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,
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
Combined Opinion