Court Opinion

ID: 4505358
Source: CourtListenerOpinion
Date Created: 2020-02-06 19:10:30.766343+00
Date Added: 2024-06-11T08:01:19.399878
License: Public Domain

J-A25042-19

                        2020 PA Super 23

 IRENE TRAVER, ADMINISTRATRIX OF :    IN THE SUPERIOR COURT OF
 THE ESTATE OF CLAYTON L. TRAVER, :         PENNSYLVANIA
 DECEASED                         :
                                  :
                                  :
             v.                   :
                                  :
                                  :
 RELIANT SENIOR CARE HOLDINGS,    :
 INC.; RELIANT LAKESIDE HOLDINGS, :
 LLC, D/B/A/, LAKESIDE HEALTH AND :
 REHABILITATION CENTER; RELIANT   :
 SENIOR CARE MANAGEMENT, LLC;     :
 RELIANT SENIOR CARE              :
 PENNSYLVANIA, LLC; RSC MASTER    :
 TENANT I, LLC; RSC CONSOLIDATED :
 HOLDINGS, LLC; HCR MANORCARE,    :
 LLC; MANORCARE OF KINGSTON PA, :
 LLC D/B/A MANORCARE HEALTH       :
 SERVICES - KINGSTON;             :
 MANORCARE HEALTH SERVICES,       :
 INC., A/K/A MANORCARE HEALTH     :
 SERVICES, LLC; HCR MANORCARE     :
 HEARTLAND, LLC; MANOR CARE,      :
 INC.; HCR MANORCARE, INC.; HCR   :
 IV HEALTHCARE, LLC.; HCR III     :
 HEALTHCARE, LLC; HCR II          :
 HEALTHCARE, LLC; HCR             :
 HEALTHCARE, LLC; HCRMC           :
 OPERATIONS, LLC; HCR MANORCARE :
 OPERATIONS II, LLC. HCR MANOR    :
 CARE SERVICES, LLC; HEARTLAND    :
 EMPLOYMENT SERVICES, LLC;        :
 GOLDEN GATE NATIONAL SENIOR      :
 CARE, LLC; GGNSC WILKES-BARRE    :
 II LP D/B/A GOLDEN LIVING CENTER :
 - SUMMIT; GGNSC EQUITY           :
 HOLDINGS, LLC; GGNSC HOLDINGS    :
 LLC; GGNSC ADMINISTRATIVE        :
 SERVICES LLC; GGNSC CLINICAL     :
 SERVICES, LLC; GOLDEN GATE       :
 ANCILLARY, LLC; WYNETTE          :
 WOLFORD, NHA; RIVER RUN, LLC     :
 D/B/A RIVER RUN REHABILITATION   :
J-A25042-19

 AND NURSING CENTER; MOSHE       :
 SCEINER; NATHAN STERN           :
                                 :
                                 :
 APPEAL OF: HCR MANORCARE, LLC;  :
 MANORCARE OF KINGSTON PA, LLC   :
 D/B/A/ MANORCARE HEALTH         :
 SERVICES - KINGSTON;            :
 MANORCARE HEALTH SERVICES,      :
 INC. A/K/A MANORCARE HEALTH     :
 SERVICES, LLC; HCR MANORCARE,   :
 INC.; HCR IV HEALTHCARE, LLC;   :
 HCR III HEALTHCARE, LLC; HCR II :
 HEALTHCARE, LLC; HCR            :
 HEALTHCARE, LLC; HCRMC          :
 OPERATIONS, LLC; HCR MANORCARE :
 OPERATIONS II, LLC; HEARTLAND   :
 EMPLOYMENT SERVICES, LLC; HCR   :                   No. 432 MDA 2019
 MANOR CARE SERVICES, LLC

              Appeal from the Order Entered February 7, 2019
              in the Court of Common Pleas of Luzerne County
                     Civil Division at No(s): 2016-3983

BEFORE: STABILE, J., McLAUGHLIN, J., and MUSMANNO, J.

