Court Opinion

ID: 6335340
Source: CourtListenerOpinion
Date Created: 2022-04-27 14:02:57.503924+00
Date Added: 2024-06-11T09:23:54.155783
License: Public Domain

Cite as 2022 Ark. App. 190
                  ARKANSAS COURT OF APPEALS
                                      DIVISION II
                                      No. CV-21-392

                                              Opinion Delivered April   27, 2022

 HICKORY HEIGHTS HEALTH AND
 REHAB, LLC; CENTRAL ARKANSAS
 NURSING CENTERS, INC.; HICKORY
 MANOR, LLC; AND MICHAEL S.
                                              APPEAL FROM THE PULASKI
 MORTON
                                              COUNTY CIRCUIT COURT,
                                              ELEVENTH DIVISION
                                              [NO. 60CV-20-2846]
                             APPELLANTS

 V.

 WESLEY SMITH, AS SPECIAL
 ADMINISTRATOR OF THE ESTATE
                                  HONORABLE PATRICIA JAMES,
 OF BETTYE JEAN SMITH, DECEASED,
                                  JUDGE
 AND ON BEHALF OF THE
 WRONGFUL DEATH BENEFICIARIES
 OF BETTYE JEAN SMITH
                         APPELLEE
                                              AFFIRMED

                           WAYMOND M. BROWN, Judge

      Appellants Hickory Heights Health and Rehab, LLC; Central Arkansas Nursing

Centers, Inc.; Hickory Manor, LLC; and Michael S. Morton bring this interlocutory appeal

of an order of the Pulaski County Circuit Court denying their motion to compel arbitration

of a negligence complaint filed by appellee Wesley Smith as special administrator of the
estate of Bettye Jean Smith. Appellants argue that the circuit court erred in failing to enforce

a valid arbitration agreement. We find no error and affirm.

        On February 19, 2018, Wesley assisted with Bettye’s admission to Hickory Heights

Health and Rehab, LLC (Hickory Heights), for medical, nursing, and personal care.1 The

facility required signatures on necessary documents. Wesley signed the admission form for

his mother as the responsible party.2 However, Bettye’s name was not anywhere on the

admission agreement. That same day, Wesley also signed an arbitration agreement that was

required as a condition of Bettye’s admission to the facility. Wesley signed the arbitration

agreement as the responsible party and indicated that his relationship to Bettye was “son.”

Bettye’s name was printed on the resident line in the arbitration agreement in what appeared

to be the handwriting of the facility’s representative. A separate line below the signatures

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.

        1
            Wesley had been appointed medical power of attorney (POA) by Bettye in December
2005.
        2
         Responsible party was defined in the admission agreement as “the Resident’s legal
guardian, if one has been appointed, the Resident’s attorney-in-fact, if the Resident executed
a power of attorney, or some other individual or family member who agrees to assist the
Facility in providing for the Resident’s health, care and maintenance.” The definition also
included someone who “manages, uses, controls, or otherwise has legal access to Resident’s
income or resources that legally may be used to pay Resident’s share of cost or other charges
not paid by the Arkansans Medicaid Program or any other source.”

                                               2
       Bettye was a resident at Hickory Heights from February 19, 2018, until October 11,

2019. Bettye died on November 9, 2019. Wesley was appointed special administrator of

Bettye’s estate on December 31. He filed the negligence complaint against appellants on

May 5, 2020. He stated that as result of appellants’ negligence, Bettye suffered numerous

physical and emotional injuries: falls, medication errors, right scapula fracture, pelvic ring

fracture, severe pain and suffering, and death. He contended that Bettye’s injuries led to

degradation, mental anguish, distress, unnecessary hospitalizations and treatment, and

emotional trauma and eventually caused her death. Appellants filed an answer on June 3

asserting the existence of an arbitration agreement and denying the material allegations of

Wesley’s complaint.

       Appellants filed a motion to compel arbitration on August 21. They contended that

Wesley executed the arbitration agreement when Bettye was admitted to Hickory Heights,

and at the time the agreements were signed, Wesley had authority under a medical POA

executed by Bettye on December 28, 2005. Appellants maintained that by signing the

agreements, Wesley bound Bettye and her estate to the terms of the arbitration agreement.

