Opinion
C.A. No.: KC 11-0491
12-04-2012
SUNNY VIEW NURSING HOME, INC. v. HENRIETTA GORMAN and SUSAN CARR
DECISION
K. RODGERS, J. This matter came before the Court for a jury-waived trial held on August 8, 2012. The Plaintiff, Sunny View Nursing Home, Inc. ("Sunny View"), is a nursing home facility that provided services to Defendant Henrietta Gorman ("Gorman"). The Plaintiff filed suit against Gorman and Gorman's niece, Defendant Susan Carr ("Carr"), seeking to collect an unpaid balance for services rendered to Gorman. After this Court granted Plaintiff's motion for summary judgment against Gorman, the claims against Carr proceeded to trial.
Two of the counts against Carr were dismissed prior to the start of trial: Count III for "Detrimental Reliance" and Count IV for "Necessaries." Plaintiff proceeded to trial on Count I, "Book Account," and Count II, "Contract."
Jurisdiction is pursuant to G.L. 1956 § 8-2-14. For the reasons set forth herein, Carr is entitled to judgment in her favor.
I
Findings of Fact
Having reviewed the evidence presented by both parties, the Court makes the following findings of fact.
Sunny View provides skilled nursing home care and services to individuals on an in-patient basis. Gorman was a resident at Sunny View from February 12, 2007 through approximately March 30, 2011. At or about the time of Gorman's admission to Sunny View, an "Admissions Agreement for Skilled Nursing Care Facility" ("Agreement") was executed in connection with Gorman's stay at the facility. The Agreement was signed by Carr on behalf of her aunt, Gorman. At the time she signed the Agreement, Carr resided at 177 Albert Avenue in Cranston. Also at the time of signing, Carr was a joint-holder of a checking account with Gorman, and Carr had been granted a power of attorney over both Gorman's finances and health care. Carr paid certain amounts from the aforementioned joint-checking account to Sunny View as those amounts came due and owing during Gorman's stay there through September 2010.
At some point while Gorman was receiving care at Sunny View, Carr applied for Medicaid benefits on Gorman's behalf. If approved, Medicaid would have made payments to Sunny View for Gorman's care and residence at Sunny View. By September of 2010, Gorman's funds were depleted. Consequently, from September 2010 through March of 2011, charges accrued for Gorman's care at Sunny View. In or around April 13, 2011, Gorman's Medicaid application was denied.
It is undisputed that by the time Gorman left Sunny View, in April of 2011, a balance of $46,808.80 was owed for all services rendered to her.
The terms of the Agreement are central to the resolution of this case. With respect to the "Responsible Party," the Agreement provides in pertinent part as follows:
"DEFINITIONS:
(A) Agreement: . . . This Agreement is a legally binding and enforceable [sic] between the Facility, the Resident and the
Responsible Party. . . .
(B) Responsible Party: If this Agreement is signed by a Responsible Party, the term Resident, as used in this Agreement will mean "the Resident and the Responsible Party," unless the context does not so permit. The Responsible party [sic] means that individual or those individuals, who has (have) legal access to the resident's income or resources available to pay for the patient's care and expenses at the Facility, under the terms and conditions of this agreement.
. . .
1. . . .
If the RESIDENT's economic or payment status changes such that the RESIDENT may be eligible for MEDICARE or MEDICAID, the RESIDENT or RESPONSIBLE PARTY must notify the FACILITY in writing of that change and when the application for assistance was made. . . . The RESIDENT and RESPONSIBLE PARTY agree to pay the FACILITY should any third party deny payment for any charges incurred on the RESIDENT' behalf.
. . .
In the event that the RESIDENT or RESPONSIBLE PARTY fails or refuses to pay any fees and charges due the FACILITY in accordance with this Agreement, the RESIDENT and RESPONSIBLE PARTY will pay all collection charges and other expenses of collection incurred by the FACILITY including attorney's fees and court costs.
. . .
13. The RESIDENT and RESPONSIBLE PARTY acknowledge, by signing below, that they have received a copy of the ADMISSION AGREEMENT, ADMISSION INFORMATION PACKAGE, INCLUDING RESIDENT'S BILL OF RIGHTS, MEDICARE AND MEDICAID INFORMATION, NOTICE OF ADVANCE DIRECTIVE, PERSONAL NEEDS FORM, GRIEVANCE PROCEDURES, RULES OF CONDUCT, LIST OF ROUTINE CHARGES, and AND [sic] METHOD OF REPORTING PATIENT
ABUSE." (Joint Ex. 1.)
