# Joint Appendix — Kindred Nursing Ctrs. Ltd. P'ship v. Clark, 137 S. Ct. 1421 (2017) (No. 16-32) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0688%3A07 ## Record - **Collection:** Supreme Court brief - **Document type:** Joint Appendix - **Published:** January 1, 2017 ## Text No. 16-32 In the Supreme Court of the Anited States KINDRED NURSING CENTERS LIMITED PARTNERSHIP, DBA WINCHESTER CENTRE FOR HEALTH AND REHABILITATION, NKA FOUNTAIN CIRCLE HEALTH AND REHABILITATION, ET AL.., Petitioners, Vv. JANIS E. CLARK AND BEVERLY WELLNER, ET AL., Respondents. On Writ of Certiorari to the Supreme Court of Kentucky JOINT APPENDIX ANDREW J. PINCUS ROBERT E. SALYER Counsel of Record Counsel of Record Mayer Brown LLP Wilkes & McHugh, PA. 1999 K Street, N.W. 429 North Broadway Washington, DC 20006 P.O. Box 1747 (202) 263-3000 Lexington, KY 40588 apincus@mayerbrown.com (859) 455-3356 rsalyer@wilkesmchugh.com Counsel for Petitioners Counsel for Respondents PETITION FOR CERTIORARI FILED JULY 1, 2016 CERTIORARI GRANTED OCTOBER 28, 2016 i TABLE OF CONTENTS Relevant Docket Entries in the Kentucky Court of Appeals (Clarh)..................cessssseeeeeeees Relevant Docket Entries in the Kentucky Court of Appeals (Wellner)..............c..cc0ce0ee00ee0 Relevant Docket Entries in the Kentucky Supreme Court (Clar hh) .........cccccccssccecccccccesccecee Relevant Docket Entries in the Kentucky Supreme Court (Wellner) ...................cccccceeeeeees Power of Attorney (Clas it) ..........0...ccccccccccsescesscce ses Power of Attorney (Wellner)..................cccesecseeeeeees Arbitration Agreement (Clark)................02.00.000000 Arbitration Agreement (Wellner)...................0...00. Petition for Rehearing (Clark) (Appendices Omitted) (October 12, 2015) .................ccseseeeees Petition for Rehearing (Wellner) (Appendices Omitted) (October 12, 2015) ..................cccccceee. Response to Petition for Rehearing (Clark) ey Cis SE occncdnsutimiidennietdineddiivercecmonsivens Response to Petition for Rehearing (Wellner) I a Appellants’ Motion for Leave to Cite Supple- mental Authority (Clark) (December 16, PIE cinincdadansimitciniintdankubihieiaimibianininiatntess The Kentucky Supreme Court’s Receipt of No- tice of Movants’ Motion for Leave to Cite Supplemental Authority (Clark) UY TN Se dee cicnicettctsndessiunistinncinonends ii Appellees’ Response to Motion to Supplement Authorities in Support of Petitioners’ Pend- ing Petition for Rehearing (Clark) ...................... 92 Appellees’ Response to Motion to Supplement Authorities in Support of Petitioners’ Pend- ing Petition for Rehearing (Wellner) ................. 101 The following items are not reproduced in the joint appendix because they have already been re- produced in the petition for a writ of certiorari, at the pages indicated: The Kentucky Supreme Court’s Order Denying Rehearing (February 18, 2016).................. la The Kentucky Supreme Court’s Opinion A ee 3a The Kentucky Court of Appeals’ Order in I i lear icemannetie 119a The Clark County Circuit Court’s November ISAS LE Ie oe 126a The Clark County Circuit Court’s January 9, NN I sities cc incsndertpssniendiddctanbisncevenanness 128a The Kentucky Court of Appeals’ Order in I I I io cccdcrncckecdectntinncensenswnce 13la The Clark County Circuit Court’s November ek I Oe BD i oiccccicinccntssvccsenbineaddeseess 138a The Clark County Circuit Court’s January 9, ee I ci ciccinitdicenntcesactomesaniideddsineionintn 140a The following items are not reproduced in the joint appendix because they have already been re- produced in the response to petition for a writ of cer- tiorari, at the pages indicated: Appellants’ Motion for Leave to Cite Supplemental Authority in Wellner (December TINIE dibs oi sa a csineddannetsundaltiegeiiiebadalinsneasuphesens sve la The Kentucky Supreme Court’s Receipt Of Notice of Movants’ Motion for Leave to Cite Supplemental Authority in Wellner (December ERT a Be: ARAN ASRS SO 8a The Kentucky Supreme Court’s Order Granting Movants’ Motion to Cite Supplemental Authority (December 30, 2015)....... 10a 1 KENTUCKY COURT OF APPEALS KINDRED NURSING CENTERS LIMITED PARTNERSHIP, Appellant, v JANIS E. CLARK, Executrix of the Estate of Olive G. Clark, deceased, Appellee. No. 2012-CA-2113 RELEVANT DOCKET ENTRIES NO. DATE DESCRIPTION 1 11/19/2012 Circuit Court Judgment 2 12/7/2012 Relief Pursuant to CR 65.07 3 12/7/2012 Motion for Interlocutory Relief 4 12/18/2012 Response to Motion 11 6/25/2013 Order Denying Relief under CR 65 13 9/24/2015 Supreme Court Opinion 15 2/23/2016 —_‘ Finality 2 KENTUCKY COURT OF APPEALS KINDRED NURSING CENTERS LIMITED PARTNERSHIP, Appellant, v BEVERLY M. WELLNER (individually, and on be- half of the Estate of Joe P. Wellner), Appellee. No. 2012-CA-2112 RELEVANT DOCKET ENTRIES NO. DATE DESCRIPTION 1 11/19/2012 Circuit Court Judgment 2 12/7/2012 Relief Pursuant to CR 65.07 3 12/7/2012 Motion for Interlocutory Relief 4 12/18/2012 Response to Motion 11 6/25/2013 Order Denying Relief under CR 65 13 9/24/2015 Supreme Court Opinion 15 2/23/2016 = Finality 3 SUPREME COURT OF KENTUCKY KINDRED NURSING CENTERS LIMITED PART- NERSHIP D/B/A WINCHESTER CENTRE FOR HEALTH AND REHABILITATION N/K/A FOUN- TAIN CIRCLE HEALTH AND REHABILITATION, et al., Appellants, v JANIS E. CLARK, Executrix of the Estate of Olive G. Clark, deceased, and on behalf of the wrongful death beneficiaries of Olive G. Clark, Appellee. No. 2013-SC-430 RELEVANT DOCKET ENTRIES NO. $DATE #£DESCRIPTION 1 6/25/2013. Judgment/Original Action Date 2 7/2/2013 Relief Pursuant to CR 65.09 3 7/10/2013 Partial Record Filed 7/15/2013 Respondent’s Response 6 7/15/2013 Sent Out for Assignment 10 11/7/2013 Courts Own Motion: Setting Oral Argument NO, 32 33 DATE 11/19/2013 6/22/2015 6/26/2015 8/4/2015 9/24/2015 10/9/2015 10/13/2015 10/26/2015 11/10/2015 2/18/2016 2/18/2016 2/18/2016 11/4/2016 4 DESCRIPTION Courts Own Motion: Setting Oral Argument Motion as to Record Response to Motion as to Record Order — As to Record Opinion — Denying Order on Courts Own Motion Petition for Rehearing Response to Petition for Rehearing Sent Out for Assignment Order Denying Petition for Rehearing Finality — Publication Letter Finality Note That Certiorari Granted 5 THE SUPREME COURT OF KENTUCKY KINDRED NURSING CENTERS LIMITED PART- NERSHIP D/B/A WINCHESTER CENTRE FOR HEALTH AND REHABILITATION N/K/A FOUN- TAIN CIRCLE HEALTH AND REHABILITATION, et al., Appellants, Vv BEVERLY WELLNER, individually and on behalf of the Estate of Joe P. Wellner, deceased, and on behalf of the wrongful death beneficiaries of Joe P. Wellner, Appellee. No. 2013-SC-431 RELEVANT DOCKET ENTRIES NO. DATE £DESCRIPTION 1 6/25/2013. Judgment/Original Action Date 2 7/2/2013 Relief Pursuant to CR 65.09 3 7/10/2013 + Partial Record Filed 7/15/2013 Respondent’s Response 6 7/15/2013 Sent Out for Assignment 10 11/7/2013 Courts Own Motion: Setting Oral Argument 19 20 21 30 31 32 33 DATE 11/19/2013 6/22/2015 6/26/2015 8/4/2015 9/24/2015 10/9/2015 10/13/2015 10/26/2015 11/10/2015 2/18/2016 2/18/2016 2/18/2016 11/4/2016 6 DESCRIPTION Courts Own Motion: Setting Oral Argument Motion as to Record Response to Motion as to Record Order — As to Record Opinion — Denying Order on Courts Own Motion Petition for Rehearing Response to Petition for Rehearing Sent Out for Assignment Order Denying Petition for Rehearing Finality — Publication Letter Finality Note That Certiorari Granted 7 GENERAL DURABLE POWER OF ATTORNEY TO CONDUCT ALL BUSINESS AND PERSONAL AFFAIRS OF PRINCIPAL I, OLIVE G. CLARK, (SSAN # XXX-XX2445), of 536 Garden Springs Drive, Mt. Sterling, KY 40353, hereby constitute and appoint my daughter, JANIS ELAINE CLARK of 825 Sunset Drive, Lexington, Fayette County, Kentucky 40502, my true and lawful attorney in fact, with full power for me and in my name, place, and stead, in her sole discretion, to transact, handle, and dispose of all matters affecting me and/or my estate in any possible way. Without limiting or derogating from this general power, I specifically authorize my attorney in fact for me and in my name, place, and stead, in her sole dis- cretion: To prepare and complete administrative docu- ments necessary to secure or preserve any and all governmental benefits available to me; To lease, sell, or convey any real or personal property that I may now or ever own; To mortgage my property as she sees fit; To receive and receipt for any money which may now or hereafter be due to me; To retain and release all liens on real or personal property; To draw, make, and sign in my name any and all checks, promissory notes, contracts, deeds or agree- ments; To invest or reinvest my money for me; 8 To institute or defend suits concerning my prop- erty or rights; To file all tax returns (including, without limita- tion, state and federal income tax returns; To enter all safe deposit boxes; To transfer assets of mine to any trust created by me for addition to trust principal; and Generally to do and perform for me and in my name all that I might do if present. Also, without limiting or derogating from this general power, I authorize my attorney in fact to make all decisions regarding my health care and medical treatment. THIS POWER OF ATTORNEY IS A DURA- BLE POWER OF ATTORNEY AND SHALL NOT BE AFFECTED BY MY DISABILITY AS PRIN- CIPAL OR OTHERWISE. The rights, powers, and authority of my attorney in fact shall commence upon execution of this in- strument and shall remain in full force and effect un- til this instrument is terminated by me in writing. I hereby adopt and ratify all of the acts of my said attorney in fact done pursuant to the power hereby granted, as fully as if I were acting in my own proper person. IN TESTIMONY WHEREOFPF, WITNESS my signa- ture this 31%t of August, 2006. _/s/ OLIVE G.CLARK (STATE OF KENTUCKY ) ) (COUNTY OF ) Before me, the undersigned authority, came OLIVE G. CLARK, who is of sound mind and eighteen (18) years of age or older, and acknowledged that she voluntarily dated and signed this writing or directed it to be signed and dated as above. Done this 31° day of August, 2006. /s/ (Signature of Notary Public) Date commission expires: 10/9/2007 Prepared by: _/s/ Glenn E. Acree Acree Law Office P O Box 25787 Lexington, KY 40583-5787 (859) 253-4664 10 POWER OF ATTORNEY OF JOE PAUL WELLNER KNOW ALL MEN BY THESE PRESENTS: That I, JOE PAUL WELLNER, of Winchester, Clark County, Kentucky hereby make, constitute and appoint my wife, BEVERLY M. WELLNER, as my true and lawful Attorney-in-Fact for me and in my name, place and stead: 1. To receive, take receipt for, and hold in pos- session, manage and control all property, both real and personal, which I now or may hereafter own, hold, possess or be or become entitled to with full power to sell, mortgage or pledge, assign, transfer, invest and reinvest the same or any part thereof in forms of investment, including bonds, notes and oth- er obligations of the United States deemed prudent by my said wife in her discretion, with full power to retain the same without liability for loss or deprecia- tion thereof. 2. To demand, sue for, collect, recover and re- ceive all debts, monies, interest and demands what- soever now due or that may hereafter be or become due to me (including the right to institute legal pro- ceedings therefor). 3. To make, execute, deliver and endorse notes, drafts, checks and order for the payment of money or other property from or to me or order in my name. 4. To, make, execute and deliver deeds, releases, conveyances and contracts of every nature in relation 11 to both real and personal property, including stocks, bonds, and insurance. 5. To have access to my safe deposit boxes, act as my proxy with power of substitution to vote all stocks or securities in my name in relation to any individual or corporate action, to deposit any stocks or securi- ties in connection with any plans of prospective or reorganization committees, to accept and exercise all rights, to subscribe for securities and to sell same. 6. To receive and receipt for all rents and income to which I am or may become entitled, pay therefrom all necessary expenses for the maintenance, upkeep, care and protection of my property, deduct therefrom her own reasonable compensation, and pay the net income from time to time to me or in such manner as I shall direct, or in the absence of such payment to me or at my discretion, to invest the same for me in her judgment in the manner above described. 7. To prepare, execute and file federal or state income tax returns and other real and personal property tax lists and to pay all such taxes. 8. In the event of my illness, incapacity or other emergency to have full power to make all health care decisions for me and in my stead; this power shall encompass the power to make any decision which I might myself make in authorizing or refusing treat- ment, surgery or other health care. My Attorney-in- Fact shall have the right to refuse the administration of nutrition and hydration. 9. If I should ever need a guardian or curator or similar person or entity to assist me if I am unable to fully handle all of my affairs, and if this Power of At- torney should not be sufficient therefor, I nominate my wife, BEVERLY M. WELLNER, as my guardi- 12 an, curator, etc., and I specifically provide that sure- ty not be required on her bond as such. 10. I hereby further grant unto my Attorney-in- Fact full power in and concerning the above premises and to do any and all acts as set forth above as fully as I could do if I were personally present, and at my decease to pay, transfer and deliver over to my per- sonal representative, all principal and income then in his possession and control, and I do ratify and con- firm whatever my said Attorney-in-Fact shall lawful- ly do under these presents, provided however, that my attorney shall not bind me as surety, guarantor for accommodation nor give away any of my estate, whatsoever, nor shall my attorney be authorized to accept service of process for or on my behalf. This Power of Attorney shall become effective immediately and shall not be affected by my disabil- ity, this provision being pursuant to KRS 386.093. A photo copy or other mechanical duplication of this instrument shall have the same effect as an orig- inal. I revoke all prior General Powers of Attorney that I may have executed and I retain the right to revoke or amend this Durable Power of Attorney and to execute a new Durable Power of Attorney, assum- ing that I have the capacity to do so. Any amend- ments to this Power of Attorney shall be made by me in writing. IN WITNESS WHEREOF, I have hereunto set my hand and signature on this the 15 day of May, 2008. 