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Nursing home negligence case goes to Kentucky Court of Appeals

Stethoscope 3In an unpublished opinion, the Kentucky Court of Appeals has found that a nursing home negligence dispute is subject to arbitration. In this case, a woman executed a general power of attorney naming her nephew as her attorney-in-fact in 2005. Approximately one year later, the woman went to live in a Danville nursing home. As part of the admission process, the woman’s nephew signed a number of documents, including an optional agreement to arbitrate any future disputes with the skilled nursing facility. More than two years later, the woman passed away, and her nephew was named the executor of her estate. The nephew then filed a negligence lawsuit against the nursing home in Boyle County Circuit Court.

In response to the lawsuit, the nursing home filed a motion to compel arbitration based on the paperwork the woman’s nephew signed at the time of her admission to the Danville facility. The trial court denied the company’s motion, based on lack of jurisdiction under the Kentucky Uniform Arbitration Act or the Federal Arbitration Act. The facility then filed an appeal with the Kentucky Court of Appeals.

After reviewing this nursing home negligence case, the appellate court held that the trial court lacked jurisdiction under the Kentucky Uniform Arbitration Act, but it remanded the case for further consideration of the issue of jurisdiction under the Federal Arbitration Act. Next, the trial court held that it had jurisdiction to enforce the arbitration agreement under the federal law.

Following the trial court’s holding, the woman’s nephew filed a motion to invalidate the optional alternative dispute resolution agreement or alternatively permit a limited amount of discovery in the case. According to the nephew, he did not have the authority to sign the arbitration agreement on behalf of his aunt. In addition, he claimed that the agreement to arbitrate was unconscionable. The trial court refused to invalidate the arbitration agreement but permitted limited discovery regarding its validity.

In 2012, the nephew and the nursing home agreed to proceed pursuant to the terms of the optional arbitration agreement that was signed by the woman’s attorney-in-fact. The trial court then issued an order incorporating its terms. Not long after, the Kentucky Supreme Court held in Ping that a general power of attorney did not permit an attorney-in-fact to enter into an agreement to arbitrate on an individual’s behalf. As a result, the woman’s nephew filed a motion to set aside the trial court’s 2012 order and invalidate the optional arbitration agreement. Based on Ping, the Boyle County Circuit Court granted the nephew’s motion.  The nursing home again appealed the trial court’s decision to the Kentucky Court of Appeals.

According to the skilled nursing facility, the parties’ agreed order constituted a valid and distinct agreement to arbitrate under both the Federal and Kentucky arbitration acts. The company also claimed that Ping was inapplicable because the woman’s nephew waived his objections to arbitration in 2012.

Nursing home negligence case ruling

First, the Kentucky Court of Appeals agreed with the nursing home’s claim that the agreed order was a separate arbitration agreement under the Federal Arbitration Act. The court also stated that the woman’s nephew did not enter into the agreement as the woman’s attorney-in-fact. Instead, the court found that the nephew agreed to arbitration while acting as the executor of her estate. Because of this, the court held that the 2012 agreement was a valid and enforceable arbitration agreement under the Federal Arbitration Act. Similarly, the appellate court held the order was also valid under the Kentucky arbitration act.

Next, the Court of Appeals stated the arbitration agreement could not be revoked unless it was based on fraud or mistake of fact. Since the nephew did not allege fraud or mistake with regard to the 2012 agreement, the court held that there was no reason to revoke or overturn the parties’ arbitration agreement. The appeals court also found that there was no evidence the 2012 agreement to arbitrate was based on a mutual mistake of fact. The court added that the parties’ mutual mistake of law was not grounds to vacate the agreed order.

The Kentucky Court of Appeals then examined the nursing home’s assertion that the woman’s nephew waived any objections he had to engaging in arbitration proceedings. According to the court, the terms of the parties’ 2012 agreed order indicated that the nephew abandoned his objections when he willingly entered into the order without preserving them and provided input regarding arbitrator selection. Finally, the appellate court said the Kentucky Supreme Court’s decision in Ping had no effect on the parties’ 2012 agreement to arbitrate.

Since a valid arbitration agreement existed, the Kentucky Court of Appeals reversed the Boyle County Circuit Court’s decision and remanded the nursing home negligence case.

If you or a close relative was a victim of nursing home negligence anywhere in Kentucky, you should speak with an experienced Bowling Green personal injury attorney about your rights. To schedule a free confidential consultation with an attorney, call English, Lucas, Priest & Owsley, LLP at (270) 781-6500 today or contact us online.

Additional Resources:

Kindred Nursing Centers Ltd. Partnership v. Gooch: Kentucky Court of Appeals, 2014

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Photo Credit: Dodgerton Skillhause, MorgueFile