Appellants attached a copy of the medical POA to their motion to compel arbitration. The

authority granted in the medical POA was to “kick in” if it was determined that Bettye was

incapacitated to provide informed consent for medical treatment and surgical and diagnostic

procedures. The document permitted Wesley to “make health care decisions and to provide,

withhold, or withdraw consent on [Bettye’s] behalf for medical treatment and surgical and

diagnostic procedures, to apply for public benefits to defray the costs of health care, and to

                                              3
authorize [Bettye’s] admission to or transfer from a health care facility.” Wesley filed a

response on September 1 contending that he signed the necessary documents as Bettye’s son

and not under any legal authority to bind Bettye, who he noted was not identified in the

admission agreement. He stated that the line outlining his legal authority was left blank on

the arbitration agreement because he did not hold legal authority to bind Bettye to the

agreement. Wesley also said that the medical POA executed in his favor did not include the

power to waive Bettye’s right to a jury trial for personal-injury claims.3 Appellants filed a

reply on September 14, contending that Wesley signed the documents as Bettye’s attorney-

in-fact and that the lack of a checkmark does not destroy the authority Wesley had. They

also argued that Wesley had the authority to consent to the arbitration agreement on Bettye’s

behalf because the arbitration agreement was in connection with Bettye’s admission to

Hickory Heights. Wesley filed a supplemental response on September 22, again contending

that his authority under the medical POA was limited to health-care decisions and was not

adequate to bind Bettye or her estate to arbitration.

       The circuit court held a hearing on appellants’ motion to compel on March 16, 2021.

Appellants maintained that the arbitration agreement was incorporated into the admission

agreement, which fell under the authority granted to Wesley in the medical POA. Wesley

argued that the medical POA did not give him the authority to bind Bettye to arbitration.

       3
       Appellants also made other contentions; however, they are not relevant to the issue
on appeal.

                                              4
The circuit court did not make an oral ruling but informed the parties that it wished to go

over all the evidence and exhibits before deciding. The circuit court filed an order on April

23 denying appellants’ motion to compel arbitration upon a finding that “the power of

attorney at issue in this matter did not give [Wesley] the right to bind his Mother to

arbitration.” Appellants filed a timely notice of appeal on May 21.

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

to Arkansas Rule of Appellate Procedure–Civil 2(a)(12).4 We review a circuit court’s denial

of a motion to compel arbitration de novo on the record. 5 While we are not bound by the

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

interpretation of the law, we will accept its decision as correct on appeal.6

       Generally, the terms of an arbitration contract do not apply to those who are not

parties to the contract.7 In Arkansas, the presumption is that the parties contract only for

themselves; thus, a contract will not be construed as having been made for the benefit of a

third party unless it clearly appears that such was the intention of the parties. 8 When a third

party signs an arbitration agreement on behalf of another, as was done in this case, the court

       4
           (2021).

       5
           Robinson Nursing & Rehab. Ctr., LLC v. Phillips, 2019 Ark. 305, 586 S.W.3d 624.

       6
           Progressive Eldercare Services-Morrilton, Inc. v. Taylor, 2021 Ark. App. 379.

       7
           Innisfree Health & Rehab, LLC v. Titus, 2021 Ark. App. 403, 636 S.W.3d 781.

       8
           Id.

                                                   5
must determine whether the third party was clothed with authority to bind the other person

to arbitration.9 Here, Hickory Heights bore the burden of proof.10

       In denying appellants’ motion to compel, the circuit court found that the authority

granted to Wesley in the medical POA was not sufficient to allow him to bind Bettye to the

terms of the arbitration agreement. We agree. Appellants argue that since the arbitration

agreement was part of the admissions process, Wesley had the authority to bind Bettye to

arbitration based on the medical POA’s language giving Wesley the right to authorize Bettye’s

admission into a health-care facility. This argument is without merit.11 The nature of an

agent’s authority must be ascertained from the power-of-attorney instrument.12 Our court

has found that a power of attorney that included authority to make health-care decisions did

not include the authority to agree to arbitrate.13 Here, there is no indication that Wesley

had power beyond making health-care decisions for Bettye. The medical POA did not

include the right for Wesley to make litigation decisions for Bettye, nor did it authorize

Wesley to sign the arbitration agreement on Bettye’s behalf. Accordingly, we hold that

Wesley lacked the authority to bind Bettye to the arbitration agreement, and there is no valid

       9
           Innisfree Health & Rehab, LLC v. Jordan, 2020 Ark. App. 518.

       10
            Pine Hills Health & Rehab., LLC v. Talley, 2018 Ark. App. 131, 546 S.W.3d 492.
       11
            Bettye’s name was not found anywhere in the admission agreement.

       12
       Courtyard Gardens Health & Rehab., LLC v. Williamson, 2016 Ark. App. 606, 509
S.W.3d 685.

       13
            Id.

                                                6
arbitration agreement to enforce. We affirm the circuit court’s denial of appellants’ motion

to compel arbitration.

       Affirmed.

       BARRETT and VAUGHT, JJ., agree.

       Hardin, Jesson & Terry, PLC, by: Jeffrey W. Hatfield, Kynda Almefty, Carol Ricketts,

Kirkman T. Dougherty, and Stephanie I. Randall, for appellants.

       Rainwater, Holt & Sexton, P.A., by: Jeff R. Priebe; and Appellate Solutions, PLLC, by:

Deborah Truby Riordan, for appellee.

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