                    IN THE SUPREME COURT OF MISSISSIPPI

                                NO. 2006-CA-00169-SCT

GRENADA LIVING CENTER, LLC, COMMUNITY
CARE CENTER OF GRENADA, LLC, COMM
CARE MISSISSIPPI, JAMES S. WILLIAMS AND
JAMES C. LANDERS

v.

CEPHUS COLEMAN, III (SUBSTITUTED FOR
ANNE DONALDSON), AS PERSONAL
REPRESENTATIVE OF CEPHUS COLEMAN, JR.,
DECEASED AND ON BEHALF OF THE
WRONGFUL DEATH BENEFICIARIES OF
CEPHUS COLEMAN, JR., DECEASED


DATE OF JUDGMENT:                         01/06/2006
TRIAL JUDGE:                              HON. C. E. MORGAN, III
COURT FROM WHICH APPEALED                 GRENADA COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT:                  STEVEN MARK WANN
                                          MARJORIE SELBY BUSCHING
ATTORNEYS FOR APPELLEE:                   CHARLES E. GIBSON, III
                                          GIGI GIBSON
NATURE OF THE CASE:                       CIVIL - PERSONAL INJURY
DISPOSITION:                              AFFIRMED - 07/26/2007
MOTION FOR REHEARING FILED:
MANDATE ISSUED:


       EN BANC.

       DIAZ, PRESIDING JUSTICE, FOR THE COURT:

¶1.    This case addresses when a person is subject to the Uniform Healthcare Decisions Act

and when a non-signatory is subject to arbitration.

                              Facts and Proceedings Below
¶2.    Cephus Coleman, Jr. was a World War II veteran, paralyzed since eighteen from a

wound suffered in battle. In a wheelchair since his service days, he earned a college degree,

married, had a child, and served as pastor to a church. In 2003, well into his seventies, Mr.

Coleman was living with his half-sister, Anne Donaldson. She needed help caring for him,

and sought a nursing home who would accept the Veterans Administration benefits Cephus

received. Grenada Living Center accepted the VA benefits, and Anne took steps to have Mr.

Coleman become a resident.

¶3.    In July of 2003 Mr. Coleman became a resident of Grenada Living Center, and he

passed away on January 22, 2004, while still a resident. After his death, a suit was filed by

Cephus’ son, Cephus Coleman, III, against the nursing home, which responded with the now-

familiar motion to dismiss in favor of arbitration.1 Anne signed the contract for admission

and placed her initials by the arbitration agreement. Coleman, wishing to avoid arbitration,

argued that his father was never a party to the arbitration agreement and therefore could not

have been bound by it.

¶4.    At a hearing before the trial, the parties stipulated to several facts which are critical

to our analysis.2 First, it was agreed that when Mr. Coleman was mentally competent when

his half-sister had him placed in the nursing home. Second, Mr. Coleman was not present

when Anne signed the admission agreement and the arbitration agreement. Third, Anne is

Mr. Coleman’s half-sister who did not retain power of attorney, a conservatorship, a


       1
      Pursuant to 9 U.S.C. § 3, a movant should file a motion to stay proceedings
contemporaneously with the motion to compel arbitration.
       2
        The facts relied upon are those stipulated to by the parties at the second hearing
before the trial court.

                                               2
guardianship, or any other legal power over her half-brother. Mr. Coleman later executed

a power of attorney in favor of his half-sister that the parties agreed was not retroactive.

¶5.    The memoranda of the parties in the trial court and the hearings before the Grenada

County Circuit Court focused on the issues on which many arbitration cases often turn, such

as whether there was duress in the entering of the contract and if the agreement was

unconscionable. After a review of two memoranda, multiple exhibits, and two hearings on

the subject, the trial court issued a narrow ruling based on basic contract law: that, generally

speaking, a contract is not enforceable against a person unless personally entered into.

Accordingly, the trial court found that no contract existed and Mr. Coleman was not bound

by arbitration.

¶6.    Aggrieved, Grenada Living Center appeals, presenting us with one question on

appeal: Is a competent person who was not a signatory to a contract bound by an arbitration

clause contained within that contract?

