Court Opinion

ID: 4279523
Source: CourtListenerOpinion
Date Created: 2018-05-30 16:46:12.793942+00
Date Added: 2024-06-11T14:34:31.680645
License: Public Domain

J-A08039-18

NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37

ELIZABETH A. GROSS,                     :     IN THE SUPERIOR COURT OF
ADMINISTRATRIX FOR THE ESTATE OF        :           PENNSYLVANIA
EUGENE R. GROSS, SR., DECEASED,         :
                                        :
                   v.                   :
                                        :
GENESIS HEALTHCARE, INC., 350           :
HAWS LANE OPERATIONS, LLC D/B/A         :
HARSTON HALL, 650 EDISON AVENUE         :
OPERATIONS, LLC D/B/A SOMERTON          :
CENTER, GENESIS HEALTHCARE, LLC,        :
CENTER MANAGEMENT GROUP, LLC,           :
10400 ROOSEVELT OPERATING, LLC          :
D/B/A ST. JOHN NEUMANN CENTER           :
FOR REHABILITATION AND                  :
HEALTHCARE, 10400 ROOSEVELT LOT,        :
LLC, 10400 ROOSEVELT REALTY, LLC,       :
10400 ROOSEVELT VENTURES, LLC,          :
CHARLES-EDOUARD GROS, MOSHE             :
ROSENBERG AND CAROLYN BOEHM             :
                                        :
APPEAL OF: 10400 ROOSEVELT              :
REALTY, LLC, 10400 ROOSEVELT LOT,       :
LLC, 10400 ROOSEVELT VENTURES,          :
LLC, CENTER MANAGEMENT GROUP,           :
10400 ROOSEVELT OPERATING LLC           :
D/B/A ST. JOHN NEUMANN CENTER           :
FOR REHABILITATION AND                  :
HEALTHCARE, CHARLES-EDOUARD             :
GROS, MOSHE ROSENBERG AND               :
CAROLYN BOEHM                           :      No. 2022 EDA 2017

                 Appeal from the Order Entered June 8, 2017
            in the Court of Common Pleas of Philadelphia County
          Civil Division at No(s): December Term, 2016 No. 00910

BEFORE:    PANELLA, LAZARUS, and STRASSBURGER,* JJ.

MEMORANDUM BY STRASSBURGER, J.:         FILED MAY 30, 2018

*Retired Senior Judge assigned to the Superior Court.
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      10400 Roosevelt Realty, LLC, 10400 Roosevelt Lot, LLC, 10400

Roosevelt Ventures, LLC, Center Management Group, 10400 Roosevelt

Operating LLC d/b/a St. John Neumann Center for Rehabilitation and

Healthcare, Charles-Edouard Gros, Moshe Rosenberg, and Carolyn Boehm

(collectively, the Facility) appeal from the June 8, 2017 order overruling the

Facility’s preliminary objections in the nature of a motion to compel

arbitration.1 We affirm.

      Eugene R. Gross, Sr. (Decedent) passed away on June 3, 2016. This

action involves claims of negligence relating to care rendered to Decedent

during his stay as a patient at three different nursing homes, including his

stay at the Facility between March 16, 2015, and April 29, 2015.

      On March 16, 2015, Decedent was admitted directly to the Facility’s

dementia unit. A week and a half after Decedent’s admission, on March 26,

2015, Elizabeth A. Gross (Gross), who is Decedent’s wife, signed two

interrelated   agreements   at   the    Facility’s   request   (collectively,   the

Agreements).     The first agreement relates to Decedent’s short-term

rehabilitative stay at the Facility (Admission Agreement).        The Admission

Agreement purports to make the following parties to the agreement: the

Facility, Decedent (known in the agreement as “Resident”), and Gross as

1 “An order overruling preliminary objections seeking to compel arbitration is
immediately appealable as an interlocutory appeal as of right pursuant to 42
Pa.C.S.[] § 7320(a) and Pa.R.A.P. 311(a)(8).”         Petersen v. Kindred
Healthcare, Inc., 155 A.3d 641, 644 n.1 (Pa. Super. 2017).