OPINION BY MUSMANNO, J.:                 FILED: FEBRUARY 6, 2020

       HCR ManorCare, LLC; ManorCare of Kingston PA, D/B/A ManorCare

Health Services – Kingston (“the ManorCare Facility”); ManorCare Health

Services, Inc., A/K/A ManorCare Health Services, LLC; HCR ManorCare, Inc.;

HCR IV Healthcare, LLC; HCR II Healthcare, LLC; HCR Healthcare, LLC;

HCRMC Operations, LLC; HCR ManorCare Operations II, LLC; Heartland

Employment Services, LLC; and HCR ManorCare Services, LLC (collectively,

“the   ManorCare   Defendants”), appeal       from the     Order   denying   their

Preliminary Objection, in the nature of a Motion to Enforce the Arbitration

Agreement,    to   the   Complaint   filed   by   Irene   Traver   (“Traver”),   as

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Administratrix of the Estate of Clayton L. Traver, deceased (“the Estate”).1

We affirm.

       Between 2013 and 2015, Clayton L. Traver (“Decedent”), Traver’s

husband, resided in several different nursing home facilities on multiple

occasions, including three separate residencies2 at the ManorCare Facility,

which is owned and operated by the ManorCare Defendants. Relevantly, each

time Decedent was admitted to the ManorCare Facility, Traver signed an

Admission Agreement and an Arbitration Agreement. Decedent died on March

20, 2015.

       As Administratrix for the Estate, Traver initiated the instant action on

April 14, 2016, by filing a Praecipe for Writ of Summons. Traver filed Praecipes

____________________________________________

1 The ManorCare Defendants’ Preliminary Objections contained various other
Motions, which the trial court denied in part and granted in part. However,
the Motion to Enforce the Arbitration Agreement is the sole issue relevant to
this appeal. Although interlocutory, an appeal may be taken as of right from
an order denying a petition to compel arbitration. Bair v. Manor Care of
Elizabethtown, PA, LLC, 108 A.3d 94, 96 (Pa. Super. 2015); see also 42
Pa.C.S.A. § 7320(a)(1); Pa.R.A.P. 311(a)(8).

2Decedent resided in the ManorCare Facility during the periods of November
22, 2013, to December 20, 2013; April 25, 2014, to June 26, 2014; and
February 25, 2015, to March 3, 2015.

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to Reissue the Writ of Summons on May 12, 2016, and June 6, 2016.3

       Traver filed a Complaint4 on September 21, 2016, asserting claims of

ordinary and corporate negligence, custodial neglect, survival and wrongful

death.    Traver sought punitive damages in four counts of the Complaint.

Regarding the ManorCare Defendants, Traver alleged that, in an effort to

maximize profits, the ManorCare Defendants intentionally reduced staffing

levels and increased the number of sick, elderly, and frail patients requiring

complex medical care.          Traver claimed that this practice resulted in a

recklessly high resident-to-staff ratio, and the failure of staff to properly

manage and treat illnesses and injuries among the residents. Traver alleged

that, as a result of inadequate care, Decedent suffered from a fall, pneumonia,

multiple urinary tract infections, dehydration, skin tears, pressure ulcers, and

scrotal dermatitis during his residencies.

____________________________________________

3 Traver later filed a Motion to Consolidate the instant action with a separate
action (which is not included in the certified record) that she had filed against
the owners and operators of the Lakeside Health and Rehabilitation Center.
The trial court granted Traver’s Motion to Consolidate on September 14, 2016.

4 The Complaint named 31 total defendants. Golden Gate National Senior
Care, LLC; GGNSC Wilkes-Barre II LP D/B/A Golden Living Center – Summit;
GGNSC Holdings, LLC; GGNSC Equity Holdings, LLC; GGNSC Administrative
Services, LLC; GGNSC Clinical Services LLC; Golden Gate Ancillary, LLC; and
Wynette Wolford, NHA, filed a separate, related appeal, which is docketed at
No. 452 MDA 2019. The remaining listed defendants are not parties to the
instant appeal.

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     On October 11, 2016, the ManorCare Defendants filed Preliminary

Objections, including a Motion to Enforce the Arbitration Agreement.

