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NO. COA10-105 NORTH CAROLINA COURT OF APPEALS Filed: 21 December 2010 IRIS B MUNN, Administratrix of the Estate of DEMETRA C.B. MURPHY, Deceased, Plaintiff, v. HAYMOUNT REHABILITATION & NURSING CENTER, INC. and CENTURY CARE OF FAYETTEVILLE, INC., Defendant. Appeal by defendants from order entered on or about 4 August 2009 by Judge Shannon R. Joseph in Superior Court, Cumberland County. Heard in the Court of Appeals 30 August 2010. Cumberland County No. 08 CVS 11675

Ferguson, Stein, Chambers, Gresham & Sumter, P.A., by Adam Stein and Anne Duvoisin, for plaintiff-appellee. Yates, McLamb & Weyher, defendant-appellants. STROUD, Judge. Defendants appeal a trial court order denying their amended motion to compel arbitration and granting plaintiff's motion to dismiss defendants' claim for arbitration. As we conclude that L.L.P., by Barry S. Cobb, for

there is no valid arbitration agreement between the parties, we affirm. I. Background

On 20 November 2008, plaintiff filed a complaint against defendants for violation of statutory duties and wrongful death,

-2negligence and wrongful death, and corporate negligence arising out of the medical treatment of Ms. Demetra Murphy at defendants' nursing home facility, Haymount Rehabilitation & Nursing Center, Inc. On 27 January 2009, defendants filed a motion to dismiss, a

motion to stay and dismiss, and an answer to plaintiff's complaint. On or about 22 July 2009, defendants filed an amended motion to compel arbitration. On or about 4 August 2009, the trial court, inter alia, denied defendants' amended motion to compel arbitration and granted

plaintiff's motion to dismiss defendants' claim for arbitration.1 The trial court made the following uncontested findings of fact: 2. Plaintiff brings this action in her representative capacity as Administratrix of the Estate of Demetra Murphy for damages stemming from the alleged wrongful death and negligent care by Defendants of Plaintiff's adult daughter, Demetra Murphy ("Murphy"). Plaintiff is not decedent Murphy's heir and will not receive proceeds, if any, from this action. At the time of her death, decedent Murphy was married to Calvin Murphy and had a daughter. . . . . 4. Decedent Murphy arrived at the nursing home after having been hospitalized for a lengthy period. She had not recovered sufficiently to be discharged to her family's home. When decedent Murphy was admitted to the nursing home, she was not responsive: she was not able to speak or communicate with anyone. The nursing home did not have any previous experience with decedent Murphy. Decedent Murphy's husband and Plaintiff, along with other family members, went to the nursing The record does not contain a motion from plaintiff to dismiss defendants' claim for arbitration, though one was apparently filed.
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-3home on the day of decedent Murphy's admission to [the] facility. While the unconscious Murphy was moved to a room in the facility, Plaintiff and Mr. Murphy participated in the admission process for Murphy's admission to the facility, including completing paperwork. 5. Mr. Murphy testified that he did not pay attention to the admission process, as he was bothered by the state of the facility. Plaintiff likewise explained that she was troubled by the state of the facility and did not focus on the admission process, but was thinking to herself that she would make efforts to move her daughter to another facility. In response to a query during the admission process about who would sign all the paperwork, Mr. Murphy asked that Plaintiff be the person to make decisions about decedent Murphy's care because his work schedule made him difficult to locate and contact. 6. Defendants seek to compel arbitration based on a paragraph entitled "Mandatory Arbitration" contained in the "Admission Agreement" signed on 17 June 2004 by Plaintiff when Plaintiff's adult daughter (decedent Murphy) was admitted to a nursing home operated by Defendants. The Admission Agreement recites that it is "by and between Century Care of Fayetteville and Demetra Murphy (Resident) or Iris Munn (Responsible Party)." 7. The arbitration section in the Admission Agreement requires all matters "[e]xcept for Facility's effort to collect monies due from Resident and Facility's option to discharge Resident for such failure" to be arbitrated in accordance with "the Alternative Dispute Resolution Service Rules of Procedure for Arbitration of the American Health Lawyers Association . . . , and not be a lawsuit or resort to court process . . . ." The arbitration section provides that its terms "inure to the benefit of and bind the parties, their successors and assigns, including the agents, employees and servants of the Facility, and all persons whose claims are derived through or on behalf of the Resident."