13 WITNESS TO SIGNATURE BY MARK His [sf _ | JOE PAUL /s WELLNER Mark /s/ STATE OF KENTUCKY ) ) s.s. COUNTY OF CLARK ) I, a notary public in and for the State and County aforesaid, do hereby certify that the foregoing Power of Attorney was produced and executed before me by JOE PAUL WELLNER who is personally known to me, and was acknowledged by him in my presence on this the 15** day of May, 2008 to be his voluntary act and deed. My commission expires March 31, 2012. /3/ Ashley B. Holley NOTARY PUBLIC STATE OF KENTUCKY AT LARGE Prepared by: /s/ Michael A. Rowady MICHAEL A. ROWADY, ESQ. Blair & Rowady, P.S.C. 212 South Maple Street Winchester, Kentucky 40391 (859) 744-3251 14 ALTERNATIVE DISPUTE RESOLUTION AGREEMENT BETWEEN RESIDENT AND FACILITY (OPTIONAL) I. ALTERNATIVE DISPUTE RESOLUTION {ADR) AGREEMENT PROVISIONS A. Any and all claims or controversies arising out of or in any way relating to this ADR Agreement (“Agreement”) or the Resident’s stay at the Facility including disputes regarding interpretation of this Agreement, whether arising out of State or Federal law, whether existing or arising in the future, whether for statutory, compensatory or punitive damages and whether sounding in breach of con- tract, tort or breach of statutory duties (including, without limitation, any claim based on violation of rights, negligence, medical malpractice, any other departure from the accepted standards of health care or safety or the Code of Federal Regulations or un- paid nursing home charges), irrespective of the basis for the duty or of the legal theories upon which the claim is asserted, shall be subdued to alternative dispute resolution as described in this Agreement. Only disputes that would constitute a legally cog- nizable cause of action in a court of law may be sub- mitted to alternative dispute resolution. The parties to this Agreement understand that the Dispute Reso- lution Process contains provisions for both mediation and binding arbitration. If the parties are unable to reach settlement informally, or through mediation, the dispute shall proceed to binding arbitration. Binding arbitration means that the parties are waiv- ing their right to a trial, including their right to a ju- ry trial, their right to trial by a Judge and their right to appeal the decision of the arkitrator(s). Except as 15 expressly set forth herein, the provisions of the Uni- form Arbitration Act, KRS 417.045 et seq., shall gov- ern the Arbitration. This Agreement includes claims against the Facility, its employees and/or its medical director in his capacity as medical director. B. It is the intention of the parties to this Agreement that it shall inure to the benefit of and bind the parties, their successors and assigns, includ- ing the agents, employees, servants, officers, direc- tors and any parent or subsidiary of the Facility, and all persons whose claim is derived through or on be- half of the Resident, including any parent, spouse, child, guardian, executor, administrator, legal repre- sentative, or heir of the Resident. The term “Resi- dent” includes the resident, his or her Guardian or Attorney In Fact, his or her agent(s) or any person whose claim is derived though or on behalf of the res- ident. C. The “Claimant” may be either the Facility or the Resident, depending on who files the Request for ADR (the “Request”). The other party or parties against whom the Request is filed will be the “Re- spondent(s)”. D. Any mediation or arbitration conducted pur- suant to this Agreement shall be administered by an independent impartial entity that is regularly en- gaged in providing mediation and arbitration. ser- vices. The Request for ADR shall be made in writing and may be submitted to the National Arbitration Forum (“NAF”), 6465 Wayzata Blvd., Suite 500, P.O. Box 50191, Minneapolis, MN 55405, (800) 474-2371, facsimile (952) 345-1160 www.adrforum.com (the “Administrator”), by regular mail, certified mail, or overnight delivery. If the parties choose not to select NAF or, if NAF is unwilling or unable to serve as the 16 Administrator, the parties shall select another inde- pendent and impartial entity that is regularly en- gaged in providing mediation and arbitration ser- vices to serve as Administrator. Requests for ADR, regardless of the entity chosen to be Administrator, shall be conducted in accordance with the NAF Me- diation Rules and NAF Code of Procedure (hereinaf- ter, collectively “NAF Rules of Procedure”). A copy of the Rules of the Dispute Resolution Process may be obtained from the Facility’s Executive Director, or from NAF at the address or website listed above. E. All claims based in whole or in part on the same incident(s), transaction(s), or related course of care or services provided by the Facility to the Resi- dent, shall be mediated or arbitrated in one proceed- ing. A claim shall be waived and forever barred if it arose prior to the Request for ADR and is not pre- sented in the arbitration hearing. F. The parties shall attempt to resolve any dis- pute arising out of or relating to the Agreement or the Resident’s stay at the Facility by mediation. Un- less the parties agree otherwise, the mediator will be selected as described in the NAF Mediation Rules. The mediation shall convene not later than 120 days after tne Request is received by the Administrator. Any claim or controversy that remains unresolved af- ter the conclusion or termination of the mediation shall be settled by binding arbitration in accordance with this Agreement. Unless the parties agree oth- erwise, the Arbitrator(s) shall be selected as de- scribed in the NAF Code of Procedure. The arbitra- tion shall convene not later than sixty (60) days after the conclusion or termination of mediation. Claims where the demand is less than $75,000 shall not be subject to mediation and shall proceed directly to ar- 17 bitration, unless one of the parties requests media- tion, in which case all parties shall mediate in good faith. The parties, at their own expense, may be rep- resented by an attorney at the mediation or arbitra- tion. G. The parties agree to engage in limited discov- ery of relevant information and documents before and during mediation in accord with the Supple- mental Disclosures for Kindred Mediations (“Sup- plemental Disclosures”). Any disputes which the par- ties cannot resolve regarding the scope and limits of discovery shall be resolved by the mediator. A copy of the Supplemental Disclosures may be obtained from the Facility’s Executive Director or from NAF at the address or website listed in Paragraph D of this Agreement. H. Cost of ADR. Facility shall pay the mediator’s fees and other reasonable costs (excluding resident’s attorney's fees) associated with the mediation. Facili- ty shall pay the Arbitrator(s) fees and other reason- able costs associated with the arbitration (excluding resident’s attorney's fees) up to a maximum of five (5) days of hearing. If the arbitration hearing exceeds five (5) days, the additional fees and costs shall be borne equally by the parties. I. The losing party must pay the award to the prevailing party within thirty (30) days of the award date. If the award is not timely paid, the prevailing party may bring legal action pursuant to KRS 417.150 to enforce the award as if ft were a judgment entered by a court. J. If for any reason there is a finding that the Uniform Arbitration Act KRS 417.045 et seq., cannot be applied to this Agreement, then the parties here- 18 by make clear their intent that their disputes/claims be resolved pursuant to the Federal Arbitration Act and that the parties do not want their dis- putes/claims resolved in a judicial forum. K. The Parties agree and stipulate that the orig- inal of this Agreement, including the signature page, may be scanned and stored in a computer database or similar device, and that any printout or other out- put readable by sight, the reproduction of which is shown accurately to reproduce the original of this document, may be used for any purpose just as if it were the original, including proof of the content of the original writing. L. The Resident, or his or her legal guardian, his or her agent or designated legal representative un- derstand that other local nursing home’s agreements may not contain an alternative dispute resolution provision. The parties agree that the _ cost- effectiveness, time-efficiency and public policy rea- sons stated above are proper consideration for the acceptance of the Agreement. ll. ATTORNEY FEES AND COSTS The parties to this Agreement expressly agree to bear their own attorney fees and costs incurred in re- lation to this Agreement, or in relation to any other claim, including a claim to collect on unpaid nursing home charges. lil. SEVERABILITY PROVISION If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, in whole or in part, the remaining 19 provisions, and partially invalid or unenforceable provisions, to the extent valid and enforceable, shall nevertheless be binding and valid and enforceable. IV. RESIDENT'S _ UNDERSTANDING OF AGREEMENT The Resident understands that (A) he/she has the right to seek legal counsel concerning this Agreement, (B) the execution of this Agreement is not a precondition to the furnishing of services to the Resident by the Facility, and (C) this Arbitration Agreement may be revoked by providing notice to the Facility from the Resident within thirty (30) days of signature. If not revoked within thirty (30) days, this Agreement shall remain in effect for all care and ser- vices rendered at the Facility, even if such care and services are rendered following the Resident’s dis- charge and readmission to the Facility. (D) Nothing in this Agreement shall prevent Resident or any oth- er person from reporting alleged violations of law to the appropriate administrative, regulatory or law en- forcement agency. The Resident, his or her agent or designated legal representative, also had the oppor- tunity to consult with a Facility representative re- garding such explanations or clarification. Olive Clark 0280 Winchester Centre for Health & Rehabilitati Print Name of Resident Print Name and Number of Facility 20 _/s/ Jan Clark POA —s—_/s/ Signature of Resident or Signature of Title of Fa- Legal Representative cility’s Authorized Agent Jan Clark, Daughter _/s/ (Financial Agent) _ Printed Name of Facili- Legal Representative ty’s Authorized Agent Printed Name and Ca- pacity (i.e., guardian, du- rable power of attorney, spouse, son, daughter, etc.) Date: 8/15/08 Date: 8/15/08 If signed by a Legal Representative, the representa- tive certifies that the Facility may reasonably rely upon the validity and authority of the representa- tive’s signature based upon actual, implied or appar- ent authority to execute this Agreement as granted by the resident. 21 ALTERNATIVE DISPUTE RESOLUTION AGREEMENT BETWEEN RESIDENT AND FACILITY (OPTIONAL) I. ALTERNATIVE DISPUTE RESOLUTION (ADR) AGREEMENT PROVISIONS A. Any and all claims or controversies arising out of or in any way relating to this ADR Agreement (“Agreement”) or the Resident’s stay at the Facility including disputes regarding interpretation of this Agreement, whether arising out of State or Federal law, whether existing or arising in the future, whether for statutory, compensatory or punitive damages and whether sounding in breach of con- tract, tort or breach of statutory duties (including, without limitation, any claim based on violation of rights, negligence, medical malpractice, any other departure from the accepted standards of health care or safety or the Code of Federal Regulations or un- paid nursing home charges), irrespective of the basis for the duty or of the legal theories upon which the claim is asserted, shall be subdued to alternative dispute resolution as described in this Agreement. Only disputes that would constitute a legally cog- nizable cause of action in a court of law may be sub- mitted to alternative dispute resolution. The parties to this Agreement understand that the Dispute Reso- lution Process contains provisions for both mediation and binding arbitration. If the parties are unable to reach settlement Informally, or through mediation, the dispute shall proceed to binding arbitration. Binding arbitration means that the parties are waiv- ing their right to a trial, including their right to a ju- ry trial, their right to trial by a Judge and their right to appeal the decision of the arbitrator(s). Except as 22 expressly set forth herein, the provisions of the Uni- form Arbitration Act, KRS 417.045 et seq., shall gov- ern the Arbitration. This Agreement includes claims against the Facility, its employees and/or its medical director in his capacity as medical director. B. It is the intention of the parties to this Agreement that it shall inure to the benefit of and bind the parties, their successors and assigns, includ- ing the agents, employees, servants, officers, direc- tors and any parent or subsidiary of the Facility, and all persons whose claim is derived through or on be- half of the Resident, including any parent, spouse, child, guardian, executor, administrator, legal repre- sentative, or heir of the Resident. The term “Resi- dent” includes the resident, his or her Guardian or Attorney in Fact, his or her agent(s) or any person whose claim is derived through or on behalf of the resident. C. The “Claimant” may be either the Facility or the Resident, depending on who files the Request for ADR (the “Request”). The other party or parties against whom the Request is filed will be the “Re- spondent(s)”. D. Any mediation or arbitration conducted pur- suant to this Agreement shall be administered by an independent impartial entity that is regularly en- gaged in providing mediation and arbitration ser- vices. The Request for ADR shall be made in writing and may be submitted to the National Arbitration Forum (“NAF”), 6465 Wayzata Blvd., Suite 500, ”.O. Box 50191, Minneapolis, MN 55405, (800) 474-2371, facsimile (952) 345-1160 www.adrforum.com (the “Administrator’), by regular mail, certified mail, or overnight delivery. If the parties choose not to select NAF or, if NAF is unwilling or unable to serve as the 23 Administrator, the parties shall select another inde- pendent and impartial entity that is regularly en- gaged in providing mediation and arbitration ser- vices to serve as Administrator. Requests for ADR, regardless of the entity chosen to be Administrator, shall be conducted in accordance with the NAF Me- diation Rules and NAF Code of Procedure (hereinaf- ter, collectively “NAF Rules of Procedure”). A copy of the Rules of the Dispute Resolution Process may be obtained from the Facility’s Executive Director, or from NAF at the address or website listed above. E. All claims based in whole or in part on the same incident(s), transaction(s), or related course of care or services provided by the Facility to the Resi- dent, shall be mediated or arbitrated in one