Specifically, the ManorCare Defendants asserted that, upon Decedent’s

admission to the ManorCare facility, Traver executed a voluntary Arbitration

Agreement on Decedent’s behalf. The ManorCare Defendants pointed to the

following relevant provisions of the Arbitration Agreement:

                   VOLUNTARY ARBITRATION AGREEMENT
                          (“AGREEMENT”)

     THE PARTIES ARE WAIVING THEIR RIGHT TO A TRIAL
     BEFORE A JUDGE OR JURY OF ANY DISPUTE BETWEEN
     THEM, PLEASE READ CAREFULLY BEFORE SIGNING. THE
     PATIENT WILL RECEIVE SERVICES IN THIS CENTER
     WHETHER OR NOT THIS AGREEMENT IS SIGNED.
     ARBITRATION IS DESCRIBED IN THE VOLUNTARY
     ARBITRATION PROGRAM BROCHURE COPY, ATTACHED
     AND MADE PART OF THIS AGREEMENT.

                                    ***

     1. Agreement to Arbitrate “Disputes”: All claims arising out
     of or related to this agreement, the Admission Agreement or any
     and all past or future admissions of the Patient [Decedent] at this
     Center [the ManorCare Facility], or any sister Center operated by
     any subsidiary of HCR ManorCare, Inc. (“Sister Center”), including
     claims for malpractice, shall be submitted to arbitration. …

                                    ***

     8. Right to Change Your Mind: This Agreement may be
     cancelled by written notice sent by certified mail to the Center’s
     Administrator within 30 calendar days of the Patient’s date of
     admission.

     9. Binding on Parties & Others: The Parties intend that this
     Agreement shall benefit and bind the Center, its parents, affiliates,
     and subsidiary companies, and shall benefit and bind the Patient

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       (as defined herein), his/her successors, spouses, children, next of
       kin, guardians, administrators, and legal representatives.

Preliminary Objections, 10/11/16, at ¶ 16 (bold in original); see also id.,

Exhibit B (Arbitration Agreement).

       Traver filed a Response, and a Memorandum in support thereof, on

October 31, 2016. Traver alleged, inter alia, that the Arbitration Agreement

was unenforceable because Traver lacked legal authority to execute a binding

agreement on Decedent’s behalf, as Decedent had never executed a power of

attorney or otherwise designated her as his agent.

       The ManorCare Defendants thereafter filed a Sur-Reply to Traver’s

Response, arguing that Traver had authority to execute the Arbitration

Agreement under the doctrines of apparent authority and authority by

estoppel. Traver filed a Response thereto.

       Following    discovery     and    briefing   concerning   the   circumstances

surrounding the execution of the Arbitration Agreement, the trial court entered

an Order on February 7, 2019, denying the ManorCare Defendants’ Motion to

Enforce the Arbitration Agreement. The ManorCare Defendants filed a timely

Notice of Appeal.5, 6

       The ManorCare Defendants now raise the following issue for our review:

____________________________________________

5 The end of the 30-day appeal period was March 9, 2019, a Saturday. See
1 Pa.C.S.A. § 1908.

6 The trial court did not order the ManorCare Defendants to file a concise
statement of matters complained of on appeal pursuant to Pa.R.A.P. 1925(b).

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      Whether the [t]rial [c]ourt erred in finding that [] Traver lacked
      authority to execute the Arbitration Agreement[] on behalf of her
      husband, [Decedent], when the record evidence demonstrated
      that there was a clear understanding between them that [] Traver
      was authorized to execute [the Arbitration Agreement] on
      [Decedent’s] behalf, and that understanding was communicated
      to the ManorCare Defendants?

Brief for Appellants at 6.

      The ManorCare Defendants claim that the trial court erred in concluding

that Traver lacked the legal authority to execute the Arbitration Agreement on

behalf of Decedent.      See id. at 20-31.      According to the ManorCare

Defendants, the trial court ignored recent case law recognizing federal and

state policies favoring arbitration. Id. at 20-23. The ManorCare Defendants

allege that Traver had authority to act as Decedent’s agent, and offer three

separate arguments in this regard.