-48. In the only full-sentence text of the six-page Admission Agreement that is underlined, the arbitration section specifies that agreeing to its terms means giving up the right to a jury trial: The parties understand and agree that by entering this Agreement they are giving up and waiving their constitutional right to have any claim decided in a court of law before a judge and a jury. . . . . 10. Plaintiff, signing the agreement on the signature line for the "Responsible Party," did not ask any questions about the arbitration provision in the Admission Agreement before signing it. . . . . 12. Decedent Murphy did not sign the Admission Agreement that contained the arbitration provision. . . . . 15. When Plaintiff signed the Admission Agreement as the "Responsible Party," she had no power of attorney and was not guardian of her daughter, decedent Murphy. . . . . 17. Plaintiff was not authorized by her status as the adult decedent's mother to agree to the arbitration provision. . . . . 27. The facility did not seek, request, or require proof of legal authority for one to act on behalf of a patient during the admission process. In particular, . . . the facility employee . . . confirmed at her deposition that she generally did not require power of attorney or guardianship documentation to establish legal authority to sign admission documents when the patient was not able to act on his or [sic] own behalf. Rather, generally in conducting the admission process, the facility employee would go

-5through the process with either the next-ofkin to the patient or whoever had acted on behalf of the patient at the hospital, even if not kin to the patient. (Emphasis in original.) (Footnote omitted.) Based on these and

other findings, the trial court determined that there was not a valid arbitration agreement between the estate of Ms. Murphy and defendants. Defendants appeal. II. Interlocutory Appeal

We first note that "[a]n order denying defendants' motion to compel arbitration is not a final judgment and is interlocutory. However, an order denying arbitration is immediately appealable because it involves a substantial right, the right to arbitrate claims, which might be lost if appeal is delayed." Raper v. Oliver

House, LLC, 180 N.C. App. 414, 418-19, 637 S.E.2d 551, 554 (2006) (citations and quotation marks omitted). III. Standard of Review

Whether a dispute is subject to arbitration is an issue for judicial determination. Our review of the trial court's determination is de novo. Pursuant to this standard of review, the trial court's findings regarding the existence of an arbitration agreement are conclusive on appeal where supported by competent evidence, even where the evidence might have supported findings to the contrary. Accordingly, upon appellate review, we must determine whether there is evidence in the record supporting the trial court's findings of fact and if so, whether these findings of fact in turn support the conclusion that there was no agreement to arbitrate. Harbour Point v. DJF Enters., ___ N.C. App. ___, ___, 688 S.E.2d 47, 50 (citations, quotation marks, and brackets omitted), disc.

-6review denied, ___ N.C. ___, 698 S.E.2d 397, appeal dismissed and cert. denied, ___ N.C. App. ___, 697 S.E.2d 439 (2010). IV. Arbitration

Defendants argue that the trial court erred in determining there was no valid arbitration agreement. The admission document

signed by Ms. Munn included provisions regarding various matters in addition to the disputed arbitration provision; the vast majority of the provisions involve financial responsibility and payment for the services provided at or by the nursing home. The admission

document also contained provisions regarding general "housekeeping" matters such as visiting hours and laundry options. Ms. Munn's

personal financial responsibility for payment for Ms. Murphy's care, as the "responsible party," is not an issue in this case, and we note that Ms. Munn did not need any legal authority from Ms. Murphy or on her behalf to agree to be personally liable for payment of Ms. Murphy's care. Furthermore, we note that the

admission document does not specifically address consent for health care for Ms. Murphy, although Ms. Munn's authority to consent to health care for Ms. Murphy is not an issue in this case either. However, Ms. Munn would be required to have some form of legal authority to enter into an arbitration agreement on behalf of Ms. Murphy or her estate. The first question which we must consider is whether there was a valid arbitration agreement between Ms. Murphy or her estate and defendants. A two-part analysis must be employed by the court when determining whether a dispute

