Providence Healthcare of Pine Meadows, LLC A/K/A Pine Meadowsidence Opco, LLC v. Keith Roark as Administrator of the Estate of Edd Roark

• Court: Court of Appeals of Kentucky
• Decided: December 3, 2020
• Docket: 2020 CA 000117
• Status: Unknown

Opinion

RENDERED: DECEMBER 4, 2020; 10:00 A.M. NOT TO BE PUBLISHED

Commonwealth of Kentucky Court of Appeals

NO. 2020-CA-0117-MR

PROVIDENCE HEALTHCARE OF PINE MEADOWS, LLC A/K/A PINE MEADOWSIDENCE OPCO, LLC; MARK MILLET, IN HIS CAPACITY AS ADMINISTRATOR OF PROVIDENCE PINE MEADOWS; PROVIDENCE ADMINISTRATIVE CONSULTING SERVICES, INC.; PROVIDENCE GROUP MANAGEMENT COMPANY, LLC; PROVIDENCE GROUP OF KENTUCKY, LLC; AND PROVIDENCE GROUP, INC. APPELLANTS

APPEAL FROM FAYETTE CIRCUIT COURT v. HONORABLE ERNESTO M. SCORSONE, JUDGE ACTION NO. 19-CI-02130

KEITH ROARK, AS ADMINISTRATOR OF THE ESTATE OF EDD ROARK, DECEASED APPELLEE

OPINION AFFIRMING

** ** ** ** **

BEFORE: GOODWINE, MCNEILL, AND L. THOMPSON, JUDGES. GOODWINE, JUDGE: Appellants (collectively referred to as “Pine Meadows”)

appeal from an order of the Fayette Circuit Court denying Pine Meadows’ motion

to compel arbitration of claims brought by Keith Roark (“Keith”) as the

administrator of the estate of Edd Roark (“Edd”). After careful review, finding no

error, we affirm.

Pine Meadows is a nursing facility in Lexington. About three months

prior to Edd’s admittance to Pine Meadows, on January 24, 2017, he executed a

“General Power of Attorney” appointing Keith as attorney-in-fact to make

decisions on his behalf, including “any personal matter, medical decision, business

transaction and all other matters not specifically prohibited” by the document.

Record (“R.”) at 125.

On April 21, 2017, Edd was admitted to Pine Meadows. As part of

the admissions process, Keith executed several documents on Edd’s behalf. One

of the documents Keith signed was a voluntary arbitration agreement. Although

Keith signed the agreement, on the line for Keith Roark to designate the capacity in

which he was acting, he wrote “Keith Roark.” Pertinent to this appeal, Keith did

not indicate on this form that he signed in his capacity as Edd’s attorney-in-fact,

despite the form giving him that option. R. at 130.

Edd died on January 9, 2018. Keith was appointed the administrator

of Edd’s estate. On June 7, 2019, he filed this action against Pine Meadows. In

-2- the complaint, Keith alleged negligence, medical negligence, corporate negligence,

and wrongful death against Pine Meadows. Pine Meadows filed an answer and

later filed a motion to compel arbitration based on the arbitration agreement. The

trial court heard the matter on September 13, 2019 and denied the motion by order

entered December 23, 2019.

The trial court held Keith “did not sign the arbitration agreement in

his capacity as his father’s power of attorney, and as such, he did not have the

authority to bind his father to the arbitration agreement.” R. at 213. The trial court

noted Keith signed his name above two lines, one for “Signature of Legal

Representative for Healthcare Decisions” and one for “Signature of Legal

Representative for Financial Decisions.” Id. The trial court found that “even if

Keith Roark was Edd Roark’s legal representative for healthcare and financial

decisions pursuant to Ping v. Beverly Enterprises, 376 S.W.3d 581 (Ky. 2012), the

signing of a voluntary, pre-dispute arbitration agreement is neither a healthcare

decision nor a financial decision.” Id.

On appeal, Pine Meadows argues there is no case law supporting the

trial court’s hyper-technical conclusion that the arbitration agreement was invalid

because Keith failed to write that he acted as Edd’s attorney-in-fact in signing the

agreement. In response, Keith argues the trial court correctly concluded he did not

-3- have the authority to bind Edd to the arbitration agreement because he did not sign

the agreement as attorney-in-fact.

We apply the following standard of review in reaching our decision:

In reviewing an order denying enforcement of an arbitration clause or agreement, we apply a two-fold standard of review. See KRS[1] 417.220(2) (“The appeal shall be taken in the manner and to the same extent as from orders or judgments in a civil action.”). First, we examine the trial court’s findings of fact. Conseco Fin. Servicing Corp. v. Wilder, 47 S.W.3d 335, 340 (Ky. App. 2001). Those factual findings are reviewed under the clearly erroneous standard and are deemed conclusive if they are supported by substantial evidence. Id. Second, we review the circuit court’s legal conclusions de novo to determine if the law was properly applied to the facts. Id.

Padgett v. Steinbrecher, 355 S.W.3d 457, 459 (Ky. App. 2011); Frankfort Medical

Inv’rs, LLC v. Thomas by and Through Thomas, 577 S.W.3d 484, 487 (Ky. App.

2019).

It is well-established that both the Kentucky Uniform Arbitration Act,

KRS 417.045 et seq. and the Federal Arbitration Act “evince a legislative policy

favoring arbitration agreements, or at least shielding them from disfavor.” Ping,

376 S.W.3d at 588. Furthermore, “a party seeking to compel arbitration has the

initial burden of establishing the existence of a valid agreement to arbitrate. . . .

Unless the parties clearly and unmistakably manifest a contrary intent . . . existence

1 Kentucky Revised Statutes.

-4- of the agreement depends on state law rules of contract formation.” Id. at 590

(citations omitted).

