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Full Opinion
No. 3--10--0260
_________________________________________________________________
Filed December 7, 2010
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 2010
MARILEE CURTO, an Administrator ) Appeal from the Circuit Court
of the Estate of Charles Curto, ) of the 10th Judicial Circuit,
Deceased ) Tazewell County, Illinois,
Plaintiff-Appellee, )
)
v. ) No. 09--L--116
)
ILLINI MANORS, INC., an )
Illinois Corporation, and )
PEKIN MANORS, ) Honorable
) Michael E. Brandt,
Defendant-Appellant. ) Judge, Presiding.
_________________________________________________________________
JUSTICE LYTTON delivered the judgment of the court, with
opinion.
Justices O'Brien and Wright concurred in the judgment and
opinion.
OPINION
_________________________________________________________________
Plaintiff, Marilee Curto, filed a complaint against defendant,
Illini Manors, Inc., and Pekin Manors (Pekin Manors),1 under the
Illinois Nursing Home Care Act (Nursing Home Care Act) (210 ILCS
45/1-101 et seq. (West 2008)) for personal injuries her husband
suffered while a resident at Pekin Manors and his wrongful death.
Defendant moved to dismiss the complaint and compel arbitration.
1
The correct name of defendant is "UDI #10, LLC."
The trial court denied the motion, and we affirm.
On August 9, 2007, Marilee entered into a contract with Pekin
Manors, a residential nursing home, to admit and care for her
husband, Charles. The contract named Charles as the resident and
Marilee as the "Guardian/Responsible Party." Marilee signed the
form on the preprinted signature line which designated her as the
"Legal Representative." Charles did not sign the contract.
The parties also entered into a separate arbitration
agreement, which provided that "any and all disputes arising
hereunder shall be submitted to binding arbitration and not to a
court for determination." In the arbitration agreement, each party
waived its right to a trial by jury. Marilee signed the
arbitration agreement above the line that stated "Signature of
Resident Representative." Charles did not sign the arbitration
agreement.
On August 13, 2009, Marilee filed a complaint against Pekin
Manors pursuant to the Nursing Home Care Act for personal injuries
Charles sustained while he was a resident. The complaint also
sought damages suffered by Charles' next of kin under the Wrongful
Death Act (740 ILCS 180/1 et seq. (West 2008)). It further alleged
that Charles suffered pain and anguish, which subjected defendant
to liability under the Survival Act (755 ILCS 5/27-6 (West 2008)),
and that his heirs incurred expenses, which they were entitled to
recover under the Rights of Married Persons Act (Family Expense
2
Act) (750 ILCS 65/15 (West 2008)).
Pekin Manors filed a motion to dismiss and to compel
arbitration, asserting that the estate was contractually bound by
the arbitration agreement Marilee signed when Charles was admitted.
After a thorough examination of authority supporting both
positions, the trial judge denied the motion. The judge found that
"the spouse is not an agent for the other spouse for purposes of an
agreement to arbitrate." He concluded that the arbitration
agreement was not valid and enforceable because there was no
indication that Marilee had the authority to bind Charles to the
mandatory arbitration terms of the contract.
STANDARD OF REVIEW
Initially, the parties dispute the standard of review.
Generally, the issue we are asked to consider on an interlocutory
appeal is whether there was a sufficient showing to sustain the
order of the trial court granting or denying the relief sought.
Onni v. Apartment Investment & Management Co., 344 Ill. App. 3d
1099 (2003). However, where the trial court does not make any
factual findings, or the underlying facts are not in dispute and
the courtās decision is based on a purely legal analysis, we review
the trial courtās denial of a motion to stay the proceedings and
compel arbitration de novo. La Hood v. Central Illinois
Construction, Inc., 335 Ill. App. 3d 363 (2002). Here, the trial
court based its decision on the undisputed facts in the record.
3
Thus, our review of the issue is de novo. See La Hood, 335 Ill.
App. 3d at 364.
ANALYSIS
Pekin Manors claims that Marilee was Charles' agent and thus
the agreement to arbitration is enforceable against him. It
contends that the evidence permitted a finding of agency based on
(1) actual authority and (2) apparent authority.
I. Agency
Whether a nonsignatory party is bound to an arbitration
agreement is dictated by the ordinary principles of contract and
agency. Johnson v. Noble, 240 Ill. App. 3d 731 (1992). The
spouse's signature on an arbitration agreement may bind a nursing
home resident if the spouse has the authority to sign the document
as the resident's agent. The status of the parties as husband and
wife, by itself, does not create an agency relationship. Capital
Plumbing & Heating Supply Co. v. Snyder, 2 Ill. App. 3d 660 (1971).