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Decedent’s “representative,” (known in the agreement as “Responsible

Person”).   Admission Agreement, 3/26/2015, at 1.      Decedent did not sign

the Admission Agreement.

      Inter alia, the Admission Agreement details the nature of the services

provided and the resident’s financial obligations.   Relevant to this appeal,

the Admission Agreement also contains an arbitration clause (Arbitration

Clause), which requires the parties to submit to arbitration all disputes

relating to the Admission Agreement, with the exception of guardianship

proceedings and disputes involving amounts in controversy less than

$8,000. Admission Agreement, 3/26/2015, at 6-11. Finally, the Admission

Agreement has a clause relating to the “Obligations of the Responsible

Person.” Id. at 2. This clause provides that

      Resident has a right to identify a Responsible Person (usually the
      Agent in the Resident’s Power of Attorney or Guardian), who
      shall be entitled to receive notice in the event of transfer or
      discharge or material changes in the Resident’s condition, and
      changes to this Agreement. Resident elects to name [Gross] of
      [Address], as the Responsible Person. The Resident’s selected
      Responsible Person shall sign this Agreement and the
      Responsible Person Agreement in recognition of this designation
      with the intent to be legally bound by all provisions in this
      Agreement except as modified by the Responsible Person
      Agreement.

Id.

      Gross   also   signed   a   second   agreement   (Responsible    Person

Agreement), the purpose of which is “to facilitate the provision of care to

[Decedent].” Responsible Person Agreement, 3/26/2015, at 1. The parties

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to the Responsible Person Agreement are Gross and the Facility.              Id.

Decedent did not sign this agreement. Essentially, the Responsible Person

Agreement obligates the Responsible Person to fulfill the duties of the

Resident under the Admission Agreement, most of which are financial in

nature, and subjects the Responsible Person to liability for failure to do so.

      On December 12, 2016, Gross, in her capacity as administratrix of

Decedent’s estate, filed a complaint against the two sets of entities that own

and operate the nursing homes.2 After reinstatement of the complaint, the

Facility filed preliminary objections on January 30, 2017, seeking, inter alia,

to enforce the Arbitration Clause in the Admission Agreement. Gross filed an

answer asserting, inter alia, that the Arbitration Clause was invalid because

Decedent did not sign the Admission Agreement and Gross lacked authority

to bind Decedent to arbitration. The trial court ordered discovery relating to

the existence of a valid agreement to arbitrate pursuant to Pa.R.Civ.P.

1028(c).   Following argument and the submission of briefs, the trial court

overruled the preliminary objections on June 8, 2017.

      The Facility timely filed a notice of appeal. The trial court did not order

the Facility to file a concise statement of errors complained of on appeal, and

2
   The other set of defendants, Genesis Healthcare, Inc., 350 Haws Lane
Operations, LLC d/b/a Harston Hall, 650 Edison Avenue Operations, LLC
d/b/a Somerton Center, and Genesis Healthcare, LLC (collectively, Genesis)
filed their own set of preliminary objections, which the trial court overruled.
Genesis appealed at 2251 EDA 2017, but the appeal was discontinued upon
the praecipe for discontinuance filed by Genesis on February 18, 2018.
Genesis has not participated in the instant appeal.

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none was filed.     The trial court filed an opinion pursuant to Pa.R.A.P.

1925(a) directing us towards its June 8, 2017 memorandum in support of its

order overruling the preliminary objections.

     The Facility asks this Court to resolve the following question on appeal.3

    1. Did the trial court err and abuse its discretion by overruling [the
       Facility’s] preliminary objections in the form of a motion to
       compel arbitration, as (1) there is a binding and valid agreement
       to arbitrate signed by Decedent’s wife with his authority and as
       his agent, and (2) the claims of Decedent and his estate fall
       within the scope of the arbitration provision?