proceed- ing. A claim shall be waived and forever barred if it arose prior to the Request for ADR and is not pre- sented in the arbitration hearing. F. The parties shall attempt to resolve any dis- pute arising out of or relating to the Agreement or the Resident’s stay at the Facility by mediation. Un- less the parties agree otherwise, the mediator will be selected as described in the NAF Mediation Rules. The mediation shall convene not later than 120 days after the Request is received by the Administrator. Any claim or controversy that remains unresolved af- ter the conclusion or termination of the mediation shall be settled by binding arbitration in accordance with this Agreement. Unless the parties agree oth- erwise, the Arbitrator(s) shall be selected as de- scribed in the NAF Code of Procedure. The arbitra- tion shall convene not later than sixty (60) days after the conclusion or termination of mediation. Claims where the demand is less than $75,000 shall not be subject to mediation and shall proceed directly to ar- 24 bitration, unless one of the parties requests media- tion, in which case all parties shall mediate in good faith. The parties, at their own expense, may be rep- resented by an attorney at the mediation or arbitra- tion. G. The parties agree to engage in limited discov- ery of relevant information and documents before and during mediation in accord with the Supple- mental Disclosures for Kindred Mediations (“Sup- plemental Disclosures”). Any disputes which the par- ties cannot resolve regarding the scope and limits of discovery shall be resolved by the mediator. A copy of the Supplemental Disclosures may be obtained from the Facility’s Executive Director or from NAF at the address or website listed in Paragraph D of this Agreement. H. Cost of ADR. Facility shall pay the mediator’s fees and other reasonable costs (excluding resident’s attorney’s fees) associated with the mediation. Facili- ty shall pay the Arbitrator(s)’ fees and other reason- able costs associated with the arbitration (excluding resident's attorney's fees) up to a maximum of five (5) days of hearing. If the arbitration hearing exceeds five (5) days, the additional fees and costs shall be borne equally by the parties. I. The losing party must pay the award to the prevailing party within thirty (30) days of the award date. If the award is not timely paid, the prevailing party may bring legal action pursuant to KRS 417.150 to enforce the award as if it were a judgment entered by a court. J. If for any reason there is a finding that the Uniform Arbitration Act KRS 417.045 et seq., cannot be applied to this Agreement, then the parties here- 25 by make clear their intent that their disputes/claims be resolved pursuant to the Federal Arbitration Act and that the parties do not want their dis- putes/claims resolved in a judicial forum. K. The Parties agree and stipulate that the orig- inal of this Agreement, including the signature page, may be scanned and stored in a computer database or similar device, and that any printout or other out- put readable by sight, the reproduction of which is shown accurately to reproduce the original of this document, may be used for any purpose just as if it were the original, including proof of the content of the original writing. L. The Resident, or his or her legal guardian, his or her agent or designated legal representative un- derstand that other local nursing home’s agreements may not contain an alternative dispute resolution provision. The parties agree that the _ cost- effectiveness, time- efficiency and public policy rea- sons stated above are proper consideration for the acceptance of the Agreement. = & Y FEE The parties to this Agreement expressly agree to bear their own attorney fees and costs incurred in re- lation to this Agreement, or in relation to any other claim, including a claim to collect on unpaid nursing home charges. Ill, SEVERABILITY PROVISION If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, in whole or in part, the remaining 26 provisions, and partially invalid or unenforceable provisions, to the extent valid and enforceable, shall nevertheless be binding and valid and enforceable. IV. RESIDENTS UNDERSTANDING OF AGREEMENT The Resident understands that (A) he/she has the right to seek legal counsel concerning this Agreement, (B) the execution of this Agreement is not a precondition to the furnishing of services to the Resident by the Facility, and (C) this Arbitration Agreement may be revoked by providing notice to the Facility from the Resident within thirty (30) days of signature. If not revoked within thirty (30) days, this Agreement shall remain in effect for all care and ser- vices rendered at the Facility, even if such care and services are rendered following the Resident’s dis- charge and readmission to the Facility. (D) Nothing in this Agreement shall prevent Resident or any oth- er person from reporting alleged violations of law to the appropriate administrative, regulatory or law en- forcement agency. The Resident, his or her agent or designated legal representative, also had the oppor- tunity to consult with a Facility representative re- garding such explanations or clarification. Joe Wellner 0280 Winchester Centre for Health & lal Rehabilitati Print Name of Resident Print Name and N umber of Facility 27 /s/ Signature of Resident or Signature of Title of Fa- Legal Representative cility’s Authorized Agent Beverly Wellner, Spouse /s/ (Financial Agent) _ Printed Name of Facili- Legal Representative ty’s Authorized Agent Printed Name and Ca- pacity (i.e., guardian, du- rable power of attorney, spouse, son, daughter, etc.) Date: 8/16/08 Date: 8/16/08 lf signed by a Legal Representative, the representa- tive certifies that the Facility may reasonably rely upon the validity and authority of the representa- tive’s signature based upon actual, implied or ap- parent authority to execute this Agreement as grant- ed by the resident. 28 COMMONWEALTH OF KENTUCKY SUPREME COURT OF KENTUCKY 2013-SC-000430-I KINDRED NURSING CENTERS LIMITED PART- NERSHIP d/b/a WINCHESTER CENTRE FOR HEALTH AND REHABILITATION n/k/a FOUN- TAIN CIRCLE HEALTH AND REHABILITATION; KINDRED NURSING CENTERS EAST, LLC; KIN- DRED HOSPITALS LIMITED PARTNERSHIP; KINDRED HEALTHCARE, INC.; KINDRED HEALTHCARE OPERATING, INC.; KINDRED REHAB SERVICES, INC. d/b/a PEOPLEFIRST REHABILITATION MOVANTS/PETITIONERS Vv. JANIS E. CLARK, Executrix of the Estate of OLIVE G. CLARK, deceased, and on behalf of the wrongful death beneficiaries of OLIVE G. CLARK RESPONDENT/RESPONDENT ON REVIEW FROM COURT OF APPEALS CASE NO: 2012-CA-002213-I PETITION FOR REHEARING Submitted by: Quintairos, Prito, Wood & Boyer, P.A. /s/ Donald L. Miller, I Peter Cassidy, III Kristin M. Lomond 29 9300 Shelbyville Road, Suite 400 Louisville, KY 40222 COUNSEL FOR PETITIONERS ERTIFICATE OF CE The undersigned hereby certifies that ten (10) copies of this brief were served upon Susan Stokley Clary, Clerk, Supreme Court of Kentucky, RM. 209, State Capitol, 700 Capitol Ave., Frankfort, KY 40601-3488, and one (1) copy served on Sam Givens, Clerk, Ken- tucky Court of Appeals, 360 Democrat Drive, Frank- fort, KY 40601; Hon. Jean Chenault Logue, Circuit Judge, Clark County Courthouse, P.O. Box 313, Winchester, KY 40391; Robert Salyer and Richard E. Circeo, Esq., Wilkes & McHugh, P.A., 429 N. Broad- way, P.O. Box 1747, Lexington, KY 40588-1747, and J.T. Gilbert, Esq., Coy, Gilbert & Gilbert, 212 N. Se- cond St., Richmond, KY 4..; on this 12th day of Oc- tober, 2015. /s/ Counsel for Petitioners PETITION FOR REHEARIN The majority Opinion sidestepped the Federal Arbitration Act, the Supremacy Clause and misin- terpreted controlling decisions of the U.S. Supreme Court. A power of attorney cannot constitutionally permit formation of one type of contract but not an arbitration contract. The Court should correct the majority's error. Civil Rule 76.32 governs petitions for rehearing and states in part, “[A] petition for re- 30 hearing shall be limited to a consideration of the is- sues argued on the appeal and will be granted only when it appears that the court has overlooked a ma- terial fact in the record, or a controlling statute or decision, or has misconceived the issues presented on the appeal or the law applicable thereto.”! The Supremacy Clause of the United States Con- stitution provides that “the Laws of the United States...shall be the supreme Law of the Land, and the Judges in every State shall be bound thereby.” U.S. CONST., Art. VI, c1.2. Therefore, a “state law that stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress’ is preempted by the Supremacy Clause.” Hines v. Davidowitz, 312 U.S. 52, 67 (1941). As fed- eral substantive law, the Federal Arbitration Act (“FAA”) preempts all contrary or inconsistent state law. See ATT Mobility, LLC v. Concepcion, 563 U.S. 333, 131 S.Ct. 1740 (2011). The majority here agreed the FAA applied to govern the arbitration agree- ments at issue: A written provision in... a contract evidenc- ing a transaction involving commerce to set- tle by arbitration a controversy thereafter arising out of such contract or transaction, ... 1 This closely decided (4-3) decision sets new Kentucky prece- dent, and Petitioners agree with the dissent that it overtly con- flicts with federal and state court decisions interpreting and applying the FAA to Kentucky arbitration law. Since oral ar- guments were held in this case on December 12, 2013, almost two years ago now, even this Court's membership has changed. Petitioners respect the Court's considered debate, and given such a close decision with such huge implications for Kentucky law, encourage the Court strongly to consider rehearing in this case. 31 or an agreement in writing to submit to arbi- tration an existing controversy arising out of such a contract,...shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C. § 2 (emphasis added). See also, Extendicare Homes, Inc. v. Whisman, No. 2013-SC-000426-I, 2015 WL 5634309 at *8 (Ky. Sept. 24, 2015). Never- theless, it failed to apply the FAA. The Court’s Opin- ion is attached as Appendix 1. The majority Opinion’s newly-created rule of law disfavoring enforcement of agent-executed arbitra- tion agreements cannot stand in light of the FAA. To require more to enforce an arbitration contract signed by an agent than for any other contract signed by an agent disproportionately impacts arbi- tration and is preempted by the FAA. Ms. Clark expressly granted to her attorney-in- fact the power to make and sign “any and all con- tracts or agreements,” without qualification. She also granted her the authority, “in her sole discretion, to transact, handle and dispose of all matters affecting me and/or my estate in any possible way.” See Gen- eral Durable Power of Attorney, attached as Appen- dix 2 (emphasis added). The majority requires for enforcement a redundancy that would require correc- tion in a grammar class. By fiat, the majority viti- ates Ms. Clark’s express grant of power and deems it to be a “vague and general delegation of authority.” See Whisman, 2015 WL 563430 at *16. The majority also characterized an arbitration contract — a con- tract to agree upon the forum for resolution of her claims — as one waiving the “inviolate,” “sacred,” and “God-given right” to a jury trial. Id. 32 The majority opinion radically misses the mark because it derives from an incorrect assumption con- cerning the United States’ form of government. Whether characterized as a “Constitutional Democ- racy’ where the majority rules, see Smith ov. Allwright, 321 U.S. 649, 664 (U.S. 1944), or a “Con- stitutional Republic” where the people are sovereign, see Chisholm v. Georgia, 2 U.S. (2 Dall.) 419 (1793)(superseded by statute in holding), its founders built the United States as a nation of laws. Indeed, when the majority's members took their places on this Court each took an oath to “support the Consti- tution of the United States and the Constitution of this Commonwealth.” Kentucky Constitution § 228 (emphasis added). The majority did not comply with this oath. As Justice Thurgood Marshall stated: Thus state law, whether of legislative or judi- cial origin, is applicable if that law arose to govern issues concerning the validity, revo- cability, and enforceability of contracts gen- erally. A state-law principle that takes its meaning precisely from the fact that a con- tract to arbitrate is at issue does not comport with this requirement of §2 .... A court may not, then, in assessing the rights of litigants to enforce an arbitration agreement, construe that agreement in a manner different from that in which it otherwise construes nonarbitration agreements under state law. Nor may a court rely on the uniqueness of an agreement to arbitrate as a basis for a state- law holding that enforcement would be un- conscionable, for this would enable the court to effect what we hold today the state legisla- ture cannot. 33 Perry v. Thomas, 482 U.S. 483, 492 fn 9 (1987) (citing Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967) and Southland Corp. v. Keating, 465 U.S. 1 (1984)(emphasis original)). The majority's Opinion does not support the U.S. or Kentucky Constitutions. A jury trial is absolutely not a “God-given” right, but rather a right provided under the terms and conditions of a constitution written and adopted by its people. In fact, one can easily waive one’s right to jury trial simply by not asking for it. See CR 38.04. See also, Brown uv. Hoblitzell, 307 S.W.2d 739 (Ky. 1956). Regardless, the majority probably invalidated countless arbitra- tion contracts signed by agents under powers of at- torney for mobile phone service, cable television, credit cards, loans, etc., without even considering those ramifications, because it so detests the agree- ments in the nursing home context.2 A result- oriented law is not faithful to any constitution. Highlighting the majority Opinion’s error is its failure to recognize — or to distinguish — that courts 2 As the Court is well aware, arbitration clauses appear in a myriad of contracts involving a host of goods and services. See, e.g., Green Tree Fin. Corp. v. Baizle, 539 U.S. 444 (2003)(home improvement loan); Citizens Bank v. Alafabco, Inc., 539 U.S. 52 (2003) (commercial debt restructuring contract); Circuit City Stores, Inc. v. Adams, 532 U.S.105 (2001)(employment con- tract); Wright v. Universal Mar. Serv. Corp., 525 U.S. 70 (1998) (longshoreman collective bargaining contract); Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (1995)(securities brokerage contract); Allied-Bruce Terminix v. Dobson, 513 U.S. 265 (1995)(termite control contract); Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967)(paint manufacturing and sales agreement). Mitsubishi Motors Corp. v. Soler Chrys- ler-Plymouth, inc. 473 U.S. 614 (1985)(automobile manufactur- ing and sales distribution contract). 