[Cite as Loyer v. Signature Healthcare of Calion, 2016-Ohio-7736.]
IN THE COURT OF APPEALS OF OHIO THIRD APPELLATE DISTRICT CRAWFORD COUNTY
CALVIN LOYER, AS PERSONAL REPRESENTATIVE OF THE ESTATE OF EDELTRUD M. LOYER,
PLAINTIFF-APPELLEE, CASE NO. 3-16-09
v.
SIGNATURE HEALTHCARE OF GALION, ET AL., OPINION
DEFENDANTS-APPELLANTS.
Appeal from Crawford County Common Pleas Court Trial Court No. 15-CV-0148
Judgment Affirmed
Date of Decision: November 14, 2016
APPEARANCES:
Robert M. Anspach and Mark D. Meeks for Appellants
Blake A. Dickson and Daniel Z. Inscore for Appellee Case No. 3-16-09
PRESTON, J.
{¶1} Defendants-appellants, Signature Healthcare of Galion, SHC LP
Holdings, LLC, Signature Healthcare LLC, Signature Healthcare Clinical
Consulting Services LLC, Signature Healthcare Consulting Services LLC, Ugwulo
Rawlins, and SHC of Galion, LP Galion LLC (collectively “defendants”), appeal
the judgment of the Crawford County Court of Common Pleas denying their motion
to stay pending arbitration the proceedings initiated by plaintiff-appellee, Calvin
Loyer (“Calvin”), as the personal representative of the estate of Edeltrud Loyer
(“Edeltrud”), (“plaintiff”). For the reasons that follow, we affirm.
{¶2} This case stems from a survivorship and wrongful-death complaint filed
by plaintiff on May 26, 2015 for the May 28, 2014 death of Edeltrud, alleging that
her death was caused by the negligence of defendants. (Doc. No. 1). On August
10, 2015, defendants filed their answer. (Doc. No. 13). At the same time,
defendants filed a motion to stay pending arbitration based on an arbitration
agreement signed by Calvin on April 23, 2014 as part of Edeltrud’s admission to
defendants’ nursing-home facility. (Doc. No. 14). Plaintiff filed affidavits of merit
on October 22, 2015. (Doc. Nos. 24, 25).
{¶3} On March 1, 2016, plaintiff filed a memorandum in opposition to
defendants’ motion to stay pending arbitration. (Doc. No. 34). That same day,
plaintiff filed the deposition of Becky King (“King”)—the representative who
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executed Edeltrud’s nursing-home admission paperwork on behalf of defendants.
(Doc. Nos. 35, 36). On March 15, 2016, defendants filed their reply to plaintiff’s
memorandum in opposition to defendants’ motion to stay pending arbitration. (Doc.
No. 37). On March 24, 2016, plaintiff filed “Plaintiff’s Motion for Leave to File the
Within Sur Reply Brief, Instanter, in Opposition to Defendants’ Motion to Stay.”
(Doc. No. 38).
{¶4} On May 19, 2016, the trial court denied defendants’ motion to stay
pending arbitration. (Doc. No. 40). The trial court filed a more detailed entry
denying defendants’ motion to stay pending arbitration on June 1, 2016. (Doc. No.
42).
{¶5} Defendants filed their notice of appeal on June 6, 2016. (Doc. No. 43).
