Opinion
No. 2 CA-CV 2017-0045
01-29-2018
JEANNETTE YAZEDJIAN, PERSONAL REPRESENTATIVE OF THE ESTATE OF HARRIETTE PATTERSON, ON BEHALF OF THE ESTATE OF HARRIETTE PATTERSON, DECEASED; AND JEANNETTE YAZEDJIAN, INDIVIDUALLY AND ON BEHALF OF HARRIETTE PATTERSON'S STATUTORY BENEFICIARIES PURSUANT TO A.R.S. § 12-612(A), Plaintiff/Appellee, v. ARC SANTA CATALINA INC., A TENNESSEE CORPORATION, DBA LA ROSA HEALTH CARE CENTER AT SANTA CATALINA VILLAS; AMERICAN RETIREMENT CORPORATION, A TENNESSEE CORPORATION; BROOKDALE SENIOR LIVING COMMUNITIES INC., A DELAWARE CORPORATION; BROOKDALE SENIOR LIVING INC., A DELAWARE CORPORATION; AND RICHARD W. PARK, ADMINISTRATOR, Defendants/Appellants.
COUNSEL Law Office of Scott E. Boehm, P.C., Phoenix By Scott E. Boehm and Wilkes & McHugh, P.A., Scottsdale By Melanie L. Bossie and Mary Ellen Spiece Counsel for Plaintiff/Appellee Quintairos, Prieto, Wood & Boyer, P.A., Phoenix By Anthony J. Fernandez, Vincent J. Montell, and Rita J. Bustos Counsel for Defendants/Appellants
THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
NOT FOR PUBLICATION
See Ariz. R. Sup. Ct. 111(c)(1); Ariz. R. Civ. App. P. 28(a)(1), (f). Appeal from the Superior Court in Pima County
No. C20152591
The Honorable Leslie Miller, Judge
AFFIRMED
COUNSEL Law Office of Scott E. Boehm, P.C., Phoenix
By Scott E. Boehm and Wilkes & McHugh, P.A., Scottsdale
By Melanie L. Bossie and Mary Ellen Spiece
Counsel for Plaintiff/Appellee Quintairos, Prieto, Wood & Boyer, P.A., Phoenix
By Anthony J. Fernandez, Vincent J. Montell, and Rita J. Bustos
Counsel for Defendants/Appellants
MEMORANDUM DECISION
Presiding Judge Vásquez authored the decision of the Court, in which Judge Espinosa and Judge Eppich concurred. VÁSQUEZ, Presiding Judge:
¶1 ARC Santa Catalina Inc., doing business as La Rosa Health Care Center at Santa Catalina Villas; American Retirement Corporation; Brookdale Senior Living Communities Inc.; Brookdale Senior Living Inc.; and Richard W. Park (collectively "La Rosa") appeal from the trial court's order denying both its motion to compel arbitration of a claim brought under the Adult Protective Services Act (APSA) by Jeannette Yazedjian as personal representative of the Estate of Harriette Patterson and on behalf of the decedent's statutory beneficiaries, and a subsequent motion to reconsider that denial. On appeal, La Rosa argues that the arbitration agreement signed by Yazedjian is enforceable because she was authorized to sign it on Patterson's behalf. For the following reasons, we affirm.
Factual and Procedural Background
¶2 We view the facts in the light most favorable to upholding the trial court's order. Escareno v. Kindred Nursing Ctrs. W., L.L.C., 239 Ariz. 126, ¶ 2 (App. 2016). Before the fall of 2009, Patterson lived in a senior living center called Amber Lights. Her husband preceded her in death, and she had no children. Her only living relative was her brother, Roger Rogers, who resided in Florida and had difficulty traveling due to his own and his wife's health problems. As Patterson's health deteriorated, and because she lacked any nearby family, her healthcare was coordinated and facilitated by a local company called Caring Cooperatives.
Neither party requested, nor did the trial court provide, findings of fact or conclusions of law in this case. "In the absence of express findings of fact, we must presume the trial court found every controverted issue of fact necessary to sustain the judgment, provid[ed] there was evidence in the record to support the same." Helfenbein v. Barae Inv. Co., 19 Ariz. App. 436, 440 (1973).