34 and legislatures can indeed set higher standards for parental rights, slavery and marriage to name a few (see, e.g., KRS 625.090; KY Const. § 25; and KRS 402.050) because no federal law prohibits those ele- vated standards. The majority — ignores that tion pre eo as amend to others. The majority's dislike for the federal mandate, “redefining” or “ele- vating” the standard for enforcing agent-executed arbitration contracts is simply preempted. I. THe MAJORITY OVERLOOKED AND IGNORED THE FAA AS THE CONTROLLING STATUTE AND MISCONSTRUED CONTROLLING DECISIONS INTERPRETING IT The Federal Arbitration Act (“FAA”) expressly protects both pre-and post-dispute arbitration con- tracts, including those used in long-term care facili- ties like the one at issue here. See 9 U.S.C. § 2. See also, Marmet Health Care Center, Inc. v. Brown, __ U.S. __, 182 S. Ct. 1201 (2012) (applying the FAA in nursing home context). In AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S. Ct. 1740 (2011), the U.S. Supreme Court held that the FAA means exactly what it says: agreements to arbitrate “shall be valid, irrevocable, and enforceable save upon such grounds as exist at law or in equity for the revocation of any contract.” Id., 131 S.Ct. at 1745 (quoting 9 U.S.C. § 2). Arbitra- tion is a matter of contract and courts must treat ar- bitration contracts “on an equal footing with other contracts” and enforce them to their terms. Id. at 1745. The FAA not only preempts state laws that expressly disfavor arbitration agreements but it also preempts state-law rules that purport to apply to all contracts equally but actually “have a dispropor- 35 tionate impact on arbitration agreements.” See Jd. at 1747 (emphasis added). The majority's Opinion does both, and the FAA preempts its rule of law. Regardless of the majority’s intent, its Opinion discriminates against arbitration contracts, isolating them as forgoing a “God-given” right. That violates the FAA. The FAA preempts all generally applicable contract defenses — as this Court crafted its rule here — that “derive their meaning from the fact that an agreement to arbitrate is at issue.” Id. at 1746: When state law prohibits outright the arbi- tration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by the FAA. Preston uv. Ferrer, 552 U.S. 346, 353, 128 S.Ct. 978, 169 L.Ed.2d 917 (2008). But the inquiry be- comes more complex when a doctrine normally thought to be generally appli- cable, such as duress or, as relevant here, unconscionability, is alleged to have been applied in a fashion that disfavors arbi- tration. In Perry v. Thomas, 482 U.S. 483, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987), for example, we noted that the FAA’s preemptive effect might extend even to grounds tradi- tionally thought to exist “at law or in equity for the revocation of any contract.” Id., at 492, n. 9, 107 S.Ct. 2520 (emphasis deleted). Concepcion, 131 S.Ct. at 1747 (bold emphasis added). The majority Opinion found Ms. Clark’s POA granted to her agent the authority to enter into the arbitration agreement. That should have ended the discussion. But the majority then took its analysis one step further and held that the arbitration con- 36 tract itself required a higher standard for enforce- ment than other contracts: One might entertain considerable doubt about whether Olive consciously intended to forfeit her right of access to the courts and to a jury trial, but the language of her POA en- compasses that result regardless of Olive’s actual intent. Given this extremely broad, universal delegation of authority, it would be impossible to say that entering into a pre-dispute arbitration agreement was not covered. Our focus has been, and remains, upon the scope of the powers expressed in the power- of-attorney document, and whether those ex- pressed powers are sufficient to supply the principal’s assent needed to form an agreement, which on its face, forfeits those fundamental constitutional rights. Whisman, 2015 WL 5634309 at *14-*15 (emphasis added). The majority's Opinion simply violates the FAA and the Supremacy Clause. The FAA does not prohibit a person from denying ‘her attorney-in-fact the power to sign arbitration contracts. The principal retains the prerogative to limit an agent’s authority under the POA as she sees fit. See, eg., Ping v. Beverly Enterprises, Inc., 376 S.W. 3d 581, 591-92 (Ky. 2012)(“Although the statute allows durable powers of attorney to be created, it does not address what authority may be granted therein. The scope of that authority is thus left to the principal to declare”). However, the FAA abso- 37 lutely prohibits a court or state legislature from do- ing what Ms. Clark herself did not do: making rules to inhibit enforcement of arbitration contracts signed by her agent, as distinguished from all other con- tracts signed by her agent. Stated otherwise, the FAA prohibits courts from interpreting a POA providing the “right to contract,” or a similar proxy, to authorize the formation of one type of contract but not a contract for arbitration. See, eg., GGNSC Vanceburg, LLC v. Taulbee, 2013 WL 4041174 (E.D.Ky., Aug. 7, 2013) (copy attached as Appendix 3). Here, the majority refused to enforce a valid ar- bitration contract by inferring that Ms. Clark might have limited her attorney-in-fact’s express power “to sign any and all contracts” because this particular contract contained an arbitration clause, which by definition waives her right to jury trial. Whisman, 2015 WL 5634309 at *14-*15. Kentucky’s legislature could not pass a law requiring more specificity in the POA’s grant of authority to enforce an arbitration contract than is required for all other contracts and this Court cannot craft one. That law flagrantly of- fends the FAA. Yet, the majority held agent- executed arbitration contracts in Kentucky shall re- quire more for enforcement than all other agent- executed contracts. Jd. at *17. Compare, Taulbee, supra.® 3“An arbitration agreement is a contract. The power of attorney must be read in accordance with its express terms and in light of the strong federal policy favoring arbitration.... Taulbee’s ar- guments that arbitration agreements are different and require more than the general power to contract for authorization to execute one are of no help to her. That line of reasoning would 38 Il. THE MAJORITY OPINION MISAPPLIED THE APPLICABLE LAW Congress enacted the FAA “in response to wide- spread judicial hostility to arbitration agreements” that had “manifested itself in a ‘great variety’ of ‘de- vices and formulas’ declaring arbitration against public policy.” AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740, 1745, 1747 (2011)(quoting Robert Lawrence Co. v. Devonshire Fabrics, Inc., 271 F.2d 402, 406 (2d Cir. 1959)). Here, the majority attempt- ed to avoid U.S. Supreme Court precedent by charac- terizing its rule as one of general agency law and denying any specific arbitration discrimination: We reject the notion that this holding con- flicts with the decisions of the United States Supreme Court in Marmet Health Care Cen- ter, Inc. v. Brown, - U.S. - , 182 S.Ct. 1201, 182 L.Ed.2d 42 (2012), and AT & T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011).... To the con- trary, our holding does not prohibit arbitra- tion of any “particular type of claim.” .... A straight-forward application of our rule that an attorney-in-fact cannot act beyond the powers granted in the power-of-attorney doc- ument stands in stark contrast to the blanket prohibitions against arbitration agreements condemned in Marmet and Concepcion. Whatever hostility our rule evinces is not against the federal policy favoring arbitra- tion; indeed, Kentucky shares that same poli- cy, as we have proclaimed on several occa- simply result in preemption of such a requirement under the FAA.” 2013 WL 4041174 at *9 (emphasis added). 39 sions. Our rule merely reflects a long- standing and well-established policy disfa- voring the unknowing and involuntary relin- quishment of fundamental constitutional rights regardless of the context in which they arise. Whisman, 2015 WL 5634309 at *17-*18 (footnote omitted). The majority apparently misreads or miscon- ceives Concepcion’s and Marmet Health’s holdings. While Concepcion held that prohibiting a particular claim violated the FAA, it also held that “a doctrine normally thought to be generally applicable” can vio- late the FAA if applied in a fashion to disfavor arbi- tration. See Concepcion, 131 S. Ct. at 1747. This Court previously rejected a similar attempted dis- tinction in a commercial context, in Schnuerle v. In- sight Commce’ns Co., L.P., 376 S.W.3d 561, 577 (Ky. 2012): [Ojur state Constitution and statutes favor the enforceability of arbitration agreements. Moreover, the purpose of the FAA “was to re- verse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts, and to place arbitration agreements upon the same footing as other contracts.” Gilmer uv. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, [citation omit- ted] (1991). The FAA’s provisions “manifest a liberal federal policy favoring arbitration agreements. “ Jd. at 25, 111 S.Ct. 1647 (quoting Moses H. Cone Mem’ Hosp. v. Mer- cury Constr. Corp., 460 U.S. 1, 24, [citation omitted] (1983)). The Supreme Court has 40 “rej nerali ttacks on i- tr h ‘ ion of arbi- tration as a method of weakening the protections afforded in the substantive law _to would-be complainants.” Green Tree Fin. Corp. v. Randolph, 531 U.S. 79, 89- 90, [citation omitted] (2000) (quoting Rodri- guez de Quijas v. Shearson/AM. Express, Inc., 490 U.S. 477, 481 [citation omitted] (1989)); Jenkins, 400 F.3d at 874. In light of such long-standing public policy, we see no basis to disturb this contractual term. (Em- phasis added.) The majority ignored its own precedent because of the context of this arbitration agreement. Com- mercial contract cases often invoke the right to jury trial just like a medical negligence case. Holding the express power to “make and sign any and all contracts,” Ms. Clark’s attorney-in-fact could have (most likely, did) enter into enforceable con- tracts for a variety of reasons, such as for banking rights, property purchases, or even to admit her mother to a hospital. Nevertheless, the majority held that the contract she signed to arbitrate her mother’s claims — a choice of forum contract with ab- solutely no substantive implications to her right to seek redress for claims — cannot be enforced because the POA document did not include redundant lan- guage to sign an “arbitration contract,” or even, “to waive her constitutional right to jury trial.”4 ‘ The dissent explained the error in this comparison logic: “The difference between arbitration and the majority's parade of horribles is obvious. Unlike the majority's examples, all of which suppose the waiver or compromise of a basic, personal 41 “The ‘principal purpose’ of the FAA is to ensure that private arbitration agreements are enforced ac- cording to their terms.” Id. at 1748 (citing Volt In- formation Sciences, Inc. v. Board of Trustees of Le- land Stanford Junior Univ., 489 U.S. 468, 478 (1989)). While the §2 savings clause preserves appli- cable common law contract defenses, the Concepcion Court warned that the grounds available under §2 must not be construed to include a state’s policy preference for procedures incompatible with arbitra- tion. “[N]lothing in it suggests an intent to preserve state-law rules that stand as an obstacle to the ac- complishment of the FAA’s objectives.” Concepcion, 1318S. Ct. 1740, 1748 (citations omitted). Federal law requires the Court to “stretch” to find ways to enforce arbitration contracts. The ma- jority reclassified “arbitration contracts” not as mere contracts but as a principal's “waiver of his constitu- tional right to access the courts and to trial by jury.” See Whisman, 2015 WL 5634309, at *17. The result mandates discriminatory enforcement for agent- entered arbitration contracts as compared with all other agent-entered contracts: an agent’s power “to substantive right (rights that an ordinary attorney-in-fact is rarely, if ever, asked to address on the principal’s behalf), arbi- tration agreements, which are commonplace these days, involve no substantive waiver. The principal’s substantive rights re- main intact, only the forum for addressing those rights is af- fected. The majority’s apparent presumption that the arbitra- tion agreement has substantive implications adverse to the principal (and thus belongs on the list of hard-to-waive sub- stantive rights) is the very presumption Congress sought to counteract with the FAA. Southland Corp. v. Keating, 465 U.S. at 14, 104 S. Ct. 852 (discussing Congress’s intent to counteract “common law hostility toward arbitration”).” Extendicare Homes, Inc. v. Whisman, No. 2013-SC-000426-I, 2015 WL 5634309, at *35 (Ky. Sept. 24, 2015). 42 sign contracts” is now insufficient to enter into arbi- tration contracts, rendering arbitration contracts - alone — unenforceable absent additional language not required for enforcement of all other agent-entered contracts. That result is preempted by the FAA. 5 5 The FAA also preempts Kentucky’s interpretation of an arbi- tration agreement's enforceability as against wrongful death claim beneficiaries. In Marmet Health Care Center, 565 U.S. _., 132 S.Ct. 1201, 1202-03 (2012), the U.S. Supreme Court -held that the FAA preempted categorical exemptions of cases from arbitration. No legitimate distinction exists between West Virginia’s “policy-based” law prohibiting enforcement of predispute agreements to arbitrate wrongful death claims and Kentucky's judicially made “contract-based” law prohibiting en- forcement of predispute agreements to arbitrate wrongful death claims. Several cases await decisions on petitions for discre- tionary review, conclusively demonstrating the constitutional impermissibility of allowing many (perhaps all) contracts affect- ing beneficiaries or other non-parties to the contract — but iso- lating arbitration agreements as an outcast. 