-7is subject to arbitration: (1) whether the parties had a valid agreement to arbitrate, and also (2) whether the specific dispute falls within the substantive scope of that agreement. The law of contracts governs the issue of whether there exists an agreement to arbitrate. Accordingly, the party seeking arbitration must show that the parties mutually agreed to arbitrate their disputes. Id. at ___, 688 S.E.2d at 50 (citations and quotation marks omitted). A. Agency Defendants first contend that "the trial court improperly determined that Iris Munn was not the actual or apparent agent" of Ms. Murphy. (Original in all caps.)

A principal is liable upon a contract duly made by its agent with a third person in three instances: when the agent acts within the scope of his or her actual authority; when a contract, although unauthorized, has been ratified; or when the agent acts within the scope of his or her apparent authority, unless the third person has notice that the agent is exceeding actual authority. First Union Nat'l Bank v. Brown, 166 N.C. App. 519, 527, 603 S.E.2d 808, 815 (2004) (citation omitted). Two essentials are present in a principal-agent relationship: (1) Authority, either express or implied, of the agent to act for the principal, and (2) the principal's control over the agent. Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act. An agency can be proved generally, by any fact or circumstance with which the alleged principal can be connected and having a legitimate tendency to establish that the

-8person in question was his agent for performance of the act in controversy[.] the

Colony Assocs. v. Fred L. Clapp & Co., 60 N.C. App. 634, 637-38, 300 S.E.2d 37, 39 (1983) (citations and quotation marks omitted). 1. Actual Authority Defendants argue that Ms. Munn was Ms. Murphy's actual agent. "[I]n establishing the existence of an actual agency relationship, the evidence must show that a principal actually consents to an agent acting on its behalf." Phillips v. Rest. Mgmt. of Carolina,

L.P., 146 N.C. App. 203, 217, 552 S.E.2d 686, 695 (2001) (emphasis added), disc. review denied, 355 N.C. 214, 560 S.E.2d 132 (2002). "Actual authority may be implied from the words and conduct of the parties and the facts and circumstances attending the transaction in question." Harris v. Ray Johnson Constr. Co., 139 N.C. App. Defendants direct our

827, 830, 534 S.E.2d 653, 655 (2000).

attention to specific facts as evidence that Ms. Munn was Ms. Murphy's actual agent: In the case at bar, the conduct of the principal Ms. Murphy both before and after her comatose state and of her agent Ms. Munn indicate an agency relationship. In December of 2003, Ms. Murphy voluntarily committed herself for psychiatric care, and at the time of that commitment she conveyed to healthcare providers that her mother was her next of kin and primary contact. In the Complaint, Plaintiff also alleges that Ms. Murphy was alert for communicating with her caregivers and family for some period prior to her death, . . . and yet she never asked to change any of the decisions made by her mother regarding her healthcare up to that point. These facts establish Ms. Murphy's intention to allow her mother to make healthcare decisions for her, including contracting for healthcare services.

-9Despite the defendants' contentions as to the facts, the trial court's factual findings are fully supported by the evidence. The

fact that Ms. Murphy identified "her mother [as] her next of kin and primary contact" and that in periods when she could

communicate, Ms. Murphy "never asked to change any of the decisions made by her mother" does not demonstrate that Ms. Munn had actual authority as Ms. Murphy's agent. Neither Ms. Murphy's "words and

actions" nor the "facts and circumstances[,]" Harris at 830, 534 S.E.2d at 655, establish that Ms. Murphy "actually consent[ed] to . . . Ms. Munn acting on [her] behalf." S.E.2d at 695. Phillips at 217, 552

