Court Opinion

ID: 2728795
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:36:21.141412+00
Date Added: 2024-06-11T09:53:11.661897
License: Public Domain

NO. COA13-948

                    NORTH CAROLINA COURT OF APPEALS

                         Filed: 15 April 2014

TERRI DEW BOOKMAN, Administratrix
of the Estate of CARTHINA ROBERSON
DEW,

    Plaintiff,

    v.                                  Wilson County
                                        No. 2011 CVS 1575
BRITTHAVEN, INC., D/B/A BRITTHAVEN
OF WILSON, DAVITA RX, LLC, WILSON
MEDICAL CENTER, MORGAN JONES, and
COURTNEY LASSITGER,

    Defendants.

    Appeal by defendant from order entered 10 May 2013 by Judge

Milton F. Fitch, Jr. in Wilson County Superior Court.              Heard in

the Court of Appeals 21 January 2014.

    Taylor Law Office, by W. Earl Taylor, Jr., for plaintiff-
    appellee.

    Williams Mullen, by Brian C. Vick and Elizabeth D. Scott,
    for defendant-appellant.

    HUNTER, Robert C., Judge.

    Defendant     Britthaven,    Inc.   d/b/a    Britthaven   of     Wilson

(“Britthaven”) appeals from the trial court’s order denying its

motion to compel arbitration.      On appeal, Britthaven argues that

apparent   authority   existed    to    bind    the   principal    to   the
                                           -2-
arbitration agreement, and therefore, the trial court erred by

ruling that the arbitration agreement is unenforceable.

       After careful review, we reverse the trial court’s order

and remand for further proceedings.

                                        Background

       On 24 August 2010, Carthina Dew (“Mrs. Dew”) was admitted

into    Britthaven       after     being    discharged          from   Wilson      Medical

Center following surgery on her broken femur.                              Mrs. Dew was

awake,    alert,      lucid,      and    responsive        to    questions    when    she

arrived at Britthaven.             However, she did not sign any of the

legal documents needed to admit her into the facility.                                Her

husband, Frederick Dew (“Mr. Dew”), and her daughter, Terri Dew

Bookman (“Mrs. Bookman”), signed all relevant documents.                             They

met    with   Janet      Watson   (“Ms.     Watson”),       Britthaven’s        admission

coordinator.        Ms. Watson filed an affidavit with the trial court

averring that Mr. Dew and Mrs. Bookman presented themselves as

having authority to sign all documents needed on Mrs. Dew’s

behalf    prior     to    her    admission    into    Britthaven.            Ms.   Watson

presented     Mr.     Dew   and     Mrs.    Bookman        with    twelve     documents,

including      one       titled     “RESIDENT        AND        FACILITY     ARBITRATION

AGREEMENT – READ CAREFULLY” (“the arbitration agreement”).                            When

it came time to sign the documents, Mr. Dew had Mrs. Bookman
                                          -3-
sign his name, “Fred Dew,” on the arbitration agreement and all

other    admission     documents.        Mrs.   Bookman         primarily         signed    Mr.

Dew’s name on signatory lines intended for either the resident’s

signature or the signature of the resident’s representative or

responsible        party.     For    example,          on    the   “Facility            Resident

Directory Opt Out Instructions,” Mrs. Bookman signed “Fred Dew”

on the line reserved for the “Signature of Resident or Legal

Representative.”

      Mrs.    Dew    was    discharged     from        Britthaven           on    or    about    7

September 2010.        She died on 3 November 2010, allegedly due to

complications with large pressure ulcers.                       On 28 September 2011,

Mrs. Bookman filed a wrongful death action against Britthaven

and four other defendants in her capacity as Administratrix of

Mrs. Dew’s estate (“plaintiff”).1                      Britthaven moved to compel

arbitration pursuant to the arbitration agreement bearing Mrs.