The terms "Resident," "Responsible Party" and "Representative" as used in the Agreement inconsistently appear as all capital letters, simply capitalized, or lower-cased. Direct quotations from the Agreement will be cited in the manner set forth in the document, but the terms will be simply capitalized, without quotes, for convenience when discussed or referenced in this Court's own analysis.
With respect to the "Representative," the Agreement provides in pertinent part:
"1. RESIDENT SHALL PAY TO THE FACILITY FOR ROOM, BOARD AND NURSING SERVICES PROVIDED IN ACCORDANCE WITH LICENSURE OF SKILLED NURSING FACILITY a per diem rate in effect at the time of admission. This rate has been ESTABLISHED and explained to the RESIDENT by a representative of the FACILITY and is subjective [sic] to change in the RESIDENT'S level of care, room accommodations, or cost of living increases, at which time the FACILITY will notify the RESIDENT or HIS/HER representative, in writing.
. . .
1. . . . The FACILITY also reserves the right to transfer the RESIDENT within the FACILITY with consent of the RESIDENT, his/her representative, and family agrees to participate in the orderly discharge of the RESIDENT at the request of the FACILITY.
. . .
6. The RESIDENT or his/her representative, acknowledge that they have been advised of the FACILITY'S Policy on the "Use of Restraints" and further understand that no chemical or physical restraints will be used with express written order of a licensed physician.
. . .
10. The policies of the FACILITY, as they pertain to various departments, will be made available to the RESIDENT/REPRESENTATIVE upon request.
11. The RESIDENT/REPRESENTATIVE acknowledges that no employee or representative of the FACILITY will be asked to witness any Legal Documentation . . . .
12. The RESIDENT/REPRESENTATIVE shall have the right to make any recommendations to the FACILITY regarding policies and service and to voice any grievances by way of any councils and groups organized for this purpose. . . ." (Joint Ex. 1.)
The signature page of the Agreement provides a line for the signatures of the "RESIDENT/REPRESENTATIVE," the "FACILITY", and witnesses to each, as well as the corresponding date of the signatures. An additional line is included after the signature lines, which provides a blank line in which to fill the "Address of responsible party." There is a hand-printed instruction to "Please Print," pointing to the area designated for the "Address of responsible party."
At trial, Carr testified that Gorman was ill or sleeping at the time Carr executed the Agreement, that Gorman had previously instructed her to do whatever was necessary toward her care, and that Carr had signed the Agreement as Gorman's Representative, with Gorman's authority and consent. Carr further testified that she began to fill in her address on the line requesting the "Address of responsible party," but stopped after setting forth her street address because, after she started filling it in, she realized that it sought information pertaining to the "Responsible Party," which she did not believe applied to her. Therefore, she did not complete her address information. Sunny View did not ask Carr to complete the address information that she left incomplete.
While it is unknown when Sunny View prepared the form Agreement that was the subject of this lawsuit, it is undisputed that it was Sunny View, and not Carr, who drafted the Agreement.
II
Presentation of Witnesses
Two witnesses testified at trial: Carr and Deborah Maguire, Sunny View's administrator. Carr, offered as a witness in both parties' case-in-chief, was credible and forthright. Carr evidently cared a great deal for her aunt and conscientiously paid Gorman's bills and attended to her healthcare needs. Carr had access to her aunt's finances, and her name had been put on Gorman's checking account so that Carr may pay Gorman's bills such as property taxes, sewer bills, and amounts due to Sunny View.
According to Carr, Gorman was ill with a leg infection and may have been sleeping at the time Carr executed the Agreement, but that she certainly was not suffering from dementia at the time of her admission. Carr recalled that she signed the Agreement at a time when people from Sunny View were also talking to her about the services at Sunny View. Although Carr acknowledged that she began to fill in her address in the line provided next to "Address of responsible party," she was unequivocal in her testimony that she did not complete that address because she did not believe she was the "Responsible party" as defined in the Agreement. Further, she stated that she intended to serve as Gorman's "Representative" in order to sign Gorman into the skilled nursing facility, and she did not intend to make herself personally liable for her aunt's debt to Sunny View. Carr also testified that she personally does not have the financial resources to pay for Gorman's care and expenses at Sunny View beyond what Gorman had in the checking account on which Carr's name also appeared.