The agency of the spouse is a question of fact to be proved by
direct or circumstantial evidence; there is no presumption that the
wife has authority to act for the husband. Fettes, Love & Sieben,
Inc. v. Simon, 46 Ill. App. 2d 232 (1964). The scope and extent of
an agency relationship depend on the terms of the agreement between
the principal and the agent and the intention of the parties.
Brown v. Kerber Packing Co., 342 Ill. App. 474 (1951). The party
claiming an agency relationship must prove it by a preponderance of
4
the evidence. Granite Properties Ltd. Partnership v. Granite
Investment Co., 220 Ill. App. 3d 711 (1991).
A. Actual Authority
Pekin Manors first argues that Marilee had actual authority to
bind Charles to the arbitration agreement because she signed the
admission contract and the arbitration agreement as her husband's
"representative."
In any agency relationship, the principal can be legally bound
by action taken by the agent where the principal confers actual
authority on the agent. Granite Properties, 220 Ill. App. 3d at
714. Actual authority may be express or implied. Buckholtz v.
MacNeal Hospital, 337 Ill. App. 3d 163 (2003). Express authority
is directly granted to the agent in express terms by the principal
and extends only to the powers the principal confers upon the
agent. United States v. Schaltenbrand, 930 F.2d 1554 (11th Cir.
1991). Such authority may be granted through a written contract,
a power of attorney or a court-ordered guardianship. Amcore Bank,
N.A. v. Hahnaman-Albrecht, Inc., 326 Ill. App. 3d 126 (2001) (power
of attorney explicitly listed powers given to the attorney-in-
fact); 755 ILCS 5/11a-17(a) (West 2006) (guardian has authority as
provided in court order under provisions of Probate Act). Implied
authority, on the other hand, is actual authority circumstantially
proved. Buckholtz, 337 Ill. App. 3d at 172. It arises when the
conduct of the principal, reasonably interpreted, causes the agent
5
to believe that the principal desires him to act on the principal's
behalf. See Restatement (Second) of Agency Ā§26 (1958). For
example, implied authority may be established from the
circumstances of a case based on prior course of dealing of a
similar nature between the alleged agent and principal or from a
previous agency relationship. Hartshorn v. State Farm Insurance
Co., 361 Ill. App. 3d 731 (2005); Linowiecki v. Wisniewski, 249
Ill. App. 474 (1928).
In this case, Marilee's signature on the nursing home
documents did not confer express or implied authority on her.
First, nothing in the record suggests that Charles gave Marilee
express authority to make legal decisions on his behalf. The terms
of the admission contract and the arbitration agreement did not
give Marilee authority to act as Charles' agent, nor did Charles
execute a power of attorney appointing Marilee as his agent for
that purpose. Second, Pekin Manors failed to demonstrate any
implied authority. No evidence indicates that Charles was present
and directed Marilee to sign the arbitration agreement as his
representative, nor is there any indication in the record that
Charles knew Marilee signed the agreement and agreed to or adopted
her signature as his own. Thus, Marileeās signature as a
representative does not establish that she had actual authority to
sign the arbitration agreement on Charlesā behalf.
We recognize that this issue is one of first impression in
6
Illinois. However, several other jurisdictions have addressed the
authority of a spouse to bind a nursing home resident to an
arbitration agreement and have reached similar dispositions. In
Dickerson v. Longoria, 995 A.2d 721 (Md. 2010), a personal
representative signed an arbitration agreement on the resident's
behalf when he was admitted to the nursing home. The Maryland
Court of Appeals held that the representative, Dickerson, did not
have actual authority to sign the arbitration agreement. The court
concluded that Dickerson's reference to herself as the resident's
"legal power of attorney" did not expand her authority absent some
evidence that the resident, Bradley, authorized, adopted or
acquiesced to the statement. The court specifically noted: "The
fact that Dickerson signed the arbitration agreement at issue in
this case certainly does not alter Dickerson's authority, as there
is no evidence suggesting that Bradley authorized Dickerson to make
this type of decision on his behalf." Dickerson, 995 A.2d at 740.
The majority of jurisdictions have followed Dickerson's
reasoning and have concluded that a spouse or other family member
did not have actual authority to sign an arbitration agreement on
the resident's behalf. Koricic v. Beverly Enterprises-Nebraska,
Inc., 773 N.W.2d 145 (Neb. 2009) (decedent's son did not possess
authority necessary to sign arbitration agreement); Mississippi
Care Center of Greenville, LLC v. Hinyub, 975 So. 2d 211 (Miss.
2008) (daughter did not have authority to enter arbitration
7
agreement where there was no declaration of resident's inability to
manage his affairs and no power of attorney in the record); Mt.
