RENDERED: JANUARY 22, 2021; 10:00 A.M. TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2019-CA-1923-MR
CAMBRIDGE PLACE GROUP, LLC D/B/A CAMBRIDGE PLACE; CAMBRIDGE PLACE PROPERTIES, LLC; LEGACY HEALTH SERVICES, INC.; JAY FRANCES; KIMBERLY SMITH; AND CARA W. CLARK, IN HER CAPACITY AS ADMINISTRATOR OF CAMBRIDGE PLACE GROUP LLC D/B/A CAMBRIDGE PLACE APPELLANTS
APPEAL FROM FAYETTE CIRCUIT COURT v. HONORABLE ERNESTO M. SCORSONE, JUDGE ACTION NO. 19-CI-00106
VICTORIA MUNDY; AND JOHN DOES 1 THROUGH 3, UNKNOWN DEFENDANTS APPELLEES
OPINION AFFIRMING
** ** ** ** **
BEFORE: CLAYTON, CHIEF JUDGE; DIXON AND JONES, JUDGES. DIXON, JUDGE: Appellants, collectively referred to as “Cambridge” herein,
appeal from an order of the Fayette Circuit Court entered on November 27, 2019,
denying their motion to compel arbitration and stay the proceedings. After careful
review of the briefs, record, and law, we affirm.
BACKGROUND
On November 4, 2011, Thomas Mundy, Jr., executed a durable power
of attorney (“POA”), naming his wife, Victoria Russell Mundy, as his attorney-in-
fact. In August 2016, Thomas was admitted as a resident to Cambridge Place, a
nursing care facility. Thomas was incompetent at the time of admission,
necessitating that Victoria complete the process on his behalf.
Cambridge proffered Victoria a voluntary alternative dispute
resolution agreement—not required for admission—wherein the resident, or the
resident through their legal representative, agreed to arbitrate any disputes with
Cambridge. The signature block contained three lines: Thomas was named as the
resident on the first line; Victoria signed on the second line, entitled “Signature of
Resident/Legal Representative”; and “wife” was written on the third line, entitled
“Legal Representative Capacity (i.e. guardian, spouse, child, Attorney-in-Fact,
etc.).”
Following the death of her husband, Victoria initiated the underlying
suit against Cambridge in 2019 alleging multiple claims of negligence on behalf of
-2- Thomas’s estate, as well as claims of wrongful death1 and loss of consortium,
individually. Cambridge moved to stay the proceedings on Victoria’s individual
claims and to compel arbitration as to the estate’s claims. Victoria opposed the
motion. The court heard arguments wherein the parties debated whether Victoria
had signed the agreement in her capacity as Thomas’s attorney-in-fact and whether
the POA granted the authority to bind Thomas to arbitration.
Ultimately, the circuit court denied the motion finding that Cambridge
had failed to sufficiently demonstrate the existence of a valid arbitration agreement
between Cambridge and Thomas where Victoria, regardless of whether she had the
authority to sign as attorney-in-fact, only signed in her capacity as wife. This
appeal followed. Additional facts will be introduced as they become relevant.
STANDARD OF REVIEW
A written pre-dispute agreement between parties to submit to
arbitration is “valid, enforceable, and irrevocable,” absent grounds not applicable
to this matter. KRS 417.050. As the party seeking to compel arbitration,
Cambridge had the initial burden of establishing a valid agreement. Ping v.
Beverly Enters., Inc., 376 S.W.3d 581, 590 (Ky. 2012). Kentucky rules of contract
1 Kentucky Revised Statutes (KRS) 411.130(1) mandates that wrongful death claims must be brought by the personal representative of the deceased. However, the deceased’s beneficiaries are the real parties in interest whose rights cannot be divested by any action of the deceased, including an otherwise valid agreement to arbitrate. Ping v. Beverly Enters., Inc., 376 S.W.3d 581, 597-600 (Ky. 2012).
-3- formation govern this inquiry. Id. It is a fundamental principle of contract
formation that to be valid and enforceable, there must be voluntary and complete
assent by parties having the capacity to contract. Extendicare Homes, Inc. v.
Whisman, 478 S.W.3d 306, 321 (Ky. 2015), rev’d in part, vacated in part by
Kindred Nursing Ctrs. Ltd. P’ship v. Clark, 137 S.Ct. 1421, 197 L.Ed.2d 806
(2017). An attorney-in-fact can assent on the principal’s behalf if the authority to
do so is conferred by the POA instrument. Id.