We conclude that the trial court did not err in

concluding that there was not an actual agency relationship between Ms. Munn and Ms. Murphy. 2. Apparent Authority Defendants apparent agent. Apparent authority is that authority which the principal has held the agent out as possessing or which he has permitted the agent to represent that he possesses. Under the doctrine of apparent authority, a principal's liability in any particular case must be determined by what authority the third person in the exercise of reasonable care was justified in believing that the principal had, under the circumstances, conferred upon his agent. Heath v. Craighill, Rendleman, Ingle & Blythe, 97 N.C. App. 236, 242, 388 S.E.2d 178, 182 (citations and quotation marks omitted), disc. review denied, 327 N.C. 428, 395 S.E.2d 678 (1990). "The also contend that Ms. Munn was Ms. Murphy's

scope of an agent's apparent authority is determined not by the

-10agent's own representations but by the manifestations of authority which the principal accords to him." McGarity v. Craighill,

Rendleman, Ingle & Blythe, P.A., 83 N.C. App. 106, 109, 349 S.E.2d 311, 313 (1986), disc. review denied, 319 N.C. 105, 353 S.E.2d 112 (1987). Defendants first direct our attention to Raper v. Oliver House, LLC, 180 N.C. App. 414, 637 S.E.2d 551 (2006). However, in

Raper there was no issue that the signor of the arbitration agreement was the decedent's agent as "[t]he trial court entered an uncontested finding of fact that plaintiff held decedent's power of attorney." state that [i]t is well established that a contract is enforceable against a party who signs the contract. Plaintiff signed the Agreement as the Responsible Party and as decedent's attorney-in-fact. The Agreement and its arbitration clause is enforceable and provides an arbitral forum to resolve all claims or disputes arising under the parties' contract. Id. We conclude that Raper is inapposite to the current case as See id. Id. at 422, 637 S.E.2d at 556. This Court went on to

agency was not an issue in that case.

Turning to the facts which defendants argue show apparent authority: Ms. Munn repeatedly held herself out over the course of her daughter's admission as the party responsible for signing off on forms, including surgical consent forms, for her daughter's care. . . . . Ms. Murphy was not in a condition where she could sign for herself, and Mr. Murphy deferred to Ms. Munn as having authority to

-11sign the paperwork. Ms. Munn signed her own name and indicated she was Ms. Murphy's authorized representative, and there is no credible evidence in the record that she qualified or limited her authority in any way. The staff at Century Care would call Ms. Munn for authority to give treatment to Ms. Murphy and Ms. Munn would authorize treatment to be given to her daughter, including surgical authorizations at the local hospital. . . . Further, Century Care had no prior relationship with Ms. Murphy that would put it on notice if Ms. Munn lacked or exceeded the authority given by her daughter. All of the evidence indicated that Ms. Munn was consulted about and made decisions regarding her daughter's medical

treatment, but it does not indicate that Ms. Munn was authorized as or acted as if she were authorized to be Ms. Murphy's general agent in matters such as arbitration agreements. Defendants also argue

that "Mr. Murphy deferred to Ms. Munn as having authority to sign the paperwork[;]" defendants do not argue that Ms. Murphy made any manifestation of Ms. Munn's authority at the time of the signing of the paperwork as at that time she was "not responsive" and unable "to speak or communicate." (emphasis added.) We again note that

"[t]he scope of an agent's apparent authority is determined not by the agent's own representations but by the manifestations of authority which the principal accords to h[er]." McGarity at 109,

349 S.E.2d at 313. Defendants have not demonstrated that the trial court's factual findings were not supported by the evidence nor that the trial court erred in its conclusion that Ms. Munn did not have apparent authority to enter into an arbitration agreement on Ms. Murphy's behalf.

-12Defendants end their argument regarding apparent authority with case law regarding "providing medical care to incompetent patients[.]" However, consent for medical care for another person

who is unable to consent is a completely different issue than being an agent who has the authority to enter into a contract such as an arbitration agreement. Ms. Munn's authority to consent to medical We agree with

care for Ms. Murphy is not an issue in this case.

the trial court's conclusion that Ms. Munn was not the apparent agent of Ms. Murphy. 3. N.C. Gen. Stat.

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