¶3 Yazedjian is an attorney based and licensed in California. In 2006 or 2007, Rogers contacted Yazedjian's office, seeking help on Patterson's behalf with some "tax issues." Yazedjian assisted Patterson on those issues, and soon thereafter also undertook estate-planning matters and established a "client trust fund" for Patterson. She also assisted with Patterson's finances and ensured that her "bills were paid and that her financial needs were being met." Rogers and Caring Cooperatives kept Yazedjian informed of Patterson's health, but she was not involved in making any healthcare decisions for Patterson.
Yazedjian's office had previously handled estate planning for Patterson's sister and her sister's husband. Patterson's sister had died and, later, following the death of her husband, "a number of trusts were set up." Patterson was a designated beneficiary of those trusts. Because Yazedjian had assisted in administering the trusts, she was already familiar with Patterson.
¶4 In 2009, Patterson's health declined further, and, in June, she was diagnosed with "moderate to severe deficits in cognition" and dementia. Both Amber Lights and Caring Cooperatives recommended moving her to a facility more capable of meeting her needs.
¶5 Patterson was admitted to La Rosa in October 2009. Yazedjian signed the admission paperwork. That paperwork included a "Binding Arbitration Agreement," which provided, in part: "[C]laims, controversies, disputes, or tort action arising out of or relating in any manner to the treatment or delivery of services by us to you during your stay at [La Rosa], shall be submitted to binding arbitration, which shall be conducted as provided in this Agreement." It additionally provided, "If you choose not to enter into this Agreement, you will not be denied residency for that reason alone." Yazedjian signed the agreement and, next to her signature, added "on behalf of Harriette Patterson."
¶6 Patterson died in May 2014. The following year, Yazedjian, as Patterson's personal representative, filed this civil lawsuit against La Rosa alleging negligence, APSA violations, and wrongful-death claims. La Rosa filed a motion to compel arbitration of the APSA claim pursuant to the arbitration agreement. Yazedjian's arguments in response included that she lacked authority to sign the agreement on Patterson's behalf and it was therefore unenforceable. Following a hearing, the trial court denied La Rosa's motion in an unsigned order, finding Yazedjian "lacked the authority to sign the agreement to arbitrate."
¶7 The case progressed, and both parties began discovery. La Rosa later filed a motion for reconsideration of the denial of its motion to compel arbitration based on newly discovered evidence relevant to Yazedjian's authority as Patterson's agent; specifically, that Yazedjian and Patterson had an attorney-client relationship beginning in 2007, which, it contended, was not limited in scope. It thus argued that Patterson had "provided actual express authority for . . . Yazedjian to act on her behalf when she hired her as an attorney." It further asserted that Yazedjian also had "actual implied authority" based on her "history of acting as Harriette Patterson's agent prior to her admission to La Rosa."
¶8 Yazedjian responded that her scope of representation was limited to tax issues and estate planning and did not encompass authority to bind Patterson to an arbitration agreement. She further argued there was no evidence she had acted as Patterson's general agent before her admission to La Rosa and, thus, had no implied authority. The trial court denied La Rosa's motion, again in an unsigned order, finding it had "provide[d] no evidence that . . . Yazedjian had Power of Attorney that permitted her to sign the Agreement in question on [Patterson's] behalf and waive her right to litigation." Pursuant to the parties' stipulation, the court entered a final, signed order denying La Rosa's motion to compel arbitration and its motion to reconsider. This appeal followed. We have jurisdiction pursuant to A.R.S. § 12-2101.01(A)(1). See Brumett v. MGA Home Healthcare, L.L.C., 240 Ariz. 420, ¶¶ 11, 26 (App. 2016).
Discussion
¶9 La Rosa argues the trial court erred by denying its motion to compel arbitration and its motion to reconsider that denial because Yazedjian had actual authority to sign the arbitration agreement. The existence of agency is generally a question of fact. Escareno, 239 Ariz. 126, ¶ 6. But because the parties do not dispute the material facts, we review de novo whether such a relationship existed. See id.