      First, the ManorCare Defendants argue that Traver had express

authority to execute the Arbitration Agreement on Decedent’s behalf, because

the couple had agreed to make decisions for one another as early as 2012,

and had never formally executed a power of attorney simply due to the costs.

Id. at 24. The ManorCare Defendants assert that Traver signed an Admission

Agreement upon Decedent’s arrival at the ManorCare Facility in 2013, and

Decedent separately signed the Admission Agreement two days later.          Id.

According to the ManorCare Defendants, Decedent’s independent signature

signified his consent to be bound by the contract, as well as Traver’s authority

to sign on his behalf. Id. at 24-25.

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         The ManorCare Defendants next claim that Traver had apparent

authority to act on behalf of Decedent because Traver indicated, in Decedent’s

presence, that she could sign the admissions documents on Decedent’s behalf,

and Decedent did not object. Id. at 25-26.

         Finally, the ManorCare Defendants contend that Traver is estopped from

denying her authority to sign on behalf of Decedent, because Decedent was

aware that Traver had signed the admissions documents, and did not object

or retract the documents. Id. at 26. The ManorCare Defendants again argue

that by signing the Admission Agreement himself two days later, Decedent

essentially acknowledged Traver’s authority.         Id. at 28, 30.    Further, the

ManorCare Defendants point out that Traver had signed the Arbitration

Agreement for each of Decedent’s three residencies at the ManorCare Facility,

and claim that “Traver should not be permitted to take a position at this

junction that is wholly inconsistent with her prior pattern and practice.” Id.

at 28.

         We are mindful of the following standard of review:

                In reviewing a claim that the trial court improperly denied
         preliminary objections in the nature of a petition to compel
         arbitration, we are 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. Since
         contract interpretation is a question of law, our review of the trial
         court’s decision is de novo and our scope is plenary.

Bair, 108 A.3d at 96 (internal citations and quotation marks omitted).

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       Even if a party did not sign an arbitration agreement, he may be

compelled to arbitrate under such agreement, based on common law

principles of agency and contract. Wisler v. Manor Care of Lancaster, LLC,

124 A.3d 317, 323 (Pa. Super. 2015). Here, the ManorCare Defendants, as

the parties asserting agency, bear the burden of establishing an agency

relationship between Decedent and Traver. See id.

       “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.” Id.

       The basic elements of agency are the manifestation by the
       principal that the agent shall act for him, the agent’s acceptance
       of the undertaking[,] and the understanding of the parties that
       the principal is to be in control of the undertaking. An 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.

Washburn v. N. Health Facilities, Inc., 121 A.3d 1008, 1012 (Pa. Super.

2015) (citations and quotation marks omitted).

       In her deposition, Traver testified that Decedent was first admitted to

the ManorCare Facility in November 2013, following a hospitalization. N.T.

(Traver Deposition), 11/1/18, at 59.7            Traver stated that Decedent was

transported from the hospital by an ambulance, and she arrived at the

ManorCare Facility later that day with her daughter and son. Id. at 64-65.

____________________________________________

7 The transcript of Traver’s deposition is attached as Exhibit D to the
ManorCare Defendants’ Supplemental Brief in support of their Motion to
Enforce the Arbitration Agreement.

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      Traver testified that she remembered meeting “the girl in the office”

(i.e., Paulette Delevan (“Delevan”), the admissions director at the ManorCare

Facility) and being given papers to admit Decedent into the ManorCare Facility.

Id. at 65-66; see also id. at 68-69 (wherein Traver stated that Delevan came

to Decedent’s room not long after Traver had arrived, and asked Traver to

accompany her to her office to sign the paperwork). According to Traver,

Delevan asked her if she was the person who could sign the papers for

Decedent, and Traver indicated that she was responsible for Decedent. Id. at

67-68; see also id. at 68 (wherein Traver explained that she managed the

household; she sometimes signed documents on Decedent’s behalf; and

Decedent was aware that she sometimes signed documents for him); id. at

74 (wherein Traver testified that she and Decedent had an understanding that

they could act on each other’s behalf). Traver also explained that she and

Decedent had talked about executing a power of attorney before he had gotten

sick, but that they did not have the money to do so. Id. at 73-74.

