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Kindred Nursing Ctrs. Ltd. P'ship v. Clark

Supreme Court of the United States

February 22, 2017, Argued; May 15, 2017, Decided

No. 16-32.

Opinion

 [**810]  Justice Kagan delivered the opinion of the Court.

The Federal Arbitration Act (FAA or Act) requires courts to place arbitration agreements [***5]  “on equal footing with all other contracts.” DIRECTV, Inc. v. Imburgia, 577 U. S. ___, ___, 136 S. Ct. 463, 468, 193 L. Ed. 2d 365, 372 (2015)  (quoting Buckeye Check Cashing, Inc. v. Cardegna, 546 U. S. 440, 443, 126 S. Ct. 1204, 163 L. Ed. 2d 1038 (2006)); see 9 U. S. C. §2. In the decision below, the Kentucky Supreme Court declined to give effect to two arbitration  [*1425]  agreements executed by individuals holding “powers of attorney”—that is, authorizations to act on behalf of others. According to the court, a general grant of power (even if seemingly comprehensive) does not permit a legal representative to enter into an arbitration agreement for someone else; to form such a contract, the representative must possess specific authority to “waive his principal’s fundamental constitutional rights to access the courts [and] to trial by jury.” Extendicare Homes, Inc. v. Whisman, 478 S. W. 3d 306, 327 (2015). Because that rule singles out arbitration agreements for disfavored treatment, we hold that it violates the FAA.

Petitioner Kindred Nursing Centers L. P. operates nursing homes and rehabilitation centers. Respondents Beverly Wellner and Janis Clark are the wife and daughter, respectively, of Joe Wellner and Olive Clark, two now-deceased residents of a Kindred nursing home called the Winchester Centre.

At all times relevant to this case, Beverly and Janis each held a power of attorney, designating her as an “attorney-in-fact” (the one for Joe, the other for Olive) [***6]  and affording her broad authority to manage her family member’s affairs. In the Wellner power of attorney, Joe gave Beverly the authority, “in my name, place and stead,” to (among other things) “institute legal proceedings” and make “contracts of every nature in relation to both real and personal property.” App. 10-11. In the Clark power of attorney, Olive provided Janis with “full power . . . to transact, handle, and dispose of all matters affecting me and/or my estate in any possible way,” including the power to “draw, make, and sign in my name any and all . . . contracts, deeds, or agreements.” Id., at 7.

Joe and Olive moved into the Winchester Centre in 2008, with Beverly and Janis using their powers of attorney to complete all necessary paperwork. As part of that process, Beverly and Janis each signed an arbitration agreement with Kindred on behalf of her relative. The two contracts, worded identically, provided that “[a]ny and all claims or controversies arising out of or in any way relating to . . . the Resident’s stay at the Facility” would be resolved through “binding arbitration” rather than a lawsuit. Id., at 14, 21.

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137 S. Ct. 1421 *; 197 L. Ed. 2d 806 **; 2017 U.S. LEXIS 2948 ***; 85 U.S.L.W. 4235; 26 Fla. L. Weekly Fed. S 570; 2017 WL 2039160

KINDRED NURSING CENTERS LIMITED PARTNERSHIP, dba WINCHESTER CENTRE FOR HEALTH AND REHABILITATION, nka FOUNTAIN CIRCLE HEALTH AND REHABILITATION, et al., Petitioners v. JANIS E. CLARK et al.

Notice: The LEXIS pagination of this document is subject to change pending release of the final published version.

Subsequent History: On remand at, Decision reached on appeal by Kindred Nursing Ctrs. L.P. v. Wellner, 2017 Ky. LEXIS 446 (Ky., Nov. 2, 2017)

Prior History:  [***1] ON WRIT OF CERTIORARI TO THE SUPREME COURT OF KENTUCKY

Extendicare Homes, Inc. v. Whisman, 478 S.W.3d 306, 2015 Ky. LEXIS 1867 (Ky., Sept. 24, 2015)

Disposition: 478 S. W. 3d 306, reversed in part, vacated in part, and remanded.

CORE TERMS

arbitration agreement, arbitration, power of attorney, contracts, clear-statement, contract formation, state court, authorization, proceedings, disfavored, courts, rights, waive

Business & Corporate Compliance, Arbitration, Federal Arbitration Act, Scope, Arbitration Agreements