NOT TO BE PUBLISHED
OPINION
THOMPSON, Judge.
Kindred Nursing Centers Limited Partnership d/b/a Oakview Nursing & Rehabilitation Center (Kindred) and its affiliated entities2 appeal from an order of the Marshall Circuit Court denying its motion to compel arbitration. The question presented is whether a power-of-attorney document executed by Virginia Wells authorized her attorney-in-fact to enter into an agreement to arbitrate any claims arising from Kindred's alleged negligence while Virginia was a Kindred resident. Based on our Supreme Court's decision in Extendicare Homes, Inc. v. Whisman, 478 S.W.3d 306 (Ky. 2016), cert. granted 137 S.Ct. 368 (2016), we conclude the power-of-attorney document did not confer such authority and, therefore, the arbitration agreement is not enforceable.
On April 2, 2007, Virginia executed a power-of-attorney document appointing Terrell Powell as her attorney-in-fact and conferring power to "make contracts, lease, sell or convey any real or personal property," and "to institute or defend suits concerning (Virginia's) property or rights, and generally to do and perform for (Virginia) and in (Virginia's) name all that (Virginia) might do if present[.]"
Virginia was admitted to Oakview Nursing & Rehabilitation Center on April 18, 2011. On April 20, 2011, Terrell signed a document entitled "Alternative Dispute Resolution Agreement," referred to herein as the ADR agreement. The optional agreement provides that the parties submit any claims arising out of or related to Virginia's care at the Kindred facility to arbitration.
In bold print the agreement states:
The parties to this Agreement understand that the Dispute Resolution Process contains provisions for mediation and binding arbitration. If the parties are unable to reach settlement informally, or through mediation, the dispute shall proceed to binding arbitration. Binding arbitration means that the parties are waiving their right to a trial, including their right to a jury trial, their right to trial by a Judge and their right to appeal the decision of the arbitrator(s).
Virginia resided at Oakview until her death on June 13, 2012. After Terrell was appointed as administrator of Virginia's estate, he filed this action in the Marshall Circuit Court claiming personal injuries to Virginia caused by Kindred's negligence, violation of Kentucky's long-term care resident's rights statute, Kentucky Revised Statues (KRS) 216.515, and wrongful death. Kindred filed a motion to compel arbitration and stay or dismiss the pending lawsuit based upon the arbitration agreement. The circuit court denied Kindred's motion. Kindred appealed.
Although an order denying arbitration is interlocutory, "an ordinary appeal at the close of litigation will not often provide an adequate remedy for the wrongful denial of a right to arbitrate[.]" Conseco Fin. Servicing Corp. v. Wilder, 47 S.W.3d 335, 340 (Ky.App. 2001). Consequently, KRS 417.220(1)(a) provides that an appeal may be taken from "[a]n order denying an application to compel arbitration made under KRS 417.060[.]" Having stated our basis for exercising jurisdiction, we address whether the wrongful death, negligence and statutory claims must be submitted to arbitration.
This case involves not only personal injury and statutory claims arising under KRS 216.510 et seq., but also a wrongful death claim. The distinction between the causes of action is important. Reaffirming its decision in Ping v. Beverly Enters., Inc., 376 S.W.3d 581 (Ky. 2012), in Whisman, the Court rejected the notion that a similar ADR agreement executed by an attorney-in-fact could bind the beneficiaries of a wrongful death claim. As the Court stated:
Under Kentucky law, a wrongful death claim is a distinct interest in a property right that belongs only to the statutorily-designated beneficiaries. Decedents, having no cognizable legal rights in the wrongful death claims arising upon their demise, have no authority to make contracts disposing of, encumbering, settling, or otherwise affecting claims that belong to others. The rightful owners of a wrongful death claim, the beneficiaries identified in KRS 411.130(2), cannot be bound to the contractual arrangements purportedly made by the decedent with respect to those claims. A decedent has no more authority to bind the wrongful death beneficiaries to an arbitration agreement than he has to bind them to a settlement agreement fixing or limiting the damages to be recovered from the wrongful death action, limiting the persons against whom a claim could be pursued, or an agreement on how and to whom to allocate the damages recovered in a wrongful death claim.
Whisman, 478 S.W.3d at 314 (internal footnotes omitted). Virginia "had no authority during [her] lifetime, directly or through the actions of [her] attorney-in-fact, to prospectively bind the beneficiaries of the wrongful death claim to an arbitration agreement." Id. at 313. There was no error in the circuit court's denial of Kindred's motion to compel arbitration of the wrongful death claims arising from Virginia's death.
The personal injury and the statutory claims belonged to Virginia. Virginia's estate "succeeded to those claims, at least to the extent that such claims survive the decedent's death pursuant to KRS 411.140 and 216.515(26)." Id. at 314 (footnotes omitted). Therefore, the question is whether the power-of-attorney document authorized Terrell to execute the ADR agreement.