Maguire is Sunny View's administrator, and held that position at the time of Gorman's admission to the facility. Maguire was self-assured and testified that anyone signing an Admission Agreement "is the person responsible as a rule" and that "by virtue of signing, they are the 'responsible party.'" She was unaware when Sunny View prepared or began using the Admission Agreement form, but did state that its content has not changed since Carr executed it in February of 2007.
Maguire further testified that anyone having a power of attorney would be responsible for paying the bill, although she acknowledged that she never reviewed Carr's power of attorney prior to Carr's execution of the Agreement on her aunt's behalf. Maguire never inquired into or verified any resources through which Gorman and/or Carr would be able to pay for skilled nursing services. Of the hundreds of admissions to Sunny View of which she has personal knowledge since Gorman's February 2007 admission, Maguire recalled that Gorman was suffering from dementia at the time Carr executed the Agreement, a point with which Carr adamantly disagreed. Additionally, she testified that "as a rule, "'responsible parties' don't put their address" on the line provided on the signature page of the Agreement.
Maguire's affirmative statements to the effect that anyone that signs the Agreement becomes personally liable for debts owed to Sunny View go well beyond the factual testimony she was asked to provide in this case. Indeed, such statements tread on the purview of this Court in determining Carr's liability under the terms of the Agreement. Solely because one believes another should be liable under the terms of the contract does not, of necessity, make it "as a rule," a phrase Maguire repeatedly used, nor does it confer legal liability upon that person. Accordingly, Maguire's testimony and demeanor provided little reason for this Court to agree with her overstated and unsupported basis for liability.
III
Standard of Review
Rule 52(a) of the Superior Court Rules of Civil Procedure provides that, "[i]n all actions tried upon the facts without a jury . . . the court shall find the facts specially and state separately its conclusions of law thereon." Super. R. Civ. P. 52(a). In a non-jury trial, "the trial justice sits as a trier of fact as well as law." Parella v. Montalbano, 899 A.2d 1226, 1239 (R.I. 2006) (quoting Hood v. Hawkins, 478 A.2d 181, 184 (R.I. 1984)). "'Consequently, he [or she] weighs and considers the evidence, passes upon the credibility of the witnesses, and draws proper inferences.'" Id. (quoting Hood, 478 A.2d at 184). It is well established that "assigning credibility to witnesses presented at trial is the function of the trial justice, who has the advantage of seeing and hearing the witnesses testify in court." McBurney v. Roszkowski, 875 A.2d 428, 436 (R.I. 2005) (citations omitted). The trial justice may also "'draw inferences from the testimony of witnesses, and such inferences, if reasonable, are entitled on review to the same weight as other factual determinations.'" DeSimone Electric, Inc. v. CMG, Inc., 901 A.2d 613, 621 (R.I. 2006) (quoting Walton v. Baird, 433 A.2d 963, 964 (R.I. 1981)).
Furthermore, "[w]hen rendering a decision in a non-jury trial, a trial justice 'need not engage in extensive analysis and discussion of all the evidence. Even brief findings and conclusions are sufficient if they address and resolve the controlling and essential factual issues in the case.'" Parella, 899 A.2d at 139 (quoting Donnelly v. Cowsill, 716 A.2d 742, 747 (R.I. 1998) (citation omitted)). The trial justice need not "categorically accept or reject each piece of evidence in his [or her] decision for [the Supreme] Court to uphold it because implicit in the trial justices [sic] decision are sufficient findings of fact to support his [or her] rulings." Notarantonio v. Notarantonio, 941 A.2d 138, 147 (R.I. 2008) (quoting Narragansett Elec. Co. v. Carbone, 898 A.2d 87, 102 (R.I. 2006)).
