Justice Ken Molberg
The Dallas Court of Appeals has held that a rehabilitation facility sued for wrongful death failed to carry its evidentiary burden that a valid arbitration agreement existed between the facility and plaintiff.
Roger Cornell Fox, Individually and on Behalf of the Estate of Karen Nasine Fox v. The Rehabilitation & Wellness Centre of Dallas, LLC and Brius, LLC (no. 05-21-00904-CV; filed June 5, 2023) arose from a wrongful death and survivor action in which the rehab facility moved to dismiss or stay plaintiff’s claims pending arbitration of the dispute because plaintiff signed a valid arbitration agreement on decedent’s behalf and the claims were within the scope of the agreement. Plaintiff objected on the basis that the facility failed to establish the existence of a valid agreement and to produce evidence that plaintiff signed such an agreement. The trial court agreed with the rehab facility. Plaintiff appealed.
In an opinion by Justice Molberg, the court of appeals reversed. First, the facility argued that the court of appeals did not have jurisdiction over the appeal because the trial court ruling to stay proceedings pending the outcome of good faith negotiation and, failing that, arbitration was interlocutory in nature. The court of appeals disagreed, holding that the trial court’s dismissal order was final and appealable. Turning to the question of whether a valid arbitration agreement existed, the court cited SCOTX’s decision in Jack B. Anglin v. Tipps, 842 S.W.2d 266, 269 (Tex. 1992)) for the proposition that “a trial court may summarily decide whether to compel arbitration on the basis of affidavits, pleadings, discovery, and stipulations. However, if the material facts necessary to determine the issue are controverted, by an opposing affidavit or otherwise admissible evidence, the trial court must conduct an evidentiary hearing to determine the disputed material facts” (emphasis added in original). Here the court determined that the rehab facility simply failed “to put forth competent prima facie evidence of the arbitration agreement itself” (citation omitted). Instead, all the facility produced was a two-page unauthenticated agreement purporting to show decedent’s signature, without any accompanying affidavits or other authenticating evidence.
Even assuming that the facility properly authenticated the purported agreement, the court went on, it presented no evidence that plaintiff signed the agreement on decedent’s behalf. Plaintiff was a nonsignatory to the agreement but might still be bound by it under “principles of contract law and agency” (citation omitted), and since plaintiff’s claims were derivative of decedent’s claims, the arbitration agreement could still apply to them under agency theory. Although plaintiff’s signature appeared on the purported agreement, however, the court found no evidence “showing that an agency relationship did, in fact, exist between [plaintiff and decedent] at the time he signed the Agreement” and that his mere signature on an otherwise unauthenticated document did not “certify” that plaintiff was acting as decedent’s agent. The rehab facility argued that the agreement further contained language stating that plaintiff had decedents’ “consent, instruction, and/or durable power of attorney,” but the court determined, again, that a mere signature on the document “fail[ed] to establish [plaintiff] in fact, ha[d] [plaintiff’s] consent or authorization to sign it on her behalf and constitutes, at most, no more than a scintilla of evidence that [plaintiff] was her agent.”
The problem in this case appears to be that the facility didn’t do anything else to show the existence of a valid arbitration agreement other than to attach an unauthenticated copy of it, along with another unauthenticated document purporting to be a power of attorney signed by decedent more than five months after the date shown on the agreement itself. The trial court didn’t even hold an evidentiary hearing, leaving the court of appeals with only a bare hearing transcript to go on. We’re not sure what else the court of appeals could have done, given this weird and irregular record and basic neglect of proper procedure.