With certain exceptions, KRS 417.050 provides that a written agreement to submit any controversy to arbitration "is valid, enforceable and irrevocable, save upon such grounds as exist at law for the revocation of any contract." "To create a valid, enforceable contract, there must be a voluntary, complete assent by the parties having capacity to contract." Conners v. Eble, 269 S.W.2d 716, 717-18 (Ky. 1954). Assent to a contract can be provided by an agent acting as an attorney-in-fact "if the authority to do so was duly conferred upon the attorney-in-fact by the power-of-attorney instrument." Whisman, 478 S.W.3d at 321. Whether the principal's assent to the contractual agreement to arbitrate disputes was validly obtained is "a question of law that depends entirely upon the scope of authority set forth in the written power-of-attorney instrument." Id.
Kindred argues that the provisions of the power-of-attorney document conferring authority upon Terrell the powers to make and sign contracts and agreements and to institute or defend suits concerning Virginia's property or rights includes the power to enter into the ADR agreement. In Whisman, our Supreme Court held to the contrary.
The Court held that the power to arbitrate "must be unambiguously expressed in the text of the power-of-attorney document in order for that authority to be vested in the attorney-in-fact." Id. at 328. The Court concluded that to hold otherwise and infer such authority when it is not expressly provided for in the power-of-attorney document would be repugnant to basic constitutional principles. It explained:
The need for specificity is all the more important when the affected fundamental rights include the right of access to the courts (Ky. Const. § 14), the right of appeal to a higher court (Ky. Const. § 115), and the right of trial by jury, which incidentally is the only thing that our Constitution commands us to hold sacred.
Id. (internal quotations and footnotes omitted). Because an agreement to arbitrate is a waiver of those fundamental constitutional rights, such power will not be inferred even from the broad power to do "whatever I might do if present." Id.
In Whisman, two provisions in a power-of-attorney document similar to those relied on by Kindred were specifically addressed. The Court rejected the argument that the grant of specific authority to "institute or defend suits concerning my property rights" is an express authorization for the attorney-in-fact to choose arbitration as the mode for resolving disputes. Id. at 322-23. It pointed out that arbitration is not a suit or legal action that occurs in a court of law. Id. at 323. The "very purpose and design [of arbitration] is intended to avoid suits in a court of law; it is the antithesis of a suit in a court of law." Id. It also differs from a settlement of litigation. "[A]n agreement to submit a dispute to arbitration is the diametrical opposite of `settling' a claim. Settling a claim ends the controversy, whereas arbitrating a claim means fighting it out before an arbitrator rather than a judge and jury." Id. at 324.
Also rejected was the contention that an attorney-in-fact was authorized to assent to an arbitration agreement pursuant to the power to make contracts in relation to real and personal property. Quoting Ping, the Court held "that powers granted expressly in relation to the management of the principal's property and financial affairs, and to health-care decisions, [do] not give the attorney-in-fact a sort of universal authority beyond those express provisions." Id. (internal quotations and brackets omitted).
The power-of-attorney document conferred the power upon Terrell only to execute contracts on Virginia's behalf relating to her real or personal property and financial affairs. There is no express provision authorizing Terrell to execute an ADR agreement.
The provisions relied on by Kindred are, in all significant ways, identical to those considered in Whisman. Pursuant to Kentucky Supreme Court Rule 1.030(8)(a), this Court "is bound by and shall follow applicable precedents established in the opinions of the Supreme Court and its predecessor court." Nevertheless, Kindred argues we should not follow Whisman.3 Instead, it argues that we should follow a string of federal district court decisions declining to apply Whisman on the basis that the Court's holding violates the Federal Arbitration Act (FAA). See e.g., Preferred Care of Delaware, Inc. v. Crocker, 5:15-CV-177-TBR, 2016 WL 1181786 (W.D. Ky. 2016). Its urging is not based on solid grounds.
Our Supreme Court specifically addressed whether its opinion conflicted with the FAA and held its reasoning was not in conflict. Although the Court recognized that arbitration agreements are favored under federal and state law, it emphasized the distinction between enforcement of an arbitration agreement and the threshold question of whether an agreement was formed. Whisman, 478 S.W.3d at 320. "Questions concerning the formation of an arbitration agreement are resolved in accordance with the applicable state law governing contract formation." Id.
Whether the federal cases cited by Kindred are well reasoned is not a proper issue for this Court to address. Unless the United States Supreme Court holds to the contrary, Whisman is the law in this state and this Court is bound to follow that law.
Kindred also argues that because an arbitration agreement is a contract, its terms implicitly include the law as existing at the time and place the parties executed the contract. Leslie Cty.v. Maggard, 212 Ky. 354, 279 S.W. 335, 338 (1926). This argument is equally unpersuasive. While Whisman provides a more thorough analysis of the law and is our Supreme Court's latest word on the subject, it was not its first word. The same result could be reached by reliance on Ping.
Finally, Kindred requests that this Court exercise its discretion under Kentucky Rules of Civil Procedure 76.44 and stay this action pending the U.S. Supreme Court's decision in Whisman. While that is a course this Court could take, we see no reason to further delay this case when Kentucky law is clear both before and after Whisman.
We conclude that the power-of-attorney document does not constitute a clear manifestation of Virginia's intent to confer the power to enter into an arbitration agreement. Consequently, the trial court did not err when it denied Kindred's motion to compel arbitration.
For the foregoing reasons, the order of the Marshall Circuit Court is affirmed.
ALL CONCUR.