Holly Nursing Center v. Crowdus, 281 S.W.3d 809 (Ky. Ct. App. 2008)
(spouse lacked authority to bind resident to arbitration
agreement); Goliger v. AMS Properties, Inc., 19 Cal. Rptr. 3d 819
(Cal. Ct. App. 2004) (daughter was not acting as mother's agent
when she signed arbitration agreement without some evidence of
authority beyond merely signing admission contracts). See also
Compere's Nursing Home, Inc. v. Estate of Farish, 982 So. 2d 382
(Miss. 2008); Sennett v. National Healthcare Corp., 272 S.W.3d 237
(Mo. Ct. App. 2008); Ashburn Health Care Center, Inc. v. Poole, 648
S.E.2d 430 (Ga. Ct. App. 2007); Flores v. Evergreen at San Diego,
LLC, 55 Cal. Rptr. 3d 823 (Cal. Ct. App. 2007); Landers v.
Integrated Health Services of Shreveport, 39,739-CA (La. App. 2
Cir. 5/11/05) 903 So. 2d 609; Pagarigan v. Libby Care Center, Inc.,
120 Cal. Rptr. 2d 892 (Cal. Ct. App. 2002).
Even where a health care power of attorney was present, courts
have concluded that the spouse lacked authority to sign the
arbitration agreement. Those cases have held that a health care
power of attorney granted for medical decisions does not confer
authority to sign an arbitration agreement waiving legal rights.
See Life Care Centers of America v. Smith, 681 S.E.2d 182 (Ga. App.
2009) (power of attorney granted to daughter for medical decisions
did not grant authority to waive legal rights under arbitration
8
agreement); Lujan v. Life Care Centers of America, 222 P.3d 970
(Colo. Ct. App. 2009) (health care proxy's decision to agree to
arbitrate was unauthorized); Texas Cityview Care Center, L.P. v.
Fryer, 227 S.W.3d 345 (Tex. Ct. App. 2007) (medical power of
attorney did not indicate that it was intended to confer authority
to sign arbitration agreement). See also Monticello Community Care
Center, LLC v. Estate of Martin, 17 So. 3d 172 (Miss. Ct. App.
2009); Moffett v. Life Care Centers of America, 187 P.3d 1140
(Colo. App. 2008); Blankfield v. Richmond Health Care, Inc., 902
So. 2d 296 (Fla. Dist. Ct. App. 2005). But see Owens v. National
Health Corp., 263 S.W.3d 876 (Tenn. 2007) (attorney-in-fact
authorized to enter into arbitration agreement as part of contract
admitting nursing home resident).
As the trial court said in denying the motion to compel
arbitration: "[T]he agreement to submit to binding arbitration is
ultra vires of a power of attorney for health care and the
duty/power to provide for the nursing home spouse's medical needs."
These cases support our conclusion that a spouse's signature
on an arbitration agreement as the resident's representative does
not demonstrate actual authority to bind a nursing home resident to
the agreement. An actual agency relationship is controlled by the
express authorization of the principal or implied conduct of the
principal and agent. The principal's conduct is crucial to
establish actual authority. Such authority is not dictated by an
9
independent act or signature of the agent. Thus, absent some
evidence that the resident gave the agent spouse authority to sign
the agreement to arbitrate on his behalf, the resident is not bound
by its terms. By our decision today, we join the majority of
states reviewing this issue.
Nevertheless, Pekin Manors urges us to consider the decisions
of a minority of courts that have enforced nursing home arbitration
agreements signed by a family member. Those cases follow the
reasoning of Sovereign Healthcare of Tampa, LLC v. Estate of
Huerta, 14 So. 3d 1033 (Fla. Dist. Ct. App. 2009). In Sovereign
Healthcare, the Florida appellate court held that a daughter-in-law
had the authority to sign a contract for admission on the
resident's behalf, including the arbitration agreement, in reliance
on a durable power of attorney. The durable power of attorney in
that case included a catch-all provision giving the attorney-in-
fact the authority "to sign any and all releases or consent
required." Sovereign Healthcare, 14 So. 3d at 1035; see also Triad
Health Management of Georgia, III, LLC v. Johnson, 298 S.E.2d 785
(Ga. 2009) (signature of patient's son on arbitration agreement was
enforceable where son had general power of attorney executed by
father); Five Points Heath Care, Ltd v. Mallory, 998 So. 2d 1180
(Fla. Dist. Ct. App. 2008) (daughter had durable power of attorney
to prosecute, defend and settle all actions or other legal
proceedings and to "do anything" regarding residentās estate).
10
These cases, however, are distinguishable. In each case, there is
at least some evidence of actual authority granting general powers
of attorney to the spouse or family representative. Here, Pekin
Manors has produced neither a general or property power of
attorney, nor an order of guardianship authorizing Marilee to
administer her husband's legal affairs. Thus, Marilee lacked
actual authority to sign the arbitration agreement on Charles'
behalf.