Bookman’s     signature      of    Mr.    Dew’s    name.           At       the   hearing       on

Britthaven’s motion, plaintiff challenged the validity of the

arbitration agreement by arguing that neither Mrs. Bookman nor

Mr.     Dew   had    actual       authority       to        execute     the       arbitration

agreement     on     Mrs.   Dew’s     behalf.           The     trial        court      agreed,

entering      an    order     denying      Britthaven’s            motion          to    compel

1
  Britthaven is        the only defendant that is                       a    party to this
appeal.
                                                -4-
arbitration,          but    did    not     determine        whether   Mr.     Dew    or    Mrs.

Bookman had apparent authority to sign the arbitration agreement

on Mrs. Dew’s behalf.                    That order was appealed to this Court,

where the case was remanded by unpublished opinion for findings

of fact and conclusions of law relating to the issue of apparent

authority.        See Bookman v. Britthaven, Inc., No. COA12-663, 2013

WL 1314965 (N.C. Ct. App. April 2, 2013) (“Bookman I”).2

      On remand, Britthaven’s request to present further evidence

on    the       issue       of     apparent      authority        went     unanswered         by

plaintiff’s       counsel          and    the   trial    court.          The   trial       court

entered     a    new     order      drafted      by   plaintiff’s        counsel      without

conducting       an     evidentiary         hearing     or    considering       any   further

evidence.        It concluded that neither Mr. Dew nor Mrs. Bookman

had   “legal      authority,         expressed        authority,       actual    authority,

2
  Plaintiff contends that under the doctrine of the law of the
case, the Bookman I Court determined that “the [trial court’s]
additional findings fully support the conclusion of law that
neither Mr. Dew nor Mrs. Bookman had apparent authority to
execute the Arbitration Agreement on behalf of Mrs. Dew and that
Defendant-Britthaven’s Motion to Compel Arbitration must be
denied.”   However, the Bookman I Court explicitly stated that
“[n]othing in this opinion is intended to express any view on
the merits of the apparent agency issue,” and “[w]e do not
address plaintiff’s arguments regarding the merits of the
apparent agency argument because that issue must be considered
in the first instance by the trial court.”     Bookman I, at *1,
*4.   Thus, plaintiff’s argument is overruled.   See Goldston v.
State, 199 N.C. App. 618, 624, 683 S.E.2d 237, 242 (2009)
(“[T]he law of the case applies only to issues that were decided
in the former proceeding.”).
                                      -5-
implied   authority,       or     apparent       authority”      to     sign     the

arbitration agreement on Mrs. Dew’s behalf, and thus it denied

Britthaven’s   motion   to      compel     arbitration.        Britthaven      filed

timely notice of appeal from the order.

                                   Discussion

                           I. Apparent Authority

    Britthaven’s    sole        argument    on   appeal   is    that    the    trial

court erred by denying its motion to compel arbitration because

Mr. Dew and Mrs. Bookman had apparent authority to sign the

arbitration    agreement     on    Mrs.    Dew’s   behalf.       After     careful

review, we reverse and remand.

    Britthaven’s appeal from the trial court’s order denying

its motion to compel arbitration is interlocutory.                     Appeals may

be taken from interlocutory orders in two circumstances:

          First, the trial court may certify that
          there is no just reason to delay the appeal
          after it enters a final judgment as to fewer
          than all of the claims or parties in an
          action. N.C.G.S. § 1A–1, Rule 54(b) [2013].
          Second, a party may appeal an interlocutory
          order that “affects some substantial right
          claimed by the appellant and will work an
          injury to him if not corrected before an
          appeal from the final judgment.”

Dep’t of Transp. v. Rowe, 351 N.C. 172, 174–75, 521 S.E.2d 707,

709 (1999) (citation omitted), cert. denied, 534 U.S. 1130, 151

L. E. 2d 972 (2002).       This Court has previously held that “[t]he
                                   -6-
right to arbitrate a claim is a substantial right which may be

lost if review is delayed, and an order denying arbitration is

therefore   immediately     appealable.”         U.S.   Trust    Co.,    N.A.    v.