43 Ill, CONCLUSION Here the Court has no choice but to grant rehear- ing and correct its plain error. Respectfully submitted, QUINTAIROS, PRIETO, WOOD & BOYER, P.A. /s/ Donald L. Miller, II, Esq. J. Peter Cassidy, III, Esq. Kristin M. Lomond, Esq. 9300 Shelbyville Road, Suite 400 Louisville, Kentucky 40222 Telephone: (502) 423-6390 Facsimile: (502) 423-6391 Counsel for Petitioners 44 COMMONWEALTH OF KENTUCKY SUPREME COURT OF KENTUCKY 2013-SC-000431-I KINDRED NURSING CENTERS LIMITED PARTNERSHIP d/b/a WINCHESTER CENTRE FOR HEALTH AND REHABILITATION n/k/a FOUN- TAIN CIRCLE HEALTH AND REHABILITATION; KINDRED NURSING CENTERS EAST, LLC; KIN- DRED HOSPITALS LIMITED PARTNERSHIP; KINDRED HEALTHCARE, INC.; KINDRED HEALTHCARE OPERATING, INC.; KINDRED REHAB SERVICES, INC. d/b/a PEOPLEFIRST REHABILITATION MOVANTS/PETITIONERS Vv. BEVERLY WELLNER, Individually and on behalf of the Estate of JOE P. WELLNER, deceased, and on behalf of the wrongful death beneficiaries of JOE P. WELLNER RESPONDENT/RESPONDENT ON REVIEW FROM COURT OF APPEALS CASE NO: 2012-CA-002212-I PETITION FOR REHEARING Submitted by: Quintairos, Prieto, Wood & Boyer,P.A. 45 /s/ J. Peter Cassidy, III Kristin M. Lomond 9300 Shelbyville Road, Suite 400 Louisville, KY 40222 COUNSEL FOR PETITIONERS CE E The undersigned hereby certifies that ten (10) copies of this brief were served upon Susan Stoldey Clary, Clerk, Supreme Court of Kentucky, Rm. 209, State Capitol, 700 Capitol Ave., Frankfort, KY 40601-3488, and one (1) copy served on Sam Givens, Clerk, Ken- tucky Court of Appeals, 360 Democrat Drive, Frank- fort, KY 40601; Hon. Jean Chenault Logue, Circuit Judge, Clark County Courthouse, P.O. Box 313, Win- chester, KY 40391; Robert Salyer and Richard E. Circeo, Esq., Wilkes & McHugh, P.A., 429 N. Broad- way, P.O. Box 1747, Lexington, KY 40588-1747, and J.T. Gilbert, Esq., Coy, Gilbert & Gilbert, 212 N. Se- cond St., Richmond, KY 40475 on this 12th day of October, 2015. /s/ Counsel For Petitioners PETITION FOR REHEARING The majority Opinion sidestepped the Federal Arbitration Act, the Supremacy Clause and misin- terpreted controlling decisions of the U.S. Supreme Court. A power of attorney cannot constitutionally permit formation of one type of contract but not an 46 arbitration contract. The Court should correct the majority's error. Civil Rule 76.32 governs petitions for rehearing and states in part, “[A] petition for re- hearing shall be limited to a consideration of the is- sues argued on the appeal and will be granted only when it appears that the court has overlooked a ma- terial fact in the record, or a controlling statute or decision, or has misconceived the issues presented on the appeal or the law applicable thereto.”' The Supremacy Clause of the United States Con- stitution provides that “the Laws of the United States...shall be the supreme Law of the Land, and the Judges in every State shall be bound thereby.” U.S. ConstT., Art. VI, cl.2. Therefore, a “state law that ‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress’ is preempted by the Supremacy Clause.” Hines v. Davidowitz, 312 U.S. 52, 67 (1941). As fed- eral substantive law, the Federal Arbitration Act (“FAA”) preempts all contrary or inconsistent state law. See ATT Mobility, LLC v. Concepcion, 563 U.S. 333, 131 S.Ct. 1740 (2011). The majority here agreed the FAA applied to govern the arbitration agree- ments at issue: ‘ This closely decided (4-3) decision sets new Kentucky prece- dent, and Petitioners agree with the dissent that it overtly con- flicts with federal and state court decisions interpreting and applying the FAA to Kentucky arbitration law. Since oral ar- guments were held in this case on December 12, 2013, almost two years ago now, even this Court’s membership has changed. Petitioners respect the Court's considered debate, and given such a close decision with such huge implications for Kentucky law, encourage the Court strongly to consider rehearing in this case. 47 A written provision in ... a contract evidenc- ing a transaction involving commerce to set- tle by arbitration a controversy thereafter arising out of such contract or transaction, ... or an agreement in writing to submit to arbi- tration an existing controversy arising out of such a contract,... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C. § 2 (emphasis added). See also, Extendicare Homes, Inc. v. Whisman, No. 2013-SC-000426-I, 2015 WL 5634309 at *8 (Ky. Sept. 24, 2015). Nevertheless, it failed to apply the FAA. The Court’s Opinion is at- tached as Appendix 1. The majority Opinion’s newly-created rule of law disfavoring enforcement of agent-executed arbitra- tion agreements cannot stand in light of the FAA. To require more to enforce an arbitration contract signed by an agent than for any other contract signed by an agent disproportionately impacts arbi- tration and is preempted by the FAA. Mr. Wellner expressly granted to his attorney-in- fact the power to make, execute and deliver “con- tracts of every nature in relation to both real and personal property,” without qualification. See Power of Attorney of Joe Paul Wellner, attached as Appx. 2. The Court agreed that personal injury claims consti- tute “personal property” under Kentucky law. See Whisman, 2015 WL 563430 at *13. The majority then characterized the arbitration contract — a con- tract to agree on a forum for resolving his personal injury claims — as a contract not relating to personal property (e.g., where to resolve the claims) but, in- stead, “to relinquish his constitutional rights,” which 48 are “decisively not ‘personal property.“ Jd. (emphasis original). By fiat, the majority vitiates Mr. Wellner’s express grant of power and removes “arbitration con- tracts” from the genre of all other contracts relating to Mr. Wellner’s personal property. Jd. Moreover, fol- lowing the majority’s logic, his attorney-in-fact could unilaterally release Mr. Wellner’s personal injury claim but could not choose to litigate that claim in an arbitral forum. The majority opinion radically misses the mark because it derives from an incorrect assumption con- cerning the United States’ form of government. Whether characterized as a “Constitutional Democ- racy” where the majority rules, see Smith v. Alfright, 321 U.S. 649, 664 (U.S. 1944), or a “Constitutional Republic” where the people are sovereign, see Chisholm v. Georgia, 2 U.S. (2 Dall.) 419 (1793)(superseded by statute in holding), its founders built the United States as a nation of laws. Indeed, when the majoritys members took their places on this Court each took an oath to “support the Consti- tution of the United States and the Constitution of this Commonwealth.” Kentucky Constitution § 228 (emphasis added). The majority did not comply with this oath. As Justice Thurgood Marshall stated: Thus state law, whether of legislative or judi- cial origin, is applicable if that law arose to govern issues concerning the validity, revo- cability, and enforceability of contracts gen- erally. A state-law principle that takes its meaning precisely from the fact that a con- tract to arbitrate is at issue does not comport with this requirement of §2 .... A court may not, then, in assessing the rights of litigants to enforce an arbitration agreement, construe 49 that agreement in a mariner different from that in which it otherwise construes nonarbitration agreements under state law. Nor may a court rely on the uniqueness of an agreement to arbitrate as a basis for a state- law holding that enforcement would be iin- conscionable, for this would enable the court to effect what we hold today the state legisla- ture cannot. Perry v. Thomas, 482 U.S. 483, 492 fn 9 (1987) (citing Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967) and Southland Corp. v. Keating, 465 U.S. 1 (1984)(emphasis original)). The majority's Opinion does not support the U.S. or Kentucky Constitutions. A jury trial is absolutely not a “God-given” right, but rather a right provided under the terms and conditions of a constitution written and adopted by its people. In fact, one can easily waive one’s right to jury trial simply by not asking for it. See CR 38.04. See also, Brown uv. Hobitzell, 307 SW2d 739 (Ky. 1956). Regardless, the majority probably invalidated countless arbitration contracts signed by agents under powers of attorney for mobile phone service, cable television, credit cards, loans, etc., without even considering those ramifications, because it so detests the agreements in the nursing home context.” A result-oriented law is not faithful to any constitution. 2 As the Court is well aware, arbitration clauses appear in a myriad of contracts involving a host of goods and services. See, e.g., Green Tree Fin. Corp. v. Bazzle, 639 U.S. 444 (2003)(home improvement loan); Citizens Bank v. Alafabco, Inc., 639 U.S. 52 (2003) (commercial debt restructuring contract); Circuit City Stores, Inc. v. Adams, 532 U.S.105 (2001)(employment con- 50 Highlighting the majority Opinion’s error is its failure to recognize — or to distinguish — that courts and legislatures can indeed set higher standards for parental rights, slavery and marriage to name a few (see, e.g., KRS 635.000; KY Const. § 25; _ ERS pers Lo dere 2 ele . The majority simply ignores that pep as pm ne to ahaos. The majority's dislike for the federal mandate, “redefining” or “ele- vating” the standard for enforcing agent-executed arbitration contracts is simply preempted. |. THE MAJORITY OVERLOOKED AND IGNORED THE FAA AS THE CONTROLLING STATUTE AND MIs- CONSTRUED CONTROLLING DECISIONS _INTER- PRETING IT The Federal Arbitration Act (“FAA”) expressly protects both pre-and post-dispute arbitration con- tracts, including those used in long-term care facili- ties like the one at issue here. See 9 U.S.C. § 2. See also, Marmet Health Care Center, Inc. v. Brown, U.S. __, 182 S.Ct. 1201 (2012) (applying the FAA in nursing home context). In AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S.Ct. 1740 (2011), the U.S. Supreme Court held that the FAA means exactly what it says: tract); Wright v. Universal Mar. Serv. Corp., 525 U.S. 70 (1998) (longshoreman collective bargaining contract); Mastrobuono v. Shearson Lehman Hutton, Inc., 614 U.S. 52 (1995)(securities brokerage contract); Allied-Bruce Terminix v. Dobson, 513 U.S. 265 (1995)(termite control contract); Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967)(paint manufacturing and sales agreement). Mitsubishi Motors Corp. v. Soler Chrys- ler-Plymouth, inc. 473 U.S. 614 (1985)(automobile manufactur- ing and sales distribution contract). 51 agreements to arbitrate “shall be valid, irrevocable, and enforceable save upon such grounds as exist at law or in equity for the revocation of any contract.” Id., 131 S.Ct. at 1745 (quoting 9 U.S.C. § 2). Arbitra- tion is a matter of contract and courts must treat ar- bitration contracts “on an equal footing with other contracts” and enforce them to their terms. Id. at 1745. The FAA not only preempts state laws that ex- pressly disfavor arbitration agreements but it also preempts state-law rules that purport to apply to all contracts equally but actually “have a dispropor- tionate impact on arbitration agreements.” See id. at 1747 (emphasis added). The majority's Opinion does both, and the FAA preempts its rule of law. Regardless of the majority's intent, its Opinion discriminates against arbitration contracts, isolating them as forgoing a “God-given” right. That violates the FAA. The FAA preempts all generally applicable contract defenses — as this Court crafted its rule here -- that “derive their meaning from the fact that an agreement to arbitrate is at issue.” Jd. at 1746: When state law prohibits outright the arbi- tration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by the FAA. Preston uv. Ferrer, 552 U.S. 346, 353, 128 S.Ct. 978, 169 L.Ed.2d 917 (2008). But the inquiry be- comes more complex when a doctrine normally thought to be generally appli- cable, such as duress or, as relevant here, unconscionability, is alleged to have been applied in a fashion that disfavors arbi- tration. [n Perry v. Thomas, 482 U.S. 483, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987), for example, we noted that the FAA’s preemptive 52 effect might extend even to grounds tradi- tionally thought to exist “ ‘at law or in equity for the revocation of any contract.’ “ Jd., at 492, n. 9, 107 S.Ct. 2520 (emphasis deleted). Concepcion, 131 S.Ct. at 1747 (bold emphasis added). The majority found Mr. Wellner’s personal injury claim constituted personal property, and his attor- ney-in-fact had the authority to make contracts relat- ing to his personal property. See Whisman, 2015 WL 5634309 at *13. In other words, Ms. Wellner could make contracts to release his personal injury claims. The arbitration contract concerns the forum to re- solve Mr. Wellner’s claims, nothing more substan- tive. But the majority then took its analysis one step further and held that the arbitration contract itself required a higher standard for enforcement than other contracts: Beverly’s authority to deal with Joe’s real and personal property does not translate into the power to relinquish his constitutional rights. Consequently, we conclude that Bev- erly was not authorized to provide Joe’s as- sent to an agreement waiving his constitu- tional rights by committing his future per- sonal injury claims to arbitration. Whisman, 2015 WL 5634309 at *13 (emphasis add- ed). The majority's Opinion simply violates the FAA and the Supremacy Clause. The FAA does not prohibit a person from denying his attorney-in-fact the power to sign arbitration con- tracts. The principal retains the prerogative to limit an agent’s authority under the POA as he sees fit. See, e.g., Ping v. Beverly Enterprises, Inc., 376 S.W. 3d 581, 591-92 (Ky. 2012)(“Although the statute al- 53 lows durable powers of attorney to be created, it does not address what authority may be granted therein. The scope of that authority is thus left to the princi- pal to declare”). However, the FAA absolutely prohib- its a court or state legislature from doing what Mr. Wellner himself did not do: making rules to in- hibit enforcement of arbitration contracts signed by his agent, as distinguished from all other ‘contracts of every nature relating to personal property” signed by his agent. Stated otherwise, the FAA prohibits courts from interpreting a POA providing the “right to contract,” or a similar proxy, to authorize the for- mation of one type of contract but not a contract for arbitration. See, e.g., GGNSC Vanceburg, LLC v. Taulbee, 2013 WL 4041174 (E.D.Ky., Aug. 7, 2013) (copy attached as Appendix 3). Here, the majority refused to enforce a valid ar- bitration contract. Even though Mr. Wellner express- ly granted his attorney-in-fact the power “to sign contracts of every nature in relation to personal property,” this particular contract contained an arbi- tration clause — which by the majority’s new defini- tion transformed a choice of forum contract (for re- solving his personal injury claims) into a contract waiving constitutional rights. Whisman, 2015 WL 5634309 at *13. Kentucky's legislature could not pass a law requiring more specificity in the POA’s grant of authority to enforce an arbitration contract than is required for all other contracts and this Court cannot craft one. That law flagrantly offends the FAA. Yet, the majority held agent-executed arbi- tration contracts in Kentucky shall require more for 54 enforcement than all other agent-executed contracts. Id. at *17. Compare, Taulbee, supra.