Cambridge’s claims of error are preserved. Accordingly, we review
the circuit court’s rulings regarding the existence of a contract de novo. Ping, 376
S.W.3d at 590.
ANALYSIS
Cambridge asserts the validity of the arbitration agreement is
established by Thomas’s POA and cannot be invalidated merely by Victoria’s
designation as wife. Cambridge notes that Kentucky law does not require a party
to explicitly state on the face of the contract their status as an attorney-in-fact and
cites in support Pannell v. Shannon, 425 S.W.3d 58, 64 (Ky. 2014). Cambridge
further argues that because the contract is clear that Thomas was the intended
party, Victoria had to be signing in her representative capacity as attorney-in-fact.
Victoria disagrees, arguing the signatory’s designation of legal representative
capacity controls, and she urges this Court to consider the analogous, but
-4- unpublished, decision of Kindred Nursing Centers Ltd. Partnership v. Butler, No.
2013-CA-000880-MR, 2014 WL 3722083 (Ky. App. Jul. 25, 2014).2
Butler is directly on point with the matter at issue. Therein, a
resident’s son, who did not contest that he held a POA, signed a voluntary
arbitration agreement on behalf of the resident. Id. at *4-5. In a signature block
that is nearly identical to the one at issue here, the resident’s son signed his own
name and designated his legal representative capacity as “son.” Id. Based on the
signatory’s designation as son, a panel of this Court upheld the circuit court’s
determination that there was not a valid agreement to arbitrate between the resident
and the nursing home. The Butler Court reasoned that “[i]t is undeniable that a
signature of an individual can signify a vast array of legal relationships[,]” and
absent an indication of the capacity under which a signature was executed, the
parties were bound by the capacity in which the agreement was signed. Id. at *5.
We find Butler to be persuasive. While Cambridge is correct that
Kentucky law does not require a party to explicitly state they are acting as an
attorney-in-fact, the issue herein is not Victoria’s silence but rather her affirmative
avowal that she was acting in a separate capacity. In her capacity as wife, Victoria
was authorized to make limited decisions on behalf of Thomas; however, the pre-
2 Pursuant to Kentucky Rule of Civil Procedure 76.28(4)(c), an unpublished opinion rendered after January 1, 2003, may be cited for consideration where there is no published authority that would adequately address the issue at bar.
-5- dispute arbitration agreement was outside that scope. See generally GGNSC
Stanford, LLC v. Rowe, 388 S.W.3d 117, 124 (Ky. App. 2012). Accordingly, the
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RENDERED: JANUARY 22, 2021; 10:00 A.M. TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2019-CA-1923-MR
CAMBRIDGE PLACE GROUP, LLC D/B/A CAMBRIDGE PLACE; CAMBRIDGE PLACE PROPERTIES, LLC; LEGACY HEALTH SERVICES, INC.; JAY FRANCES; KIMBERLY SMITH; AND CARA W. CLARK, IN HER CAPACITY AS ADMINISTRATOR OF CAMBRIDGE PLACE GROUP LLC D/B/A CAMBRIDGE PLACE APPELLANTS
APPEAL FROM FAYETTE CIRCUIT COURT v. HONORABLE ERNESTO M. SCORSONE, JUDGE ACTION NO. 19-CI-00106
VICTORIA MUNDY; AND JOHN DOES 1 THROUGH 3, UNKNOWN DEFENDANTS APPELLEES
OPINION AFFIRMING
** ** ** ** **
BEFORE: CLAYTON, CHIEF JUDGE; DIXON AND JONES, JUDGES. DIXON, JUDGE: Appellants, collectively referred to as “Cambridge” herein,
appeal from an order of the Fayette Circuit Court entered on November 27, 2019,
denying their motion to compel arbitration and stay the proceedings. After careful
review of the briefs, record, and law, we affirm.
BACKGROUND
On November 4, 2011, Thomas Mundy, Jr., executed a durable power
of attorney (“POA”), naming his wife, Victoria Russell Mundy, as his attorney-in-
fact. In August 2016, Thomas was admitted as a resident to Cambridge Place, a
nursing care facility. Thomas was incompetent at the time of admission,
necessitating that Victoria complete the process on his behalf.