The Facility’s Brief at 4 (trial court’s answers and unnecessary articles

omitted; some capitalization altered).

       “[O]ur review of a claim that the trial court improperly denied

preliminary objections in the nature of a petition to compel arbitration is

limited to determining whether the trial court’s findings are supported by

substantial evidence and whether the trial court abused its discretion in

denying the petition.” Petersen, 155 A.3d at 644. “We employ a two-part

test to determine whether the trial court should have compelled arbitration:

[(1)] whether a valid agreement to arbitrate exists, and [(2)] whether the

dispute is within the scope of the agreement.”       Washburn v. Northern

Health Facilities, Inc., 121 A.3d 1008, 1012 (Pa. Super. 2015).

3 The Facility also asks this Court to decide whether the Arbitration Clause in
the Admission Agreement is unconscionable or a contract of adhesion. The
Facility’s Brief at 4. Because we hold that there is no enforceable agreement
to arbitrate between the Facility and Decedent, we need not reach the
second issue the Facility presents.

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      The dispute in the instant case focuses on the validity of the

Arbitration Clause in the Admission Agreement – i.e., the first part of the

two-part test.   Our case law makes clear that “[a]rbitration is a matter of

contract, and parties to a contract cannot be compelled to arbitrate a given

issue absent an agreement between them to arbitrate that issue.” Civan v.

Windermere Farms, Inc., 180 A.3d 489, 494 (Pa. Super. 2018). Whether

an agreement to arbitrate exists is a question of law. Provenzano v. Ohio

Valley Gen. Hosp., 121 A.3d 1085, 1095 (Pa. Super. 2015).           Thus, our

standard of review over this issue is de novo and our scope is plenary.

Petersen, 155 A.3d at 644.

      Decedent did not sign the Admission Agreement. Therefore, in order

for the Arbitration Clause to be binding on Decedent’s estate, an agency

relationship between Gross and Decedent must have existed at the time

Gross signed the Admission Agreement. “Agency is a relationship whereby

the principal manifests assent that another person (the agent) will act on the

principal’s behalf subject to the principal’s control, and the agent agrees to

do so.” Wisler v. Manor Care of Lancaster PA, LLC, 124 A.3d 317, 323

(Pa. Super. 2015).

      [A]n agency relationship may be created by any of the following:
      (1) express authority, (2) implied authority, (3) apparent
      authority, and/or (4) authority by estoppel.

            Express authority exists where the principal
            deliberately and specifically grants authority to the
            agent as to certain matters. Implied authority exists
            in situations where the agent’s actions are “proper,

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           usual and necessary” to carry out express agency.
           Apparent agency exists where the principal, by word
           or conduct, causes people with whom the alleged
           agent deals to believe that the principal has granted
           the agent authority to act. Authority by estoppel
           occurs when the principal fails to take reasonable
           steps to disavow the third party of their belief that
           the purported agent was authorized to act on behalf
           of the principal.

     The party asserting the existence of an agency relationship bears
     the burden of proving it by a fair preponderance of the evidence.

Petersen, 155 A.3d at 645 (citations omitted).

     The Facility first contends that Gross had Decedent’s express, implied,

and apparent authority to enter into the Admission Agreement and bind

Decedent to the Arbitration Clause. The Facility’s Brief at 32-48. To support

its contention, the Facility focuses on Gross’s marital relationship to

Decedent and Decedent’s dementia.       Id. at 33-34, 38-39, 47-48.      The

Facility acknowledges that Decedent was not qualified to execute the

Admission Agreement due to his dementia.         Id. at 34.   The gist of the

Facility’s argument is that because Decedent could not sign the Admission

Agreement, “clearly someone – his wife – had the authority to execute this

contract on his behalf.” Id.

     The Facility’s bald statement has no basis in law.        Agency is not

assumed merely because one person does an act for another.         Walton v.