Stanford Grp. Co., 199 N.C. App. 287, 289-90, 681 S.E.2d 512,

514 (2009) (citation and quotation marks omitted).                       Thus, we

hold that Britthaven’s appeal is properly before us.

      “When a party disputes the existence of a valid arbitration

agreement, the trial judge must determine whether an agreement

to   arbitrate   exists.”      Sciolino     v.    TD    Waterhouse       Investor

Servs., Inc., 149 N.C. App. 642, 645, 562 S.E.2d 64, 66, disc.

review denied, 356 N.C. 167, 568 S.E.2d 611 (2002).                  “The trial

court’s   findings    regarding   the    existence       of     an   arbitration

agreement are conclusive on appeal where supported by competent

evidence, even where the evidence might have supported findings

to the contrary.”       Ellision v. Alexander, 207 N.C. App. 401,

404, 700 S.E.2d 102, 106 (2010).            “Accordingly, upon appellate

review,   we   must   determine   whether    there      is    evidence    in    the

record supporting the trial court’s findings of fact and if so,

whether these findings of fact in turn support the conclusion

that there was no agreement to arbitrate.”               Sciolino, 149 N.C.

App. at 645, 562 S.E.2d at 66.
                                     -7-
       “The   law   of   contracts   governs   the   issue   of   whether   an

agreement to arbitrate exists.”         Brown v. Centex Homes, 171 N.C.

App. 741, 744, 615 S.E.2d 86, 88 (2005). In order to hold an

alleged principal contractually liable to a third party for the

acts of his agent, the third party has the burden of proving

that

              a particular person was at the time acting
              as a servant or agent of the [principal]. An
              agent’s authority to bind his principal
              cannot be shown by the agent’s acts or
              declarations. This can be shown only by
              proof that the principal authorized the acts
              to be done or that, after they were done, he
              ratified them. One who seeks to enforce
              against an alleged principal a contract made
              by an alleged agent has the burden of
              proving the existence of the agency and the
              authority of the agent to bind the principal
              by such contract.

Simmons v. Morton, 1 N.C. App. 308, 310, 161 S.E.2d 222, 223

(1968) (citations omitted).

       Here, the trial court was to determine whether Mr. Dew or

Mrs. Bookman had apparent authority to bind Mrs. Dew as their

principal to the arbitration agreement.

              Apparent authority is that authority which
              the principal has held the agent out as
              possessing or which he has permitted the
              agent to represent that he possesses. Under
              the   doctrine  of   apparent  authority,  a
              principal’s liability in any particular case
              must be determined by what authority the
              third person in the exercise of reasonable
                                        -8-
             care was justified in believing that the
             principal had, under the circumstances,
             conferred upon his agent.

Munn v. Haymount Rehab. & Nursing Ctr., 208 N.C. App. 632, 639,

704    S.E.2d   290,    295    (2010)     (citation   and   quotation   marks

omitted).       Furthermore,       “the   principal   cannot   restrict    his

liability for acts of his agent within the scope of his apparent

authority by limitations thereon of which the person dealing

with   the   agent     has   not   notice.”    Morpul   Research   Corp.    v.

Westover Hardware, Inc., 263 N.C. 718, 721, 140 S.E.2d 416, 419

(1965).

             The   law  of   apparent  authority  usually
             depends upon the unique facts of each
             case[.] . . .     Thus, in a case where the
             evidence is conflicting, or susceptible to
             different reasonable inferences, the nature
             and extent of an agent’s authority is a
             question of fact to be determined by the
             trier of fact. Where different reasonable
             and logical inferences may not be drawn from
             the evidence, the question is one of law for
             the court.

Foote & Davies, Inc. v. Arnold Craven, Inc., 72 N.C. App. 591,

595, 324 S.E.2d 889, 893 (1985) (citations omitted).

       On remand, the trial court found as fact that:

             13. Neither Frederick Washington Dew nor
             Terri Dew Bookman discussed with Carthina
             Roberson  Dew   anything  with  regards  to
             consenting to any arbitration on her behalf
             on August 24, 2010 or at anytime relevant
             hereto.
                     -9-

. . .

