Heather Manor Care Center, Inc.; And Michael Morton v. James Marshall, by His Special Administrator, Trina Ellis

2024 Ark. App. 596, 704 S.W.3d 134
CourtCourt of Appeals of Arkansas
DecidedDecember 4, 2024
StatusPublished
Cited by1 cases

This text of 2024 Ark. App. 596 (Heather Manor Care Center, Inc.; And Michael Morton v. James Marshall, by His Special Administrator, Trina Ellis) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Heather Manor Care Center, Inc.; And Michael Morton v. James Marshall, by His Special Administrator, Trina Ellis, 2024 Ark. App. 596, 704 S.W.3d 134 (Ark. Ct. App. 2024).

Opinion

Cite as 2024 Ark. App. 596 ARKANSAS COURT OF APPEALS DIVISION III No. CV-23-533

HEATHER MANOR CARE CENTER, Opinion Delivered December 4, 2024

INC.; AND MICHAEL MORTON APPEAL FROM THE HEMPSTEAD APPELLANTS COUNTY CIRCUIT COURT [NO. 29CV-20-27] V. HONORABLE DUNCAN CULPEPPER, JAMES MARSHALL, DECEASED, BY JUDGE HIS SPECIAL ADMINISTRATOR, TRINA ELLIS REVERSED APPELLEE

CINDY GRACE THYER, Judge

Heather Manor Care Center (“Heather Manor”) appeals from an order of the

Hempstead County Circuit Court denying its motion to compel arbitration in a nursing-

home medical-negligence case. Heather Manor argues that the circuit court erred in finding

that the Federal Arbitration Act (FAA) does not apply; that appellee Trina Ellis signed the

arbitration agreement in her individual capacity; and that the power of attorney executed by

appellee James Marshall was invalid. We agree and reverse and remand.

I. Factual and Procedural Background

James Marshall was admitted to Heather Manor in April 2017. As part of the

admissions process, Ellis, his daughter, signed several documents, including an admission

agreement and an arbitration agreement. The arbitration agreement was a condition of admission, and it provided that “any and all claims, disputes, and controversies arising out

of, or in connection with, or relating in any way to the Admission Agreement, or any service

or health care provided by the Facility to the Resident, that would constitute a cause of action

in a court of law . . . shall be resolved exclusively by binding arbitration and not by a lawsuit

or resort to court process.”

Ellis signed the admission agreement as “Resident’s Responsible Party.” “Resident’s

Responsible Party” was defined in the agreement as, among other things, “the Resident’s

attorney-in-fact, if the Resident has executed a power of attorney.” Ellis likewise signed the

arbitration agreement as “Responsible Party” and indicated that her relationship to the

resident was “Daughter.” In addition, she checked a blank on the arbitration agreement that

stated the following: “A copy of my guardianship papers, durable power of attorney, or other

documentation has been provided to the Facility and is attached.”

Marshall died on March 7, 2018. On March 2, 2022, Ellis, as special administrator

of Marshall’s estate, filed a complaint against Heather Manor alleging claims of medical

negligence, ordinary negligence, violation of the Nursing Home Resident Rights Act, breach

of fiduciary duty, and wrongful death. Heather Manor answered Ellis’s complaint, generally

denying her claims and specifically denying that jurisdiction and venue were proper in the

circuit court because her claims were barred from being litigated in court “by virtue of an

arbitration agreement executed on behalf of Mr. Marshall.”

Heather Manor subsequently moved to compel arbitration. It asserted that Ellis

executed paperwork in connection with Marshall’s admission to Heather Manor, and as part

2 of the admission process, Ellis received and signed both the admission agreement and the

arbitration agreement. Heather Manor argued that Ellis had the authority to enter into the

admission agreement and arbitration agreement on her father’s behalf pursuant to a durable

power of attorney executed by Marshall in March 2017, a copy of which it attached to its

motion.1 Moreover, in its brief in support of its motion to compel, Heather Manor

specifically asserted that the FAA governs arbitration in this case and preempts any Arkansas

law to the contrary.