They raise three assignments of error for our review. For ease of our discussion, we
will discuss them together.1
1 Assuming without deciding that they are properly before this court, we deny plaintiff’s motions to dismiss and for sanctions. Plaintiff’s motion to dismiss for the lack of a final appealable order is without merit because “[a] trial court’s decision to grant or deny a motion to stay pending arbitration is a final appealable order.” Meyers v. Marks, 3d Dist. Henry No. 7-10-13, 2011-Ohio-3523, ¶ 26, citing R.C. 2711.02(C). Also meritless is plaintiff’s motion for sanctions because defendants’ appeal is not frivolous. Under R.C. 2323.51(A)(2)(a)(ii), frivolous conduct is defined as conduct that “is not warranted under existing law, cannot be supported by a good faith argument for an extension, modification or reversal of existing law, or cannot be supported by a good faith argument for the establishment of new law.” “A frivolous appeal under App.R. 23, ‘“is essentially one which presents no reasonable question for review.”’” Coburn v. Auto-Owners Ins. Co., 10th Dist. Franklin No. 09AP-923, 2010-Ohio-3327, ¶ 55, quoting Stuller v. Price, 10th Dist. Franklin No. 03AP-30, 2003-Ohio-6826, ¶ 28, quoting Frowine v. Hubbard, 10th Dist. Franklin No. 99AP-496, 2000 WL 284040 (Feb. 15, 2000). See also Stegall v. Stegall, 3d Dist. Auglaize No. 2-2000-28, 2001 WL 75660, *2 (Jan. 30, 2001). This appeal is not frivolous because it presents a reasonable question for review.
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Assignment of Error No. I
The trial court erred in failing to stay the case pending arbitration of either the pleaded wrongful death or survivorship claims pursuant to the subject Agreement to Informally Resolve and Arbitrate All Disputes.
Assignment of Error No. II
The trial court erred by finding that Appellee did not sign the Agreement to Informally Resolve and Arbitrate All Disputes in [sic] his own behalf, thus requiring arbitration of the wrongful death claims.
Assignment of Error No. III
The trial court erred by finding that Appellee lacked authority to sign the Agreement to Informally Resolve and Arbitrate All Disputes on behalf of his decedent, Edeltrud M. Loyer, thus requiring arbitration of the survivorship medical claims.
{¶6} In their assignments of error, defendants argue that the trial court
abused its discretion by denying their motion to stay pending arbitration because
Calvin signed an arbitration agreement binding any survivorship or wrongful-death
claims to the arbitration forum. That is, defendants argue that Calvin signed the
arbitration agreement either on his own behalf or behalf of Edeltrud. Specifically,
regarding the survivorship complaint, defendants argue that Calvin signed the
arbitration agreement under “Ohio’s necessaries statute, R.C. 3103.03, to effectuate
his wife’s admission to [defendants’] facility.” (Appellants’ Brief at 17). That is,
defendants argue that Calvin had authority to sign on Edeltrud’s behalf based on an
emergency.
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{¶7} “When reviewing a trial court’s decision to grant or deny a motion to
stay proceedings and compel arbitration, an appellate court generally applies an
abuse-of-discretion standard of review.” Spearman v. Am. Elec. Power Co., 3d Dist.
Hardin No. 6-14-13, 2015-Ohio-928, ¶ 13, citing Kellogg v. Griffiths Health Care
Grp., 3d Dist. Marion No. 9-10-59, 2011-Ohio-1733, ¶ 9, citing Morris v. Morris,
189 Ohio App.3d 608, 2010-Ohio-4750, ¶ 15 (10th Dist.). An abuse of discretion
suggests the trial court’s decision is unreasonable, arbitrary, or unconscionable.
Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983). “Furthermore, when a trial
court makes factual findings, such as any findings regarding the circumstances
surrounding the making of the contract, those factual findings should be reviewed
with great deference.” Kellogg at ¶ 9, citing Taylor Bldg. Corp. of Am. v. Benfield,
117 Ohio St.3d 352, 2008-Ohio-938, ¶ 38 and Nationwide Mut. Fire Ins. Co. v.
Guman Bros. Farm, 73 Ohio St.3d 107, 108 (1995) (contract interpretation, a
question of law, is reviewed de novo, “[u]nlike determinations of fact which are
given great deference”). “‘However, a de novo standard of review is appropriate
when the appeal presents a question of law.’” Spearman at ¶ 13, quoting Kellogg
at ¶ 9, citing Morris at ¶ 15 and Barhorst, Inc. v. Hanson Pipe & Prods. Ohio, Inc.,
