Cullinane v. Beverly Enters.-Neb., Inc.

300 Neb. 210

912 N.W.2d 774

Thomas CULLINANE, as Special Administrator for the Estate of Helen Cullinane, deceased, appellee,

v. BEVERLY ENTERPRISES-NEBRASKA, INC., doing business as Golden LivingCenter-Valhaven, appellant,andThomas Larson, Jr., DPM, et al., appellees.

No. S-17-486.

Supreme Court of Nebraska.

Filed June 15, 2018

Jeanelle R. Lust and Charles E. Wilbrand, of Knudsen, Berkheimer, Richardson & Endacott, L.L.P., Lincoln, for appellant.

Shayla M. Reed, of Reed Law Offices, P.C., L.L.O., Omaha, for appellee Thomas Cullinane.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, and Funke, JJ.

Funke, J.Beverly Enterprises-Nebraska, Inc., doing business as Golden LivingCenter-Valhaven (GLCV), appeals the denial of its motion to dismiss or stay proceedings and compel arbitration. GLCV moved to enforce an agreement to arbitrate against Thomas Cullinane, as special administrator for the estate of his mother, Helen Cullinane; Thomas had filed a wrongful death action against GLCV. Thomas objected to GLCV’s motion, and the court ruled in his favor, finding the execution of the "Alternative Dispute Resolution Agreement" (the ADR Agreement) was not binding upon Helen or her estate. GLCV appealed, and for the reasons set forth below, we affirm.

I. BACKGROUND

Helen was a resident of GLCV, a skilled nursing facility located in Valley, Nebraska. She was 88 years old at the time of her admission in 2010 and suffered from dementia. She passed away on February 2, 2015. Thomas became the special administrator of Helen’s estate and filed a wrongful death action against GLCV on behalf of the estate.

GLCV filed a motion to dismiss or, in the alternative, stay proceedings and compel arbitration pursuant to § 4 of the Federal Arbitration Act (FAA),¹ in accordance with the terms of a written arbitration agreement between GLCV and Helen. GLCV asserted that Eugene Cullinane, Helen’s husband, age 84, while acting as Helen’s attorney in fact, agreed to resolve disputes through arbitration when he signed the ADR Agreement on September 28, 2010, the date Eugene and Helen were admitted to the facility.

The front page of the ADR Agreement contains a title written in bold and capitalized letters and large font which states: "Alternative Dispute Resolution Agreement." The following language, in bold and capitalized letters, appears below the title: "This agreement is not a condition of admission to or continued residence in the facility." The ADR Agreement states:

The Parties agree that any disputes covered by this Agreement ("Covered Disputes") that may arise between them shall be resolved exclusively by an ADR process that shall include mediation and, where mediation is not successful, binding arbitration. The parties to this Agreement acknowledge and agree that upon execution by Resident, this Agreement becomes part of the Admission Agreement, and that the Admission Agreement evidences a transaction in interstate commerce governed by the [FAA].

The ADR Agreement further includes the following language, in bold and capitalized letters:

The parties understand, acknowledge, and agree that they are selecting a method of resolving disputes without resorting to lawsuits or the courts, and that by entering into this agreement, they are giving up their constitutional right to have their disputes decided in a court of law by a judge or jury ....

The ADR Agreement provides: "Covered Disputes, including the determination of the scope or applicability of this Agreement, shall be determined by arbitration ...." A section in the agreement titled "Resident’s Understanding" states: "The Resident understands that ... his or her signing of this Agreement is not a condition of admission to or residence in the Facility ...." The signature page of the document states in bold and capitalized letters and in large font: "This agreement governs important legal rights. Please read it carefully and in its entirety before signing."

At the hearing on GLCV’s motion to compel arbitration, GLCV offered the affidavit of Trisha Weberg, the business manager of GLCV. The affidavit included a copy of the durable power of attorney signed by Helen on July 23, 2008, which appointed Eugene as her attorney in fact. Weberg, who was not present when the ADR Agreement was executed, stated her personal knowledge concerning the facility’s routine procedure with respect to its resident admissions. Weberg stated that when she assisted in the admission process, she would do the following: present the ADR Agreement to the resident and allow the resident and the resident’s family members to read the paperwork; explain that by signing the ADR Agreement, the resident would waive his or her right to a trial and agree to submit any dispute to arbitration, but state that signing the ADR Agreement was not required to become a resident at the facility; obtain the resident’s signature; and sign the document on behalf of GLCV. Weberg stated it is her belief that the normal procedure was followed with regard to Helen’s admission. GLCV did not present an affidavit from its employee who executed the ADR Agreement on its behalf.