Cambridge proffered Victoria a voluntary alternative dispute
resolution agreement—not required for admission—wherein the resident, or the
resident through their legal representative, agreed to arbitrate any disputes with
Cambridge. The signature block contained three lines: Thomas was named as the
resident on the first line; Victoria signed on the second line, entitled “Signature of
Resident/Legal Representative”; and “wife” was written on the third line, entitled
“Legal Representative Capacity (i.e. guardian, spouse, child, Attorney-in-Fact,
etc.).”
Following the death of her husband, Victoria initiated the underlying
suit against Cambridge in 2019 alleging multiple claims of negligence on behalf of
-2- Thomas’s estate, as well as claims of wrongful death1 and loss of consortium,
individually. Cambridge moved to stay the proceedings on Victoria’s individual
claims and to compel arbitration as to the estate’s claims. Victoria opposed the
motion. The court heard arguments wherein the parties debated whether Victoria
had signed the agreement in her capacity as Thomas’s attorney-in-fact and whether
the POA granted the authority to bind Thomas to arbitration.
Ultimately, the circuit court denied the motion finding that Cambridge
had failed to sufficiently demonstrate the existence of a valid arbitration agreement
between Cambridge and Thomas where Victoria, regardless of whether she had the
authority to sign as attorney-in-fact, only signed in her capacity as wife. This
appeal followed. Additional facts will be introduced as they become relevant.
STANDARD OF REVIEW
A written pre-dispute agreement between parties to submit to
arbitration is “valid, enforceable, and irrevocable,” absent grounds not applicable
to this matter. KRS 417.050. As the party seeking to compel arbitration,
Cambridge had the initial burden of establishing a valid agreement. Ping v.
Beverly Enters., Inc., 376 S.W.3d 581, 590 (Ky. 2012). Kentucky rules of contract
1 Kentucky Revised Statutes (KRS) 411.130(1) mandates that wrongful death claims must be brought by the personal representative of the deceased. However, the deceased’s beneficiaries are the real parties in interest whose rights cannot be divested by any action of the deceased, including an otherwise valid agreement to arbitrate. Ping v. Beverly Enters., Inc., 376 S.W.3d 581, 597-600 (Ky. 2012).
-3- formation govern this inquiry. Id. It is a fundamental principle of contract
formation that to be valid and enforceable, there must be voluntary and complete
assent by parties having the capacity to contract. Extendicare Homes, Inc. v.
Whisman, 478 S.W.3d 306, 321 (Ky. 2015), rev’d in part, vacated in part by
Kindred Nursing Ctrs. Ltd. P’ship v. Clark, 137 S.Ct. 1421, 197 L.Ed.2d 806
(2017). An attorney-in-fact can assent on the principal’s behalf if the authority to
do so is conferred by the POA instrument. Id.
Cambridge’s claims of error are preserved. Accordingly, we review
the circuit court’s rulings regarding the existence of a contract de novo. Ping, 376
S.W.3d at 590.
ANALYSIS
Cambridge asserts the validity of the arbitration agreement is
established by Thomas’s POA and cannot be invalidated merely by Victoria’s
designation as wife. Cambridge notes that Kentucky law does not require a party
to explicitly state on the face of the contract their status as an attorney-in-fact and
cites in support Pannell v. Shannon, 425 S.W.3d 58, 64 (Ky. 2014). Cambridge
further argues that because the contract is clear that Thomas was the intended
party, Victoria had to be signing in her representative capacity as attorney-in-fact.
Victoria disagrees, arguing the signatory’s designation of legal representative
capacity controls, and she urges this Court to consider the analogous, but
-4- unpublished, decision of Kindred Nursing Centers Ltd. Partnership v. Butler, No.
2013-CA-000880-MR, 2014 WL 3722083 (Ky. App. Jul. 25, 2014).2
Butler is directly on point with the matter at issue. Therein, a
resident’s son, who did not contest that he held a POA, signed a voluntary
arbitration agreement on behalf of the resident. Id. at *4-5. In a signature block
that is nearly identical to the one at issue here, the resident’s son signed his own
name and designated his legal representative capacity as “son.” Id. Based on the
signatory’s designation as son, a panel of this Court upheld the circuit court’s
determination that there was not a valid agreement to arbitrate between the resident
and the nursing home. The Butler Court reasoned that “[i]t is undeniable that a
signature of an individual can signify a vast array of legal relationships[,]” and
absent an indication of the capacity under which a signature was executed, the
parties were bound by the capacity in which the agreement was signed. Id. at *5.
