Bedford Health Properties, LLC v. Estate of Theodore Davis ex rel. Davis

50 So. 3d 362, 2010 Miss. App. LEXIS 531, 2010 WL 3781994
CourtCourt of Appeals of Mississippi
DecidedSeptember 28, 2010
DocketNo. 2007-CA-00945-COA
StatusPublished

This text of 50 So. 3d 362 (Bedford Health Properties, LLC v. Estate of Theodore Davis ex rel. Davis) is published on Counsel Stack Legal Research, covering Court of Appeals of Mississippi primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bedford Health Properties, LLC v. Estate of Theodore Davis ex rel. Davis, 50 So. 3d 362, 2010 Miss. App. LEXIS 531, 2010 WL 3781994 (Mich. Ct. App. 2010).

Opinion

MODIFIED OPINION ON MOTION FOR REHEARING

GRIFFIS, J.,

for the Court:

¶ 1. The motion for rehearing is granted. The original opinion of this court is withdrawn, and this opinion is substituted in lieu thereof.

¶ 2. This appeal involves a nursing home admission agreement containing an arbitration clause. The two pertinent issues are: (1) whether the arbitration clause was rendered invalid by changes in the procedural rules of the arbitration association that the arbitration clause specified would apply to any arbitrated dispute and (2) whether Theodore Davis’s wife, Patricia, had the authority to bind him to an arbitration clause in the nursing home admission agreement. The circuit court found the arbitration clause unenforceable, but the record does not disclose findings of fact that the circuit court relied upon in making its ruling. Our initial opinion reversed the circuit court’s judgment and remanded the case for further proceedings. In our initial decision, we found that the arbitration clause was valid and that Patricia bound Theodore’s estate to arbitration through a durable power of attorney for healthcare decisions. Upon rehearing, Patricia asserted that intervening decisions by the supreme court required that we reverse our holdings on both issues and affirm the circuit court’s judgment. We agree, in part, and withdraw our original opinion and substitute this opinion to affirm the judgment of the circuit court.

¶ 3. In light of intervening decisions of the supreme court, we find the first issue to be dispositive of this appeal. As will be more fully discussed, the American Health Lawyers Association (“AHLA”) Alternative Dispute Resolution Service Rules of Procedure for Arbitration, which the arbitration clause specifies shall control this case, were amended after Patricia signed the nursing home agreement but before the present action was filed. The amendment specified that the AHLA Alternative [364]*364Dispute Resolution Service would “administer” a claim only if the parties agreed to arbitration “after the injury has occurred.” We find that, in light of this amendment, there was no valid agreement to arbitrate. We, therefore, affirm the circuit court’s judgment, albeit upon grounds the circuit court may not have relied upon, and we remand this case for proceedings consistent with this opinion.

FACTS

¶ 4. On September 20, 2000, Theodore executed a properly authenticated durable power of attorney making his wife, Patricia, his agent for all healthcare decisions. On November 12, 2002, Patricia signed an admission agreement with Bedford Care Center on behalf of Theodore as his responsible party. The admission agreement contained an arbitration clause that stated: “It is understood and agreed by the Facility and Resident and/or Responsible Party that any legal dispute, controversy, demand or claim ... that arises out of or relates to ... any service or health care provided by the Facility to the Resident, shall be resolved exclusively by binding arbitration ... in accordance with the American Health Lawyers Association (“AHLA”) Alternative Dispute Resolution Rules of Procedure for Arbitration which are hereby incorporated into this agreement....” This section was initialed by Patricia.

¶ 5. During Theodore’s residence at Bedford Healthcare Center, he allegedly suffered numerous injuries culminating in his death on December 5, 2003. On August 25, 2004, Patricia filed suit alleging, among other things, that Bedford Health Properties had been negligent in earing for Theodore and that the arbitration agreement was unconscionable and unenforceable.

