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In a Wrongful Death Action, Can an Earlier Agreed-to Arbitration Agreement Be Enforced?

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In Kindred Healthcare v. Boyd, (2017 Wy. 22), the Supreme Court for the State of Wyoming answers this question. Ninety-three-year-old Aletha Boyd (“Aletha”) died following her discharge from Kindred Nursing and Rehabilitation – Wind River (“Kindred”). Her daughter, Susan Boyd (“Boyd”), filed a wrongful death action against Kindred. Kindred moved to compel arbitration pursuant to an alternative dispute resolution (“ADR”) agreement signed by Leanna Putnam (“Putnam”), Aletha’s other daughter (representative under a power of attorney at the time of her admission into the facility). The district court denied the motion. Kindred appeals.

The Supreme Court examined three questions: whether Putnam had the authority to sign the ADR agreement on Aletha’s behalf and bind her to arbitration, whether the ADR agreement is unconscionable, and whether the ADR agreement lacks mutuality of assent and consideration.

The ADR signed by Putnam on behalf of Aletha says that signing the agreement is not a condition for admission to the facility. It states that the parties to the agreement agree that any disputes between them arising out of Aletha’s stay at the facility shall be resolved exclusively by an ADR process that shall include mediation and, where mediation is not successful, binding arbitration.

Kindred argued in district court that Boyd is bound by the ADR agreement because Putnam had the authority to sign it on Aletha’s behalf.  Boyd said that the power of attorney signed by Aletha authorizing Putnam to make all lawful health decisions qualifies as a power of attorney for health care only, and that this was not a health care decision.  The Court declined to examine whether the ADR was specifically a health care decision because it found that the power of attorney unambiguously gave Putnam authority to sign the agreement on Aletha’s behalf. Therefore, Putnam had the authority to sign the ADR.

Second, Boyd claims the ADR agreement is unconscionable because Kindred included it among the packet of documents Putnam was required to sign to get medical care for Aletha, no one explained she was not required to sign it. The Court in deciding whether a contract is unconscionable looks at whether the contract provisions unreasonably favor one party over the other. Second, whether the latter party lacked a meaningful choice in entering into the contract. Boyd presented no evidence that Putnam was deprived of meaningful choice as to whether to sign it. Boyd presented no evidence that Putnam was easily taken advantage of. There was no evidence presented to show that the agreement was biased unfairly for Kindred.  Therefore, the Court held that the contract was not unconscionable.

Finally, examining consent and mutual consideration of the ADR, Boyd argued that the arbitration rules the parties were required to follow were subject to change, and therefore the parties did not know what rules they were agreeing to, and there was no meeting of the minds. Mutual assent between contracting parties is necessary for the formation of a contract. The parties need only agree upon the essentials of the contract, and those essentials must be ascertainable.

Kindred and Putnam agreed to submit disputes to mediation, and if that was unsuccessful, to arbitration. From the express language in the ADR agreement, the Court can ascertain intent of the parties. The agreement is not unenforceable for lack of mutual assent.  Kindred and Putnam mutually agreed that any disputes arising from Aletha’s care at the facility would be resolved by an ADR process and that they were giving up their constitutional right to have disputes decided by a court of law. Thus, they exchanged mutual promises: sufficient consideration to support the ADR agreement.

Because of these reasons, the Supreme Court reversed the lower court’s ruling, and remanded with instructions to order arbitration as required by the agreement

The Metier Law Firm is committed to assisting people with personal injury claims throughout Colorado, Wyoming and Nebraska, and we frequently serve as co-counsel to law firms nationwide. Tom Metier recently secured the largest personal injury verdict in Colorado