In its opinion filed on February 12, 2020, the Arkansas Court of Appeals Division II (“Arkansas Appellate Court”) refused to enforce an alleged arbitration agreement between a nursing home resident and the defendant nursing home regarding the subsequent nursing home negligence claims filed against the defendant nursing home, holding “Delores did not agree to arbitrate, and Mikeal did not have the authority to agree to arbitration on her behalf. The fact that the arbitration agreement is incorporated into the admission agreement does not change our analysis. We hold that the circuit court did not err in determining that Hickory Heights cannot compel arbitration pursuant to an invalid agreement.”
The Underlying Facts
Mary was a resident of defendant Hickory Heights Health and Rehab, LLC (“Hickory Heights”), a skilled-nursing facility, from October 10 to November 8, 2016. In November 2016, Mary executed a durable power of attorney appointing her son and daughter, Mikeal and Delores, respectively, as co-attorneys-in-fact. On November 13, 2017, Delores filed a lawsuit in the circuit court against Hickory Heights asserting claims of negligence, medical negligence, breach of the admission agreement, breach of the provider agreement, and deceptive trade practices.
Hickory Heights filed a motion to compel arbitration asserting that Mikeal signed the admission agreement and the arbitration agreement in his individual capacity as her son and a person who assists in her care. Hickory Heights contended that Mikeal did not sign as his mother’s representative; thus, he acknowledged consent to the arbitration agreement and bound his mother to the terms as a third-party beneficiary. Hickory Heights also asserted that because Delores’s complaint includes a breach-of-contract claim, she is bound by the terms of the admission-agreement contract, which incorporates the arbitration agreement. Lastly, Hickory Heights argued that the Federal Arbitration Act governs and favors arbitration, preempting any Arkansas law to the contrary.
The circuit court denied Hickory Heights’s motion to compel to arbitration, and Hickory Heights appealed the denial of its motion.
Arkansas Appellate Court Opinion
The Arkansas Appellate Court stated that in order to apply the third-party-beneficiary doctrine, there must be an underlying valid agreement between two parties, and there must be evidence of a clear intention to benefit a third party. The salient question here is whether the document was signed by a party in an individual capacity or in a representative capacity.
The following sentence appears at the end of the arbitration agreement. “____ (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.” No check mark appears in the blank space provided. The power of attorney was executed after the arbitration agreement had been signed; thus, there was no evidence that Mikeal had the authority to bind Mary as a third-party beneficiary when he signed the documents.
The Arkansas Appellate Court stated that there is no indication anywhere in the arbitration agreement that Mikeal had the authority to sign in a representative capacity (“Delores did not agree to arbitrate, and Mikeal did not have the authority to agree to arbitration on her behalf”): “We hold that the circuit court did not err in determining that Hickory Heights cannot compel arbitration pursuant to an invalid agreement.”
Source Hickory Heights Health and Rehab, LLC v. Taylor, 2020 Ark. App. 98.
If you or a loved one suffered injuries (or worse) while a resident of a nursing home in Arkansas or in another U.S. state due to a nursing home fall, nursing home aspiration, nursing home neglect, nursing home negligence, nursing home abuse, nursing home under-staffing, or the nursing home failing to properly care for a vulnerable adult, you should promptly find an Arkansas nursing home claim lawyer, or a nursing home claim lawyer in your state, who may investigate your nursing home claim for you and file a nursing home claim on your behalf or behalf of your loved one, if appropriate.
Click here to visit our website to be connected with medical malpractice attorneys (nursing home claim attorneys) in your U.S. state who may assist you with your nursing home claim, or call us toll-free in the United States at 800-295-3959.
Turn to us when you don’t know where to turn.