IV
Analysis
A contract may be subject to judicial construction if its terms are ambiguous. W.P. Associates v. Forcier, Inc. 637 A.2d 353, 356 (R.I. 1994). The Rhode Island Supreme Court has stated that the determination of whether or not a contract is ambiguous is a question of law. Haffenreffer v. Haffenreffer, 994 A.2d 1226, 1231 (R.I. 2010) (citing Gorman v. Gorman, 883 A.2d 732, 738 n.8 (R.I. 2005)). It is well-settled that a contract is ambiguous when it is reasonably susceptible of more than one interpretation. Haviland v. Simmons, 45 A.3d 1246, 1259 (R.I. 2012); Bliss Mine Road Condominium Ass'n v. Nationwide Property & Cas. Ins. Co., 11 A.3d 1078, 1084 (R.I. 2010); Andrukiewiez v. Andrukiewiez, 860 A.2d 235, 238 (R.I. 2004); Rotelli v. Catanzaro, 686 A.2d 91, 94 (R.I. 1996); Westinghouse Broadcasting Co. v. Dial Media, Inc., 122 R.I. 571, 581 n.10, 410 A.2d 986, 991 n.10 (1980). In order to determine whether a contract is ambiguous, this Court must look to the four corners of the document in its entirety and give the terms their usual and plain meaning. Rivera v. Gagnon, 847 A.2d 280, 284 (R.I. 2004); Rotelli, 686 A.2d at 94; Paradis v. Greater Providence Deposit Corp., 655 A.2d 738, 741 (R.I. 1994). In ascertaining whether a contract is ambiguous, this Court cannot consider the subjective intent of the parties but instead must consider the intent as expressed in the written language of the contract. Clark-Fitzpatrick Inc./Franki Foundation Co. v. Gill, 652 A.2d 440, 443 (R.I. 1994).
If the terms of a written contract are ambiguous, "'[a]mbiguities in a contract must be construed or interpreted against the drafter of the document.'" Haviland, 45 A.3d at 1259-60 (quoting Fryzel v. Domestic Credit Corp., 385 A.2d 663, 665, 666-67 (R.I. 1978)).
If the Court finds the terms of the contract are clear and unambiguous, then the task of judicial construction is at an end and the contract terms must be applied as written without reference to extrinsic facts or aids. Clark-Fitzpatrick/Franki, 652 A.2d at 443; see also W.P. Associates v, Forcier, Inc., 637 A.2d 353, 356 (R.I. 1994). However, if the contract is ambiguous, extrinsic evidence will be considered to complete or clarify the contract. Rotelli, 686 A.2d 95 (citing Supreme Woodworking Co. v. Zuckerberg, 82 R.I. 247, 252, 107 A.2d 287, 290 (1954)).
A
The Agreement Is Ambiguous
A review of the language contained within the four corners of the Agreement reveals that the Agreement is ambiguous in several respects. First, there is no place reserved for the Responsible Party to sign the Agreement as there is for the "RESIDENT/REPRESENTATIVE," yet there is a line for the "Address of the responsible party." Nor is there a place in the Agreement in which the party executing the Agreement elects or identifies the capacity in which he or she is signing. If one were signing solely as the "Responsible party," as defined therein, there would be no place for that individual to affix his or her signature. Similarly, if one was signing solely as Representative, there is no specification that that is the only capacity in which he or she is executing the document. Thus, any signature affixed to the Agreement is reasonably susceptible of different meanings concerning the capacity in which that person is signing. Accordingly, the Agreement, as drafted by Sunny View, is ambiguous with respect to the capacity in which one would be signing.
The Agreement is also ambiguous in defining the "Responsible party." The Agreement provides: "[t]he Responsible party means that individual or those individuals, who has (have) legal access to the resident's income or resources available to pay for the patient's care and expenses at the Facility . . . ." (Joint Ex. 1, at 1) (emphasis added.) This definition does not explain if it is the access to the "resident's income or resources available" or if it is the access to one's own "resources available" that renders a person a Responsible Party. Whether Carr or anyone else fits within the definition of "Responsible party" is dependent on the different reasonable interpretations of this provision, thereby rendering the Agreement ambiguous in this regard.
Finally, the Agreement is ambiguous, at best, with respect to the extent to which a Responsible Party may be liable for the debt of the Resident. The definition of "Responsible party" references the "legal access to the resident's income or resources available." Yet the Agreement mandates that the "RESIDENT and RESPONSIBLE PARTY agree to pay the FACILITY should any third party deny payment for any charges or fees incurred on the RESIDENT's behalf." (Joint Ex. 1, at 1) (emphasis in original). Under one reasonable interpretation of these provisions, the Responsible Party may be required to pay up to the amount for which he or she has "access to the resident's income or resources available." Alternatively, the Responsible Party may be required to pay any additional amounts if a third party had denied payment. These are reasonable interpretations that lead to entirely different conclusions as to the limit of a Responsible Party's liability, again leading this Court to conclude as a matter of law that the Agreement is ambiguous with respect to the limitation of a Responsible Party's liability.
For each of these reasons, the Court finds as a matter of law that the Agreement is ambiguous.