                                    Standard of Review

¶7.    “The grant or denial of a motion to compel arbitration is reviewed de novo.” East

Ford, Inc. v. Taylor, 826 So. 2d 709, 713 (Miss. 2002). We have previously ruled that

lawsuits involving negligence at a nursing home affects interstate commerce, thus invoking

the Federal Arbitration Act. Vicksburg Partners, 911 So. 2d at 515-16.

¶8.    The FAA requires a two-step inquiry when scrutinizing an arbitration agreement.

East Ford, 826 So. 2d at 713. First, we must determine if the parties intended to arbitrate

the dispute; if so, we next consider “whether legal constraints external to the parties’

agreement foreclosed the arbitration of those claims.” Mitsubishi Motors Corp. v. Soler

                                               3
Chrysler-Plymouth, 473 U.S. 614, 628 (1985); East Ford at 826 So. 2d at 713. “Under the

second prong, applicable contract defenses available under state contract law such as fraud,

duress, and unconscionability may be asserted to invalidate the arbitration agreement without

offending the Federal Arbitration Act.” Id. at 713; see 9 U.S.C. § 2 (an “agreement in writing

to submit to arbitration an existing controversy . . . shall be valid, irrevocable, and

enforceable, save upon such grounds as exist at law or in equity for the revocation of any

contract”).

                                           Discussion

¶9.    To determine if the parties are bound by arbitration, in this case we must first

determine if a contract exists between them. A valid contract must have (1) two or more

contracting parties, (2) consideration, (3) an agreement that is sufficiently definite, (4) parties

with legal capacity to make a contract, (5) mutual assent, and (6) no legal prohibition

precluding contract formation. Rotenberry v. Hooker, 864 So. 2d 266, 270 (Miss. 2003).

In this case we focus on the fourth and fifth factors—whether the parties who executed the

contract had the legal ability to create the contract or assent to the contract.

¶10.   Coleman asserts that Anne could not legally bind his father to arbitration because he

was not a party to the contract. In response, Grenada Living Center offers four reasons why

arbitration applies.

¶11.   Grenada Living Center asserts that Anne acted as Cephus’ healthcare surrogate, citing

to the Uniform Healthcare Decisions Act. See Miss. Code Ann. § 41-41-203 et seq. (Rev.

2005). This argument was never raised before the trial court in any fashion. We have

“repeatedly held that a trial judge will not be found in error on a matter not presented to the

                                                4
trial court for a decision.” Purvis v. Barnes, 791 So. 2d 199, 203 (Miss. 2001). Accordingly,

this issue is procedurally barred.

¶12.   Notwithstanding this procedural bar, we will briefly examine the plain language of

the statute for the sake of guidance. Section 1 of the statute defines the requirements for any

person who wishes to be a surrogate. There are two pre-conditions: “A surrogate may make

a health-care decision for a patient who is an adult or emancipated minor if [1] the patient has

been determined by the primary physician to lack capacity and [2] no agent or guardian has

been appointed or the agent or guardian is not reasonably available.” Miss. Code Ann. § 41-

41-211(Rev. 2005) (emphasis added). Therefore, a close reading of the statute reveals that

a prerequisite before any other analysis is that a patient may only have a surrogate if they do

not have mental capacity to make decisions and they do not have any other person legally

available to care for them. Sections 2 and 3 of the statute define who may be a surrogate, but

the preconditions of Section 1 must first be met.

¶13.   In the case at hand, the parties stipulated that Mr. Coleman was competent, and no

physician had declared him incompetent. In addition, no agent or guardian had been

appointed, and so the first pre-requisite of Section 1 was not met. Accordingly, Mr.

Coleman’s half-sister Anne could not have been his health-care surrogate. Further, it is clear

from the statute that the Legislature intended to create a system whereby a family member

(or other de facto guardian) could tend to the health needs of a loved one when they were

incapacitated. Because Mr. Coleman was not incapacitated, the statutes governing health

care surrogates do not apply.




                                               5
¶14.   The nursing home also asserted that “neither Mississippi, nor Federal Law require a

power of attorney, conservatorship, guardianship or other court-ordered legal authority to

admit a resident to a nursing home.” Grenada Living Center provided no citation of authority

in this section. Accordingly, this argument is barred, as failure to cite any authority in

support of a claim of error precludes this Court from considering the specific claim on

appeal. See Grey v. Grey, 638 So. 2d 488, 491 (Miss. 1994).

