El Jen Med. Hosp., Inc. v. Tyler

535 P.3d 660

EL JEN MEDICAL HOSPITAL, INC., d/b/a El Jen Convalescent Hospital and Retirement Center, a Domestic Corporation; Toomey Real Estate, LLC, a Nevada Limited Liability Company; and James Toomey, Individually and as Administrator, Appellants,

v.Stacy TYLER, Individually, as Special Administrator for the Estate of Gary Tyler, and as Legal Guardian for Omega Tyler, a Minor; Aziah Tyler, as Statutory Heir to Gary Tyler; and Heaven Tyler, as Statutory Heir to Gary Tyler, Respondents.

No. 83945

Supreme Court of Nevada.

Filed September 21, 2023

Lewis Brisbois Bisgaard & Smith LLP and S. Brent Vogel, Adam Garth, Robert D. Rourke, and Ethan M. Featherstone, Las Vegas, for Appellants.

Cogburn Law and Jamie S. Cogburn and Hunter S. Davidson, Henderson; Cameron Law and Daven P. Cameron, Las Vegas, for Respondents.

BEFORE THE SUPREME COURT, CADISH, PICKERING, and BELL, JJ.

OPINION

By the Court, PICKERING, J.:

Nevada's wrongful death statute, NRS 41.085, provides separate causes of action for the decedent's estate and the statutory heirs. Following the death of her husband, Gary Tyler, respondent Stacy Tyler asserted wrongful death claims individually and on behalf of Gary's estate and their minor child, and was joined by two adult statutory heirs, against appellant El Jen Convalescent Hospital and Retirement Center (El Jen). The district court compelled the estate's claims to arbitration pursuant to an arbitration agreement signed during Gary's admission to El Jen but found that the statutory heirs were not bound by the agreement, which they did not sign, and declined to compel arbitration of their claims.

El Jen appeals, and we affirm. Arbitration is a matter of contract. NRS 41.085 provides the statutory heirs with separate causes of action arising upon the death of the decedent that require the heirs’ agreement if arbitration is to be compelled. While the heirs’ claims derive from the injury to the decedent, that does not authorize the decedent to bind the heirs to arbitration absent their agreement, which the district court correctly determined was lacking here.

I.

A

After suffering a series of strokes, 54-year-old Gary Tyler was admitted to El Jen for long-term care. During his admission, Gary's wife, Stacy Tyler, provided El Jen with two documents—a Nevada general durable power of attorney and a durable power of attorney for healthcare decisions (together, power of attorney documents)—both of which designated her as Gary's agent in the event of his disability or incapacity. As part of El Jen's admission paperwork, Stacy signed an arbitration agreement on Gary's behalf as "the Resident." This agreement subjected any claim related to El Jen's services or care of Gary to arbitration and purported to bind all claims "derived through or on behalf of the Resident," including claims by Gary's heirs, to arbitration as well.

Gary was wheelchair-bound throughout his time at El Jen. At his family's request, El Jen arranged for the Regional Transportation Commission of Southern Nevada (RTC) to transport Gary to and from church. One Sunday, when the transport driver returned Gary to El Jen and found no El Jen staff member at the front desk, the driver left Gary alone in his wheelchair in El Jen's lobby. Gary stood up and fell, hitting his head on the floor. He later died, allegedly from complications stemming from the fall.

B.

Stacy and Gary's children (collectively, the Tylers) and Gary's estate sued El Jen, RTC, and others, asserting negligence, wrongful death, and survivorship claims. El Jen moved to compel arbitration of the claims against it pursuant to the arbitration agreement Stacy had signed on Gary's behalf. After requesting and receiving the power of attorney documents and supplemental briefing, the district court concluded that the estate's claims against El Jen were subject to the arbitration agreement. But the district court denied the motion as to Stacy's and the statutory heirs’ individual wrongful death claims, finding that arbitration is a matter of contract and that neither Stacy nor the other heirs agreed to arbitrate their claims. Although the district court stayed litigation of the statutory heirs’ claims against El Jen pending the outcome of this appeal, it denied El Jen's request to stay the litigation pending the conclusion of the arbitration proceedings between El Jen and the estate.

El Jen appeals. It argues that the Tylers, as nonsignatory statutory heirs, are bound by the arbitration agreement because a statutory heir's claim under NRS 41.085 is "entirely derivative" of the decedent's claim. Alternatively, El Jen argues that the district court abused its discretion under NRS 38.221(7) by failing to stay the litigation until the estate's arbitration concludes.

II.

