Northport Health Servs. of Ark., LLC v. Posey
Opinion
Representing the estate of his deceased father, Clyde Posey, Mark Posey appeals the district court's adverse grant of summary judgment in his wrongful death action against Northport Health Services of Arkansas, LLC (Northport). Having jurisdiction pursuant to
On September 2, 2004, Clyde and another son, Matt Posey, arrived at a residential rehabilitation center owned by Northport and sought Clyde's admission to the facility. Clyde was experiencing disorientation, delusions, and hallucinations. As part of the admission process, Matt and Clyde received an admission agreement (the Agreement) that included an arbitration agreement and waiver of jury trial. Both Clyde and Matt signed the Agreement; Clyde signed as the "Resident," Matt as the "Responsible Party." The Agreement defined Responsible Party as a legal guardian, attorney-in-fact, "or some other individual or family member who agrees to assist the Facility in providing for [the resident's] health, care, and maintenance." It also noted that "[t]he Responsible Party represents to the Facility that he or she manages, uses, directs or controls funds or assets which may be used to pay for Resident's Facility charges and/or that he or she tends to make decisions for or otherwise act on behalf of Resident." It is undisputed that Matt was not his father's legal guardian or attorney-in-fact.
Northport admitted Clyde as a resident to its center, where he stayed until his death in January 2016. A few months later, Mark Posey, as special administrator of his father's estate, sued Northport in Arkansas state court for wrongful death. Northport filed a separate action in federal court, seeking to stay the state court action and compel arbitration of the wrongful death claim pursuant to the Agreement. The parties then filed competing motions for summary judgment. The district court denied Mark's motion and granted Northport's motion to the extent that it sought to compel arbitration. Basing its reasoning solely on the Agreement, assuming without finding that Clyde was incompetent at the time of his admission, and recognizing that Matt was not his father's legal representative, the district court used the third-party beneficiary theory to find as a matter of law that Matt, in his individual capacity, entered into a binding arbitration agreement with Northport, for which Clyde was the intended beneficiary. Therefore, the district court directed Clyde's estate to arbitrate the dispute. This appeal follows, with Mark asserting that the district court misused the third-party beneficiary theory when no underlying agreement was present between the Poseys and Northport.
"We review de novo the district court's grant of summary judgment, applying the same standards as the district court."
Dulany v. Carnahan
,
Though there is a "liberal federal policy favoring arbitration agreements,"
Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp.
,
To determine whether a valid agreement to arbitrate exists, we look to the forum state's contract law-here, Arkansas's.
Baker v. Golf U.S.A., Inc.
,
The Arkansas Trial Lawyers Association's amicus brief argues the district court used the third-party beneficiary doctrine inappropriately, given that the doctrine developed in common law to allow beneficiaries to enforce agreements against promisors and not vice versa. However, we need not reach this argument because the district court's use of the third-party beneficiary doctrine was premised on the conclusion that Matt Posey signed a contract with Northport in his individual capacity and that Matt did not sign as a representative for his father. Arkansas courts have repeatedly declined to find that individuals like Matt-relatives without power-of-attorney or other legal authority who admit a family member to a nursing home-possess valid authority to bind their relatives to arbitration under a third-party beneficiary theory.
See
Courtyard Gardens Health & Rehab., LLC v. Quarles
,
Broadway Health & Rehab, LLC v. Roberts
,
Here, the form contract prepared by Northport states that its terms and conditions are agreed by Clyde; Clyde's Responsible Party, Matt; and Northport. As in
Hickory Heights
, the definition of Responsible Party in the Agreement equates a Responsible Party to a legal guardian, attorney-in-fact, or legal representative. The Agreement goes on to state that "[t]he Responsible Party represents to the Facility that he ... tends to make decisions for or otherwise act on behalf of Resident." In the absence of other evidence, including testimony, we find as a matter of law that the term "Responsible Party" as used in the Agreement describes a representative similar to a legal guardian.
See
Byme, Inc. v. Ivy
,
Accordingly, based on this record, Matt Posey attempted to sign in a representative capacity; he did not sign a contract with Northport in his individual capacity.
See
Hickory Heights
,
In
Quarles
, the court specifically noted that the third-party beneficiary argument had not been preserved for its review. However, it found that a son did not have actual or apparent authority to bind his mother to a nursing home arbitration agreement.
Reference
- Full Case Name
- NORTHPORT HEALTH SERVICES OF ARKANSAS, LLC, Doing Business as Covington Court Health and Rehabilitation Center ; NHS Management, LLC; Northport Health Services, Inc., Plaintiffs - Appellees v. Mark Wesley POSEY, Individually and as Special Administrator of the Estate of Clyde Wesley Posey, and on Behalf of the Wrongful Death Beneficiaries of Clyde Wesley Posey, Defendant - Appellant Arkansas Trial Lawyers Association ; AARP; AARP Foundation, Amici on Behalf of Appellant(s) Arkansas Health Care Association ; American Health Care Association; National Center for Assisted Living, Amici on Behalf of Appellee(s)
- Cited By
- 37 cases
- Status
- Published