arbitration

may move a trial court to compel participation in the arbitration proceeding, and, where

arbitration is ordered, the underlying action at the trial court must be stayed. I.C. § 34-57-2-

3(a) & (d).

       We review de novo appeals from the grant or denial of a motion to compel arbitration.

Brumley v. Commonwealth Bus. College Educ. Corp., 945 N.E.2d 770, 775 (Ind. Ct. App.

2011). Both Indiana and federal law recognize a strong public policy favoring enforcement

of arbitration agreements. Safety Nat. Cas. Co. v. Cinergy Corp., 829 N.E.2d 986, 1000 (Ind.

Ct. App. 2005), trans. denied. A party seeking to compel arbitration must satisfy two

elements. Id. First, the party must demonstrate that there is an enforceable agreement to

arbitrate the dispute. Id. Second, the party must prove the disputed matter is the type of

claim that the parties agreed to arbitration. Id. Once the party seeking arbitration has carried

its burden of proof, the trial court must compel arbitration. Id. (citing, inter alia, I.C. § 34-

57-2-3(a)).

                                                4
       Our standard of review is altered in this case by the absence of an appellee’s brief

from the Estate. “An appellee who does not respond to the appellant’s allegations of error on

appeal runs a considerable risk of reversal.” Trisler v. Carter, 996 N.E.2d 354, 356 (Ind. Ct.

App. 2013). We do not undertake the burden of developing arguments for the appellee.

Damon Corp. v. Estes, 750 N.E.2d 891, 892-93 (Ind. Ct. App. 2001). Where an appellee’s

brief has not been submitted, the appellant need only demonstrate prima facie reversible

error, that is, error “‘at first sight, on first appearance, or on the face of it.’” Id. at 893

(quoting Hill v. Ramey, 744 N.E.2d 509, 511 (Ind. Ct. App. 2001)).

       Here, the Agreement provides:

       This AGREEMENT is made by and between Lincolnshire (hereinafter referred
       to as the “Facility”) and Dora Berry (hereinafter referred to as the “Resident”),
       Rita Griggy, the Resident’s Legal Representative … and the Resident’s Health
       Care Representative.

       ***

       Any dispute or other matters in question arising out of or relating to the
       Resident’s receipt of care and services pursuant to this Agreement that the
       parties are unable to resolve through negotiation, the parties agree in good
       faith to attempt to settle the dispute by mediation…before resorting to
       arbitration.

       ***

       Any disputes [or] other matters in question arising out of or related to the
       Resident’s receipt of care and services pursuant to this Agreement that are not
       settled by mediation within 60 days after a mediator is appointed are subject to
       binding Arbitration….

       The Resident and Legal Representative understand and agree that by entering
       into this Agreement they are giving up and waiving the constitutional right to
       have any claim decided in a court of law before a judge and jury.

(App’x at 33, 40-41.)

                                              5
       Looking to the language of the Agreement, the trial court concluded that the

Agreement bound Berry and Claxton—and thus, the Estate—to its terms. However, the trial

court found the Agreement ambiguous with respect to the identity of the other party.

       A contract is ambiguous only if reasonable persons would differ as to the meaning of

its terms. Oxford Financial Group, Ltd. v. Evans, 795 N.E.2d 1135, 1142 (Ind. Ct. App.

2003) (citing Beam v. Wausau Ins. Co., 765 N.E.2d 524, 528 (Ind. 2002)). Where a contract

is unambiguous, the court must give effect to the intentions of the parties “as expressed in the

four corners of the instrument, and clear, plain, and unambiguous terms are conclusive of that

intent.” Id.

       Where a contract is by its terms ambiguous, that ambiguity may be patent or latent. A

patent ambiguity “is apparent on the fact of the instrument and arises from an inconsistency

or inherent uncertainty of language used so that it either conveys no definite meaning or a

confused meaning.” Id. at 1143. Extrinsic evidence may not be used to explain a patent

ambiguity. Id. A latent ambiguity “does not emerge until one attempts to implement the

words as directed in the instrument. Extrinsic evidence is admissible to explain a latent

ambiguity.” Eckart v. Davis, 631 N.E.2d 494, 497-98 (Ind. Ct. App. 1994). Generally, an

ambiguous contract is construed against the party that drafted the agreement. Id. at 498.

       Here, the trial court concluded:

       8. It is impossible for the Court to determine, under the four corners of the
       Agreement, the entity that is identified by the worlds “Lincolnshire” and
       “Facility.” The surrounding circumstances can be used to ascertain the intent
       of the parties only to a limited degree: obviously, [Berry] and [Claxton]
       sought to admit [Berry] for nursing home care, and, it is equally obvious,
       whomever [sic] was going to provide nursing home care sought to have any

                                               6
       dispute (other than fees for payment) resolved through arbitration. This is still
       not enough to ascertain who was supposed to provide the care to [Berry] and to
       whom [Berry] and [Claxton] were bound to arbitrate.

       9. The Court is not willing to enforce and agreement that does not state with
       sufficient clarity all the parties who are bound by it and who will benefit from
       it.

(App’x at 8, 9.)

       Because the Agreement did not specify in full the name of any of the parties seeking

to enforce the arbitration provisions of the Agreement, the trial court refused to compel

arbitration. That is, the trial court concluded that the ambiguity associated with the name,

“Lincolnshire,” in the Agreement was a patent ambiguity not susceptible to proof by extrinsic

evidence.

       We disagree.

       Assuming that the Agreement was ambiguous, any such ambiguity was latent—that is,

the Agreement’s terms are not internally contradictory, but rather are unclear only in

application. Yet the Estate’s Second Amended Complaint alleged that Lincolnshire Care

Center was administered by Lincolnshire Operations. And Claxton, in an affidavit submitted

in opposition to Lincolnshire’s motion to compel arbitration, averred that she signed the

Agreement at Lincolnshire Care Center. (App’x at 69.) That is, extrinsic evidence

established that Claxton, serving as Berry’s health care representative, signed the Agreement

with Lincolnshire. The trial court’s conclusion that it was impossible from the terms of the

Agreement to determine to what “Lincolnshire” referred is thus prima facie error.

                                              7
                                      Conclusion

      The trial court erred when it concluded that the arbitration agreement was

unenforceable because of ambiguity. We accordingly reverse the trial court’s decision and

remand for further proceedings.

      Reversed and remanded for further proceedings.

FRIEDLANDER, J., and KIRSCH, J., concur.

                                           8