Johnson, 66 A.3d 782, 787 (Pa. Super. 2013) (holding that Walton was not

bound by an arbitration agreement her mother signed on her behalf while

Walton was comatose, as the facility did not establish that Walton authorized

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her mother to act as her agent). Moreover, “[i]t is well settled that neither a

husband nor wife has the power to act as agent for the other merely due to

the marriage relationship.” Washburn, 121 A.3d at 1014.         This does not

change merely because Decedent was incapacitated. 4 See id. (holding that

nursing home failed to establish authority of wife to bind husband, who had

dementia, to arbitrate claims arising from husband’s stay at nursing home).

      The Facility’s other arguments regarding express, implied, and

apparent authority fail as well. The Facility contends that Decedent’s grant

of power of attorney to Gross in February 2016 confirms that Decedent

approved of Gross’s acting on Decedent’s behalf at the time of his admission

to the nursing home in March 2015. The Facility’s Brief at 36-37, 42-43, 48.

However, the Facility does not point us to any terms of the February 2016

power of attorney that demonstrate that Decedent intended the power of

attorney to apply retroactively to ratify past actions by Gross on Decedent’s

behalf. See Twp. of N. Fayette v. Guyaux, 992 A.2d 904, 906 (Pa. Super.

2010) (rejecting Guyaux’s argument that a power of attorney executed after

4
 If the Facility wished to bind Decedent to a legal agreement and Decedent
did not have the capacity to enter into an agreement, the Facility needed to
either (1) use reasonable diligence to ensure that Decedent had granted
authority to an agent, Bolus v. United Penn Bank, 525 A.2d 1215, 1222
(Pa. Super. 1987), and have that agent execute an agreement on
Decedent’s behalf; or (2) seek to have Decedent declared an incapacitated
person and a guardian appointed pursuant to 20 Pa.C.S. § 5511. Walton,
121 A.3d at 786-87.

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Guyaux signed pleadings on his mother’s behalf had the effect of ratifying

these past actions).

      The Facility next relies upon Gross’s signing of the Responsible Person

Agreement, arguing that by signing the agreement Gross “affirmed that she

had the authority from [Decedent] to sign the paperwork on his behalf.” The

Facility’s Brief at 35, 47-49. The Facility directs our attention to a clause in

the Responsible Person Agreement, wherein Gross represented that she was

Decedent’s guardian or Decedent’s agent pursuant to a power of attorney,

had Decedent’s authorization to execute the Admission Agreement, or

previously had Decedent’s authorization to act as his agent. Id. at 49; see

Responsible Person Agreement, 3/26/2015, at 4.

      However, the flaw in the Facility’s argument is that Decedent was

suffering from dementia, and there is no evidence in the record that

Decedent had any awareness of the Agreements. Decedent did not sign the

Agreements. Decedent was not present while Gross signed the Agreements.

Gross Deposition, 4/26/2017, at 77. Gross “might have mentioned [signing

the Agreements] to [Decedent], but it went over his head.”          Id. at 78.

While the Admission Agreement claims that Decedent selected Gross as his

Responsible Person, only Gross signed the Admission Agreement, and she

did so in her capacity as the Responsible Person. “An agent cannot simply

by h[er] own words, invest [her]self with apparent authority. Such authority

emanates from the action of the principal and not the agent.” Wisler, 124

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A.3d at 324. Thus, even if Gross represented that Decedent authorized her

to sign the Admission Agreement or serve as his Responsible Person, the

Facility did not point to any words or actions by Decedent that led it to

believe that he had invested Gross with such authority. See id.

