Stap, Inc., D/B/A St. Andrews Place; Kilgore Consulting Group, Inc.; And Joshua Kilgore v. Lagatha Sutterfield, as Personal Representative of the Estate of James Sutterfield, and on Behalf of the Wrongful Death Beneficiaries of James Sutterfield

2020 Ark. App. 18, 592 S.W.3d 249

• Court: Court of Appeals of Arkansas
• Decided: January 15, 2020
• Status: Published

Opinion

Cite as 2020 Ark. App. 18 ARKANSAS COURT OF APPEALS DIVISION I No. CV-19-234

STAP, INC., D/B/A ST. ANDREWS Opinion Delivered: January 15, 2020 PLACE; KILGORE CONSULTING GROUP, INC.; AND JOSHUA KILGORE APPEAL FROM THE FAULKNER COUNTY CIRCUIT COURT APPELLANTS [NO. 23CV-18-1270]

V. HONORABLE CHARLES E. CLAWSON, JR., JUDGE LAGATHA SUTTERFIELD, AS PERSONAL REPRESENTATIVE OF THE ESTATE OF JAMES SUTTERFIELD, AND ON BEHALF OF THE WRONGFUL DEATH BENEFICIARIES OF JAMES SUTTERFIELD

APPELLEE

AFFIRMED

MEREDITH B. SWITZER, Judge

LaGatha Sutterfield, as special administrator of her husband’s estate and on behalf

of his wrongful-death beneficiaries, filed a lawsuit against STAP, Inc., d/b/a St. Andrews

Place; Kilgore Consulting Group, Inc.; and Joshua Kilgore (“St. Andrews Place”). She

asserted claims of negligence, medical malpractice, breach of the admission agreement, and

deceptive trade practices. St. Andrews Place filed a motion to compel arbitration and to

dismiss the case. The motion was denied, and this appeal followed. St. Andrews Place

contends that (1) the arbitration agreement is a valid and enforceable contract under Arkansas law and (2) the circuit court erred in relying on Pine Hills Health & Rehabilitation,

LLC v. Matthews, 2014 Ark. 109, 431 S.W.3d 910, and Regional Care of Jacksonville, LLC v.

Henry, 2014 Ark. 361, 444 S.W.3d 356. Our jurisdiction is pursuant to Rule 2(a) of the

Arkansas Rules of Appellate Procedure–Civil. We affirm.

I. Background

On January 18, 2018, James Sutterfield was admitted to St. Andrews Place, a long-

term care facility. His wife, LaGatha Sutterfield, signed the admission agreement on his

behalf. “T[racy] Moore” signed the admission agreement on behalf of St. Andrews Place.

On the same date, LaGatha also signed the arbitration agreement, albeit on the wrong line,

but no one from St. Andrews Place signed it. James died on May 28, 2018. On August 24,

2018, LaGatha filed the underlying action in circuit court, asserting claims of negligence,

medical malpractice, breach of the admission agreement, and deceptive trade practices.

On October 18, 2018, the defendants filed a motion to compel arbitration and

dismiss the action. At the hearing on the motion, only counsels’ arguments were heard,

and no witnesses were presented. The circuit court thereafter entered its letter opinion on

January 18, 2019. The court ruled that the arbitration agreement was not enforceable and

denied the motion to compel and dismiss. The order denying the motion was filed on

January 22, and this appeal followed.

The admission agreement provides in pertinent part, under the “Miscellaneous”

section:

2 F. Modifications. No modification of the terms and conditions of this Agreement shall be valid unless in writing and signed by both parties to this Agreement.

G. Entire Understanding. This Agreement including its Attachments and Policies, Procedures, and Statements of Understanding of the Facility received and acknowledged by the Resident/Responsible Party at any time on or after the date of this Agreement all of which are incorporated by reference herein, contains the entire agreement between the parties, and it supersedes all prior agreements, arrangements or oral representations as to all matters relating to the Resident and his or her care at the Nursing Facility. Upon execution, the Arbitration Agreement becomes an addendum to and a part of this Agreement. This Agreement shall remain in full force and effect for all the Resident’s future stays in the Facility, regardless of transfers to hospitals, other institutions or home, until and unless superseded by any new Agreements.

(Emphasis added.)

