Gray v. PruittHealth-North August.

1

Grace Gray, Individually and as Wife of Willie J. Gray, deceased, and as Personal Representative of The Estate of Willie J. Gray, deceased, Respondent, v. PruittHealth-North Augusta, LLC; UHS Pruitt Corporation a/k/a PruittHealth, Inc.; PruittHealth Consulting Services, Inc.; United Health Services of South Carolina, Inc.; John Doe, and Richard Roe Corporation, Appellants.

No. 2024-UP-292

Appellate Case No. 2019-001102

Court of Appeals of South Carolina

August 7, 2024

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

Submitted May 2, 2022

Appeal From Aiken County R. Keith Kelly, Circuit Court Judge.

Joshua Steven Whitley, of Smyth Whitley, LLC, of Charleston, for Appellants.

Kenneth Luke Connor, Christopher Caleb Connor, and Anne Katharine Moore, of Connor & Connor, LLC, of

Aiken and Allen Keith McAlister, Jr., of Hawk Law Group, of Aiken all for Respondent.

MCDONALD, J.

This is an appeal from the circuit court's order denying a motion to dismiss and to compel arbitration filed by PruittHealth-North Augusta, LLC; UHS Pruitt Corporation a/k/a PruittHealth, Inc.; Pruitt Health Consulting Services, Inc.; and United Health Services of South Carolina, Inc. (collectively, Appellants). Appellants assert the circuit court erred in finding the Arbitration Agreement executed by Tamara Donnelle Gray (Daughter) on behalf of her father, Willie James Gray, is unenforceable. Because the power of attorney Gray executed while hospitalized in Georgia gave Daughter the authority necessary to execute the Arbitration Agreement on his behalf, we reverse and remand for arbitration.

Facts and Procedural History

On July 27, 2017, Gray was involved in a car accident and transported to University Hospital in Augusta, Georgia; he complained of bilateral arm weakness and pain. Gray was diagnosed with an acute spinal cord injury and underwent surgery for spinal cord decompression and a cervical fusion. He developed postoperative complications, including but not limited to a stroke, and was eventually diagnosed with quadriparesis and acute respiratory failure necessitating ventilation. Although Gray was seemingly oriented, he had only a limited ability to communicate.

On August 10, 2017, during his Georgia hospital stay, Gray executed a power of attorney appointing Daughter or his wife as his "true and lawful agent and attorney-in-fact." He also completed a Georgia Advance Directive for Health Care (HCPOA) appointing Daughter as his health care agent and potential guardian and Wife as his "back-up health care agent."

Gray spent a total of thirty-four days at University Hospital before he was transferred to Select Specialty Hospital for continuation of care and ventilator weaning. He was then transferred to PruittHealth-North Augusta (PruittHealth) for short-term rehabilitation.^[1] As part of the admissions process Daughter executed various documents on Gray's behalf, including the Arbitration Agreement at issue.

While in PruittHealth's care, Gray developed a Stage IV sacral decubitus ulcer and suffered other pressure ulcerations, an infection, sepsis, malnutrition, and dehydration. On October 26, 2017, PruittHealth deemed Gray stable for discharge and arranged to transfer him to Chester Valley Nursing Facility in Pennsylvania. However, during transport, EMS found Gray was unstable and his blood sugars were dangerously out of range. Thus, EMS diverted to the nearest hospital in Wilson, North Carolina.

Wilson Emergency Department staff diagnosed Gray with severe sepsis and admitted him. He was hospitalized for ten days and underwent wound therapy, including two debridements of an abscessed sacral decubitus ulcer. Wilson Medical Center discharged Gray on November 5, with a diagnosis of sacral decubitus ulcer with associated cellulitis and abscess (following extensive debridement), sepsis, acute metabolic encephalopathy, and sinus tachycardia.

Gray then continued his journey to Pennsylvania, where he was admitted to Chester Valley on November 6, 2017. Gray received stringent wound care, and a wound VAC was applied to his sacral wound. Gray died on June 19, 2018.

Wife filed a notice of intent to file suit (NIF), along with the required expert witness affidavit, and served Appellants. Appellants moved to dismiss and to compel arbitration, which Wife opposed.