¶15.   Third, the nursing home argued that Anne’s actions could bind Mr. Coleman through

express agency, or in the alternative, implied agency. As noted above, Grenada Living

Center stipulated before the trial court facts which undercut the theory of express agency,

including stipulating that there was no express grant of agency through a guardianship,

conservatorship, or power of attorney. The trial court found no basis for the nursing home

to simply assume the presence of express agency. As to implied agency, this argument was

never presented to the trial court and therefore is procedurally barred. See Purvis, 791 So.

2d at 203.

¶16.   Fourth and last, Grenada Living Center asserts that the family of Cephus should be

bound to the terms and conditions of the arbitration agreement in the contract. In support,

it offers correctly that we have held that non-signatories may be bound by an arbitration

agreement when they are third-party beneficiaries. See Smith Barney, Inc. v. Henry, 775

So. 2d 722, 727 (Miss. 2001) (finding that arbitration clause covered successor to will);

Terminix Intern., Inc. v. Rice, 904 So. 2d 1051, 1058 (Miss. 2004) (wife bound by

arbitration clause in contract signed by her husband despite the fact she did not sign).




                                              6
¶17.   Those cases remain binding precedent, and this case does not stand for the proposition

that non-signatories to a contract containing an arbitration clause can never be bound by

arbitration. Here, the trial court reasoned in accordance with the stipulations of the parties

that “nobody had the authority to speak for Cephus Coleman, Jr. except himself,” and

therefore “there is no binding written contract between Cephus Coleman, Jr. and the nursing

home requiring arbitration.” We find this reasoning persuasive. Any wrongful death

beneficiaries of Cephus can be bound only to the extent he would be bound. Because there

was no contract between Cephus and the nursing home in the first place, no arbitration clause

exists to be enforced against the wrongful death beneficiaries of Cephus.

                                         Conclusion

¶18.   The Uniform Healthcare Decisions Act does not apply to those persons who are

competent. In addition, for our Court to review a case, the issues must first be presented to

the trial court.3 We cannot examine that which does not exist, and we must counsel parties

not to “bootstrap” arguments or submit issues that are not properly before the Court.

Accordingly, we affirm the judgment of the Grenada County Circuit Court denying

arbitration.

¶19.   AFFIRMED.



       3
        With some notable exceptions. For instance, subject matter jurisdiction may be
raised at any time, even for the first time on appeal. See M.R.A.P. 12(h)(3) (“Whenever it
appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the
subject matter, the court shall dismiss the action or transfer the action to the court of proper
jurisdiction”); Comment, M.R.A.P. 12 (“Under Rule 12(h)(3) a question of subject matter
jurisdiction may be presented at any time . . . [and] may be presented for the first time on
appeal”).


                                               7
      WALLER, P.J., CARLSON, GRAVES, DICKINSON, RANDOLPH AND
LAMAR, JJ., CONCUR. SMITH, C.J., CONCURS IN RESULT ONLY. EASLEY,
J., CONCURS IN PART AND IN RESULT. CARLSON, J., SPECIALLY CONCURS
WITH SEPARATE WRITTEN OPINION JOINED BY SMITH, C.J., WALLER, P.
J., EASLEY, DICKINSON, RANDOLPH AND LAMAR, JJ.


       CARLSON, JUSTICE, SPECIALLY CONCURRING:

¶20.   While I unhesitatingly join my colleagues in the majority, I deem it necessary to go

a little further concerning our discussion on arbitration. While the majority acknowledges

this Court’s decisions in Smith Barney, Inc. v. Henry, 775 So. 2d 722, 727 (Miss. 2001) and

Terminix International, Inc. v. Rice, 904 So. 2d 1051, 1058 (Miss. 2004), there is more to

our history concerning arbitration cases.

¶21.   In Parkerson v. Smith, 817 So. 2d 529 (Miss. 2002), this Court held, inter alia, that

a nonsignatory to a contract containing an arbitration clause, who was not even mentioned

in the arbitration clause, could not gain the benefit of compelling arbitration. Id. at 535.

However, Parkerson generated four separate opinions.4 In the wake of the muddied waters

created by Parkerson, this Court began a course of attempting to lay out with clarity when

parties might or might not be bound by arbitration, beginning with East Ford, Inc. v. Taylor,

826 So. 2d 709 (Miss. 2002), and Russell v. Performance Toyota, Inc., 826 So. 2d 719

(Miss. 2002).


