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Koricic v Beverly Enterprises (Neb 2009)

Koricic v Beverly Enterprises (Neb 2009)

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Published by blundeen
Nebraska Supreme Court opinion.
Nebraska Supreme Court opinion.

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Published by: blundeen on Jan 29, 2010
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Koricic v. Beverly Enterprises - Nebraska, 773 N.W.2d 145, 278 Neb. 713 (Neb., 2009)- 1 -
773 N.W.2d 145278 Neb. 713Frank KORICIC, as Trustee for the heirs and next of kin of Manda Baker, appellant,v.BEVERLY ENTERPRISES — NEBRASKA, INC., formerly doing business as Beverly Hallmark,et al., appellees.No. S-08-1167.Supreme Court of Nebraska.October 16, 2009.[773 N.W.2d 148]
Brian G. Brooks, P.L.L.C., Richard F. Hitz,of Hauptman, O'Brien, Wolf & Lathrop, P.C.,Omaha, and S. Drake Martin, of Nix, Patterson& Roach, L.L.P., Daingerfield, for appellant.Rodney M. Confer and Jeanelle R. Lust, of Knudsen, Berkheimer, Richardson & Endacott,L.L.P., Lincoln, for appellees.HEAVICAN, C.J., WRIGHT,CONNOLLY, GERRARD, STEPHAN,McCORMACK, and MILLER-LERMAN, JJ.CONNOLLY, J.The appellant, Frank Koricic (Frank), livedwith his elderly mother, Manda Baker (Manda),and assisted her in her daily affairs. When herhealth declined, she was admitted to BeverlyHallmark, a nursing home in Omaha, Nebraska.At Manda's admission, Frank signed severaldocuments for her. One of the documents was anoptional arbitration agreement.This appeal presents the issue whetherFrank had authority to act as Manda's agent andto enter into the arbitration agreement for her.The district court determined that because Frank had actual authority to enter into the arbitrationagreement, the agreement bound her estate.Although we agree that Frank had authority tosign the mandatory paperwork for[278 Neb. 715]admission, we conclude that Frank did not haveauthority to sign the arbitration agreementbecause it was not a condition of admission. Wereverse the district court's order dismissingFrank's complaint.Born in what is now Croatia in 1912,Manda immigrated to Omaha in 1958. She had alimited ability to read, speak, or understandEnglish. Frank immigrated to Omaha in 1966and lived with Manda for most of the following40 years.As Manda aged, Frank assisted her inmanaging her affairs. In 1998, when Manda'shealth started declining, Frank began signingmedical authorizations for her. He testified thathe signed only medical documents at thehospital and that Manda signed all otherdocuments. Frank stated that he would explaindocuments to Manda and that if she wantedthem signed, she would have Frank sign for her.Frank testified that he never signed anythingwithout discussing it with Manda and that henever signed anything she did not agree with.Frank described their relationship as acollaborative effort, with him serving asManda's advisor and interpreter. While he mightoffer advice, he took only the actions Mandadirected him to take. Manda was never declaredincompetent,[773 N.W.2d 149]and she never granted Frank power of attorneyover her affairs.In November 2005, Frank took Manda toBeverly Hallmark. It is undisputed that Mandawas competent when she was admitted toBeverly Hallmark. Frank accompanied Mandaduring her admission, and after Frank placed her
Koricic v. Beverly Enterprises - Nebraska, 773 N.W.2d 145, 278 Neb. 713 (Neb., 2009)- 2 -
in her room, an employee of Beverly Hallmark took Frank to the office where he signed thepaperwork for her admission. Manda was notpresent when Frank signed the admission papers,and Frank never discussed the content of theadmission paperwork with her. Frank claimedthat he did not read any of the paperwork andthat the employee did not explain any of thedocuments.One of the papers Frank signed was a"Resident and Facility Arbitration Agreement"that Beverly Hallmark presented to all residentsupon admission. At the top of the agreement, itstates that it is not a condition of admission. Theagreement provides that "any and all claims,disputes, and controversies . . . arising out of, orin connection with, or relating in any way to theAdmission Agreement or any service or healthcare provided[278 Neb. 716]by the Facility to the Resident shall be resolvedexclusively by binding arbitration. . . ."Before Manda died in September 2007, sheallegedly sustained injuries and pain andsuffering because of Beverly Hallmark'snegligence. Frank, as Manda's next of kin andtrustee of her estate, filed suit against BeverlyEnterprises — Nebraska, Inc., formerly doingbusiness as Beverly Hallmark; Beverly Healthand Rehabilitation Services, Inc.; and BeverlyEnterprises, Inc. (collectively BeverlyHallmark), alleging negligence, breach of contract, and breach of fiduciary duty. BeverlyHallmark moved to dismiss the case and tocompel arbitration under the arbitrationagreement. Frank argued that Beverly Hallmark could not enforce the arbitration agreementagainst Manda's estate because Frank, notManda, had signed the arbitration agreement.The district court concluded that thearbitration agreement was valid and enforceableagainst Manda's estate. Because Manda