In its opening brief, La Rosa contends that Yazedjian also had apparent authority to sign the arbitration agreement. See Best Choice Fund, LLC v. Low & Childers, P.C., 228 Ariz. 502, ¶ 26 (App. 2011) (agent may have actual or apparent authority to act). It did not, however, meaningfully raise this argument below and, instead, relied on a theory of actual authority. Moreover, it does not appear the trial court's ruling was based on a theory of apparent authority. Additionally, La Rosa has not provided the transcript of the hearing held on its initial motion to compel arbitration. See Ariz. R. Civ. App. P. 11(c) (appellant responsible for providing all relevant transcripts); see also Ramsey v. Yavapai Family Advocacy Ctr., 225 Ariz. 132, ¶ 20 (App. 2010). Thus we presume the missing transcript supports the trial court's ruling. Varco, Inc. v. UNS Elec., Inc., 242 Ariz. 166, ¶ 14 (App. 2017). We therefore do not address La Rosa's argument regarding apparent authority. See Odom v. Farmers Ins. Co. of Ariz., 216 Ariz. 530, ¶ 18 (App. 2007) (court of appeals generally does not consider arguments raised for first time on appeal); see also Ramsey, 225 Ariz. 132, ¶ 20 (appellate court will not presume argument raised during hearing when appellant fails to provide transcripts).
¶10 Although arbitration agreements cover a specific topic—an agreement to arbitrate certain disputes—they are a form of contract and consequently "subject to the same defenses to enforceability as any other contract." Duenas v. Life Care Ctrs. of Am., Inc., 236 Ariz. 130, ¶ 6 (App. 2014); see A.R.S. § 12-3006(A) (arbitration agreements "valid, enforceable and irrevocable except on a ground that exists at law or in equity for the revocation of a contract"); see also Kindred Nursing Ctrs. Ltd. P'ship v. Clark, ___ U.S. ___, ___, 137 S. Ct. 1421, 1424 (2017) (arbitration agreements "on equal footing with all other contracts"), quoting DIRECTV, Inc. v. Imburgia, ___ U.S. ___, ___, 136 S. Ct. 463, 465 (2015). A defendant seeking to enforce a contract must show the plaintiff accepted the terms of the agreement. See Escareno, 239 Ariz. 126, ¶ 7; see also Goodman v. Physical Res. Eng'g, Inc., 229 Ariz. 25, ¶ 7 (App. 2011) ("For a valid contract to have been formed between them, there must have been an offer, acceptance of the offer, and consideration . . . ."). Or, as relevant here, that the person who signed the contract was "in fact . . . the plaintiff's agent and, thus, had authority to do so." Escareno, 239 Ariz. 126, ¶ 7; see Goodman, 229 Ariz. 25, ¶ 11.
¶11 "Actual authority 'may be proved by direct evidence of express contract of agency between the principal and agent or by proof of facts implying such contract or the ratification thereof.'" Ruesga v. Kindred Nursing Ctrs., L.L.C., 215 Ariz. 589, ¶ 29 (App. 2007), quoting Corral v. Fid. Bankers Life Ins. Co., 129 Ariz. 323, 326 (App. 1981). This "includes both express authority outlined in specific language, and implied authority when the agent acts consistently with the agent's 'reasonable interpretation of the principal's manifestation in light of the principal's objective and other facts known to the agent.'" Best Choice Fund, LLC v. Low & Childers, P.C., 228 Ariz. 502, ¶ 26 (App. 2011), quoting Ruesga, 215 Ariz. 589, ¶ 29.
¶12 We find Escareno particularly instructive. In that case, the decedent's son had signed an arbitration agreement on his mother's behalf when she was admitted to an assisted-living facility. 239 Ariz. 126, ¶¶ 2-3. At that time, his mother suffered from "encephalopathy, cognitive deficits, and a 'severe case of dementia.'" Id. ¶ 2. The undisputed evidence in this case similarly demonstrates that Patterson likely was unaware Yazedjian had signed the arbitration agreement and was incapable of understanding Yazedjian's actions in such a way as to either give her consent or contest them. As we noted above, Patterson was diagnosed with "moderate to severe deficits in cognition" and dementia prior to her admission at La Rosa.