       4
        Presiding Justice McRae wrote the majority opinion, joined by Justices Diaz, Easley
and Graves, and Justice Carlson concurred in result only. Justice Diaz wrote a concurring
opinion, joined by Presiding Justice McRae, and Justices Easley and Graves. Justice Cobb
wrote a dissenting opinion. Chief Justice Pittman likewise wrote a separate opinion wherein
he concurred in part, and dissented in part, and this opinion was joined by Justice Waller,
and was joined in part by Justices Cobb and Carlson. Presiding Justice Smith did not
participate.

                                             8
¶22.   Without citing all our arbitration cases, and those of the Court of Appeals, which are

by now legion, I focus only on a few of our cases where we have addressed the issue of

nonsignatories in an arbitration setting. I start by citing this Court’s decision in Terminix

International, Inc. v. Rice, 904 So. 2d 1051, 1058 (Miss. 2004) (wife bound by arbitration

clause in contract signed by her husband, although she did not sign the contract). In B. C.

Rogers Poultry, Inc. v. Wedgeworth, 911 So. 2d 483, 491-92 (Miss. 2005), we stated:

       [S]tate law principles might provide for the arbitration of disputes between a
       nonsignatory and a signatory to a contract, where there are allegations of
       substantially interdependent and concerted misconduct. A non-signatory
       should have standing to compel arbitration where the non-signatory has a close
       legal relationship, such as, alter ego, parent/subsidiary, or agency relationship,
       with a signatory to the agreement. See Terminix Int’l, Inc. v. Rice, 904 So.
       2d 1051 (Miss. 2004) (quoting Washington Mut. Fin. Group, LLC v. Bailey,
       364 F. 3d 260, 267 (5 th Cir. 2004) (“A nonsignatory party may be bound to an
       arbitration agreement if so dictated by the ordinary principles of contract and
       agency.”) See also Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.
       3d 753, 757 (11 th Cir. 1993); J. J. Ryan & Sons, Inc. v. Rhone Poulenc
       Textile, S.A., 863 F. 2d 315 (4 th Cir. 1988); Interocean Ship. Co. v. Nat’l
       Ship. & Trading Corp., 523 F. 2d 527, 539 (2d Cir. 1975).

Id. at 491-92.    See also Fradella v. Seaberry, 952 So. 2d 165, 175 (Miss. 2007)

(nonsignatory to contract containing arbitration clause could compel arbitration against

signatory where nonsignatory had certain specified rights and responsibilities to the signatory

under the contract); Adams v. Greenpoint Credit, LLC, 943 So. 2d 703, 708 (Miss. 2006)

(“arbitration agreements can be enforced against nonsignatories if such nonsignatory is a

third party beneficiary” or if the doctrine of equitable estoppel applies); 5 Cleveland v. Mann,

942 So. 2d 108, 119 (Miss. 2006) (decedent’s heirs-at-law in wrongful death action against


       5
       In Adams, the nonsignatory was found not to be bound by the arbitration agreement.
943 So. 2d at 709.

                                               9
medical providers bound by arbitration agreement signed by decedent); Sullivan v. Protex

Weatherproofing, Inc., 913 So. 2d 256, 260-61 (Miss. 2005) (case involving a global

transaction with several documents found to be integral to the overall transaction –

nonsignatory could compel arbitration against a signatory).

¶23.   This list is by no means all-inclusive. I could go on, but trusting that my point is

made, I will stop. Hopefully, my learned colleagues in the majority will react to this separate

opinion by stating that the cases I cite are clearly distinguishable from today’s case. If that

is their reaction, they would be absolutely correct – and that is my point. The cases I cite

today are unquestionably distinguishable from the case sub judice, but I simply felt

compelled to briefly discuss this Court’s history in an area of the law that we have struggled

mightily to clarify over the past five years.

¶24.   With this having been said, I unhesitatingly fully concur in the majority’s opinion

based on the specific facts and circumstances peculiar to this particular case.

       SMITH, C.J., WALLER, P.J., EASLEY, DICKINSON, RANDOLPH AND

LAMAR, JJ., JOIN THIS OPINION.




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