Court Opinion

ID: 4107114
Source: CourtListenerOpinion
Date Created: 2016-12-14 16:03:18.831827+00
Date Added: 2024-06-11T07:46:06.212480
License: Public Domain

Cite as 2016 Ark. App. 608

                ARKANSAS COURT OF APPEALS

                                       DIVISION II
                                      No.CV-15-746

COURTYARD GARDENS HEALTH Opinion Delivered: December 14, 2016
AND REHABILITATION, LLC,
ET AL.                        APPEAL FROM THE CLARK COUNTY
                  APPELLANTS CIRCUIT COURT
                              [NO. 10CV-14-38]
V.
                              HONORABLE ROBERT MCCALLUM,
ERICKA ANN DAVIS, SPECIAL     JUDGE
ADMINISTRATOR OF THE
ESTATE OF JULIUS MARKS,
DECEASED
                     APPELLEE REVERSED AND REMANDED

                              RITA W. GRUBER, Judge

       Appellant Courtyard Gardens Health and Rehabilitation, LLC, along with its

owners, administrators, and other related entities (collectively “Courtyard”), appeal from an

order denying their motion to compel arbitration. 1 We reverse and remand.

                                             I.

       In 2009, Julius Marks, the father of appellee Ericka Ann Davis, became a resident of

Courtyard’s nursing-home facility in Arkadelphia, Arkansas. Mr. Marks’s admission papers,

including an arbitration agreement, were signed on his behalf by Ms. Davis, pursuant to her

power of attorney.

       1
        An order denying a motion to compel arbitration is an appealable order. Ark. R.
App. P. –Civ. 2(a)(12) (2016).
                               Cite as 2016 Ark. App. 608

       The arbitration agreement provided, in essence, that any claims related to

Courtyard’s provision of services or health care would be resolved exclusively by binding

arbitration. The agreement also provided that arbitration would be conducted in accordance

with the National Arbitration Forum (“NAF”) Code of Procedure, which was incorporated

into the agreement.

       Mr. Marks remained at Courtyard until shortly before his death in October 2013. In

April 2014, Ms. Davis, as special administrator of her father’s estate, filed suit against

Courtyard in Clark County Circuit Court, alleging negligence and medical malpractice in

her father’s care and treatment. Courtyard moved to compel arbitration of the claim in

accordance with the above-referenced arbitration agreement. However, Davis responded

that the arbitration agreement was legally impossible to perform because the NAF, whose

procedural code was incorporated into the agreement, no longer conducted consumer

arbitrations. The court agreed and ruled that the arbitration agreement was impossible to

perform due to the unavailability of the NAF. Courtyard filed a timely appeal.

                                            II.

       Courtyard argues that the parties’ arbitration agreement remained enforceable,

despite the NAF’s unavailability as an arbitration forum. We agree.

       The NAF’s absence from consumer-arbitration cases stems from an action filed by

Minnesota’s Attorney General in 2009. The action alleged that the NAF had violated various

consumer-protection laws while handling consumer arbitration claims. See Green v. U.S.

Cash Advance Ill., LLC, 724 F.3d 787 (7th Cir. 2013); Meskill v. GGNSC Stillwater Greeley,

LLC, 862 F. Supp.2d 966 (D. Minn. 2012); Miller v. GGNSC Atlanta, LLC, 746 S.E.2d

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                                Cite as 2016 Ark. App. 608

680 (Ga. Ct. App. 2013). To settle the case, the NAF signed a consent decree barring it

from accepting consumer arbitration cases. As a result, a legal dilemma arose with regard to

arbitration agreements that, like the one here, invoked the NAF procedures. See Meskill,

supra. The issue that would soon be addressed by numerous courts was whether the NAF’s

unavailability rendered such arbitration agreements legally impossible to perform.

       The courts split on this question, but our supreme court recently resolved the issue

for our State in Courtyard Gardens Health & Rehabilitation, LLC v. Arnold, 2016 Ark. 62, 485

S.W.3d 669. The Arnold court held that, based on the language of the parties’ arbitration

agreement and the applicable law, the absence of the NAF did not render performance of

the arbitration agreement impossible. Specifically, the court determined that the agreement’s

reference to the NAF was ancillary to, rather than integral to, the parties’ agreement to

arbitrate. We reach the same conclusion, based on the holding in Arnold.

       Our decision is rooted in the fact that Arnold is identical in many respects to the case

before us. Arnold involved, as does the present case, Courtyard’s appeal from a ruling by the

Clark County Circuit Court that an arbitration agreement was impossible to perform due

to the unavailability of the NAF. Of greater importance, the arbitration agreement in Arnold

is the same for all practical purposes as the arbitration agreement in this case—a crucial

consideration in light of the supreme court’s reliance on the particular language of the

agreement. Further, the parties’ arguments in Arnold, as here, focus on the legal concept of

impossibility of performance and the effect of the NAF’s unavailability. The supreme court’s

analysis of these arguments in Arnold was thorough and meticulous, and there is no need to

expound on that analysis.

                                              3
                                  Cite as 2016 Ark. App. 608

         Given these factual and legal similarities between Arnold and the case at bar, there

remains little, if any, room for a different outcome. We therefore see no reason to deviate

from Arnold’s holding that arbitration must go forward, despite the NAF’s unavailability.

         Davis attempts to distinguish Arnold, but her efforts are unavailing. In particular, she

contends that Arnold did not address certain parts of the NAF Code, such as Rules 48(D)

and (E), which, she contends, warrant a denial of arbitration. Without delving into the

substance of these rules, we observe that another recent supreme court case, GGNSC

Holdings, LLC v. Lamb, 2016 Ark. 101, 487 S.W.3d 348, rejected these Rule 48 arguments.

The Lamb court stated the following:

         As a separate point of appeal, GGNSC takes issue with the circuit court’s finding that
         Rules 48(D) and (E) permit the residents to assert their claims in court. In response,
         Lamb argues that the circuit court correctly ruled that the arbitration agreement does
         not require the residents to arbitrate their disputes, but that Rule 48 allows the
         residents to sue in court. Further, Lamb argues that “it is impossible for the NAF to
         arbitrate this dispute as a result of the consent judgment with the Minnesota Attorney
         General.” Thus, despite this argument being addressed as a separate point on appeal,
         the crux of Lamb’s argument involves impossibility. As explained below, we reject
         Lamb’s argument for the reasons set forth in Courtyard Gardens Health & Rehabilitation,
         LLC v. Arnold, 2016 Ark. 62, 11-12, 485 S.W.3d 669.

2016 Ark. 101, at 12, n. 3, 487 S.W.3d 348, at 356, n. 3. The court then went on to hold

that, for the reasons stated in Arnold, the parties’ arbitration agreement was not impossible

to perform.

         We reverse and remand for entry of an order compelling arbitration. See Arnold,

supra.

         Reversed and remanded.

         HARRISON and HOOFMAN, JJ., agree.

                                                4
                               Cite as 2016 Ark. App. 608

       Kutak Rock LLP, by: Mark W. Dossett, Samantha B. Leflar, and Luke Burton, for

appellants.

       Appellate Solutions, PLLC, by: Deborah Truby Riordan; The Edwards Firm, P.L.L.C.,

by: Robert H. Edwards; and Wilkes & McHugh, P.A., by: William P. Murray III, for appellee.

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