¶13 Moreover, Yazedjian testified that Patterson did not want to leave Amber Lights, and she and Caring Cooperatives "trick[ed] her into moving" by "arrang[ing] for [Patterson] to be out for a number of hours" while they moved her belongings from Amber Lights to La Rosa. "[W]hen [they] brought her to La Rosa, [Patterson] said, 'I want to go home.'" Although Yazedjian stated that one of her responsibilities as Patterson's attorney was to keep Patterson "reasonably informed of what [she did] on [Patterson's] behalf," she clarified that "[i]f you are asking me specifically about the agreements for admission to La Rosa, it was a very different situation." Indeed, the move to La Rosa—a facility which was recommended by Caring Cooperatives—was prompted by Patterson's need for more "hands on care" due to her declining cognitive abilities.
¶14 This evidence demonstrates that Yazedjian was aware she was, in fact, acting against Patterson's wishes when she signed La Rosa's admission forms, including the arbitration agreement, despite having acknowledged she signed them as Patterson's attorney. See Escareno, 239 Ariz. 126, ¶ 11 ("[I]t is well settled that the declarations of an agent are insufficient to establish the fact or extent of his authority."), quoting Jolly v. Kent Realty, Inc., 151 Ariz. 506, 512 (App. 1986); cf. Ruesga, 215 Ariz. 589, ¶ 29 (implied authority exists when agent acts "in a manner in which an agent believes the principal wishes the agent to act"), quoting Restatement (Third) of Agency (hereinafter "Restatement") § 2.01 cmt. b. Under those circumstances, Patterson's failure to expressly contest Yazedjian's action of signing the agreement does not constitute a manifestation of her assent, particularly given that Patterson likely did not know Yazedjian had even taken the action. See Restatement § 1.03 cmt. b; see also Escareno, 239 Ariz. 126, ¶ 12; Dickerson v. Longoria, 995 A.2d 721, 740 (Md. 2010) (agent's authority to make "general legal decisions" did not extend to signing arbitration agreement where principal was "unaware" agent had done so and thus "never had an opportunity to object to that action").
¶15 La Rosa argues, however, that Yazedjian "had a history of acting as [Patterson's] agent prior to her admission to La Rosa," which Patterson did not contest. See Ruesga, 215 Ariz. 589, ¶¶ 19, 35-36; see also Restatement § 1.03 cmt. b ("Silence may constitute a manifestation [of assent] when, in light of all the circumstances, a reasonable person would express dissent to the inference that other persons will draw from silence."). As support, it notes that Yazedjian toured La Rosa prior to Patterson's move, helped move Patterson into La Rosa, sorted through Patterson's paperwork that was in storage, hired Patterson's caregivers, and would "regularly" call and visit Patterson to "check up on her." However, all of these factors focus on Yazedjian's conduct, not Patterson's. They do not support a finding of express authority—that Patterson "has stated in very specific or detailed language." Ruesga, 215 Ariz. 589, ¶ 29, quoting Restatement § 2.01 cmt. b. Nor do they support a finding of "'implied authority'—when an agent has actual authority 'to act in a manner in which an agent believes the principal wishes the agent to act based on the agent's reasonable interpretation of the principal's manifestation in light of the principal's objective and other facts known to the agent.'" Ruesga, 215 Ariz. 589, ¶ 29, quoting Restatement § 2.01 cmt. b. These factors only reflect "a pattern of care-giving alone," and one that increased as Patterson's cognitive abilities declined. See Escareno, 239 Ariz. 126, ¶¶ 12, 16. Nothing in those facts constitutes circumstantial evidence that Patterson manifested her assent to Yazedjian's authority to sign the arbitration agreement on her behalf. See id. ¶ 13; Restatement § 2.02 (scope of actual authority).