169 Ohio App.3d 778, 2006-Ohio-6858, ¶ 10 (3d Dist.).
{¶8} Under Ohio law, survivorship claims are separate and distinct actions
from wrongful-death claims. Cincinnati Ins. Co. v. Phillips, 44 Ohio St.3d 163, 166
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(1989), rev’d on other grounds, 52 OhioSt.3d 162 (1990); Peters v. Columbus Steel
Castings Co., 115 Ohio St.3d 134, 2007-Ohio-4787, ¶ 11 (“Although they are
pursued by the same nominal party, we have long recognized the separate nature of
these claims in Ohio.”). “[W]hen an individual is killed by the wrongful act of
another, the personal representative of the decedent’s estate may bring a survival
action for the decedent’s own injuries leading to his or her death as well as a
wrongful-death action for the injuries suffered by the beneficiaries of the decedent
as a result of the death.” (Emphasis sic.) Peters at ¶ 11. As such, we address first
plaintiff’s survivorship claim, followed by plaintiff’s wrongful-death claim.
{¶9} We conclude that the trial court did not abuse its discretion by denying
defendants’ motion to stay pending arbitration with respect to plaintiff’s
survivorship claim because defendants failed to show that Calvin had the authority
to bind Edeltrud to the terms of the arbitration agreement. There is no dispute that
Edeltrud did not execute the arbitration agreement. However, defendants argue that
Calvin “possessed sufficient authority” to execute the arbitration agreement on
behalf of Edeltrud. (Appellants’ Brief at 17).
{¶10} “‘The relationship of principal and agent, and the resultant liability of
the principal for the acts of the agent, may be created by the express grant of
authority by the principal. Absent express agency, the relation may be one of
implied or apparent agency.’” Simmons v. Extendicare Health Servs., Inc., 5th Dist.
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Delaware No. 15 CAE 12 0095, 2016-Ohio-4831, ¶ 15, quoting Master
Consolidated Corp. v. BancOhio Natl. Bank, 61 Ohio St.3d 570, 574 (1991).
“‘Apparent agency exists “where one who is assuming to act as an agent for a party
in the making of a contract but in fact has no actual authority to do so, such party
will nonetheless be bound by the contract ‘if such party has by his words or conduct,
reasonably interpreted, caused the other party to the contract to believe that the one
assuming to act as agent had the necessary authority to make the contract.’”’” Id.,
quoting Scott v. Kindred Transitional Care & Rehab., 8th Dist. Cuyahoga No.
103256, 2016-Ohio-495, ¶ 13, quoting Master Consolidated Corp. at 576,
quoting Miller v. Wick Bldg. Co., 154 Ohio St. 93 (1950).
{¶11} “In order for a principal to be bound by the acts of his agent under the
theory of apparent agency, evidence must affirmatively show: (1) that the principal
held the agent out to the public as possessing sufficient authority to embrace the
particular act in question, or knowingly permitted him to act as having such
authority, and (2) that the person dealing with the agent knew of those facts and
acting in good faith had reason to believe and did believe that the agent possessed
the necessary authority.” Id. at ¶ 16, citing Master Consolidated Corp. at syllabus.
“The burden of proving that apparent authority exists rests upon the party asserting
the agency.” Id., citing Scott at ¶ 15, citing Irving Leasing Corp. v. M & H Tire
Co., 16 Ohio App.3d 191 (2d Dist.1984).
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{¶12} “It is the acts of the principal, not the acts of the agent, that create
apparent authority.” Id. at ¶ 17, citing Master Consolidated Corp. at syllabus.
“‘“The principal is responsible for the agent’s acts only when the principal has
clothed the agent with apparent authority and not when the agent’s own conduct has
created the apparent authority.”’” Id., quoting Primmer v. Healthcare Industries
Corp., 4th Dist. Athens No. 14CA29, 2015-Ohio-4104, ¶ 26, quoting Ohio State
Bar Assn. v. Martin, 118 Ohio St.3d 119, 2008-Ohio-1809, ¶ 41.