B
Carr's Capacity in Executing the Agreement
The Court now turns to the capacity in which Carr executed this ambiguous contract. Having concluded that the Agreement is ambiguous with respect to the capacity in which one signs the Agreement, this Court is permitted to consider extrinsic evidence as must construe the ambiguities against Sunny View. Rotelli, 686 A.2d at 95 (extrinsic evidence considered to clarify an ambiguous contract term); see also Haviland, 45 A.3d 1259-60 (construing ambiguities against drafter).
At trial, Plaintiff argued that Carr signed the Agreement as a Responsible Party and is therefore personally liable for any charges and fees incurred on Gorman's behalf. Carr contends that she did not sign the agreement as the Responsible Party, but as a Representative of her aunt, Gorman.
While the Agreement ambiguously defines "Responsible party," neither Representative nor Resident/Representative is defined in the Agreement. Nonetheless, at the end of the document, Carr affixed her signature to the line under which read "RESIDENT/REPRESENTATIVE." Carr offered compelling and credible testimony that she did not intend to execute the Agreement as a Responsible Party but rather only as her aunt's Representative. Carr had access to her aunt's finances but did not have her own resources with which to pay Sunny View for Gorman's care. Carr's intent is further evidenced by the fact that she did not complete her address information where the Agreement requests the "Address of responsible party." The evidence of record reveals that she only completed her house number and the name of her street, omitting the city, state, and zip code because, once Carr realized that this portion of the Agreement was for information of the Responsible Party, she did not complete this section because she was under the impression that she was not signing the Agreement as the Responsible Party, but as a Representative.
It has long been held that a person acting on behalf of a disclosed individual or entity is not acting on his or her own behalf, but rather as an agent of a principal. Stebbins v. Wells, 818 A.2d 711, 718 (R.I. 2003); Kennett v. Marquis, 798 A.2d 416, 418 (R.I. 2000); Alterio v. Biltmore Const. Corp., 119 R.I. 307, 314, 377 A.2d 237, 241 (1977); Cardente v. Maggiacomo Ins. Agency, Inc., 108 R.I. 71, 73, 272 A.2d 155, 156 (1971). In this case, the principal is Gorman, who, according to the undisputed testimony, authorized Carr to sign the Agreement on Gorman's behalf and to use Gorman's funds to pay for Gorman's care at Sunny View. By doing so, Carr was not intending to and did not cause herself to be personally liable to Sunny View for her aunt's expenses. Cardente, 108 R.I. at 73, 272 A.2d at 156 (agent acting for disclosed principal not personally liable for acts performed within scope of the agency).
In light of the credible evidence of record and construing the ambiguity against Sunny View, this Court finds that Carr executed the Agreement solely as Gorman's Representative, and not as the Responsible Party.
C
Carr Is Not Liable for Gorman's Debt to Sunny View
Finally, this Court considers Sunny View's argument that even signing as a Representative renders Carr personally liable to Sunny View for Gorman's debt. Sunny View insists that a Representative who signs the Agreement is, in fact, signing it in his or her personal capacity. Sunny View can point to no language in the Agreement which purports to confer personal liability upon the Representative. Moreover, such personal liability is contrary to the law of agents and principals, namely, that an agent acting on behalf of a disclosed principal is not personally liable for the acts performed within scope of the agency. See Cardente, 108 R.I. at 73, 272 A.2d at 156.
Moreover, this Court is not persuaded by Plaintiff's argument that Carr is personally liable to it because the terms Representative and Responsible Party are interchangeable throughout the Agreement. There is no place in the Agreement that clearly states or even suggests that "Representative" has the same meaning as the specifically defined term "Responsible party." To the contrary, the varied places throughout the Agreement that identify the role of the Responsible Party and the Representative do not lend themselves to using these terms interchangeably. The Responsible Party is expressly made a party to the Agreement and agrees to make payments to the Facility. The Representative is the contact person on behalf of the Resident, the conduit of information by and between the Resident and the Facility concerning the delivery of services to the Resident. While nothing in the Agreement prohibits a single person from serving as both the Responsible Party and the Representative, their roles are not interchangeable as Plaintiff contends.
Accordingly, there is no basis upon which to confer personal liability upon Carr in her capacity as the Representative of her aunt under the terms of the Agreement.
V
Conclusion
For all foregoing reasons, this Court finds that the Defendant Carr is entitled to judgment on both Counts I and II.
Counsel for Carr shall prepare a Judgment consistent with this Decision.