® Il. THE MAJORITY OPINION MISAPPLIED THE APPLICABLE LAW Congress enacted the FAA “in response to wide- spread judicial hostility to arbitration agreements” that had “manifested itself in a ‘great variety’ of ‘de- vices and formulas’ declaring arbitration against public policy.” AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740, 1745, 1747 (2011)(quoting Robert Lawrence Co. v. Devonshire Fabrics, Inc., 217 F.2d 402, 406 (2d Cir. 1959)). Here, the majority attempt- ed to avoid U.S. Supreme Court precedent by charac- terizing its rule as one of general agency law and denying any specific arbitration discrimination: We reject the notion that this holding con- flicts with the decisions of the United States Supreme Court in Marmet Health Care Cen- ter, Inc. v. Brown, - U.S. - , 132 S.Ct. 1201, 182 L.Ed.2d 42 (2012), and AT & T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011).... To the con- trary, our holding does not prohibit arbitra- tion of any “particular type of claim.” .... A straight-forward application of our rule that an attorney-in-fact cannot act beyond 3“An arbitration agreement is a contract. The power of attorney must be read in accordance with its express terms and in light of the strong federal policy favoring arbitration.... Taulbee’s ar- guments that arbitration agreements are different anc require more than the general power to contract for authorization to execute one are of no help to her. That line of reasoning would simply result in preemption of such a requirement under the FAA.” 2013 WL 4041174 at *9 (emphasis added). 55 the powers granted in the power-of-attorney document stands in stark contrast to the blanket prohibitions against arbitration agreements condemned in Marmet and Con- cepcion. Whatever hostility our rule evinces is not against the federal policy favoring ar- bitration; indeed, Kentucky shares that same policy, as we have proclaimed on several oc- casions. Our rule merely reflects a long- standing and well-established policy disfa- voring the unknowing and involuntary relin- quishment of fundamental constitutional rights regardless of the context in which they arise. Whisman, 2015 WL 5634309 at *17-*18 (footnote omitted). The majority apparently misreads or miscon- ceives Concepcion’s and Marmet Health’s holdings. While Concepcion held that prohibiting a particular claim violated the FAA, it also held that “a doctrine normally thought to be generally applicable” can vio- late the FAA if applied in a fashion to disfavor arbi- tration. See Concepcion, 131 S. Ct. at 1747. This Court previously rejected a similar attempted dis- tinction in a commercial context, in Schnuerle v. In- sight Commce’ns Co., LP., 376 S.W.3d 561, 577 (Ky. 2012): [O]jur state Constitution and statutes favor the enforceability of arbitration agreements. Moreover, the purpose of the FAA “was to re- verse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts, and to place arbitration agreements upon the same footing as other 56 contracts.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, [citation omit- ted] (1991). The FAA’s provisions “manifest a liberal federal policy favoring arbitration agreements.’ “ Jd. at 25, 111 S.Ct. 1647 (quot- ing Moses H Cone Mem’ Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, [citation omit- ted] (1983)). The Supreme Court has “re- erali on arbitra- i r n_‘s ° itra- tion w n tections bstantive law to would-be complainants.’ “ Green Tree Fin. Corp. v. Randolph, 531 U.S. 79, 89-90, [citation omitted] (2000) (quoting Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 481 [citation omitted] (1989)); Jen- kins, 400 F.3d at 874. In light of such long- standing public policy, we see no basis to dis- turb this contractual term. (Emphasis add- ed.) The majority ignored its own precedent because of the context of this arbitration agreement. Commer- cial contract cases often invoke the right to jury trial just like a medical negligence case. Holding the express power to “make contracts of every nature in relation to personal property,” Mr. Wellner’s attorney-in-fact could have (most likely, did) enter into enforceable contracts for a variety of reasons, such as for banking, purchases, or even to admit her husband to a hospital. Nevertheless, the majority held that the contract she signed to arbi- trate her husband’s claims — a choice of forum con- tract with absolutely no substantive implications to his right to seek redress for claims — cannot be en- 57 forced because the POA document did not include redundant language to sign an “arbitration con- tract,” or even, “to waive his constitutional right to jury trial.”4 “The ‘principal purpose’ of the FAA is to ensure that private arbitration agreements are enforced ac- cording to their terms.” Jd. at 1748 (citing Volt Jn- formation Sciences, Inc. v. Board of Trustees of Le- land Stanford Junior Univ., 489 U.S. 468, 478 (1989)). While the §2 savings clause preserves appli- cable common law contract defenses, the Concepcion Court warned that the grounds available under §2 must not be construed to include a state’s policy preference for procedures incompatible with arbitra- tion. “Nothing in it suggests an intent to preserve state-law rules that stand as an obstacle to the ac- complishment of the FAA’s objectives.” Concepcion, 131 S. Ct. 1740, 1748 (citations omitted). * The dissent explained the error in this comparison logic: “The difference between arbitration and the majority's parade of horribles is obvious. Unlike the majority’s examples, all of which suppose the waiver or compromise of a basic, personal substantive right (rights that an ordinary attorney-in-fact is rarely, if ever, asked to address on the principal’s behalf), arbi- tration agreements, which are commonplace these days, involve no substantive waiver. The principal’s substantive rights re- main intact, only the forum for addressing those rights is af- fected. The majority's apparent presumption that the arbitra- tion agreement has substantive implications adverse to the principal (and thus belongs on the list of hard-to-waive sub- stantive rights) is the very presumption Congress sought to counteract with the FAA. Southland Corp. v. Keating, 466 U.S. at 14, 104 S.Ct. 852 (discussing Congress's intent to counteract “common law hostility toward arbitration”).” Extendicare Homes, Inc. v. Whisman, No. 2013-SC-000426-I, 2015 WL 5634309, at *35 (Ky. Sept. 24, 2015). 58 Federal law requires the Court to “stretch” to find ways to enforce arbitration contracts. The ma- jority reclassified “arbitration contracts” not as mere contracts but as a principal’s “waiver of his constitu- tional right to access the courts and to trial by jury.” See Whisman, 2015 WL 5634309, at *17. The result mandates discriminatory enforcement for agent- entered arbitration contracts as compared with all other agent-entered contracts: an agent’s power “to sign contracts” is now insufficient to enter into arbi- tration contracts, rendering arbitration contracts — alone -- unenforceable absent additional language not required for enforcement of all other agent- entered contracts. That result is preempted by the FAA.5 Ul CLUSION Here the Court has no choice but to grant rehear- ing and correct its plain error. Respectfully submitted, 5 The FAA also preempts Kentucky’s interpretation of an arbi- tration agreement's enforceability as against wrongful death claim beneficiaries. In Marmet Health Care Center, 565 U.S. _, 132 S.Ct. 1201, 1202-03 (2012), the U.S. Supreme Court held that the FAA preempted categorical exemptions of cases from arbitration. No legitimate distinction exists between West Vir- ginia’s “policy-based” law prohibiting enforcement of predispute agreements to arbitrate wrongful death claims and Kentucky's judicially made “contract-based” law prohibiting enforcement of predispute agreements to arbitrate wrongful death claims. Sev- eral cases await decisions on petitions for discretionary review, conclusively demonstrating the constitutional imperimissibility of allowing many (perhaps all) contracts affecting beneficiaries or other non-parties to the contract — but isolating arbitration agreements as an outcast. 59 QUINTAIROS ETO, WOOD & BOYER, P.A. /s/ Donald L. Miller, II, Esq. J. Peter Cassidy, III, Esq. Kristin M. Lomond, Esq. 9300 Shelbyville Road, Suite 400 Louisville, Kentucky 40222 Telephone: (502) 423-6390 Facsimile: (502) 423-6391 Counsel for Petitioners 60 COMMONWEALTH OF KENTUCKY SUPREME COURT OF KENTUCKY 2013-SC-000430-1 KINDRED NURSING CENTERS LIMITED PART- NERSHIP d/b/a WINCHESTER CENTRE FOR HEALTH & REHABILITATION PETITIONERS Vv. JANIS E. CLARK, Executrix Of The Estate Of OL- IVE G. CLARK, deceased, and on behalf of the wrongful death beneficiaries of OLIVE G. CLARK, deceased RESPONDENT RESPONSE TO PETITION FOR REHEARING Submitted By: /s/ Richard E. Circeo (KY Bar # 91996) Robert E. Salyer (KY Bar # 91869) WILKES & MCHUGH, P.A. P.O, Box 1747 Lexington, KY 40588-1747 Telephone Number: (859) 455-3356 Facsimile Number: (859) 455-3362 Counsel for Petitioner 61 CERTIFICATE OF SERVICE I certify that this petition was served upon Don- ald L. Miller, Il, Esq.; J. Peter Cassidy, III, Esq.; Kristin M. Lomond, Esq.; Quintairos, Prieto, Wood & Boyer, P.A.; 9300 Shelbyville Road, Suite 400; Louis- ville, KY 40222; Hon. Jean Chenault Logue, Circuit Judge, Clark County Courthouse, P.O. Box 313, Win- chester, KY 40391; J.T. Gilbert, Esq., Coy, Gilbert & Gilbert, 212 N. Second St., Richmond, KY 40475; and upon the Hon. Sam Givens, Clerk of the Court of Ap- peals, 360 Democrat Drive, Frankfort, Kentucky 40601, on this the 23rd day of October, 2015. Counsel for Respondent RESPONSE The material and procedural facts, controlling law, and jurisdictional basis have not changed. This response to petition is filed pursuant to CR 76.32, which provides in part: (1) When authorized. ree (b) Except in extraordinary cases when jus- tice demands it, a petition for rehearing shall be limited to a consideration of the issues ar- gued on the appee* and will be granted only when it appears that the court has over- looked a material fact in the record, or a controlling statute or decision, or has misconceived the issues presented on the _\ appeal or the law applicable thereto. ee 62 I. Petitioners Do Not Offer A Sufficient Justi- fication For Rehearing. Petitioners provide this Court with no basis upon which to justify a rehearing. The facts were not in dispute in this case. There have been no facts aris- ing since the Opinion issued to affect its conclusions. Neither the parties nor the Court overlooked either a controlling decision or statute. The Supreme Court’s analyses of the issues, including the analyses of the Dissents, were lengthy. Petitioners go on to argue in effect however, that this Court “has misconceived the issues presented on appeal or the law applicable thereto.” Not so. Whether or not the Court’s Opinion is correct (and it is), the Court certainly perceived all the issues squarely. A rehearing is not authorized in this instance under the Rule. Petitioners obviously wish to re-argue to this Court, that the Court “got it wrong.” Again, even if this represented a correct characterization—and it does not—such a proposition is not a legitimate ba- sis upon which to hold a rehearing. Notwithstanding Petitioners’ apparent dissatisfaction with the Opin- ion of this Court, this Court issued an exhaustive Opinion, in terms of both the Majority and Dissent- ing optnions, and, as such, it can be fairly said that the Court left no stone unturned in reaching its final result. And the decision was in fact correct. Il. The Supreme Court’s Decision Correctly Interpreted Kentucky Agency And Power- Of-Attorney Law. Whisman clarifies the law regarding Kentucky powers-of-attorney as they relate to pre dispute arbi- tration agreements entered into between parties. It extends interpretation of Kentucky’s law from Donna 63 Ping v. Beverly Enterprises, Inc., 376 SW3d 581 (Ky. 2012), and sets out three teachings: First, general power-of-attorney language pur- porting to grant agency authority to transact any and all business that a principal could do if in per- gon, i.é., a generic proxy power, is, by itself, ineffec- tive to alter a fundamental right of the principal un- der Kentucky law, e.g., promising forever to forego all litigation in civil courts, of future disputes, be- tween a principal and an outside party. See Pine Tree Villa, LLC v. Brooker, 612 FedAppx 340, 344 (6th Cir. 2015) (“Kentucky law does not appear to provide for unlimited POAs.”). That is, the latter transactions alter the principal's status in society, at least with respect to the other party to the agree- ment. These transactions would thus not normative- ly be foreseeable by the principal, and would not be seen to be encompassed by a general grant of author- ity without the appropriate specific language going thereto. Second, the act of signing a pre-dispute arbitra- tion agreement is qualitatively different from the act of instituting or participating in an arbitration, or of ordinary actions tending to property. A reviewing court must seek out the language for signing the agreement. Third, the power to enter into the status- altering pre-dispute agreement to arbitrate all dis- putes between an outside party and a principal is not immanent in specific power-of-attorney language purporting to grant agency authority (1) over litiga- tion; or (2) over contracts involving a principal's nroperty. Tending to these matters does not cover the alteration of the principal’s civil right to a jury 64 trial vis-a-vis disputes with a second party, potential- ly in perpetuity. Just as important decisions which could be ex- pressed in a power-of-attorney, e.g., the ability to marry by proxy, or to cede parental rights, must have that authority set out; an agent waiving his principal's trial rights generally with respect to an- other party must be set out. Whisman could not be more clear regarding vague, general, “big tent” lan- guage in a power-of-attorney. It is insufficient to ex- ecute the agreement at bar. This is so because the power to modify the fundamental rights of a princi- pal changes that principal’s standing in society, L.e., it affects the principal’s status. It permanently al- ters the principal’s access to the “King’s justice,” with respect to at least the other party to the arbitration agreement,! and cannot be inferred from an instru- ment without explicit address. Given its enormity, mere creation of a power over the principal’s legal affairs, to include litigation and the authority to file a law suit on behalf of the prin- cipal, is not sufficient. Many powers-of-attorney in- clude language authorizing litigation. However, it does not follow