STANDARD OF REVIEW

¶ 6. We apply a de novo standard of review to the denial of a motion to compel arbitration because the motion presents a question of law as to whether the circuit court has jurisdiction to hear the underlying matter. Vicksburg Partners, L.P. v. Stephens, 911 So.2d 507, 513 (¶ 9) (Miss.2005) (overruled on other grounds). The Federal Arbitration Act (“FAA”) governs contracts “evidencing a transaction involving commerce” which include nursing home admission agreements. Id. at 514-15 (¶¶ 13, 16-18) (quoting 9 U.S.C. § 2 (2000)). Therefore, we must apply the policy of the FAA to “rigorously enforce agreements to arbitrate.” East Ford, Inc. v. Taylor, 826 So.2d 709, 713 (¶ 11) (Miss.2002) (quoting Shearson/Am. Express, Inc. v. McMahon, 482 U.S. 220, 226, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987)).

ANALYSIS

¶ 7. The FAA governs contracts “evidencing a transaction involving commerce,” which include nursing home admission agreements. Vicksburg Partners, 911 So.2d at 514-15 (¶¶ 13, 16-18) (quoting 9 U.S.C. § 2). In determining the validity of a motion to compel arbitration under the FAA, courts generally conduct a two-pronged inquiry. “Under the first prong, the court should determine whether the parties have agreed to arbitrate the dispute.” Rogers-Dabbs Chevrolet-Hummer, Inc. v. Blakeney, 950 So.2d 170, 173 (¶ 12) (Miss.2007).1 “The first prong has two considerations: (1) whether there is a valid arbitration agreement and (2) whether the parties’ dispute is within the scope of the [365]*365arbitration agreement.” East Ford, Inc., 826 So.2d at 713 (¶ 9).

¶ 8. Here, the arbitration clause that was incorporated into the nursing home admission agreement provided that arbitration would take place in accordance with the rules promulgated by the AHLA.

¶ 9. After we issued our initial opinion in this case, the supreme court decided Magnolia Healthcare, Inc. v. Barnes ex rel. Grigsby, 994 So.2d 159 (Miss.2008), which turned upon an arbitration clause in a nursing home admission agreement that was identical to the one involved in the present case. Id. at 161 (¶ 7). The supreme court noted that the AHLA had amended its rules to provide that it would only arbitrate claims after January 1, 2004, if both parties agreed to arbitration after an injury occurred, stating:

The parties shall be bound by these Rules whenever they have agreed in writing to arbitration by the Service or under the Rules. The Service will administer a “consumer health care liability claim” under the Rules on or after January 1, 2004[,] only if all of the parties have agreed in writing to arbitrate the claim after the injury has occurred and a copy of the agreement is received by the Service at the time the parties make a request for a list of arbitrators. For purposes of the Rules, a “consumer health care liability claim” means a claim in which a current or former patient or a current or former patient’s representative (including his or her estate or family) alleges that an injury was caused by the provision of (or the failure to provide) health care services or medical products by a health care provider or the manufacturer, distributor, supplier, or seller of a medical product.

Id. at (¶ 8) (quoting AHLA Alternative Dispute Resolution Service Rule of Procedure 1.01(c) 1991 (Rev.2003)). The supreme court held in Barnes that because of this rule change, “there was no valid agreement to arbitrate.” Id. at 162 (¶ 11).

¶ 10.

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Related

Shearson/American Express Inc. v. McMahon
482 U.S. 220 (Supreme Court, 1987)
East Ford, Inc. v. Taylor
826 So. 2d 709 (Mississippi Supreme Court, 2002)
Magnolia Healthcare, Inc. v. Barnes Ex Rel. Grigsby
994 So. 2d 159 (Mississippi Supreme Court, 2008)
Pass Termite & Pest Control, Inc. v. Walker
904 So. 2d 1030 (Mississippi Supreme Court, 2004)
MISS. CARE CENTER OF GREENVILLE v. Hinyub
975 So. 2d 211 (Mississippi Supreme Court, 2008)
Vicksburg Partners, LP v. Stephens
911 So. 2d 507 (Mississippi Supreme Court, 2005)
Rogers-Dabbs Chevrolet-Hummer v. Blakeney
950 So. 2d 170 (Mississippi Supreme Court, 2007)

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Bluebook (online)
50 So. 3d 362, 2010 Miss. App. LEXIS 531, 2010 WL 3781994, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bedford-health-properties-llc-v-estate-of-theodore-davis-ex-rel-davis-missctapp-2010.