{¶13} Defendants failed to prove that Calvin had any authority to bind
Edeltrud to the arbitration agreement. First, defendants failed to prove that Calvin
had Edeltrud’s express authority to bind her to the arbitration agreement because it
did not demonstrate that Calvin was Edeltrud’s legal representative—that is, for
instance, it did not provide a statutorily valid power of attorney or guardianship
appointment. See Brown v. Extendicare, Inc., 2d Dist. Montgomery No. 26589,
2015-Ohio-3059, ¶ 49 (“There is no evidence in the record before us that [the
purported agent] was expressly authorized to act on [the decedent’s] behalf by, for
example, a power of attorney or guardianship appointment.”); Scott at ¶ 8-10
(concluding that the decedent’s daughter was not expressly authorized to execute an
arbitration agreement on the decedent’s behalf because there was no valid power of
attorney). That Calvin signed the arbitration agreement as Edeltrud’s purported
“representative” cannot vest Calvin with actual authority in the absence of a
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statutorily valid power of attorney or court order appropriating that authority to
Calvin. See Scott at ¶ 10. Thus, defendants failed to meet their burden of proving
that Calvin had actual authority to bind Edeltrud to the terms of the arbitration
agreement.
{¶14} Second, defendants failed to prove that Calvin had Edeltrud’s apparent
authority to bind her to the terms of the arbitration agreement. Under the first prong
of the apparent-authority analysis, defendants must establish that Edeltrud, the
principal, held Calvin, the alleged agent, out to the public as possessing sufficient
authority to bind her to the arbitration forum. See Simmons, 2016-Ohio-4831, at ¶
19. As in Simmons, Calvin signed the paperwork for Edeltrud’s admission to
defendants’ facility and the arbitration agreement was not a precondition to
Edeltrud’s admission. See id. Defendants did not provide any evidence that
Edeltrud held out Calvin as possessing sufficient authority to enter into the
arbitration agreement on Edeltrud’s behalf. Defendants did not provide any
evidence as to whether Edeltrud knew of the arbitration agreement. Likewise, the
record reflects that Edeltrud was not present when Calvin signed her admission
paperwork, including the arbitration agreement. Indeed, the record reflects that
Calvin met with King—defendants’ representative—in the lobby area of
defendants’ facility to execute Edeltrud’s admission paperwork. (See King Depo.
at 17, 27-28). See also Simmons at ¶ 19, citing Scott at ¶ 17, citing Long v.
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Beachwood Pointe Care Ctr., 8th Dist. Cuyahoga No. 100109, 2014-Ohio-1238, ¶
6, and citing Primmer, 2015-Ohio-4104, at ¶ 25. While there is no requirement that
the principal be aware that the documents are executed by his or her agent, be aware
that those documents contain certain provisions, or witness his or her agent execute
those documents, there remains the requirement that the principal clothe his or her
agent with authority to act on his or her behalf prior to the agent acting. See Brown
at ¶ 50, citing Stocker v. Castle Inspections, Inc., 99 Ohio App.3d 735 (8th
Dist.1995). Defendants did not prove that Edeltrud clothed Calvin with authority
to act on her behalf. As such, defendants failed to prove the first prong of the
apparent-authority test.
{¶15} Based on these circumstances, defendants failed to satisfy the second
prong of the apparent-authority analysis by failing to present evidence that they
acted in good faith having reason to believe that Calvin had authority to bind
Edeltrud to the terms of the arbitration agreement. See Koch v. Keystone Pointe
Health & Rehab., 9th Dist. Lorain No. 11CA010081, 2012-Ohio-5817, ¶ 14;
Templeman v. Kindred Healthcare, Inc., 8th Dist. Cuyahoga No. 99618, 2013-Ohio-
3738, ¶ 23-26. That is, because defendants provided no evidence that Edeltrud acted
in any way to clothe Calvin with authority to act on her behalf, they could not have,
in good faith, reasonably relied on any assertion of Calvin that he had the authority
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to act. See Master Consolidated Corp., 61 Ohio St.3d at 576. Therefore, defendants
also failed to prove the second prong of the apparent-authority analysis.