Thomas offered affidavits from himself and Eugene. According to Eugene’s affidavit, he and Helen sought admission to GLCV when Helen was transferred from the hospital on September 28, 2010. Helen was taken to a room, and a GLCV staff member led Eugene and Thomas into a small office. Eugene stated, "[W]e sat down and the female staff member presented me with a stack of papers which she said was ‘the paperwork I needed to sign to admit my wife’ and another stack to admit myself." He stated, "The staff member handled the papers, turned the pages and told me she needed my signature ‘here’ and directed me where to sign." Eugene conceded that he signed the ADR Agreement, but stated that he did so because it was his understanding that if he did not sign the paperwork, Helen would not have been admitted to receive health care. He stated he was not informed that any document in the stack of papers was optional, that the paperwork included an arbitration agreement, or that he was waiving his or his wife’s right to a jury trial. Eugene stated he would have not signed the ADR Agreement had he known what it meant and that it was not required.

Thomas stated in his affidavit that when he and Eugene met with the staff member in the office, she specifically stated that " ‘these are standard forms we need you to sign.’ " Thomas stated she turned the stack of papers to face Eugene, flipped up the bottom half of the pages, and pointed to the place where she wanted him to sign. He stated that he was present during the entire meeting and that at no time did the staff member state any of the documents were optional or would have the effect of waiving legal rights.

Based on the evidence, the district court entered an order which found that "Eugene[’s] execution of the arbitration agreement cannot be binding upon Helen ..., nor her estate, and that [GLCV’s] motion should be dismissed, and [GLCV] given two weeks to further plead to [Thomas’] Complaint."

II. ASSIGNMENTS OF ERROR

GLCV assigns, summarized, that the district court erred in (1) dismissing GLCV’s motion to dismiss or stay proceedings and compel arbitration, (2) failing to compel Thomas to arbitration, (3) determining that Eugene’s execution of the ADR Agreement was not binding upon Helen or her estate, (4) implicitly ruling that Eugene’s signature was obtained by fraud, and (5) failing to support its decision with any legal analysis.

III. STANDARD OF REVIEW

Arbitrability presents a question of law.² Whether a stay of proceedings should be granted and arbitration required is also a question of law.³ Likewise, a jurisdictional issue that does not involve a factual dispute presents a question of law.⁴

When reviewing questions of law, an appellate court resolves the questions independently of the lower court’s conclusions.⁵

We have not yet had the opportunity to determine a standard of review when the issue of arbitrability is summarily tried to the court. However, we see no reason why the standard of review would be different from the standard of review in a bench trial of a law action.

In a bench trial of a law action, a trial court’s factual findings have the effect of a jury verdict and will not be set aside on appeal unless clearly wrong.⁶ In reviewing a judgment awarded in a bench trial of a law action, an appellate court does not reweigh evidence, but considers the evidence in the light most favorable to the successful party and resolves evidentiary conflicts in favor of the successful party, who is entitled to every reasonable inference deducible from the evidence.⁷

IV. ANALYSIS

1. JURISDICTION

Before reaching the legal issues presented for review, it is the duty of an appellate court to determine whether it has jurisdiction over the matter before it.⁸ This is so even where, as here, neither party has raised the issue.⁹ For an appellate court to acquire jurisdiction of an appeal, there must be a final order entered by the court from which the appeal is taken; conversely, an appellate court is without jurisdiction to entertain appeals from nonfinal orders.¹⁰ In this case, we must decide whether the order denying GLCV’s motion to compel arbitration was a final, appealable order.

Nebraska has adopted the Uniform Arbitration Act (UAA), which is codified in Neb. Rev. Stat. §§ 25-2601 to 25-2622 (Reissue 2016). Section 25-2603(a) of the UAA authorizes a party to a judicial proceeding to apply for an order compelling arbitration of the dispute. The UAA further provides that an appeal may be taken from an order denying such an application, pursuant to § 25-2620(a)(1).¹¹

But GLCV did not invoke the UAA in its motion to compel arbitration. Instead, GLCV filed its motion to compel arbitration pursuant to the FAA. Thus, the provision of the UAA permitting an appeal from an order denying an application to compel arbitration is inapplicable to this case.

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