B. Apparent Authority
Pekin Manors also claims that the arbitration agreement is
valid because Marilee acted as her husband's apparent agent at the
time of his nursing home admission. Pekin Manors argues that since
Marilee made a health care decision for her husband to be placed in
the nursing home and Charles remained in the nursing home, Charles
consented to Marilee's authority to sign the arbitration agreement.
In the absence of actual authority, a principal can be bound
by the acts of a purported agent when that person has apparent
authority to act on behalf of the principal. Amcore Bank, 326 Ill.
App. 3d at 137. Apparent authority arises when a principal creates
a reasonable impression to a third party that the agent has the
authority to perform a given act. Crawford Savings & Loan Ass'n v.
Dvorak, 40 Ill. App. 3d 288 (1976). To prove apparent authority,
the proponent must show that (1) the principal consented to or
knowingly acquiesced in the agent's exercise of authority, (2)
11
based on the actions of the principal and agent, the third party
reasonably concluded that the agent had authority to act on the
principal behalf, and (3) the third party justifiably relied on the
agent's apparent authority to his detriment. Career Concepts, Inc.
v. Synergy, Inc., 372 Ill. App. 3d 395, 404 (2007) (company's sales
manager had apparent authority to sign contract with employee-
placement agency where company authorized manager to enter other
contracts and interview potential employees). In establishing
apparent authority, it is critical to find some words or conduct by
the principal that could reasonably indicate consent. Emmenegger
Construction Co. v. King, 103 Ill. App. 3d 423 (1982). An agent's
authority may be presumed by the principal's silence if the
principal knowingly allows another to act for him as his agent.
Elmore v. Blume, 31 Ill. App. 3d 643, 647 (1975).
The record before us demonstrates that Charles never acted or
conducted himself in a way that would indicate to Pekin Manors that
Marilee was his apparent agent for purposes of the arbitration
agreement. There is no evidence showing that Charles was present
when Marilee signed the agreement or that Charles understood
Marilee was signing an agreement waiving his legal rights. The
record contains no words or conduct by Charles that would
reasonably indicate consent. Thus, Pekin Manor failed to establish
that Marilee had apparent authority to sign the arbitration
agreement on her husband's behalf. As a result, Marilee cannot be
12
required to arbitrate Charles' claims against the nursing home.
Pekin Manors attempts to analogize this case to Strino v.
Premier Healthcare Associates, P.C., 365 Ill. App. 3d 895 (2006).
In that case, parents of a newborn filed a medical negligence case
against the obstetrician that delivered the baby Cesarian section.
The jury found the mother was contributorily negligent due to the
father's decision to decline the use of forceps for a vaginal
delivery. On appeal, the parents claimed that the agency
instruction was error. The reviewing court disagreed, finding an
agency relationship based on the father's blatant refusal to allow
the doctor to use forceps, the mother's presence in the operating
room and her silence when the doctor requested her permission to
use forceps. Strino, 365 Ill. App. 3d at 902.
The facts in this case are dissimilar. The record does not
indicate that Charles was present when Marilee signed the contracts
on his behalf. And neither party suggests that the nursing home
staff asked Charles to agree to the terms of the arbitration
agreement. Without some evidence of an agency relationship, he
cannot be bound by the arbitration agreement.
II. Marilee's Personal Claims
In the alternative, Pekin Manors argues that Marilee is
obligated to arbitrate her personal claims for wrongful death and
medical expenses because she had the authority to bind herself to
the agreement. We disagree.
13
Marilee signed the arbitration agreement as "Resident
Representative." Marilee did not sign the agreement in her
individual capacity. She signed the agreement as a representative
of the beneficiary, Charles. Thus, Marilee's signature carries no
legally binding weight regarding the arbitration of her personal
claims against the nursing home under the Wrongful Death Act or the
Family Expense Act. See Ward v. National Healthcare Corp., 275
S.W.3d 236 (Mo. 2009) (arbitration clause signed by daughter did
not preclude daughter's personal wrongful death claim); Goliger,
19 Cal. Rptr. 3d at 821.
CONCLUSION
Because Marilee lacked authority to enter into the arbitration
agreement on behalf of Charles, the arbitration agreement is
invalid. Therefore, Marilee is not required to arbitrate her
claims against Pekin Manors. In light of our holding on the issue
of agency, it is unnecessary for this court to address the
remaining issues raised on appeal.
The judgment of the circuit court of Tazewell County denying
the motion to dismiss and compel arbitration is affirmed. The
cause is remanded to the circuit court for further proceedings
consistent with this opinion.
Affirmed and remanded.
14