from this that granting power to take a certain action intrinsically encompasses the power to promise never to take that action. Disavowal (on the principal’s behalf), potentially into perpetuity, by an agent of a power given him by the principal would constitute the agent stepping into the shoes of the principal in the creation of the agency, i.e., unilaterally rewriting the power-of- attorney. ! Including successors, assigns, affiliates, officers, employees, ete.... 65 Creation of a power to execute contracts in rela- tion to the principal’s property is likewise not suffi- cient. This Court agreed that a law suit involving a dispute is a species of property, a “chose-in- action.” However, the gravamen of the arbitration agreement acts not in relation to that property; the agreement acts primarily in relation to a fundamen- tal civil right, vis-a-vis a second party. It is sometimes pointed out that trial mghts are easily waived, by the mere failure not to invoke them. But the dissimilarity here should be obvious. For an agent to transact with respect to, or disavow, a particular piece of property should obviously be small potatoes in a well-equipped power-of-attorney. For an agent to disavow the institution of property altogether, however, is entirely another matter. Il. The Court’s Opinion Does Not Impinge Upon The FAA. The U.S. Supreme Court, interpreting the FAA, has rejected numerous attempts by States to refuse to enforce arbitration contracts undoubtedly made, by virtue of their essential nature or their terms. That is not happening here. The former point notwithstanding, the U.S. Su- preme Court has never held that the FAA requires State agency law to bend to find authority to make such contracts where it otherwise would not be found. As U.S. Supreme Court Justice Clarence Thomas noted in his concurrence in Concepcion, see infra, “the FAA requires that an agreement to arbi- trate be enforced unless a party successfully chal- lenges the formation of the arbitration agreement.” AT&T Mobility, LLC v. Concepcion, 131 SCt 1740, 1753 (2011). This identifies where the FAA begins 66 to apply. It intervenes once an arbitration agree- ment is formed pursuant to unbiased State law prin- ciples of interpretation (including those pertaining to authority), and not befor. Where the FAA does not begin to apply, the States are unbounded except by their own self-governance... a self-governance that has a place for State judicial interpretation of State law.2 “A power of attorney cannot constitutionally permit formation of one type of contract but not an 2 Petitioners bring this Court’s attention to Chisholm v. Geor- gia, 2 U.S. 419 (1793), but misread the case. In Chisholm, the U.S. Supreme Court denied that States possessed sovereign immunity (Justice Iredell dissenting), holding that all sover- eignty was held by the people of the United States as an aggre- gate of sovereign individuals. It is commonly understood that the peoples of the United States clarified this error via the Eleventh Amendment (1795). Today, Dual Sovereignty is the accepted understanding of the American federal system. See e.g., Burt v. Titlow, 134 S.Ct. 10, 15 (2013); see also The Ken- tucky Resolution (1799); Ware v. Hylton, 3 US 199 (1796): “In June 1776, the Convention of Virginia formally declared, that Virginia was a free, sovereign, and independent state; and on the 4th of July, 1776, following, the United States, in Con- gress assembled, declared the Thirteen United Colonies free and independent states; and that as such, they had full power to levy war, conclude peace, etc. I consider this as a declara- tion, not that the United Colonies jointly, in a collective capaci- ty, were independent states, etc. but that each of them was a sovereign and independent state, that is, that each of them had a right to govern itself by its own authority, and its own laws, without any control from any other power upon earth.” Ware, 3 US at 224 (Opinion of Justice Chase). Finite authority is granted to the federal government through the U.S. Constitu- tion and the laws promulgated therefrom; all other residual governing authority is retained by the States. U.S. Const. amend. X. 67 arbitration contract.” (Petition at p. 1) The error in this statement should be obvious. Of course it can. To put it clearly and methodically: Courts have no right to discriminate against arbitration. Princi- pals however, have every right to discriminate against arbitration. Happily, Petitioners recognize their error later in their briefing. (See id. at p.6) Evidence of discrimi- nation by the principal, as with all discriminations, may arise affirmatively, or by omission. This Court has simply announced what language signifies an omission as a matter of law. The power must be affirmatively set out, or it is omitted. This is the crux of the issue at bar. It would be strange, indeed, if we were to in- fer, for example, that an attorney-in-fact with the authority “to do and perform for me in my name all that I might if present to make any contracts or agreements that I might make if present” could enter into an agree- ment to waive the principal's civil rights; or the principal’s right to worship freely; or en- ter into an agreement to terminate the prin- cipal’s parental rights; put her child up for adoption; consent to abort a pregnancy; con- sent to an arranged marriage; or bind the principal to personal servitude. It would, of course, be absurd to infer such audacious powers from a non-specific, general, even universal, grant of authority. So too, it would be absurd to infer from a non-specific, universal grant, the principal’s assent to sur- render of other fundamental, even sacred, liberties. 68 The Dissent calls the comparative list in the quota- tion supra, a “parade of horribles.” The majority's apparent presumption that the arbitration agreement has substantive impli- cations adverse to the principal (and thus be- longs on the list of hard-to-waive substantive rights) is the very presumption Congress sought to counteract with the FAA. By lumping in arbitration with the “parade of horribles,” the Dissent believes the Majority shows animus toward arbitration. Respectfully, this is not necessarily so. The list is not really a “parade of horribles.” In many instances the decisions listed in the parade may actually be highly beneficial to the principal under the circumstances, e.g., marrying by proxy. See State v. Anderson, 396 P2d 558, 561 (Ore. 1964) (“There is nothing about a proxy marriage, that appears to be contrary to public policy.”). The decision to marry, by proxy or otherwise, is not a “horrible” one. It is however, a monumental deci- sion, in effect altering the principal’s status in socie- ty.3 If the agent might make the decision to execute a marriage is foreseen by the principal, surely the principal would make this authority clear in any power-of-attorney instrument. If not set out, the courts will deem it to be omitted. This is not discrim- ination or animus.* 8’ But unlike the arbitration contract at bar, it is possible to break marital contract and obtain a civil divorce. 4 It goes without saying that the U.S. Supreme Court considers “marriage” a right, a good, and something to be favoured. See Obergefell v. Hodges, 135 S.Ct. 2584 (2015). 69 Petitioners deny the significance of the decision to waive trial rights generally vis-a-vis a party, even potentially in perpetuity. (See Petition at p.3)° By implication, Petitioners suggest that courts should treat all decisions by agents with complete indiffer- ence; yet the document from whence this Court de- rives its authority and jurisdiction—the Kentucky Constitution—calls the subject matter here “sacred.” Certainly the Commonwealth and its people, as well as the United States, could alter the trial rights be- longing to the people. However, the alteration ought not to be effected lightly, as its pedigree reaches back at least to the Magna Carta, wherein King John first conceded that property rights’ disputes must remain in the permanent county courts, rather than follow the movable King’s Bench. It is easy enough to distinguish between the will of God and the will of the English barons, but it is difficult not to see the hand of Providence shepherd- ing the resolution of disputes in Anglo-American law from the Medieval trial by combat, to the appeal to the Kings’ Bench, finally to the right to a civil trial in front of one’s peers. Whereas due process in the criminal law is the modus wherein the citizens’ rela- tionship with the state mainly subsists, the civil law is the modus wherein the citizens’ legal relationships with each other subsists. Petitioners’ protestations notwithstanding, civil trial rights are important, and fundamental. More to the point, how agency law 5 It is not appropriate for Respondent to comment on Petition- ers’ charged language on page 3 of the Petition. Suffice to say that Petitioners’ institutional commentary comes off as over- heated and unfortunate. 70 treats such rights does not in any way impact upon the FAA. This Court in this case has not acted against ar- bitration. Rather, the Court has acted to specify rules in written agency. More precisely, it has en- gaged in the interpretation of words on a piece of pa- per, seeking to determine the intentions of a princi- pal, from what is reasonably foreseeable. Petitioners recite a litany of false analogies in their petition, one of which demonstrates their mis- construction of the issue at bar: “Kentucky's legisla- ture could not pass a law requiring more specificity in the POA’s grant of authority to enforce an arbitra- tion contract than is required for all other contracts and this Court cannot craft one.” (Petition at p.7) This is a straw man. Again, the Court here in effect issued a canon of interpretation of language in an instrument, in the endeavor to divine the intentions of the principal. If the Kentucky legislature were to pass the aforesaid statute, presumably it would be issuing a proscription. The Supreme Court here has issued no proscription.® Nursing home facilities may still enforce ar- bitration agreements with their residents 6 Whether the aforesaid proscription—limiting the circum- stances under which a power of attorney may execute an arbi- tration agreement—-would be federally pre-empted is not a question in front of this Court. If, to take a different perspec- tive, the legislature attempted to “interpret” principal inten- tions statutorily, i.e., not place a wicket in front of creating the agency power, but rather, claim to legislatively determine a principal's intent; such would probably constitute an invasion of the judiciary’s sphere and a violation of the principle of the sep- aration of powers. This has not occurred, and Petitioners’ point is entirely irrelevant and, again, not in front of the bar. 71 when the resident has signed the agreement or validly authorized his agent to sign in his stead. (emphasis added) CONCLUSION Complaint was filed in this case years ago. Re- spondent prays this Court deny rehearing. Respectfully submitted, /s/ Robert E. Salyer, Esq. 72 SUPREME COURT OF KENTUCKY 2013-SC-000431-I KINDRED NURSING CENTERS LIMITED PART- NERSHIP d/b/a WINCHESTER CENTRE FOR HEALTH & REHABILITATION, et al. PETITIONERS v. BEVERLY WELLNER, individually and on behalf of the estate of JOE P. WELLNER, deceased, and on behalf of the wrongful death beneficiaries of JOE P. WELLNER, deceased RESPONDENT RESPONSE TO PETITION FOR REHEARING Submitted By: /s/ Robert E. Salyer __ Richard E. Circeo (KY Bar# 91996) Robert E. Salyer (KY Bar# 91859) WILKES & MCHUGH, P.A. P.O. Box 1747 Lexington, KY 40588-1747 Telephone Number: (859) 455-3356 Facsimile Number: (859) 455-3362 Counsel for Petitioner CERTIFICATE OF SERVICE I certify that this petition was served upon Donald L. Miller, II, Esq.; J. Peter Cassidy, III, Esq.; Kristin M. Lomond, Esq.; Quintairos, Prieto, Wood & Boyer, P.A.; 9300 Shelbyville Road, Suite 400; Louisville, KY 40222; Hon. Jean Chenault Logue, Circuit Judge, 73 Clark County Courthouse, P.O. Box 313, Winchester, KY 40391; J.T. Gilbert, Esq., Coy, Gilbert & Gilbert, 212 N. Second St., Richmond, KY 40475; and upon the Hon. Sam Givens, Clerk of the Court of Appeals, 360 Democrat Drive, Frankfort, Kentucky 40601, on this the 23rd day of October, 2015. /s/ Robert E. Salyer Counsel for Respondent RESPONSE The material and procedural facts, controlling law, and jurisdictional basis have not changed. This response to petition is filed pursuant to CR 76.32, which provides in part: (1) When authorized. “** (b) Except in extraordinary cases when jus- tice demands it, a petition for rehearing shall be limited to a consideration of the issues ar- gued on the appeal and will be granted only when it appears that the court has over- looked a material fact in the record, or a controlling statute or decision, or has misconceived the issues presented on the appeal or the law applicable thereto. eee I. Petitioners do not offer a sufficient jus- tification for rehearing. Petitioners provide this Court with no basis upon which to justify a rehearing. The facts were not in dispute in this case. There have been no facts arising 74 since the Opinion issued to affect its conclusions. Neither the parties nor the Court overlooked either a controlling decision or statute. The Supreme Court’s analyses of the issues, including the analyses of the Dissents, were lengthy. Petitioners go on to argue in effect however, that this Court “has misconceived the issues presented on appeal or the law applicable thereto.” Not so. Whether or not the Court’s Opinion is correct (and it is), the Court certainly perceived all the issues squarely. A rehearing is not authorized in this instance under the Rule. Petitioners obviously wish to re-argue to this Court, that the Court “got it wrong.” Again, even if this represented a correct characterization — and it does not — such a proposition is not a legitimate ba- sis upon which to hold a rehearing. Notwithstanding Petitioners’ apparent dissatisfaction with the Opin- ion of this Court, this Court issued an exhaustive Opinion, in terms of both the Majority and Dissent- ing opinions, and, as such, it can be fairly said that the Court left no stone unturned in reaching its final result. And the decision was in fact correct. Il. The Supreme Court’s decision correctly in- terpreted Kentucky agency and power-of- attorney law. Whisman clarifies the law regarding Kentucky powers-of-attorney as they relate to pre- dispute ar- bitration agreements entered into between parties. It extends interpretation of Kentucky’s iaw from Donna Ping v. Beverly Enterprises, Inc., 376 SW3d 581 (Ky. 2012), and sets out three teachings: First, general power-of-attorney language pur- porting to grant agency