Covenant Health & Rehab. of Picayune, LP v. Lumpkin


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Docket Number: 2007-CA-00449-COA
Linked Case(s): 2007-CA-00449-COA

Court of Appeals: Opinion Link
Opinion Date: 02-05-2008
Opinion Author: ISHEE, J.
Holding: Reversed and Remanded

Additional Case Information: Topic: Personal injury - Arbitration agreement - Health-care surrogate - Consideration - Fraud - Substantive unconscionability
Judge(s) Concurring: KING, C.J., LEE, P.J., CHANDLER, GRIFFIS, BARNES, ROBERTS AND CARLTON, JJ.
Dissenting Author : MYERS, P.J. AND IRVING, J., without separate written opinion.
Procedural History: Motion to Compel Arbitration
Nature of the Case: CIVIL - PERSONAL INJURY; CIVIL - CONTRACT

Trial Court: Date of Trial Judgment: 03-09-2007
Appealed from: PEARL RIVER COUNTY CIRCUIT COURT
Judge: Prentiss Harrell
Disposition: TRIAL COURT REFUSED TO COMPEL ARBITRATION.
Case Number: 2006-0438

  Party Name: Attorney Name:  
Appellant: COVENANT HEALTH & REHABILITATION OF PICAYUNE, LP AND COVENANT DOVE, INC.




JOHN L. MAXEY, PAUL HOBART KIMBLE



 

Appellee: NELLIE LUMPKIN, BY AND THROUGH FRED LUMPKIN, NEXT FRIEND F.M. TURNER  

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Topic: Personal injury - Arbitration agreement - Health-care surrogate - Consideration - Fraud - Substantive unconscionability

Summary of the Facts: Nellie Lumpkin, through her husband and next friend Fred Lumpkin, filed suit against Covenant Health and Rehabilitation of Picayune, seeking damages for personal injuries that allegedly occurred during her stay at its facility. Covenant Health moved to compel arbitration of the case based on the arbitration clause found in its standard admissions agreement. The trial court refused to compel arbitration, and Covenant Health appeals.

Summary of Opinion Analysis: Lumpkin argues that her daughter, McDaniel, lacked the capacity to consent to arbitration as her health-care surrogate and, in the alternative, that the arbitration clause is void because it lacked sufficient consideration. Lumpkin does not dispute that McDaniel was, in fact, acting as her health-care surrogate for the purposes of that section when she was admitted to the Picayune Convalescent Center. Therefore, a health-care surrogate, acting under the provisions of the Uniform Health-Care Decisions Act, is capable of binding his or her patient to arbitration. With regard to the issue of consideration, Lumpkin points to the statement of the facility administrator that Lumpkin would not have been refused admission to the facility had she objected to the arbitration agreement as evidence that the arbitration clause lacked consideration, and that therefore the arbitration clause should be stricken from the admissions agreement. However, those statements are irrelevant to the issue of consideration. The only thing her statements represent is an admission that, in retrospect, Lumpkinā€™s daughter could have entered into a more beneficial contract for her mother had she bargained for it. Simply because one party to a contract later admits that the other party could have successfully bargained for more beneficial terms at the time the contract was formed does not mean that the element of the contract not bargained for is void for lack of consideration. In addition, the statements are barred by the parol evidence rule. All that is needed to constitute a valid consideration to support an agreement or contract is that there must be either a benefit to the promissor or a detriment to the promisee. Here, there is quite clearly sufficient consideration to support the arbitration agreement. Both parties undertook duties towards one another under the admissions agreement. Covenant Health promised to provide care and assistance to Lumpkin. Lumpkin promised to pay it for its service. The dispute between Lumpkin and Covenant Health falls within the scope of the arbitration clause. Lumpkin argues that her daughter, McDaniel, was fraudulently induced into signing the admissions agreement. The admissions agreement itself did not contain any false information, it simply contained terms that could have been altered had McDaniel attempted to do so. The fact that she failed to bargain for those terms does not constitute fraud any more than it constitutes a lack of consideration. Lumpkin argues that the admissions agreement contains several provisions that have previously been found unconscionable by the supreme court. Some of the language in the agreement have been found to be unconscionable by the supreme court, and those are stricken from the agreement. The admissions agreement, absent the offending language, is substantively conscionable and the parties are bound by it, including its arbitration clause.


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