BLOGS: North Carolina Appellate Blog

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Thursday, December 23, 2010, 7:24 AM

COA Opinions

On Tuesday, the North Carolina Court of Appeals issued 27 opinions. We'll have more on any cases of interest after the holiday.

Tuesday, December 21, 2010, 9:45 AM

COA Declines to Enforce Arbitration Clause in Nursing Home Admission Agreement

Today, in a very interesting opinion, the Court of Appeals held that the mother of a nursing home patient did not bind the patient or her estate to arbitration by signing an agreement to admit daughter to the nursing home that contained an arbitration clause. The case is Munn v. Haymount Rehabilitation and Nursing Center.

Plaintiff Munn, whose daughter Demetra Murphy died in a nursing home, filed a wrongful death action against the nursing home arising out of their medical treatment of Murphy. Munn filed the suit as administratrix of Murphy's estate. When Murphy was admitted to the nursing home Munn signed an "Admission Agreement." That agreement stated that it was “by and between Century Care of Fayetteville and Demetra Murphy (Resident) or Iris Munn (Responsible Party)." The term "Responsible Party" meant that Munn was responsible for payment of Murphy's nursing home care. The Admission Agreement contained provisions related to such payment, visiting hours, laundry options, and other "housekeeping" matters. The arbitration clause in the agreement required all disputes other than those related to debt collection to be arbitrated, and stated that it was binding on "all persons whose claims are derived through or on behalf of the Resident.”

The COA noted that Munn had to have some form of legal authority to enter into an arbitration agreement on behalf of Murphy or her estate, and found that Munn was not the actual or apparent agent of Murphy. In order for Munn to have actual authority, Murphy had to have actually consented to Munn acting on her behalf. The COA found that Murphy did not do so, even though at some point prior to her stay in the nursing home Murphy identified her mother as her next of kin and "primary contact." This was not enough to make Munn Murphy's general agent.

The COA also found that even though Munn was consulted about and made decisions regarding her daughter’s medical treatment, Munn was not authorized as or acted as if she were authorized to be "Murphy’s general agent in matters such as arbitration agreements." The COA pointed out that apparent authority rests on the principal's manifestations of authority - at the time that Munn signed the Admission Agreement containing the arbitration clause Murphy was “not responsive” and unable “to speak or communicate,” and thus did not give Munn authority to act as her agent for purposes of binding Murphy to arbitration. There was also no ratification of any apparent agency by Murphy. The COA further noted that the primary purpose of the Admission Agreement was to secure payment for the nursing home's services, not to bind Murphy to arbitration.


McCullough Wins Instant Runoff

After a statewide recount, Doug McCullough was declared the winner of the race to replace Judge James A. Wynn on the North Carolina Court of Appeals. McCullough defeated incumbent Judge Cressie Thigpen, who was appointed to the Court of Appeals by Governor Perdue in August, by 6,655 votes.

Monday, December 20, 2010, 5:11 PM

Supreme Court: Partner Executes Contract On Behalf of Partnership Unless There's No Authority or Ratification

Today the Supreme Court held that a partner in a licensed partnership signs contracts as an agent of the partnership unless the partner was not authorized to act on behalf of the partnership and the contract was not ratified by the partnership. The case is Medlin Construction v. Harris.

Medlin Construction, a partnership, built a house for the Harrises. The construction contract was signed only by Ron Medlin, a partner in Medlin Construction. Medlin was not a licensed contractor, but Medlin construction was. Medlin and Medlin Construction claimed that the Harrises failed to pay them for materials and labor in building the house, and the Harrises claimed that Medlin Construction/Medlin breached the construction contract and committed unfair and deceptive trade practices. On appeal, Medlin and Medlin Construction claimed that even though Medlin entered into an express construction contract, they could still recover in quantum meruit.

The Court disagreed. All parties agreed that Medlin Construction did not have a contractual relationship with defendants, but the Court found that one in fact did exist because Medlin was acting in his capacity as a partner and signed the contract on behalf of the partnership. Medlin Construction did not argue that Medlin lacked authority to enter into the contract on behalf of the partnership, and by getting materials, hiring subcontractors, and building the house, Medlin Construction acknowledged that Medlin was authorized to enter into the contract with the Harrises on behalf of the partnership. The Court concluded: "We hold that, as a matter of law, a contract for the construction of a home or building executed by a partner in a licensed partnership engaged in the construction business is the contract of the partnership unless the remaining partners can show that the partner was not authorized to act on behalf of the partnership and, if not so authorized, the partnership did not ratify the contract. Without this showing, a licensed construction contractor partnership cannot recover in quantum meruit."

Supreme Court Opinions

Today, the North Carolina Supreme Court issued six opinions. We will have more on any cases of interest later.

Tuesday, December 07, 2010, 8:27 AM

Final Court of Appeals Race is Almost Over (Maybe)

Various news sources are reporting that former North Carolina Court of Appeals Judge Doug McCullough has a 6,700 vote lead over incumbent Court of Appeals Judge Cressie Thigpen in the race to fill the seat vacated by Judge James A. Wynn. It is highly likely that McCullough will be declared the winner because the only county left to report – Warren County – had less than 6,700 votes cast in this race. Initial reports had Judge Thigpen leading by tens of thousands of votes, but apparently there was some sort of error in the way that the vote totals were tracked.

If the race is decided by less than 10,000 votes, which seems likely at this point, Judge Thigpen has the ability to request a recount. According to the Virginian Pilot, linked below, Judge Thigpen's campaign has not decided whether to ask for a recount.

Court of Appeals Opinions

This morning the Court of Appeals published 29 opinions on its newly revised web site. We will have more on any cases of interest later. The next potential opinion release date is December 21, 2010.

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