authority to transact any and all business that a principal could do if in per- 75 son, i.e., a generic proxy power, is, by itself, ineffec- tive to alter a fundamental right of the principal un- der Kentucky law, e.g., promising forever to forego all litigation in civil courts, of future disputes, be- tween a principal and an outside party. See Pine Tree Villa, LLC v. Brooker, 612 FedAppx 340, 344 (6th Cir. 2015) (“Kentucky law does not appear to provide for unlimited POAs.”). That is, the latter transac- tions alter the principal’s status in society, at least with respect to the other party to the agreement. These transactions would thus not normatively be foreseeable by the principal, and would not be seen to be emcompassed by a general grant of authority without the appropriate specific language going thereto. Second, the act of signing a pre-dispute arbitra- tion agreement is qualitatively different from the act of instituting or participating in an arbitration, or of ordinary actions tending to property. A reviewing court must seek out the language for signing the agreement. Third, the power to enter into the status- altering pre-dispute agreement to arbitrate all dis- putes between an outside party and a principal is not immanent in specific power-of-attorney language purporting to grant agency authority (1) over litiga- tion; or (2) over contracts involving a principal's property. Tending to these matters does not cover the alteration of the principal's civil right to a jury trial vis-a-vis disputes with a second party, potential- ly in perpetuity. Just as important decisions which could be ex- pressed in a power-of-attorney, e.g., the ability to marry by proxy, or to cede parental rights, must have that authority set out; an agent waiving his 76 principal's trial rights generally with respect to an- other party must be set out. Whisman could not be more clear regarding vague, general, “big tent” lan- guage in a power-of- attorney. It is insufficient to ex- ecute the agreement at bar. This is so because the power to modify the fundamental rights of a princi- pal changes that principal’s standing in society, 1.e., it affects the principal’s status. It permanently alters the principal's access to the “King’s justice,” with re- spect to at least the other party to the arbitration agreement,' and cannot be inferred from an instru- ment without explicit address. Given its enormity, mere creation of a power over the principal’s legal affairs, to include litigation and the authority to file a law suit on behalf of the prin- cipal, is not sufficient. Many powers-of-attorney in- clude language authorizing litigation. However, it does not follow from this that granting power to take a certain action intrinsically encompasses the power to promise never to take that « ction. Disavowal (on the principal’s behalf), potentially into perpetuity, by an agent of a power given him by the principal would constitute the agent stepping into the shoes of the principal in the creation of the agency, i.e., unilaterally rewriting the power-of- attorney. Creation of a power to execute contracts in rela- tion to the principal’s property is likewise not suffi- cient. This Court agreed that a law suit imvelving a dispute is a apecies of property, a “chose-in- action.” However, the gravamen of the arbitration agreement acts not in relation to that property: the ‘ Including successors, assigns, affiliates, officers, employees, Ove... 77 agreement acts primarily in relation to a fundamen- tal civil right, vis-a-vis a second party. It is sometimes pointed out that trial rights are easily waived, by the mere failure not to invoke them. But the dissimilarity here should be obvious. For an agent to transact with respect to, or disavow, a particular piece of property should obviously be small potatoes in a well- equipped power-of-attorney. For an agent to disavow the institution of property altogether, however, is entirely another matter. Il. The Court’s Opinion does not impinge upon the FAA. The U.S. Supreme Court, interpreting the FAA, has rejected numerous attempts by States to refuse to enforce arbitration contracts undoubtedly made, by virtue of their essential nature or their terms. That is not happening here. The former point notwithstanding, the U.S. Su- preme Court has never held that the FAA requires State agency law to bend to find authority to make such contracts where it otherwise would not be found. As U.S. Supreme Court Justice Clarence Thomas noted in his concurrence in Concepcion, see infra, “the FAA requires that an agreement to arbi- trate be enforced unless a party successfully chal- lenges the formation of the arbitration agreement.” AT&T Mobility, LLC v. Concepcion, 131 SCt 1740, 1753 (2011). This identifies where the FAA begins to apply. It intervenes once an arbitration agreement is formed pursuant to unbiased State law principles of interpretation (including those pertaining to authori- ty), and not before. Where the FAA does not begin to apply, the States are unbounded except by their own 78 self-governance... 4 self- governance that has a place for State judicial interpretation of State law.” “A power of attorney cannot constitutionally permit formation of one type of contract but not an arbitration contract.” (Petition at p. 1) The error in this statement should be obvious. Of course it can. To put it clearly and methodically: Courts have no right to discriminate against arbitration. Principals how- ever, have every right to discriminate against ar- bitration. 2 Petitioners bring this Court’s attention to Chisholm v. Geor- gia, 2 U.S. 419 (1793), but misread the case. In Chisholm, the U.S. Supreme Court denied that States possessed sovereign immunity (Justice Iredell dissenting), holding that all sover- eignty was held by the people of the United States as an aggre: gate of sovereign individuals. It is commonly understood that the peoples of the United States clarified this error via the Eleventh Amendment (1795). Today, Dual Sovereignty is the accepted understanding of the American federal system. See e.g., Burt v. Titlow, 134 S.Ct. 10, 15 (2013); see also The Ken- tucky Resolution (1799); Ware v. Hylton, 3 US 199 (1796): “In June 1776, the Convention of Virginia formally declared, that Virginia was a free, sovereign, and independent state, and on the 4th of July, 1776, following, the United States, in Con- gress assembled, declared the Thirteen United Colonies free and independent states, and that as such, they had full power to levy war, conclude peace, etc. | consider this as a declaration, not that the United Colonies jointly, in a collective capacity, were independent states, etc. but that each of them was & 60v- ereign and independent state, that is, that each of them had a right to govern itself by its own authority, and its own laws, without any control from any other power upon earth.” Ware, 3 US at 224 (Opimion of Justice Chase). Finite authority is granted to the federal government through the U.S. Constitu- tion and the laws promulgated therefrom; all other residual governing authority ig retained by the States. U.S. Const. amend. X. 79 Happily, Petitioners recognize their error later in their briefing. (See id. at p.6) Evidence of discrimina- tion by the principal, as with all discriminations, may arise affirmatively, or by omission. This Court has simply announced what language signifies an omission as a matter of law. The power must be af- firmatively set out, or it is omitted. This is the crux of the issue at bar. It would be strange, indeed, if we were to in- fer, for example, that an attorney-in-fact with the authority “to do and perform for me in my name all that I might if present to make any contracts or agreements that I might make if present” could enter into an agree- ment to waive the principal's civil rights; or the principal’s right to worship freely; or en- ter into an agreement to terminate the prin- cipal’s parental rights; put her child up for adoption; consent to abort a pregnancy; con- sent to an arrauged marriage; or bind the principal to personal servitude. It would, of course, be absurd to infer such audacious powers from a non-specific; general, even universal, grant of authority. So too, it would be absurd to infer from a non-specific, uni- versal grant, the principal’s assent to sur- render of other fundamental, even sacred, liberties. The Dissent calls the comparative list in the quo- tation supra, a “parade of horribles.” The majority's apparent presumption that the arbitration agreement has substantive implications adverse to the principal (and thus belongs on the list of hard-to-waive sub- 80 stantive rights) is the very presumption Con- gress sought to counteract with the FAA. By lumping in arbitration with the “parade of horribles,” the Dissent believes the Majority shows animus toward arbitration. Respectfully, this is not necessarily so. The list is not really a “parade of horribles.” In many instances the decisions listed in the parade may actually be highly beneficial to the principal under the circumstances, e.g., marrying by proxy. See State v. Anderson, 396 P2d 558, 561 (Ore. 1964) (“There is nothing about a proxy marriage that appears to be contrary to public policy.”). The deci- sion to marry, by proxy or otherwise, is not a “horri- ble” one. It is however, a monumental decision, in effect altering the principal’s status in society.’ If the agent might make the decision to execute a marriage is foreseen by the principal, surely the principal would make this authority clear in any power-of- attorney instrument. If not set out, the courts will deem it to be omitted. This is not discrimination or animus.‘ Petitioners deny the significance of the decision to waive trial rights generally vis-a-vis a party, even potentially in perpetuity. (See Petition at p.3)® By implication, Petitioners suggest that courts should 3 But unlike the arbitration contract at bar, it is possible to break marital contract and obtain a civil divorce. 4 It goes without saying that the U.S. Supreme Court considers “marriage” a right, a good, and something to be favoured. See Obergefell v. Hodges, 136 S.Ct. 2684 (2015). 5 It is not appropriate for Respondent to comment on Petition- ers’ charged language on page 3 of the Petition. Suffice to say that Petitioners ‘ inetitutional commentary comes off as over- heated and unfortunate. 81 treat all decisions by agents with complete indiffer- ence; yet the document from whence this Court de- rives its authority and jurisdiction — the Kentucky Constitution — calls the subject matter here “sacred.” Certainly the Commonwealth and its people, as well as the United States, could alter the trial rights be- longing to the people. However, the alteration ought not to be effected lightly, as its pedigree reaches back at least to the Magna Carta, wherein King John first conceded that property rights’ disputes must remain in the permanent county courts, rather than follow the movable King’s Bench. It is easy enough to distinguish between the will of God and the will of the English barons, but it is difficult not to see the hand of Providence shepherd- ing the resolution of disputes in Anglo-American law from the Medieval trial by combat, to the appeal to the Kings’ Bench, finally to the right to a civil trial in front of one’s peers. Whereas due process in the crim- inal law is the modus wherein the citizens’ relation- ship with the state mainly subsists, the civil law is the modus wherein the citizens’ legal relationships with each other subsists. Petitioners’ protestations notwithstanding, civil trial rights are important, and fundamental. More to the point, how agency law treats such rights does not in any way impact upon the FAA. This Court in this case has not acted against ar- bitration. Rather, the Court has acted to specify rules in written agency. More precisely, it has en- gaged in the interpretation of words on a piece of pa- per, seeking to determine the intentions of a princi- pal, from what is reasonably foreseeable. Petitioners recite a litany of false analogies in their petition, one of which demonstrates their mis- 82 construction of the issue at bar: “Kentucky’s legisla- ture could not pass a law requiring more specificity in the POA’s grant of authority to enforce an arbitra- tion contract than is required for all other contracts and this Court cannot craft one.” (Petition at p.7) This is a straw man. Again, the Court here in effect issued a canon of interpretation of language in an instrument, in the endeavor to divine the intentions of the principal. If the Kentucky legislature were to pass the aforesaid statute, presumably it would be issuing a proscription. The Supreme Court here has issued no proscription.® Nursing home facilities may still enforce ar- bitration agreements with their residents when the resident has signed the agreement or validly authorized his agent to sign in his stead. (emphasis added) CONCLUSION Complaint was filed in this case years ago. Re- spondent prays this Court deny rehearing. Respectfully submitted, /3/ E. er _ 6 Whether the aforesaid proscription — limiting the circum- stances under which a power of attorney may execute an arbi- tration agreement — would be federally pre-empted is not a question in front of this Court. If, to take a different perspec- tive, the legislature attempted to “interpret” principal inten- tions statutorily, t.e., not place a wicket in front of creating the agency power, but rather, claim to legislatively determine a principal's intent; such would probably constitute an invasion of the judiciary’s sphere and a violation of the principle of the sep- aration of powers. This has not occurred, and Petitioners’ point is entirely irrelevant and, again, not in front of the bar. 83 Robert E. Salyer, Esq. CERTIFICATE OF SERVICE The undersigned hereby certifies that ten (10) copies of this brief were served upon Susan Stokley Clary, Clerk, Supreme Court of Kentucky, Rm. 209, State Capitol, 700 Capitol Ave., Frankfort, KY 40601-3488, and one (1) copy served on Sam Givens, Clerk, Ken- tucky Court of Appeals, 360 Democrat Drive, Frank- fort, KY 40601; Hon. Jean Chenault Logue, Circuit Judge, Clark County Courthouse, P.O. Box 313, Win- chester, KY 40391; Robert Salyer and Richard E. Circeo, Esq., Wilkes & McHugh, P.A., 429 N. Broad- way, P.O. Box 1747, Lexington, KY 40588-1747, and J.T. Gilbert, Esq., Coy, Gilbert & Gilbert, 212 N. Se- cond St., Richmond, KY 40475 on this 15th day of December, 2015. /s/ Counsel for Movants 84 COMMONWEALTH OF KENTUCKY SUPREME COURT OF KENTUCKY 2013-SC-000430-I KINDRED NURSING CENTERS LIMITED PART- NERSHIP D/B/A WINCHESTER CENTRE FOR HEALTH AND REHABILITAT [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0688%3A07. Public record. Not legal advice.