      While the Facility emphasizes Gross’s management of Decedent’s

“personal, financial[,] and business affairs” after Decedent had a mini-stroke

in 2014 prior to Decedent’s admission at the Facility, see the Facility’s Brief

at 36, these actions do not aid its contention that Gross had express,

implied, or apparent authority. The Facility argues that because Gross “took

over all the bills, dealt with Social Security and Medicare, filled out and

signed [Decedent’s] paperwork,5 took control over [Decedent’s] money and

finances, … and made his medical appointments and accompanied him,” this

demonstrated that “Gross was managing all of [Decedent’s] affairs and

completing paperwork on his behalf with his knowledge, consent[,] and

authority.” Id. at 41, 46-49 (emphasis removed). Again, however, there is

no evidence that Decedent authorized Gross to do these things, as opposed

5
  It is unclear to which paperwork the Facility is referring. Gross indicated
that she signed consent forms when Decedent was admitted to a hospital in
2014 after suffering a stroke and at subsequent doctor’s appointments.
Gross Deposition, 4/26/2017, at 13, 18. She also stated that she would fill
out and/or sign unspecified “paperwork” due to Decedent’s health issues,
but denied signing “legal documents.” Id. at 16.

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to Gross taking it upon herself to assist Decedent.6     See Washburn, 121

A.3d at 1014 (“The flaw in [the nursing home’s] position is that while there

is evidence that Mrs. Washburn previously acted on her husband’s behalf,

the record is devoid of evidence that Mr. Washburn ever authorized his wife

to do so.”); Wisler, 124 A.3d at 325 (dismissing nursing home’s argument

that son’s actions on behalf of father, including being involved in prior

hospital admissions, handling his banking, and paying his bills, indicated that

son was his father’s agent; “[a]gain, authority emanates from the principal’s

action, and not the agent’s”).

      Even if Decedent had authorized Gross to manage certain aspects of

his finances and healthcare, the Facility fails to convince us that this

authorization constituted an express or implied grant of authority to manage

his legal affairs, such that Gross was authorized to waive his constitutional

right to a jury trial. See Wisler, 124 A.3d at 324 (distinguishing authority

to consent to medical treatment and care from authority to consent to

arbitration); Walton, 66 A.3d at 788 (same).         A deliberate and specific

grant of authority as to “certain matters” does not constitute a deliberate

and specific grant of authority as to all matters. Id.

6
  For example, Gross stated that Decedent did not have control over his
finances after he suffered a mini-stroke, and she “was making sure that all
his bills were being paid. Everything he had to get paid I took over.”
Gross Deposition, 4/26/2017, at 16 (emphasis added).

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      Moreover, nothing in Gross’s deposition testimony or the affidavit of

Patricia Prout, the Facility’s admissions coordinator who met with Gross

when she signed the Agreements,7 indicates that at the time of signing the

Facility was aware that Gross had been handling certain of Decedent’s

affairs.8 Thus, for purposes of apparent authority, the Facility has no basis

to contend that it was caused to believe that Decedent had granted Gross

authority to act.   See Washburn, 121 A.3d at 1015 (concluding that

because there were no prior dealings between the decedent and the nursing

home, and the nursing home was unaware that Washburn had been signing

her husband’s name to some documents, “it had no basis to infer that she

was authorized to act on his behalf”).

      Thus, based on the foregoing, the trial court did not err in determining

that Gross did not have express, implied, or apparent authority to bind

Decedent to arbitration.

      In addition to arguing that Gross had express, implied, and apparent

authority to bind Decedent, the Facility also argues that Gross was

Decedent’s agent by estoppel. There are two basic elements to agency by

7
 Prout had no recollection of meeting with Gross and merely reviewed her
custom and practice for admission in her affidavit. Trial Court Opinion,
6/8/2017, at 3-4.

8 This is the case even though Gross did not tell Prout that she did not have
authority to sign on Decedent’s behalf. The Facility had a duty to exercise
“reasonable diligence to ascertain the agent’s authority.” Bolus, 525 A.2d at
1222.     There is no indication that Prout questioned Gross about her
authority, let alone inquired about her handling of Decedent’s affairs.