hadauthorized Frank to sign medical authorizationsfor her as early as 1998, the court concluded thatFrank had actual authority to sign the arbitrationagreement. And because all allegations, if true,would fall under the arbitration agreement, thedistrict court dismissed the case withoutprejudice to arbitration.Frank asserts that the trial court erred indetermining (1) that Frank had authority asManda's agent to sign the arbitration agreementfor her and (2) that the agreement bound herestate.Generally, whether an agency relationshipexists presents a factual question.1 The scope of an agent's authority also is a question of fact.2 Ina bench trial of a law action, the trial court'sfactual findings have the effect of a jury verdictand will not be disturbed on appeal unlessclearly wrong.3[278 Neb. 717]Because arbitration is purely a matter of contract, we first determine whether anagreement to arbitrate exists under basic[773 N.W.2d 150]contract principles.4 Here, because Manda didnot sign the arbitration agreement, we focus onwhether Frank acted as Manda's agent withauthority to enter into the arbitration agreement.So we begin with a discussion of agency law.Beverly Hallmark bears the burden of provingFrank's authority and that his acts were withinthe scope of his authority.5 Beverly Hallmark claims that Frank, as an agent, had actualauthority to bind Manda to the arbitrationagreement or, in the alternative, that he hadapparent authority.An "agent" is a person authorized by theprincipal to act on the principal's behalf andunder the principal's control.6 For an agencyrelationship to arise, the principal "manifestsassent" to the agent that the agent will "act onthe principal's behalf and subject to theprincipal's control."7 And the agent "manifestsassent or otherwise consents so to act."8 Anagency relationship may be implied from thewords and conduct of the parties and thecircumstances of the case evidencing anintention to create the relationship irrespective
Koricic v. Beverly Enterprises - Nebraska, 773 N.W.2d 145, 278 Neb. 713 (Neb., 2009)- 3 -
of the words or terminology used by the partiesto characterize or describe their relationship.9Actual authority is authority that theprincipal expressly grants to the agent orauthority to which the principal consents.10 Asubcategory of actual authority is impliedauthority, which courts typically use to denoteactual authority either to (1) do what isnecessary to accomplish the agent's expressresponsibilities or (2) act in a manner that theagent reasonably[278 Neb. 718]believes the principal wishes the agent to act, inlight of the principal's objectives andmanifestations.11 When a principal delegatesauthority to an agent to accomplish a task without specific directions, the grant of authorityincludes the agent's ability to exercise his or herdiscretion and make reasonable determinationsconcerning the details of how the agent willexercise that authority.12Frank signed medical documents for Mandaunder her instructions for 10 years. Frank andManda discussed her health care treatmentoptions, and she repeatedly consented to hissigning for her. Frank testified that Mandaexpressly gave him permission to sign medicaldocuments for her but that he never signed forher without her express permission. He testifiedthat "when she was kind of more sick I wassigning, you know, all the time in the hospital."Manda never objected to Frank's signingmedical documents for her.The record shows that in November 2005,Frank and Manda went to Beverly Hallmark toadmit her to the nursing home. During hisdeposition, Frank recounted their conversation,stating that Manda understood she was beingadmitted to the nursing home and that Frank would[773 N.W.2d 151]take care of the necessary admission documents:[Beverly Hallmark's counsel:] Before you got tothe nursing home, had you talked with [Manda]about the fact that you were going to take herthere?[Frank:] Yeah . . . .. . . .Q. And she understood that you were going tomeet with the office people?A. What everybody, whatever was going to bedone, she trusts me. And I went over there anddone the best I can.Q. You talked to her about that before you gotthere that day?A. Right.[278 Neb. 719]Q. She understood that, you know, whateverneeded to be done in the office, you were goingto do it for her?A. Right.Q. You talked about that with her?A. Together, again together, we agree together,we do it together.Based on Frank's testimony, Mandaauthorized Frank to sign the paperwork requiredfor her admission to Beverly Hallmark.But the arbitration agreement is anothermatter—Beverly Hallmark did not require it as acondition of Manda's admission. The agreementwas optional and was not required for Manda toremain at the facility. We agree with the districtcourt's finding that an agency relationshipexisted between Manda and Frank. We alsoagree that as Manda's agent, Manda authorizedFrank to sign the required admission papers. Butwe conclude that his actual authority did notextend to signing an arbitration agreement thatwould waive Manda's right of access to thecourts and to trial by jury. The district court's

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