Arbitration  – Skilled Nursing Home – Attorney-in-Fact – No Fiduciary Duty

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Although licensed memory wards possess special knowledge and skill concerning the care of those afflicted with cognitive impairments, the court declines plaintiff’s invitation to create a de jure fiduciary relationship between assisted living facilities with memory wards and their residents.

We reverse the trial court’s denial of defendant Smithfield East Health Holdings, LLC’s motion to compel arbitration. We remand for findings as to defendant Smithfield Operations, LLC’s relationship with Smithfield East. We affirm the trial court’s denial of the remaining defendants’ motion to compel arbitration.

Facts

Plaintiff, as her father’s attorney-in-fact, signed multiple documents admitting him to the defendant-nursing home, Gabriel Manor. One of those documents was an optional arbitration agreement.

Plaintiff’s father later died in Gabriel Manor, and she brought this wrongful death action. The nursing home moved to compel arbitration. The trial court denied the motion, and the nursing home appeals.

Fiduciary Relationship

We decline plaintiff’s invitation to create a de jure fiduciary relationship between assisted living facilities with memory wards and their residents for two reasons. First, to create a de jure fiduciary relationship on the basis of special knowledge and skill alone would greatly expand the limited list of de jure fiduciary relationships. Second, a person may wish to place a relative with Alzheimer’s in a long-term care facility for reasons other than the specialized knowledge of care providers, whether for a lack of physical space in the home or insufficient time to provide the necessary degree of care and supervision.

In this case, there was also no de facto fiduciary relationship between plaintiff’s father and Gabriel Manor. The uncontroverted evidence and findings of fact made by the trial court in this case are readily distinguishable from the extensively developed facts that led to the conclusion that a fiduciary relationship existed between plaintiff and his surgeon in King v. Bryant, 369 N.C. 451, 795 S.E.2d 340 (2017).

Unlike the plaintiff in King, plaintiff was not referred to Gabriel Manor by a person who already owed her father a pre-existing fiduciary duty, but instead was referred by her chiropractor, who had never treated her father and who had no personal knowledge of his condition.

Unlike Mr. King, plaintiff was not asked to sign the arbitration agreement before she could evaluate the care offered by Gabriel Manor; prior to signing the agreement, she toured the facility and was provided the opportunity to ask questions. She signed the agreement after assessing the facility with a friend who also had the opportunity to offer her independent thoughts on the facility.

In light of these factual distinctions, King’s factually specific analysis and holding is not controlling here.

We also disagree with plaintiff’s argument that the findings and evidence show she placed her father with Gabriel Manor because of its staff’s specialized skill and knowledge in caring for people suffering from Alzheimer’s. The trial court’s undisputed findings of fact indicate that plaintiff had cared for her father while he had dementia for over a year in her own home prior to admitting him to Gabriel Manor. She sought out an assisted living facility once her father needed bathing and toileting assistance, which she did not feel she could provide without violating his dignity. Thus, it does not appear that plaintiff sought out an assisted living facility because she was unable to exercise specialized knowledge or skill in caring for her father’s medical needs.

The only two facts common to both this case and King are the provision of confidential information by the party asserting the existence of a fiduciary duty and their lack of legal expertise. While it is true that the provision of confidential information places confidence in the recipient, that alone does not create a fiduciary duty. Unlike Mr. King, plaintiff provided the confidential information only after she had the opportunity to perform her own due diligence by touring and dining at Gabriel Manor with her friend.

Plaintiff’s lack of legal knowledge does not suffice to show the fiduciary relationship present in King, particularly when the arbitration agreement at issue here—in contrast to the agreement in King—outlined the nature of arbitration, identified the rights plaintiff’s father was relinquishing, and encouraged plaintiff to seek the advice of legal counsel before signing. And unlike Mr. King, plaintiff had the right to cancel the arbitration agreement on her father’s behalf for any reason within 60 days, during which period she had the opportunity to monitor the care provided to him.

In light of all the uncontroverted facts, we cannot conclude that when plaintiff signed the arbitration agreement, Gabriel Manor figuratively held all the cards such that the special circumstance of a fiduciary relationship had arisen. We therefore reverse the trial court’s order concluding Smithfield East owed plaintiff’s father a fiduciary duty.

Finally, with the exception of Smithfield Operations, LLC, each remaining defendant has denied the allegations in the complaint asserting the existence of relationships among them. Therefore, the trial court did not err in concluding that these defendants did not have standing to invoke the arbitration agreement.

Reversed in part, affirmed in part, and remanded.

Hager v. Smithfield East Health Holdings, LLC (Lawyers Weekly No. 011-062-19, 22 pp.) (Lucy Inman, J.) (Wanda Bryant, J., concurring in the result only without separate opinion) Appealed from Johnston County Superior Court (Thomas Lock, J.) Stephen Gugenheim for plaintiff; Carl Newman and Katherine Hilkey-Boyatt for defendants. N.C. App.