15. Carthina Roberson Dew did not delegate
to Terri Dew Bookman or Frederick Washington
Dew the right and/or authority to agree to
any arbitration agreement on her behalf on
August 24, 2010 or at anytime relevant
hereto.

. . .

18. Carthina Roberson Dew did not give the
authority either expressed or implied to
Terri Dew Bookman or Frederick Washington
Dew to execute the Resident and Facility
Arbitration Agreement.

19. Carthina Roberson Dew did not hold Terry
Dew Bookman nor Frederick Washington Dew out
to Britthaven, Inc., as having or possessing
the right and/or authority to execute or
agree to any arbitration agreement on her
behalf on August 24, 2010 or at anytime
relevant hereto, nor did she make or
indicate   any    manifestations   of   such
authority to Britthaven, Inc.

. . .

21.   At  no   time   during the admission
procedure on August 24, 2010 or at anytime
relevant hereto did Carthina Roberson Dew
hold   Terry   Dew   Bookman  or  Frederick
Washington Dew out as possessing the right
to agree or enter into any arbitration
agreement on her behalf.

22.   At   no   time   during   the   admission
procedure on August 24, 2010 or at anytime
relevant hereto did Carthina Roberson Dew
permit   Terry    Dew  Bookman   or   Frederick
Washington    Dew   to  represent   that   they
possessed the right or authority to agree or
                                             -10-
              enter into any arbitration agreement on her
              behalf. (Emphasis added.)

Based on these findings of fact, the trial court concluded that

neither Mr. Dew nor Mrs. Bookman had apparent authority to sign

the arbitration agreement on Mrs. Dew’s behalf and that any

belief    on     Britthaven’s           part        of      apparent      authority      was

unreasonable      and   unjustified           under      the    circumstances.          Even

assuming that the trial court’s findings of fact are supported

by competent evidence and are thus binding on appeal, Ellision,

207 N.C. App. at 404, 700 S.E.2d at 106, they are insufficient

to   support     the    trial     court’s           conclusion      that    no    apparent

authority existed to bind Mrs. Dew to the arbitration agreement.

     Significantly, the trial court made no factual findings as

to whether Mrs. Dew conferred authority on Mrs. Bookman or Mr.

Dew to conduct the admission process in general on her behalf.

Thus,    its     analysis       as      to     the       arbitration       agreement      is

incomplete.       Ms.    Watson        averred       that    both   Mr.    Dew    and   Mrs.

Bookman “presented themselves as having full authority to act on

behalf   of     Mrs.    Dew,     and    to     sign      and    execute    any    and    all

necessary      documents    on    her        behalf.”          Indeed,    not    only   does

plaintiff not challenge the enforceability of any of the eleven

other contracts signed by Mrs. Bookman and Mr. Dew on Mrs. Dew’s

behalf, Mrs. Bookman averred that she signed documents in Mr.
                                             -11-
Dew’s name so that Mrs. Dew could be “admitted” into Britthaven.

The complaint itself states that Mrs. Dew was “admitted” into

Britthaven, and the trial court found as fact that “[Mrs. Dew]

was admitted as a resident” of Britthaven.                          Ms. Watson averred

that   the        paperwork     signed      by    Mrs.    Bookman     and      Mr.    Dew   is

“necessary”         for    a   resident      to    be    admitted     into     Britthaven.

Therefore, the trial court’s finding of fact that Mrs. Dew was

“admitted”        and     plaintiff’s       own    concession      that     Mrs.     Dew    was

“admitted” tends to show that at the very least, there may have

been actual or apparent authority conferred on Mr. Dew or Mrs.

Bookman to execute some or all of the contracts that were needed

in order to complete the admission process.