A district court's order resolving a motion to compel arbitration may involve mixed questions of law and fact. See Gonski v. Second Judicial Dist. Court, 126 Nev. 551, 557, 245 P.3d 1164, 1168 (2010), overruled on other grounds by U.S. Home Corp. v. Michael Ballesteros Tr., 134 Nev. 180, 415 P.3d 32 (2018). We review purely legal questions de novo, Clark Cty. Pub. Emps. Ass'n v. Pearson , 106 Nev. 587, 590, 798 P.2d 136, 137 (1990), and defer to the district court's factual findings unless they are clearly erroneous or not based on substantial evidence, see May v. Anderson, 121 Nev. 668, 672-73, 119 P.3d 1254, 1257 (2005).

A.

El Jen argues that nonsignatory statutory heirs asserting wrongful death claims under NRS 41.085 are bound by a decedent's pre-death arbitration agreement. But as a predicate matter, the Tylers argue that the arbitration agreement is unenforceable because Stacy lacked legal authority to bind anyone since her powers of attorney were invalid. See id. at 672, 119 P.3d at 1257 (stating that enforceable contracts require acceptance by the offeree). Because the question of Stacy's legal authority is a question of fact, see Simmons Self-Storage Partners, LLC v. Rib Roof, Inc., 130 Nev. 540, 549, 331 P.3d 850, 856 (2014), we defer to the district court unless its finding is clearly erroneous or not based on substantial evidence.

Nevada has adopted the Uniform Power of Attorney Act (2006), 8B U.L.A. 175 (2014) (Uniform Act), codified at NRS 162A.200 through NRS 162A.660. NRS 162A.220(2) requires that a certificate of the principal's competency be attached to a power of attorney if, at the time of its execution, "the principal resides in a hospital, residential facility for groups, facility for skilled nursing or home for individual residential care." See NRS 162A.790(5) (2019) (imposing the same requirement for a durable power of attorney for healthcare decisions). The Tylers argue that this statute invalidates Stacy's powers of attorney because no certificate of competency was attached, and Gary signed them while he was a patient at Mountain's Edge Hospital. Further, citing deposition testimony from litigation involving another facility that cared for Gary, the Tylers allege that Gary may have lacked mental competency when he signed the power of attorney documents. See 2A C.J.S. Agency § 28 (2023) (defining competency to sign powers of attorney as "whether that person is able to understand and comprehend their own actions").

The district court rejected these challenges. It noted that the powers of attorney were signed two years before El Jen accepted Gary for long-term care and that they were notarized and appeared regular on their face. Under the Uniform Act, "[a] person that in good faith accepts an acknowledged power of attorney without actual knowledge that the power of attorney is ... invalid" may rely on the power of attorney as valid. NRS 162A.360(2) ; see NRS 162A.815(2) (making similar provision for good faith reliance on a durable power of attorney for healthcare decisions). Even crediting the heirs’ argument that a certificate of competency should have been attached, the arbitration agreement was nevertheless enforceable because the heirs failed to demonstrate that El Jen did not rely in good faith on the powers of attorney Stacy furnished. A properly executed and acknowledged power of attorney permits a party "to rely in good faith on the validity of the power of attorney, the validity of the agent's authority, and the propriety of the agent's exercise of authority"—and thus carry out the agent's instructions in effecting a transaction—"unless the person has actual knowledge to the contrary." Unif. Power of Attorney Act § 119 cmt., 8B U.L.A. 214.

The Tylers argue that the district court's finding of El Jen's good faith reliance was not supported by substantial evidence. Pointing to other admission documents that Stacy signed as "immediate family member" or "spouse," they maintain that she did not sign the arbitration agreement under her powers of attorney. But Stacy signed the arbitration agreement as "Resident/Representative," with "Resident" referring to Gary, and provided El Jen with the power of attorney documents identifying her as Gary's agent. Considering this evidence, the district court found that, while it was "difficult to tell" Stacy's intent when signing the arbitration agreement, "[i]t does appear that it was represented to [El Jen] that [Stacy] held power of attorney" when El Jen "entered into this agreement to take this person as a patient." The district court also found that the admission documents did not reasonably provide El Jen with knowledge of Gary's residency at Mountain's Edge Hospital or possible lack of competency two years earlier when he signed the power of attorney documents.

This sufficiently supports the district court's finding that El Jen did not have actual knowledge of the possible invalidity of Stacy's powers of attorney and thus relied on them in good faith when it agreed to provide service and care to Gary. See McClanahan v. Raley's, Inc., 117 Nev. 921, 924, 34 P.3d 573, 576 (2001) ("Substantial evidence has been defined as that which a reasonable mind might accept as adequate...