Kindred Nursing Centers Limited Partnerhship D/B/A Winchester Centre for Health and Rehabilitation N/K/A Fountain Circle Health and Rehabilitation v. Beverly Wellner Individually and on Behalf of the Estate of Joe P. Wellner, and on Behalf of the Wrongful Death Beneficiaries of Joe P. Wellner

CORRECTED: NOVEMBER-22, 2017
\
RENDERED: NOVEMBER 2, 2017
TO BE PUBLISHED

KINDRED NURSING CENTERS LIMITED APPELLANTS
PARTNERSHIP D/B/A WINCHESTER .
CENTRE FOR HEALTH AND -
REHABILITATION N/K/ A FOUNTAIN1
CIRCLE HEALTH AND REHABILITIATION;
KINDRED NURSING CENTERS EAST, LLC;
KINDRED HOSPITALS LIMITED
PARTNERSHIP; KINDRED HEALTHCARE,
INC.; AND KINDRED HEALTHCARE
OPERATING, INC. .

ON REMAND FROM THE UNITED STATES.SUPREME COURT
V. CASE NO. 16-32
CLARK CIRCUIT COURT CASE NO. 10-CI-00472

BEVERLY WELLNER, INDIVIDUALLY AND APPELLEE
ON BEHALF OF THE ESTATE OF JOE P.
WELLNER, DECEASED, AND ON BEHALF
OF THE WRONGFUL DEATH
BENEFICIARIES OF JOE P. WELLNER

OPINION OF THE COURT BY JUSTICE VENTERS
)

This matter is before the Gourt on remand pursuant to the opinion of the

United States Supreme Court in Kindred Nursing Centers Ltd. Partnership v.

Clark, 137 S. Ct. 1421 (2017). The case initially came to this Court as three

separate actions which we consolidated into a single opinion styled Ex:tendicare
Homes, Inc. v. Whisman, 478 S.W.3d 306 (Ky. 2015).1 Extendicare Homes,

Inc., did not seek review by the United Stated Supreme Court, and so our

disposition of its case, No. 2013-SC-000426-1, Extendicare Homes, Inc. v.

Whisman became final. Without Extendicare Homes as a party to the United

States Supreme Court action, the case went forward with Kindred identified as

the Appellant. To avoid confusion, we refer to the final decision of this Court

as "E~endicare' and the decision of the United States Supreme Court as

"Kindred."
Among other holdings, ~xtendicare held that an attomey-in..;fact did not

have the authority to bind his principal to a pre-dispute" arbitration· agreement

unless that authority was clearly stated in the power-of-attorney document.. In

Kindred, the Supreme Court dubbed this the "clear statement rule," and for

convenience and consistency we accept that term as a useful name. As

articulated in Ext,endicare, we set forth the clear statement rule as a more

specific application of the general rule stated in Pi.ng v. Beverly Enterprises,

Inc., 376 S.W.3d 581 (Ky. 2012).2 We said in Extendicare:
· [Ping] caution~ ... that given the 'significant legal consequences~
arising from an agreement waiving the principal's rights of ·access
to the courts and to trial by jury, 'authority to make such a waiver
is not to be inferred lightly.' Our holdings throughout this opinion,
··~
as in Pi.ng itself, serve to highlight our reservation about casually
inferring a power laden with such consequences.

1 The three cases are: No. 2013-SC-000426-1, Extendicare Homes, Inc., v.
Whisman; No. 2013-SC-000430-1, Kindred Nursing Centers Limited Partnership v.
Clark, and No. 2013-SC-000431-1, Kindred Nursing Centers Limited Partnership v.
Wellner.
2 Cert. denied,_. U.S._, 133 S. Ct. 1996 (2013).

2
 478 S.W.3d at 327 (quo~g Pi.ng, 376 S.W.3d at 593).

Kindred Nursing Centers challenged the "clear statement rule" by

petitioning the United States Supreme Court for a writ of certiorari. ' The writ

was granted and the Supreme Court ultimately concluded that our adoption of

the clear statement rule, insofar as it affected Kindred's pre-dispute arbitration

agreement, impinged upon the supremacy of the Federal Arbitration Act. Our

· ruling in the case of Kindred Nursing Centers Ltd. Partnership v. Clark turned

exclusively upon the clear statement rule, and so the Supreme Court's decision

reversed It. How~ver, otir ruling in the associated case of Kindred Nursing

Centers Ltd. Partnership v. Wellner also rested upon alternative grounds.

Uncertain about whether we had· incorporated the clear statement.rule into the

alternative basis for the Wellner decision, the Supreme Court remanded that

case for us to determine whether the altem~te grounds for our holding with

r~spect to the Wellner POA was "wholly independent" of the clear statement

rule. The Supreme Court said:

The Kentucky Supreme Court began its opinion by stating that the
Wellner power of attorney was ipsufficiently broad to give Beverly
the authority to execute an arbitration agreement for Joe. If that
interpretation of the ditration. After the principal's death, can the

executor challenge the son's actions and the arbitration award as not

authorized?