       If    such       authority     did    exist,       the    issue     regarding        the

apparent authority to enter into the arbitration agreement would

become      one    of     scope.      The    North      Carolina    Supreme      Court      has

established that “[t]he principal is liable upon a contract duly

made by his agent with a third person . . . when the agent acts

within the scope of his apparent authority, unless the third

person      has     notice     that    the       agent    is    exceeding      his    actual

authority.”         Morpul Research Corp., 263 N.C. at 721, 140 S.E.2d

at 418.      Throughout the admission process, Mrs. Bookman and Mr.

Dew    signed       twelve     contracts         with    Britthaven       on   Mrs.    Dew’s
                                            -12-
behalf.       Of     those    twelve    contracts,            they   now     challenge   the

enforceability of only one – the arbitration agreement.                                  Mrs.

Bookman signed Mr. Dew’s name on signatory lines reserved for

Mrs. Dew or her “Legal Representative,” “Responsible Party,” and

“Agent or Representative.”              Ms. Watson averred that neither Mr.

Dew nor Mrs. Bookman “raised any objection to agreeing to or

signing any of the documents that I presented them” and that

“[a]t no time during the admission process, did Mr. Dew or his

daughter make any statement or take any action to suggest that

their authority to act on behalf of Mrs. Dew was limited in any

way or that either lacked the authority to sign any of the

paperwork on her behalf.”               Given that Mrs. Bookman and Mr. Dew

may have had authority to conduct the admission process for Mrs.

Dew,    and    Ms.     Watson    averred         that    she     was    unaware    of    any

limitation      on     this     authority        if     it    existed,     there   remains

evidence which the trial court failed to address in its findings

of   fact     and    conclusions       of   law       “that     would    allow,    but   not

require, a finding of apparent authority”                            to enter into the

arbitration agreement.            Bookman I, at *4.

       Rather       than   allowing     Britthaven,            the   party    bearing    the

burden of proof, to put on further evidence as to these matters

after    remand       from    Bookman       I,    the        trial   court    entered    new
                                              -13-
findings of fact taken verbatim from plaintiff’s proposed order.

Such findings are only supported by affidavits from Mrs. Bookman

and Mr. Dew that were initially presented to the trial court in

support     of        plaintiff’s      argument        that    there     was     no     actual

authority        to    bind     Mrs.    Dew       to     the   arbitration       agreement.

Plaintiff presented no evidence for the purpose of resolving the

issue of apparent authority.                      Thus, because the trial court

denied     Britthaven          the    opportunity         to   carry     its     burden     of

establishing apparent authority and failed to address all issues

raised by the evidence it had before it, we conclude that it did

not fully comply with the Bookman I Court’s mandate to enter

“further    findings          of     fact   and    conclusions      of     law       regarding

whether either Mr. Dew or [Mrs.] Bookman had apparent authority

to enter into the arbitration agreement in this case.”                                 Bookman

I, at *4; see Small v. Small, 107 N.C. App. 474, 477, 420 S.E.2d

678, 681 (1992) (“In a trial without a jury, it is the duty of

the trial judge to resolve all issues raised by the pleadings

and   the    evidence          by    making       findings     of   fact       and     drawing

therefrom conclusions of law upon which to base a final order or

judgment.”).

      Because the trial court failed to enter findings of fact or

conclusions       of     law    resolving:         (1)    whether   Mr.     Dew       or   Mrs.
                                   -14-
Bookman had authority to bind Mrs. Dew to the other admission

contracts; (2) whether the arbitration agreement fit into the

scope of this potential authority; (3) whether there was any

limitation   on    this    potential      authority;   and        (4)   whether

Britthaven was aware of any limitation on this authority if one

existed, we must reverse the trial court’s order and remand.                 We

further   instruct   the   trial   court    to   conduct     an    evidentiary

hearing as needed to resolve these outstanding issues.

                               Conclusion

    For the reasons stated above, we reverse the trial court’s

order   denying   Britthaven’s     motion   to   compel    arbitration      and

remand for further proceedings.

    REVERSED AND REMANDED.

    Judges MCGEE and ELMORE concur.