We find Butler to be persuasive. While Cambridge is correct that
Kentucky law does not require a party to explicitly state they are acting as an
attorney-in-fact, the issue herein is not Victoria’s silence but rather her affirmative
avowal that she was acting in a separate capacity. In her capacity as wife, Victoria
was authorized to make limited decisions on behalf of Thomas; however, the pre-
2 Pursuant to Kentucky Rule of Civil Procedure 76.28(4)(c), an unpublished opinion rendered after January 1, 2003, may be cited for consideration where there is no published authority that would adequately address the issue at bar.
-5- dispute arbitration agreement was outside that scope. See generally GGNSC
Stanford, LLC v. Rowe, 388 S.W.3d 117, 124 (Ky. App. 2012). Accordingly, the
circuit court did not err in finding there was not a valid agreement between
Cambridge and Thomas.
Moreover, even if this Court were to find that Victoria acted as
Thomas’s attorney-in-fact, we would nevertheless affirm as she lacked the
authority to bind Thomas to the agreement. While the circuit court did not reach
this issue, the parties fully argued the matter, both before the circuit court and in
their respective briefs, and this Court is permitted to affirm on other grounds.
Fischer v. Fischer, 348 S.W.3d 582, 589-90 (Ky. 2011), abrogated on other
grounds by Nami Res. Co. L.L.C. v. Asher Land & Mineral, Ltd., 554 S.W.3d 323
(Ky. 2018).
The construction of a POA is a question of law. Ping, 376 S.W.3d at
590. “[A]n agent’s authority under a power of attorney is to be construed with
reference to the types of transaction expressly authorized in the document and
subject always to the agent’s duty to act with the utmost good faith.” Id. at 592
(internal quotation marks and citation omitted).
Cambridge argues the POA herein authorized Victoria to agree to pre-
dispute arbitration as it granted her the authority to: “(1) draw, make, and sign any
and all checks, contracts, deeds or agreements, and exercise all of [Thomas’s]
-6- voting rights over assets owned by [him]; . . . (7) institute or defend legal actions
concerning [Thomas] or [his] property; . . . [and] (15) do and perform in [his] name
all that [he] might individually do.” However, Cambridge has ignored the limiting
language concerning the enumerated power granted. After enumerating fifteen
specific grants of authority, the document then provides a summary of when those
powers may be employed:
This Power of Attorney authorizes my Attorney-in-Fact to make various property related decisions on my behalf, some of which may relate to my healthcare. Accordingly, I confirm that my Attorney-in-Fact will be treated as my personal representative as provided in 45 CFR 164.502(g)(2) to the extent necessary to carry out any purpose of this Power of Attorney. However, my Attorney-in-Fact may not make any health care decisions on my behalf.
Appellant Brief Appendix B (emphasis added). Clearly, pursuant to this grant of
authority, Victoria, as attorney-in-fact, possessed no power to obligate Thomas to
an arbitration agreement related to his healthcare. This conclusion is affirmed by
our Supreme Court’s decision in Kindred Nursing Centers Ltd. Partnership v.
Wellner, 533 S.W.3d 189 (Ky. 2017), cert. denied, 139 S.Ct. 319, 202 L.Ed.2d 217
(2018).
-7- CONCLUSION
Therefore, and for the foregoing reasons, the order of the Fayette
Circuit Court denying Cambridge’s motion to compel arbitration and stay the
proceedings is AFFIRMED.
JONES, JUDGE, CONCURS.
CLAYTON, CHIEF JUDGE, CONCURS IN RESULT ONLY AND
FILES SEPARATE OPINION.
CLAYTON, CHIEF JUDGE, CONCURRING IN RESULT ONLY: I
write separately because this Court need not address whether the language in the
power of attorney granted Ms. Mundy the authority to agree to arbitration. The
trial court’s order read: “Without addressing the validity of the power of
attorney document in the Record, the document named Ms. Mundy as his
attorney-in-fact. Thus, Ms. Mundy may have had the legal authority to sign the
Arbitration Agreement as Mr. Mundy’s attorney-in-fact, but she did not . . . .”
(Emphasis added.) The trial court did not rule on the powers given in the
document and there is no reason for this Court to address it.
I agree that the decision should be affirmed based upon the reasoning
given by the trial court.
-8- BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:
Emily W. Newman Lisa E. Circeo Paul A. Dzenitis Hannah R. Jamison Rebecca R. Schafer Lexington, Kentucky Louisville, Kentucky
-9-