{¶16} Nevertheless, defendants argue that they were justified in assuming
that Calvin was authorized by necessity to sign the arbitration agreement on behalf
of Edeltrud. There is scant jurisprudence, especially in Ohio, regarding agency out
of necessity. The Seventh District Court of Appeals discussed agency by necessity:
“in some situations agency may be created by necessity, that is, by an emergency
arising from a particular situation making it necessary or proper for the agent to act
without receiving the sanction or authority of the principal in the matter.” Adams v.
Double E Enterprises, Inc., 7th Dist. Belmont No. 84-B-56, 1986 WL 4372, *3
(Apr. 4, 1986). Referencing American Jurisprudence, Ohio Jurisprudence
recognizes that “an agency may arise by necessity.” 3 Ohio Jurisprudence 3d,
Agency and Independent Contractors, Section 76 (2016), citing 14 American
Jurisprudence 2d, Expansion of Agent’s Authority by Necessity, Section 14, at 483
(1977). American Jurisprudence expounds on the concept of agency by necessity:
The rule requiring the agent to follow the principal’s instructions does
not apply where, from the necessities of the case, without the agent’s
fault or neglect, some sudden and unexpected emergency or
extraordinary or supervening necessity arises, or some unforeseen
event happens, which will not [allow] delay for consultation or
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communication with the principal; in such case, if the agent,
exercising prudence and sound discretion, in good faith adopts the
course which seems best to him under all the circumstances as they
exist, he will be justified and his acts will bind his principal, even
though subsequent events may demonstrate that some other course
would have been better.
***
Thus, for the proof to be sufficient it is necessary to show the
unforeseeability of the situation, the possibility of substantial loss if
nothing is done, the impossibility or unfeasibility of communicating
with the principal before taking the necessary action, and the
reasonableness of the decision made. Proof that a similar course was
taken at some previous time with the sanction of the principal would,
of course, be very helpful.
14 American Jurisprudence 2d, Expansion of Agent’s Authority by Necessity,
Sections 1, 2, at 483.
{¶17} Inherent in the doctrine of agency by necessity is an underlying
emergency. See O’Connor v. Bankers Trust Co., 159 Misc. 920, 947, 289 N.Y.S.
252 (1936) (“The doctrine of agency by necessity has no application here. It is
invoked only where there is an emergency requiring immediate action by the agent,
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and is generally limited to cases where action must be taken at once for the physical
preservation of some person or object. If the agent has an opportunity to consult his
principal before he takes action, the doctrine may not be invoked. No condition
requiring immediate emergency action existed here.”); 14 American Jurisprudence
2d, Expansion of Agent’s Authority by Necessity, Section 1, at 483 (“As to the
burden of proof in these cases, the [party] who seeks to hold the principal liable has
the burden of showing that the person who contracted for emergency services was
authorized to do so, and that the emergency or necessity involved was sufficient to
constitute the basis of the expansion of the agent’s authority.”), citing Barnes v Blue
Plate Foods, Inc., 167 So 219 (La.App.1936); 14 American Jurisprudence 2d,
Expansion of Agent’s Authority by Necessity, Section 1, at 483 (“The emergency
must be one which arises unexpectedly in the absence of the principal or master and
which requires the agent or servant to act for the immediate protection of his
employer’s interests.”), citing Howland v Tri-State Theatres Corp., 139 F.2d 560
(8th Cir.1944) and Marks v Rochester R. Co., 146 NY 181 (Ny.App.1895). Indeed,
Black’s Law Dictionary defines “agency by necessity” as a “doctrine * * * that
confers authority to act for the benefit of another in an emergency.” Black’s Law
Dictionary 74 (10th Ed.2014).