Following a hearing, the circuit court denied Appellants' motions, finding Gray's power of attorney (POA) "did not confer the necessary authority to execute an arbitration agreement on Decedent's behalf" because it was not identified as a general durable power of attorney and did not confer authority upon Daughter to enter contracts generally, to enter releases on Gray's behalf, or to waive his constitutional right to a jury trial. The circuit court further noted the POA did not include the "catch-all provision giving the attorney-in-fact the authority 'to sign any and all releases or consent required.'" Finally, the circuit court found that even if Daughter had actual or apparent authority to sign, the agreement was "unenforceable against [Gray's] wrongful death statutory beneficiaries under South Carolina contract law defenses." The circuit court denied Appellants' Rule 59(e), SCRCP, motion to reconsider, and Appellants timely appealed.

Analysis "Arbitrability determinations are subject to de novo review." Arredondo v. SNH SE Ashley River Tenant, LLC, 433 S.C. 69, 74, 856 S.E.2d 550, 553 (2021) (quoting Johnson v. Heritage Healthcare of Estill, LLC, 416 S.C. 508, 512, 788 S.E.2d 216, 218 (2016)). "The litigant opposing arbitration bears the burden of demonstrating that he has a valid defense to arbitration." Id. at 75, 856 S.E.2d at 553 (quoting Johnson, 416 S.C. at 512, 788 S.E.2d at 218).

Appellants argue the circuit court erred in finding the Arbitration Agreement unenforceable on the basis that neither the POA nor HCPOA provided Daughter the authority necessary to execute the Agreement on Gray's behalf. We agree.

"A power of attorney is an instrument in writing by which one person, as principal, appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal. The written authorization itself is the power of attorney." Stott v. White Oak Manor, Inc., 426 S.C. 568, 573, 828 S.E.2d 82, 85 (Ct. App. 2019) (quoting Watson v. Underwood, 407 S.C. 443, 454, 756 S.E.2d 155, 161 (Ct. App. 2014)). "Our courts have looked to contract law when reviewing actions to set aside or interpret a power of attorney." Arredondo, 433 S.C. at 75, 856 S.E.2d at 553 (quoting Stott, 426 S.C. at 577, 828 S.E.2d at 87). "The cardinal rule of contract interpretation is to ascertain and give effect to the intention of the parties, and, in determining that intention, the court looks to the language of the contract." Id. at 75, 856 S.E.2d at 553-54 (quoting Stott, 426 S.C. at 577, 828 S.E.2d at 87). "When the language of a contract is plain and capable of legal construction, that language alone determines the instrument's force and effect." Id. at 75, 856 S.E.2d at 554 (quoting Stott, 426 S.C. at 577, 828 S.E.2d at 87). Therefore, we must consider the validity and language of the POA in determining whether Daughter had authority to execute the Arbitration Agreement on Gray's behalf.^[2] Under the South Carolina Uniform Power of Attorney Act (the Act),^[3] a "[p]ower of attorney" is a "writing or other record that grants authority to an agent to act in place of the principal." S.C. Code Ann. § 62-8-102(7) (2017); see also Watson, 407 at 454, 756 S.E.2d at 161 ("'A power of attorney is an instrument in writing by which one person, as principal, appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal. The written authorization itself is the power of attorney.'" (quoting In re Thames, 344 S.C. 564, 569, 544 S.E.2d 854, 856 (Ct. App. 2001))). "A power of attorney classified as 'durable' contains language establishing the principal's intent that the attorney-in-fact or agent's authority be exercisable during periods of the principal's physical or mental incapacity." Stott, 426 S.C. at 574, 828 S.E.2d at 85; see also Gaddy v. Douglass, 359 S.C. 329, 344 n.11, 597 S.E.2d 12, 20 n.11 (Ct. App. 2004) ("'Durable' is a term of art signifying that a power of attorney survives the principal's disability.").

Respondent references the power of attorney Gray executed as a "General POA for Finance," but the instrument itself contains no such title. The instrument Gray executed-in the presence of the witness and notary required by Georgia law-is untitled, but provision five specifically states,

This is a durable power of attorney, and it shall NOT be terminated by my incompetency. This is a power to act as attorney-in-fact for me, and if I subsequently become incompetent, it shall remain in force until such time as a guardian or receiver shall be appointed for me or until some other judicial proceeding shall terminate the power.

Thus, the circuit court erred in finding "[t]his document is titled 'Power of Attorney' and is not identified [as] a General Durable Power of Attorney." See Arredondo, 433 S.C. at 80, 856 S.E.2d at 556 (noting "the mere title of the document" was not dispositive as to the powers granted to Arredondo "beyond the plain meaning of the provisions contained in the document").

In the POA's opening paragraph, Gray appointed Daughter (or Wife) as

[his] true and lawful agent and attorney-in-fact, to do and perform in [his] name and behalf any and all things that she may think desirable or proper in as full and complete a manner as [

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