Although the parties claim to disagree regarding the existence of

several factual disputes, the key disputed issues are whether the trial court correctly

interpreted Keith’s omission of his title of “POA” on the signature line of the

arbitration agreement and whether any other documents in the record support a

finding that Keith signed the agreement as Edd’s POA. Based on our review, the

trial court’s factual findings are supported by the record. Although Keith was

clearly Edd’s POA and he signed other admissions documents as such, he either

chose to omit or mistakenly omitted “POA” from the title or relationship line on

the signature page of the agreement. Pine Meadows argues these other documents

are evidence that Keith signed in his capacity as POA, but presented no evidence

supporting its contention.

Pine Meadows drafted the arbitration agreement. There are two

glaring omissions on the arbitration agreement. First, on page 1 of the agreement,

the line after “legal representative of” is left blank. Second, on the line below the

signature on page 6 of the form, Pine Meadows lists four different capacities for a

signatory to choose from, including Power of Attorney. Keith chose neither. To

its detriment, Pine Meadows did not request Keith clarify his role. As such, we

-5- conclude the trial court’s factual findings are supported by substantial evidence and

are not clearly erroneous.

Next, we address whether the trial court properly applied the law to

the facts in this case. The only opinion directly addressing this issue is

unpublished, but its holding is supported by analogous Kentucky contract law

precedent. In Kindred Nursing Centers Ltd. Partnership v. Butler, No. 2013-CA-

000880-MR, 2014 WL 3722083 (Ky. App. Jul. 25, 2014), the son was appointed as

his mother’s attorney-in-fact prior to her admission to a nursing facility. Id. at *1.

As part of the admissions process, the son executed several documents on his

mother’s behalf, including an arbitration agreement. Id. He “signed the arbitration

agreement in his capacity as ‘son’ and did not indicate on the form his status as

attorney-in-fact.” Id. The arbitration agreement in Butler had three signature

lines: (1) “Print Name of Resident”; (2) “Signature of Legal Representative”; and

(3) “Legal Representative Printed Name and Capacity.” Id. at *4. The third line

included a list of capacities to choose from “guardian, durable power of attorney,

spouse, son, daughter, etc.” This Court held the arbitration agreement was invalid

because it was signed as “son” without indicating the son’s capacity as attorney-in-

fact. Id. at *6. This Court noted it was also questionable as to whether the nursing

facility’s authorized agent properly signed the agreement, but nonetheless

concluded that the signature as “son” was the basis for its holding. Id.

-6- Butler relied on analogous precedent highlighting the importance of

indicating one’s representative capacity when signing a written agreement:

Kennedy v. Joy Manufacturing Co., 707 S.W.2d 362 (Ky. App. 1986) and

Enzweiler v. Peoples Deposit Bank of Burlington, 742 S.W.2d 569 (Ky. App.

1987). In Kennedy, the vice president of a company signed a guaranty agreement

for a corporate debt. Kennedy, 707 S.W.2d at 363. Kennedy argued he intended to

sign the agreement only in his representative capacity and that he intended “the

words ‘as Vice-president of the Marrick Company or, the Marrick Company by

Walter Kennedy, Vice-President’” be typed in by Joy Manufacturing. Id.

However, those words were never added to the agreement. Id. This Court held

that Kennedy was personally liable for his company’s debts because “Kennedy did

not sign in his representative capacity and nothing in the record supports his

allegations as to the parties’ supposed intent.” Id. at 364. In Enzweiler, this Court

explained that “[t]he Kennedy decision did not hold that parol evidence would be

considered to disestablish an agent’s personal liability where only the agent’s name

appears on the instrument.” Enzweiler, 742 S.W.2d at 571.

Here, Keith signed his name on four lines: (1) “Signature of Legal

Representative for Healthcare Decisions”; (2) “Print Name and Relationship or

Title (Guardian, Conservator, Power of Attorney, Proxy)”; (3) “Signature of Legal

Representative for Financial Decisions”; and (4) Print Name and Relationship or

-7- Title (Guardian, Conservator, Power of Attorney, Proxy).” R. at 130. The words

on the signature lines in this case and Butler are nearly identical. Keith did not

write his title or relationship on the second or fourth line and instead signed his

name. Pine Meadows argues that because Keith did not sign as “son,” there is no

evidence that he signed in any capacity other than “Legal Representative.”

Appellants’ Brief at 17.

We disagree with Pine Meadows’ argument. The arbitration

agreement drafted by Pine Meadows clearly intended for the signatory to write his

title or relationship to the resident on the relevant signature lines. Keith signed

other documents as Edd’s POA, and Pine Meadows could have requested Keith

sign the arbitration agreement in that capacity. Kennedy supports the trial court’s

decision that the omission of Keith’s capacity as POA on the relevant signature

lines means that he acted as “Keith Roark” and not Edd’s POA in signing the

agreement. R. at 213. As such, we hold Pine Meadows failed to establish its

burden of establishing the existence of a valid arbitration agreement under

Kentucky contract law.

Finally, Pine Meadows argues public policy favors enforcement of

this arbitration agreement. Although the Federal Arbitration Act and Kentucky

Uniform Arbitration Act generally favor arbitration agreements as a means of

dispute resolution, Pine Meadows failed to establish the existence of a valid

-8- arbitration agreement under Kentucky contract law principles. Ping, 376 S.W.3d

at 588. As such, general public policy does not overcome the requirement under

Kentucky contract law that an agent must denote his representative capacity to

bind the principal to a contact.

For the foregoing reasons, we affirm the order of the Fayette Circuit

Court.

ALL CONCUR.

BRIEFS FOR APPELLANTS: BRIEF FOR APPELLEE:

Tiara B. Shoter Hannah R. Jamison Louisville, Kentucky Lexington, Kentucky

-9-