La Rosa also points out that Yazedjian "participate[d] in care conferences." This participation, however, occurred after Patterson was admitted to La Rosa and after Patterson had executed the healthcare power of attorney in favor of Yazedjian. It therefore does not inform our analysis of whether Yazedjian had authority to sign the arbitration agreement on Patterson's behalf at the time of her admission to La Rosa. Moreover, even if it were relevant, the authority to make healthcare decisions does not extend to the authority to enter into an optional nursing home arbitration agreement. See Dickerson, 995 A.2d at 737 ("[T]he decision to sign an arbitration agreement is a decision concerning the legal rights of the parties to the agreement about how to resolve their legal disputes, not a health care decision.").
¶16 Again, our reasoning is supported by Escareno. In that case, the son had begun helping his mother with her financial matters two years before she was moved into the nursing home by transferring money from her account to pay her bills. Escareno, 239 Ariz. 126, ¶¶ 2, 12-13. He additionally assisted her at medical appointments by filling out and signing paperwork for her when she was unable to do so. Id. ¶ 14. In addressing whether the son had authority to sign the agreement, we determined there was no evidence of affirmative actions on his mother's behalf showing she had manifested assent to the assistance. Id. ¶¶ 13, 15. We concluded that the son's acts of helping with his mother's finances and medical appointments were insufficient circumstantial evidence that the son had actual authority to sign the arbitration agreement on his mother's behalf. Id. ¶ 16. We further explained that because the elderly generally "rely on others to meet their needs as their health deteriorates[,] . . . a pattern of care-giving alone is insufficient to create an agency relationship, particularly in the absence of any evidence showing a manifestation of assent on the part of the elderly person." Id. ¶ 16.
¶17 The evidence in this case similarly shows that Yazedjian's role in Patterson's life before her admission at La Rosa was primarily limited to assisting Patterson with her finances—although not making financial decisions on Patterson's behalf—and representing her for tax and estate-planning purposes. Accordingly, any authority Yazedjian may have had related to those areas did not extend to signing the arbitration agreement. See id. ¶ 13; see also Ping v. Beverly Enters., Inc., 376 S.W.3d 581, 594 (Ky. 2012) ("[A]n optional nursing home arbitration agreement does not involve a financial decision within the authority of an agent authorized to manage his or her principal's property and finances."); Dickerson, 995 A.2d at 736 (authority to make healthcare and financial decisions on principal's behalf does not extend to decision to sign arbitration agreement as part of admission to nursing home). In sum, the evidence shows that Patterson did not authorize Yazedjian to sign the arbitration agreement and that her "acts and conduct" did not imply Yazedjian had such authority. Phx. W. Holding Corp. v. Gleeson, 18 Ariz. App. 60, 66 (1972); see also Restatement § 2.01 & cmt. b (defining "express" and "implied" authority).
Despite Yazedjian's role in managing Patterson's finances, she did not make "any decisions for [Patterson] without checking with [Rogers] first," as he was the trustee of the trust established for Patterson.
¶18 La Rosa further argues that Yazedjian had express authority to sign the agreement "[b]ased on the scope of [Yazedjian's] authority as [Patterson's] attorney." It contends that Patterson never expressly limited the scope of Yazedjian's representation and, in an attorney-client relationship, there is a "presumption of authority." See Garn v. Garn, 155 Ariz. 156, 160 (App. 1987) (attorney acting within scope of representation "is clothed with the presumption of authority to represent his or her client").
¶19 La Rosa, however, overstates the scope of an attorney's authority when representing a client. "An attorney is not . . . a general agent for a client and there are limitations on his or her power to act on behalf of a client." Id. The scope of an attorney's authority "is governed by the law of agency," id., and is limited to those actions "designated or implied in the principal's manifestations to the agent and acts necessary or incidental to achieving the principal's objectives," Restatement § 2.02(1); see Restatement (Third) of the Law Governing Lawyers § 26 (2000) (hereinafter "Restatement (Third) of Lawyers") (attorney has actual authority to act on client's behalf when, inter alia, "client has expressly or impliedly authorized the act"); see also Rotary Club of Tucson v. Chaprales Ramos de Pena, 160 Ariz. 362, 365 (App. 1989) (finding attorney not authorized to act as client's authorized agent to receive service "solely by reason of his capacity as attorney"). As discussed above, the record in this case contains no evidence that Patterson expressly or implicitly authorized Yazedjian to sign the arbitration agreement, which would have been outside the scope of Yazedjian's established authority as Patterson's tax and estate-planning attorney. Accordingly, La Rosa's reliance on Patterson and Yazedjian's attorney-client relationship is misplaced.