{¶18} Even assuming without deciding that defendants could rely on the
doctrine of agency by necessity under Ohio law, defendants did not provide any
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evidence that an emergency existed necessitating Calvin to bind Edeltrud to the
terms of the arbitration agreement. Instead, the record reflects that Calvin was
presented, and subsequently singed, the agreement eight days after Edeltrud was
admitted to defendants’ facility. Moreover, arbitration agreements are generally
executed before a dispute arises between the parties. See Black’s at 126.
Accordingly, Edeltrud cannot be bound to the arbitration agreement out of any
agency by necessity.
{¶19} Therefore, we conclude that defendants failed to meet their burden of
proving that Calvin had apparent authority to bind Edeltrud to the terms of the
arbitration agreement. Thus, because defendants failed to prove Calvin had any
authority to bind Edeltrud to the terms of the arbitration agreement, the arbitration
agreement as it pertains to the survivorship claim is not enforceable against
Edeltrud. Accordingly, the trial court did not abuse its discretion by denying
defendants’ motion to stay pending arbitration with respect to plaintiff’s
survivorship claim.
{¶20} We next address whether the trial court abused its discretion by
denying defendants’ motion to stay pending arbitration with respect to plaintiff’s
wrongful-death claim. We conclude that the trial court did not abuse its discretion
by denying defendants’ motion to stay pending arbitration with respect to the
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wrongful-death claim because defendants failed to show that Calvin signed the
arbitration agreement in his individual capacity.
{¶21} “‘[A]rbitration is a matter of contract and a party cannot be required
to submit to arbitration any dispute which he has not agreed so to submit.’”
McFarren v. Emeritus at Canton, 5th Dist. Stark No. 2013CA00040, 2013-Ohio-
3900, ¶ 29, quoting Council of Smaller Ents. v. Gates, McDonald & Co., 80 Ohio
St.3d 661, 665 (1998). See also Peters, 2007-Ohio-4787, at ¶ 8. “While arbitration
is encouraged as a form of dispute resolution, the policy favoring arbitration does
not trump the constitutional right to seek redress in court.” Peters at ¶ 8. An
arbitration agreement is not enforceable against a beneficiary who signs that
agreement in a purported representative capacity. See McFarren at ¶ 30; Peters at
¶ 8. Only if that beneficiary signs that agreement in his or her individual capacity
will the arbitration agreement be enforceable against that beneficiary. See id.; Id.
{¶22} As we noted above, aside from defendants’ representative, King,
Calvin was the only person to sign the arbitration agreement. However, Calvin did
not sign the arbitration agreement in his individual capacity, but, as we addressed
above, signed as the purported representative of Edeltrud. Indeed, Calvin’s printed
name appears as “Calvin Loyer Spouse” above the line entitled “Resident’s
Authorized Representative/Name and Relationship” and Calvin’s signature appears
above the line entitled “RESIDENT REPRESENTATIVE SIGNATURE.” (Emphasis
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sic.) (Doc. No. 14). There are two additional signature lines entitled “Additional
Signatory/Relationship to Resident” at the bottom of the arbitration agreement.
(Id.). Calvin did not sign on either one of those signature lines. Therefore, the
arbitration agreement is not enforceable against Calvin. See McFarren at ¶ 30;
Younce v. Heartland of Centerville, 2d Dist. Montgomery No. 26794, 2016-Ohio-
2965, ¶ 53. Accordingly, the trial court did not abuse its discretion by denying
defendants’ motion to stay pending arbitration with regard to plaintiff’s wrongful-
death claim.
{¶23} Defendants’ assignments of error are overruled.
{¶24} Having found no error prejudicial to the appellants herein in the
particulars assigned and argued, we affirm the judgment of the trial court.
SHAW, P.J. and WILLAMOWSKI, J., concur.
/jlr
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