Ellis responded to Heather Manor’s motion, pointing out numerous inconsistencies

in the identification of the parties to the agreements. She further argued that Heather Manor

had not authenticated the power of attorney, noting that the copy attached to its motion did

not bear Marshall’s signature. She also denied that the Federal Arbitration Act applied, and

she argued that the arbitration agreement was unenforceable under Arkansas law. Finally,

she contended that the manner in which the agreements were executed rendered them

unenforceable, pointing out ambiguities regarding the parties and signatories to the

agreements.

1 The power of attorney granted to Ellis by Marshall gave her generally the “full power to act for me and in my name in all matters and to do all things which I could do if personally present and acting in my own behalf.” The power of attorney also specifically granted Ellis the power, among other things, “[t]o institute, compromise, settle, defend, appear in, appeal, give bond in and engage counsel to represent me in all legal proceedings in which at any time I may have any interest.” Unless a power of attorney provides otherwise, language in a power of attorney granting general authority with respect to claims and litigation authorizes the agent to submit to alternative dispute resolution. Ark. Code Ann. § 28-68-212(5) (Repl. 2012).

3 Following a hearing, the circuit court entered an order denying Heather Manor’s

motion to compel arbitration. The court found, without elaboration, that the arbitration

agreement was signed by Ellis in her individual capacity and not as Marshall’s attorney-in-

fact; that the power of attorney purportedly executed by Marshall was invalid; and that the

FAA did not apply to this case. Heather Manor filed a timely notice of appeal and now

assigns error to each of the circuit court’s rulings.

II. Standard of Review and Applicable Law Regarding Arbitration Agreements

An order denying a motion to compel arbitration is immediately appealable pursuant

to Arkansas Rule of Appellate Procedure–Civil 2(a)(12). We review a circuit court’s denial

of a motion to compel arbitration de novo on the record. Nursing & Rehab. Ctr. at Good

Shepherd, LLC v. White, 2024 Ark. App. 307, 689 S.W.3d 684. While we are not bound by

the circuit court’s decision, in the absence of a showing that the circuit court erred in its

interpretation of the law, we will accept its decision as correct on appeal. Id.

When a court is asked to compel arbitration, it is limited to deciding two threshold

questions: (1) whether there is a valid agreement to arbitrate between the parties, and (2) if

such an agreement exists, whether the dispute falls within its scope. Asset Acceptance, LLC v.

Newby, 2014 Ark. 280, 437 S.W.3d 119. The threshold issue is whether there was a valid

arbitration agreement. Pines - Progressive Eldercare Servs., Inc. v. Carnahan, 2024 Ark. App. 138,

686 S.W.3d 524. We are also guided by the legal principle that contractual agreements are

construed against the drafter. Colonel Glenn Health & Rehab., LLC v. Aldrich, 2020 Ark. App.

222, 599 S.W.3d 344.

4 This court looks to state contract law to determine if the parties’ agreement is valid.

GGNSC Holdings, LLC v. Chappel, 2014 Ark. 545, 453 S.W.3d 645. In Arkansas, the essential

elements for an enforceable arbitration agreement are (1) competent parties, (2) subject

matter, (3) legal consideration, (4) mutual agreement, and (5) mutual obligation. Bank of the

Ozarks, Inc. v. Walker, 2014 Ark. 223, 434 S.W.3d 357. Heather Manor, as the proponent of

the arbitration agreement, has the burden of proving these essential elements. See Robinson

Nursing & Rehab. Ctr., LLC v. Phillips, 2019 Ark. 305, 586 S.W.3d 624.

III. Discussion

A. Applicability of the Federal Arbitration Act

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2024 Ark. App. 596, 704 S.W.3d 134, Counsel Stack Legal Research, https://law.counselstack.com/opinion/heather-manor-care-center-inc-and-michael-morton-v-james-marshall-by-arkctapp-2024.