The arbitration agreement provides in pertinent part:

This Arbitration Agreement is executed by ___________________ (Resident), x LaGatha Sutterfield (Resident’s Agent/Representative/Responsible Party (“Responsible Party”)) and St. Andrews Place (the “Facility”) in conjunction with the Admission Agreement and operates as an addendum to and part thereof.

It is understood and agreed by the Parties that any and all claims, disputes, and controversies (“Claims”) 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 shall be resolved exclusively by binding arbitration and not by a lawsuit or resort to court process.

....

The Resident/Responsible Party understands:

(1) he/she has the right to seek legal counsel concerning this Arbitration Agreement; and

(2) execution of this Arbitration Agreement is not a precondition to admission or to the furnishing of services to the Resident by the Facility. 3 There are numerous other healthcare providers in the State and the Resident is not required to use the Facility for his/her needs;

(3) this Arbitration Agreement may be rescinded by written notice to the Facility from the Resident/Responsible Party within thirty (30) days of signature. If not rescinded within thirty (30) days, this Arbitration Agreement shall remain in effect for all subsequent stays at the Facility, even if the Resident is discharged from and readmitted to the Facility.

.... For Facility Date: 01/18/18 Authorized Representative Signature: x LaGatha Sutterfield

LaGatha signed in the wrong place, but it is undisputed that no facility representative

signed the agreement.

For its first point of appeal, St. Andrews Place contends the circuit court erred in

concluding the arbitration agreement was not valid and enforceable because (a) an

arbitration agreement does not have to be signed by both parties to be enforceable, (b) St.

Andrews Place manifested assent to the arbitration agreement, and (c) both parties are

obligated to submit their claims to arbitration pursuant to the terms of the arbitration

agreement. For its second point of appeal, St. Andrews Place contends that the circuit

court erred in relying on Matthews and Henry, supra, in denying the motion. These points

are so interrelated that they can best be discussed together. In deciding this case, the

circuit court determined that the arbitration agreement was unenforceable for lack of

“mutuality of assent” and cited Matthews and Henry as support for its decision. The lack of

a facility signature on the arbitration agreement was pivotal. In Matthews, there was no

4 facility signature on the arbitration agreement either. The arguments raised by the

appellants in Matthews are remarkably similar to those raised here.

II. The Matthews Case

The appellants in Matthews argued that the absence of their representative’s

signature did not render the arbitration agreement unenforceable because their conduct

manifested assent: preparing a form arbitration agreement and admission agreement,

presenting a nonmandatory offer of arbitration to incoming residents, retaining both

agreements, and attempting to enforce the arbitration agreement. In addition, they

focused on the arbitration agreement’s language: providing that the resident, not the

facility, could rescind the agreement within thirty days of signing; advising that the resident

might want to consult an attorney; and a certification block above the resident’s signature

(but not the facility’s) that the “undersigned” had read and understood the agreement and

was either the resident or someone authorized by the resident to execute the agreement.

Id. They also focused on the following language in the admission agreement: “Resident

acknowledges that disputes arising out of this Agreement…may be submitted to arbitration,

if the Resident elects to do so, by signing a separate agreement executed between the

Nursing Facility and the Resident.” Id. at 6, 431 S.W.3d at 914. The appellants in

Matthews further argued that “signing” is not synonymous with “executing” an agreement;

that “executing” means “commencement of the contract”; and that ambiguities must be

resolved in favor of arbitration. Finally, they argued that the facility made an offer that was

5 accepted, demonstrating mutual assent and a valid contract. Id. The arguments made in

Matthews are virtually identical to those raised here by St. Andrews Place.

In resolving those issues in Matthews, our supreme court explained that whether

there was an enforceable arbitration agreement was a matter of contract construction, and

it was therefore necessary to look at the agreement’s language, apply contract-law principles,

and determine as a matter of law the construction and legal effect of the agreement. The

essential elements of a contract are competent parties, subject matter, legal consideration,

mutual agreement, and mutual obligations. Id. Both parties must manifest assent to the

particular terms of the contract. Id. The reviewing court employs an objective test for

determining mutual assent, looking for objective indicators of agreement and not

subjective opinions. Id.

