Judges affirm grant of senior living facility’s arbitration motion

Although a senior living facility “inexplicably” failed to keep a copy of an arbitration agreement signed by a resident, the facility produced enough extrinsic evidence to conclude an enforceable arbitration agreement exists, the Indiana Court of Appeals ruled.

Frank Cavazos became a resident of Golden Living in Kokomo in 2011. He executed two documents at that time – an admission agreement and an alternative dispute resolution agreement requiring arbitration over any disputes. Maureen Maynard, his personal representative, signed the admission agreement but not the arbitration agreement. It is not clear from the record whether she was his personal representative when she signed the documents.

Cavazos died May 17, 2013, and Maynard sued Golden Living nine months later, alleging staff failed to comply with applicable standards of care and that their negligence and breach of contract caused Cavazos untimely death.

Golden Living filed a motion to dismiss, demand for arbitration and motion to compel arbitration, citing the arbitration agreement signed by Cavazos. But Golden Living was unable to produce its signed copy of the agreement. The originals were given to Cavazos, as is the facility’s customary practice. Instead, it produced a blank copy of the arbitration agreement.

Golden Living deposed its former marketing director Joni Lott, who testified that she gave Cavazos the two agreements to sign and encouraged him to take them home and have someone else review it. She noted that he was alert and oriented and appeared to understand what she was saying.

The trial court granted Golden Living’s motion to compel, leading to an interlocutory appeal by Maynard.

The appeals court considered the existing extrinsic evidence to solve the ambiguity over the contract, including Lott’s testimony and the blank form.

“Golden Living inexplicably failed to retain a copy of the arbitration agreement, but the trial court concluded that sufficient extrinsic evidence existed to conclude that an enforceable agreement exists. We agree and conclude that the extrinsic evidence in the record resolves the ambiguity surrounding the parties to the arbitration agreement,” Judge Paul Mathias wrote.

As such there was no error in determining the arbitration agreement was enforceable. The judges also rejected Maynard’s claim that the agreement is voidable. Maynard never raised lack of capacity to contract as a defense and presented no evidence that Cavazos was incompetent, for which she bore the burden to prove, Mathias noted in Maureen Maynard, as Personal Representative of the Estate of Frank Cavazos v. Golden Living in its own capacity and d/b/a Golden Living Center-Sycamore, et al., and Anonymous M.D., et al., 34A04-1512-CT-2153.