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estoppel: “(1) there must be negligence on the part of the principal in failing

to correct the belief of the third party concerning the agent; and (2) there

must be justifiable reliance by the third party.”   Turnway Corp. v. Soffer,

336 A.2d 871, 876 (Pa. 1975).       For the doctrine to apply, the principal

intentionally or carelessly must have caused a third party to believe an

agency relationship existed, or must have known that the third party held

such a belief without taking reasonable steps to clarify the facts. Petersen,

155 A.3d at 647 (citing Restatement (Second) of Agency, Section 8(B)).

      The Facility baldly asserts that Decedent was careless and negligent in

allowing the Facility to believe Gross had authority to complete the

enrollment process. The Facility’s Brief at 51; The Facility’s Reply Brief at

15. The Facility also contends that since Decedent received the benefits of

the nursing home’s services without repudiating the Admission Agreement,

Decedent cannot now “pick and choose” which parts of the Admission

Agreement he wants to enforce. Id. at 53.

      Gross urges us to find waiver, stating that the Facility failed to

preserve the arguments by not presenting them to the trial court. Gross’s

Brief at 18. In its reply brief, the Facility responds that these arguments are

“merely part and parcel” of its other arguments, particularly apparent

authority.   The Facility’s Reply Brief at 10.      However, while agency by

estoppel and apparent authority are similar, they are distinct doctrines.

Jones v. Van Norman, 522 A.2d 503, 511 (Pa. 1987). Furthermore, the

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Facility’s contention that Decedent’s estate is estopped from disavowing the

Arbitration Clause because Decedent accepted other benefits of the

Admission Agreement is actually an equitable estoppel argument, another

wholly distinct theory. Petersen, 155 A.3d at 646 (explaining that equitable

estoppel is distinct from agency by estoppel and applies to prevent a party

from assuming a position or asserting a right to another’s disadvantage

inconsistent with a position previously taken).

      The trial court did not address agency by estoppel or equitable

estoppel in its opinion. Moreover, the Facility did not present such theories

in its preliminary objections, accompanying brief, or supplemental brief to

the trial court. “A new argument cannot be raised in support of an issue on

appeal if it was not first presented before the trial court.” Newman Dev.

Grp. of Pottstown, LLC v. Genuardi’s Family Mkt., Inc., 98 A.3d 645,

658 n.16 (Pa. Super. 2014); see also Pa.R.A.P. 302(a). Thus, we find that

the Facility has waived its claim of agency by estoppel and equitable

estoppel.9

      Even if the Facility had not waived its claims of agency by estoppel and

equitable estoppel, it has not convinced us that it is entitled to relief.

Despite discussing its interpretation of the law regarding agency by estoppel

9
  The Facility also claims that Gross is a third-party beneficiary of the
Admission Agreement. The Facility’s Brief at 54. This claim is also waived,
both because the Facility did not present this argument to the trial court in
the first instance, and because it failed to develop the claim in its brief. See
Pa.R.A.P. 302(a), 2119(a).

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at length, the Facility’s analysis of law as it applies to the facts of this case is

lacking.   Specifically, the Facility fails to explain how Decedent, despite

suffering from dementia, somehow carelessly or negligently caused the

Facility to believe an agency relationship existed such that Gross could bind

him as to his legal affairs. See Walton, 66 A.3d at 789-90.

      Furthermore, the Facility’s argument that Decedent is picking and

choosing certain parts of the Admission Agreement does not hold water. As

explained supra, the Facility chose to enter into the Admission Agreement

without seeking to obtain a guardian or use reasonable diligence to ensure

that Gross had authority to bind Decedent. Again, there is no evidence that

Decedent, who was suffering from dementia, ever knew Gross had signed

any agreement on his behalf, including the Admission Agreement.

      In sum, there is no enforceable arbitration agreement between the

Facility and Decedent under any of the theories advanced by the Facility.

“Despite national and state policies favoring arbitration, a party cannot be

compelled to arbitrate in the absence of a valid agreement to do so under

either Pennsylvania law or the Federal Arbitration Act.”         Washburn, 121

A.3d at 1016. Thus, we affirm the trial court’s order overruling the Facility’s

preliminary objections in the nature of a motion to compel arbitration.

      Order affirmed.

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Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 5/30/18

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