¶20 La Rosa additionally contends that, even if Yazedjian did not have authority when she signed the arbitration agreement, Patterson subsequently ratified that action by granting Yazedjian a healthcare power of attorney after her admission. See Restatement (Third) of Lawyers §§ 21(4) ("A client may ratify an act of a lawyer that was not previously authorized."), 26(3) (lawyer's act considered that of client when client ratifies act); see also Restatement (Second) of Agency § 416 (1958). La Rosa did not, however, raise this argument below and has therefore waived it for review. See Odom v. Farmers Ins. Co. of Ariz., 216 Ariz. 530, ¶ 18 (App. 2007); see also Ramsey v. Yavapai Family Advocacy Ctr., 225 Ariz. 132, ¶ 20 (App. 2010) (this court will not presume argument raised during hearing when appellant fails to provide transcripts). Moreover, the healthcare power of attorney limited Yazedjian to making "health care decisions for [Patterson] when [she could not] make or communicate" those decisions herself. Whether to sign a nursing home's optional arbitration agreement is not a healthcare decision. See Fiala v. Bickford Senior Living Grp., LLC, 32 N.E.3d 80, ¶ 44 (Ill. App. Ct. 2015) (An "agent acting pursuant to a health-care power of attorney is not authorized to sign the [optional] arbitration provision and the patient cannot be bound by the agent's action."); Ping, 376 S.W.3d at 593 (when arbitration agreement is optional condition of admission to nursing home, "authority to choose arbitration is not within the purview of a health-care agency"); Dickerson, 995 A.2d at 737 (decision to sign arbitration agreement is decision about how to resolve legal disputes, not healthcare matters); Koricic v. Beverly Enters.—Nebraska, Inc., 773 N.W.2d 145, 148, 151 (Neb. 2009) (son's authority to admit mother to long-term care facility and make healthcare decisions "did not extend to signing an [optional] arbitration agreement"); Primmer v. Healthcare Indus. Corp., 43 N.E.3d 788, ¶ 19 (Ohio Ct. App. 2015) ("The decision to sign a free-standing arbitration agreement is not a health care decision if the patient may receive health care without signing the arbitration agreement."). Yazedjian's actions were thus outside the scope of any purported authorization Patterson later may have granted her.
We recognize that in Ruesga we determined the wife had authority to sign an optional arbitration agreement on her husband's behalf based, in part, on her history of making healthcare-related decisions for her husband. 215 Ariz. 589, ¶¶ 2-5, 35. We also noted in that case, however, that "the degree of proof required to establish and define the agency relationship" between spouses is lower than non-spouses. Id. ¶ 33, quoting State Farm Mut. Auto. Ins. Co. v. Long, 16 Ariz. App. 222, 225 (1972). Furthermore, because the scope of the wife's authority had not been raised by either party, and they instead focused on whether the wife had any authority to make decisions on her husband's behalf, this court had no reason to address that issue. Id. ¶¶ 17, 23, 31 & n.6. Consequently, Ruesga does not control the issue of the scope of Yazedjian's authority even if she had authority to make Patterson's healthcare decisions.
Because we conclude Yazedjian lacked authority to sign the arbitration agreement, we do not address La Rosa's alternative argument that the trial court erred "by holding that [Yazedjian] required an express power of attorney to waive [Patterson's] alleged right to litigation." See Forszt v. Rodriguez, 212 Ariz. 263, ¶ 9 (App. 2006) (court of appeals may affirm trial court "if it is correct for any reason apparent in the record"). Similarly, we do not address Yazedjian's alternative arguments that the agreement was unconscionable and unenforceable due to certain American Arbitration Association rules. --------
Disposition
¶21 For the foregoing reasons, we affirm the trial court's order.