Sikes v. Heritage Oaks West Retirement Village

238 S.W.3d 807, 2007 Tex. App. LEXIS 7769, 2007 WL 2791449
CourtCourt of Appeals of Texas
DecidedSeptember 26, 2007
DocketNo. 10-06-00176-CV
StatusPublished
Cited by1 cases

This text of 238 S.W.3d 807 (Sikes v. Heritage Oaks West Retirement Village) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sikes v. Heritage Oaks West Retirement Village, 238 S.W.3d 807, 2007 Tex. App. LEXIS 7769, 2007 WL 2791449 (Tex. Ct. App. 2007).

Opinion

OPINION

FELIPE REYNA, Justice.

The wife and children of decedent Joel Sikes1 filed wrongful death and survival claims against Heritage Oaks West Retirement Village and others2 alleging malpractice in his treatment.

The Sikeses appeal the trial court’s judgment on an arbitration award. They first complain that the Dispute Resolution Plan is unenforceable because: 1) it does not comply with former article 4590i; 2) Heritage failed to sign the agreement; 3) the wrongful death claims are not within the scope of the agreement; 4) Eugenia Sikes lacked authority to sign the agreement on behalf of her husband; 5) the agreed order to arbitrate was both revoked and superseded; and 6) Heritage failed to negate the Sikeses’ contractual defenses to arbitration. In the alternative, the Sikeses contend that the judgment on the arbitrator’s decision is in error because: 1) under federal law, the arbitrator’s decision failed to adjudicate all claims and reflected a manifest disregard of the law; and 2) under state law, the decision resulted from a gross mistake and a failure to execute an honest judgment. We will reverse and remand.

A party seeking to compel arbitration must establish that: (1) there is a valid arbitration agreement; and (2) the claims raised fall within the agreement’s scope. In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex.2005) (orig.proceeding). Because there is a presumption favoring agreements to arbitrate, doubts regarding an agreement’s scope are resolved in favor of arbitration; however, the presumption arises only after the party seeking to compel arbitration proves that a valid arbitration agreement exists. Id.

The Sikeses contend in their first issue that the Dispute Resolution Plan is unenforceable because it does not comply with former article 4590i. Ordinarily, state laws burdening arbitration are preempted by the Federal Arbitration Act (FAA), but the Sikeses contend that the McCarran-Ferguson Act “reverse preempts” the FAA to allow the application of stricter state law. See In re Kepka, 178 S.W.3d 279, 292 (Tex.App.-Houston [1st] 2005, orig. proceeding). However, the Sikeses failed to raise this issue before the trial court and have not preserved it for appellate review.

[810]*810The Sikeses contend in their fourth issue that Eugenia Sikes lacked authority to sign the Dispute Resolution Plan on behalf of her husband. Eugenia signed the document on the line labeled “Power of Attorney/Guardian’s Signature.” The Sikeses presented affidavit proof that Eugenia was neither Joel Sikes’s guardian nor had she been given power of attorney. Affidavits further established that Joel Sikes was not incapacitated and was capable of signing the document upon admittance to the nursing home. Heritage offered no rebuttal evidence. Instead, Heritage argues that Eugenia is estopped from denying the validity of the signature.

Heritage relies on arbitration cases stating that in certain circumstances a non-signatory to an arbitration agreement can be equitably estopped from denying that his claims are arbitrable. See, e.g., Kellogg Brown & Root, 166 S.W.3d at 739. However, this form of estoppel arises only when the plaintiff seeks “to derive a direct benefit from the contract containing the arbitration provision.” Id. at 741. Stated another way, “nonparties generally must arbitrate claims if liability arises from a contract with an arbitration clause, but not if liability arises from general obligations imposed by law.” In re Vesta Ins. Group, Inc., 192 S.W.3d 759, 761 (Tex.2006) (orig.proceeding) (per curiam).

Here, the Sikeses do not assert claims arising under Joel’s purported arbitration agreement with Heritage. Rather, their malpractice claims “arise[] from general obligations imposed by law.” See id. Therefore, Heritage’s equitable estoppel theory does not excuse Heritage from proving the existence of a valid arbitration agreement.

Nonetheless, Eugenia may be es-topped to deny her authority to sign the arbitration agreement if she acted with apparent authority. See Baptist Memorial Hosp. Sys. v. Sampson, 969 S.W.2d 945, 949 (Tex.1998) (“Apparent authority in Texas is based on estoppel.”). Apparent authority looks to the actions of the principal, Joel Sikes, to determine if he participated in, had knowledge of, or acquiesced in his agent, Eugenia, signing on his behalf. See id.; Tex. Cityview Care Ctr., L.P. v. Fryer, 227 S.W.3d 345, 353 (Tex.App.-Fort Worth 2007, pet. filed); Lifshutz v. Lifshutz, 199 S.W.3d 9, 22 (Tex.App.-San Antonio 2006, pet. denied). Without actions by the principal, “no mere combination of circumstances which may mislead persons into a false inference of authority, however reasonable, will serve as a predicate for apparent authority.” Hall v. F.A. Halamicek Enters., Inc., 669 S.W.2d 368, 375 (Tex.App.-Corpus Christi 1984, no writ).

There is no evidence of Joel Sikes taking actions to induce the belief that Eugenia was his agent. In fact, there is no evidence he was even present when the form was signed. See Texas Cityview, 227 S.W.3d at 353-54. Because there is no evidence that Eugenia had authority to sign the agreement, Heritage failed to prove the existence of a valid arbitration agreement. Id. at 354. Similarly, the arbitration agreement is unenforceable against Eugenia in her individual capacity because there is no evidence that she signed in that capacity. Id.; see also Kep-ka, 178 S.W.3d at 294.

To the extent that Heritage attempts to assert the common-law affirmative defense of equitable estoppel, this too fails under agency principles. In signing the arbitration agreement, Eugenia acted without authority and, therefore, any misrepresentation on her part cannot be imputed to the ostensible principal, Joel Sikes. Great Am. Life Ins. Co. v. Lonze, 803 S.W.2d 750, 754 (Tex.App.-Dallas 1990, writ de[811]*811nied). Accordingly, we sustain the Sikes-es’s fourth issue.

The Sikeses contend in their fifth issue that the court erred by concluding that they are bound by an agreed order to arbitrate which was later superseded by an amended order to which they did not agree. An “agreed order to arbitrate” was rendered by the court with each party’s attorney signing to indicate his agreement as to form and substance. Subsequent to that order, the Sikeses amended their pleadings to add an additional defendant, and a second motion to compel arbitration was filed and was granted in an amended order. The Sikeses asked the court to reconsider its ruling on the second motion to compel. After a hearing, the court signed a final order sending the case to arbitration.

The Sikeses contend that they revoked the agreed order or in the alternative that the subsequent order superseded the agreed order.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Sikes v. HERITAGE OAKS WEST RETIR. VILLAGE
238 S.W.3d 807 (Court of Appeals of Texas, 2007)

Cite This Page — Counsel Stack

Bluebook (online)
238 S.W.3d 807, 2007 Tex. App. LEXIS 7769, 2007 WL 2791449, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sikes-v-heritage-oaks-west-retirement-village-texapp-2007.