The supreme court noted that no testimony was presented at the hearing in

Matthews, and no facility representative signed the arbitration agreement to indicate

mutual assent. Manifestation of assent may be made wholly or partly by written or spoken

words or by other acts or by failure to act. Id. “Moreover, a ‘written contract, not required

to be in writing, is valid if one of the parties signs it and the other acquiesces therein.’” Id.

at 7, 431 S.W.3d at 915 (quoting Parker v. Carter, 91 Ark. 162, 167, 120 S.W. 836, 838

(1909)). Applying those contract principles to the Matthews facts, the supreme court

reasoned:

Though appellants assert that their conduct indicated Pine Hills’s manifestation of its assent to the Arbitration Agreement, there was no testimony presented concerning any conduct that would have manifested assent. Appellee cites 6 provisions in the Arbitration Agreement that they assert evidence Pine Hills’s manifestation of its assent: the provisions stating that the Responsible Party could rescind the Arbitration Agreement and the certification that he read and understood the Arbitration Agreement. This language, however, does not establish Pine Hills’s manifestation of its assent. Rather, it establishes only the Responsible Party’s manifestation of assent.

Further, appellants’ reliance on language in the Admission Agreement—a separate agreement signed by a Pine Hills representative two days after Matthews had signed the Arbitration Agreement—does not illuminate whether Pine Hills also manifested its assent to the Arbitration Agreement.

Id. at 7–8, 431 S.W.3d at 915. The Matthews court noted other language in the

agreements, and then stated, “While appellants assert that ‘signing’ is not synonymous with

‘execut[ing]’ an agreement and that ‘executed’ means ‘commencement of the contract,’ we

observe that no testimony was presented regarding any acts that would have indicated the

‘commencement of the contract.’” Id. at 8, 431 S.W.3d at 915–16. The Matthews court

employed an objective test to determine mutual assent and held that the arbitration

agreement did not establish that Pine Hills manifested its assent to the arbitration

agreement; therefore, the agreement was not enforceable.

III. The Instant Case

St. Andrews Place attempts to distinguish Matthews and Henry from the instant case.

St. Andrews Place argues that in the instant case, the admission agreement and the

arbitration agreement were entered into on the same day; that the admission agreement

includes a clear incorporation-by-reference clause, which demonstrated that St. Andrew

Place’s intended for all admission documents to be considered as a single agreement and

manifested assent to the terms of those documents included in the single agreement,

7 making it clear that St. Andrews Place intended to be bound by the arbitration agreement

even if its representative did not sign the agreement. It further argues that unlike the

situation in Henry, the arbitration agreement here does not exclude from its scope claims

for nonpayment or other breaches of the admission agreement by the resident; instead St.

Andrews Place relinquished its own ability to pursue relief through the courts, indicating

mutuality of obligation. We do not find these distinctions persuasive.

Our review of the facts in the instant case convinces us that its similarities to

Matthews are compelling and control the outcome here. The distinctions urged by St.

Andrews Place are not significant enough to require a different analysis. The facility did

not sign the arbitration agreement. At the hearing on the motion to compel and dismiss,

no testimony or other evidence was presented. The arbitration agreement was an optional

separate agreement, and St. Andrew Place’s assent to the admission agreement did not, in

and of itself, constitute assent to the separate arbitration agreement. The admission

agreement itself conditions incorporation of the arbitration agreement “upon execution”

of the arbitration agreement, and the arbitration agreement contained signature blocks for

both the facility and the resident. The admission agreement also provided:

“Modifications. No modification of the terms and conditions of this Agreement shall be

valid unless in writing and signed by both parties to this Agreement.” Moreover, the

Matthews court also implicitly rejected the following arguments made here—that the

facility’s presentation of the arbitration agreement constituted an offer that was accepted by

the resident’s representative, creating a binding contract; that the arbitration agreement

8 could be rescinded by the resident, but not St. Andrews Place, within thirty days; and that

signing the admission agreement, incorporating by reference the arbitration agreement,

manifested assent.

We conclude that our supreme court’s decision in Matthews controls the outcome

here. Accordingly, we affirm the circuit court’s denial of the motion to compel arbitration

and dismiss the action.

Affirmed.

ABRAMSON and WHITEAKER, JJ., agree.

Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C., by: Benjamin D. Jackson and

Lauren S. Grinder, for appellants.

Reddick Moss, PLLC, by: Matthew D. Swindle and Robert W. Francis, for appellee.