These scenarios are not even the more likely instances where confusion

will occur from the majority's holding. The principal's homeowner's insurance

policy needs to be renewed. The principal rents an apartment and her lease is

due for renewal. The principal has few assets but unexpectedly receives a

sizeable inheritance, so the agent wants to open an account with a conservative

. stock brokerage company. All these contracts have arbitration clauses. If the

agents execute them, are the contracts themselves invalid or just the

arbitration ~lause? Perhaps the majority would conclude that none of these
16
pose a problem because the arbitration clause is embedded in a."contract in

relation to" either real or personal property. If that's the case, are only

freestanding. pre-dispute arbitration agreements verboten under the POA~ And

why is that? The freestanding arbitra~on agreement, liked the embedded

clause, has no purpose other than to identify the forum for the parties to settle

disputes .about prop~rty interests. It is a "contract ... in relation to . . .

personal property. "B

Additionally, the majority places great emphasis on "pre-dispute" as

indicative of the fact that an arbitratie>n agreement such as the one at issue

here is only about constitutional rights. In their view, the "futureness" of the

dispute between the parties means that the agreement is not about property at

all, just the jury trial right under Section 7 of the Kentucky Constitution. Aside

from the repeatedly noted fact about the very, indeed. only, reason for an

arbitration agreement, where does the emphasis on the futureness of

somethin~ lead? When a principal, such as Mr. Wellner, gives his agent

authority under a POA to collect debts, that authority manifestly includes

future debts owed him by others, such as a tenant's rental payment or a form.er
employer's final payments under an employment contract or pursuant to a

pension plan. The authority to make "contracts of every nature in relation to

s Again, in our original Extendicare opinion, the majority aclmowledged that a
personal injuiy claim is a chose in action and therefore personal property. 478
S.W.3d at 326. The dissent noted that a chose in action is defined "generally as '[a]
proprietary right in personam, such as a debt owed by another person, a share in a
joint-stock company, or a claim for damages in tort' and also as 'the right to bring an.
action to recover a debt, money or thing."' 478 S.W. 3d at 348, citing BLACK'S LAW
DICTIONARY, 275 (9th ed. 2009). .

17
 . .

both real and personal property" includes future property of the principal

~ whether a stock dividend, a check for· a property insurance claim, an

unexpected inheritance or a run-of-the mill refund in a consumer class action.

All these future thing~. are encompassed by the POA because that is the nature
. .
of the instrument, i.e., to deal with the principal's affairs in the manner stated

whether or not a particular thing, event, type of property was in existence or

even envisioned at the time of the execution of the POA. The majority's

position would presumably respect
.
the agent's authority
.
in all these future

matters.but not the future matter of a potential legal claim (a chose in action

an.d therefore personal property) and whether or not to agree to arbitration.

Finally, recent emphasis on .arbitration, and its increasing prevalence in

various facets of everyday life, has heightened the bar's awareness of the need

to consider carefully what the principal wishes to authorize tl?.e agent to do on

that score. Many attorneys now inquire whether the principal wishes for his or

her agent to agree .to arbitr~tion, and the POA so states that preference. Going

forward, I believe we can expect more clarity in POA ~nstruments regarding the

specific preferences of the principal, and that is obviously a desirable result..

However,. as for the many POAs that are currently in existence we must take

them as we find them and construe them in a straightforward manner, not

through a lens that disfavors arbitration in violation of the Supremacy Clause

and not with artificial distinctions that cannot-withstand scrutiny.

Because the majority's construction of the Wellner POA was and is

dearly affected, "impermissibl[y] taint[ed]," 137 S. Ct. at 1429; by the same

negative view of arbitration that underlay its clear statement rule, we should

acknowledge that fact. We must "evaluate the document's meaning anew" and
18
 ~

determine not to ~adhere ... to [the] prior reading of the Wellner power of

attorney." Id. For these reasons, I respectfully and strongly dissent.
Minton, C.J.; and VanMeter, J., join.

·coUNSEL FOR APPELLANTS:

Donald Lee Miller II
Kristin M. Lomond
James Peter Cas~idy III
Quintairos, Prieto, Wood & Boyer P.A.

COUNSEL FOR APPELLEE:

James T. Gilbert
Coy, Gilbert, Shepherd & Wilson

· Richard Eric Circeo
Robert Earl Salyer
Wilkes & McHugh, P.A.

·'

19
 20 l 3-SC-000431-1

KINDRED NURSING CENTERS LIMITED APPELLANTS
PARTNERSHIP D /Bf A WINCHESTER
CENTRE FOR HEALTH AND
REHABILITATION N/K/ A FOUNTAIN
CIRCLE HEALTH AND REHABILITIATION;
KINDRED NURSING CENTERS EAST, LLC;
KINDRED HOSPITALS LIMITED
PARTNERSHIP; KINDRED HEALTHCARE,
INC.; AND KINDRED HEALTHCARE
OPERATING, INC.

ON REMAND FROM THE UNITED STATES SUPREME COURT
V. CASE NO. 16-32
CLARK CIRCUIT COURT CASE NO. 10-CI-00472

BEVERLY WELLNE~, INDIVIDUALLYAND APPELLEE
ON BEHALF OF THE ESTATE OF JOE P.
WELLN~R, DECEASED, AND ON BEHALF
OF THE WRONGFUL DEATH
BENEFICIARIES OF JOE P. WELLNER

ORDER

The Opinion of the Court rendered November 2, 2017, is corrected on its face by

. substitution of the attached opinion in lieu of the original opinion. Said correction does

not affect the hp1ding of the original Opinion of the Court.

ENTERED:· November --2.f_; 2017

F JUSTICE JOHN D. MINTON,