      Traver testified that she could not remember any of the documents

being explained to her before she signed them. Id. at 70-71. When presented

with a copy of the Admission Agreement, Traver testified that the document

did not look familiar, and she did not remember signing it. Id. at 78-79, 81.

Traver was also unable to confirm whether she had read the Arbitration

Agreement before she had signed it. Id. at 88-89. Further, Traver testified

that, prior to initiating the instant action, she did not know what arbitration

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was, and was unaware that there are ways to resolve disputes outside of a

courtroom. Id. at 62-63.8

       Delevan testified in her deposition that she had no memory of Traver or

Decedent, and did not remember reviewing paperwork with either one of

them. N.T. (Delevan Deposition), 11/1/18, at 8, 14.9 Delevan stated that in

instances where a new resident did not have a power of attorney document,

her ordinary procedure was to “ask [her] counterpart at the hospital who

would be the responsible party for the individual coming into the nursing

home, who did they work with … and who signed the documents for them in

the hospital.” Id. at 15-16. According to Delevan, her routine practice was

to ask the resident who they would like to sign admissions paperwork on their

behalf before presenting the paperwork to a family member. Id. at 28. But

see id. at 34 (wherein Delevan testified that “it was a different scenario with

everyone coming into the nursing home.”). Delevan stated that she would tell

the resident that she was taking their family member to her office to complete

paperwork, and would tell the resident who had signed on their behalf. Id. at

29. Delevan also testified that she typically presented the signed documents

to the resident. Id. at 29-30. Despite having no recollection of Traver or

____________________________________________

8 Traver was not specifically questioned about any agreements she would have
signed at the start of Decedent’s other residencies at the ManorCare Facility.

9 The transcript of Delevan’s deposition is attached as Exhibit E to the
ManorCare Defendants’ Supplemental Brief in support of their Motion to
Enforce the Arbitration Agreement.

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Decedent, Delevan testified that the signatures and dates on the Admission

Agreement indicate that, in accordance with her routine procedure, Traver had

signed the document on behalf of Decedent, and Delevan had then presented

a copy of the signed document to Decedent. Id. at 32.

      We first examine whether Traver had express authority to bind Decedent

to the terms of the Arbitration Agreement. “Express authority exists where

the principal deliberately and specifically grants authority to the agent as to

certain matters.” Wisler, 124 A.3d at 323. Additionally, “[t]he creation of

an agency relationship requires no specific formalities.” Walton v. Johnson,

66 A.3d 782, 787 (Pa. Super. 2013) (citation omitted). “It 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; see also

Wisler, 124 A.3d at 323 (explaining that a familial relationship does not, by

itself, create an agency relationship).   Instead, we conduct a fact-specific

inquiry to determine whether the principal intended to establish an agency

relationship. See Wisler, 124 A.3d at 323. “[W]e do not assume agency by

a mere showing that one person does an act for another.” Walton, 66 A.3d

at 787 (citation omitted).

      As the trial court aptly noted in its Opinion, “it is undisputed that []

Traver did not have a power of attorney for [Decedent] at the time she

executed the Agreements, nor was she his legal guardian.”          Trial Court

Opinion, 5/1/19, at 2. Traver’s status as Decedent’s wife does not, by itself,

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establish an agency relationship. Washburn, 121 A.3d at 1014. Further,

nothing in the record suggests that Decedent expressly indicated to Delevan

that Traver could sign the documents on his behalf.       See id. at 1014-15

(concluding that wife was not husband’s agent, despite her having previously

signed and filed joint tax returns and healthcare forms on her husband’s

behalf, because there was no evidence that husband had authorized her to do

so); see generally Wisler, 124 A.3d at 324 (because the nursing home had

the duty to ascertain the nature and extent of the written power of attorney,

the patient’s son, who had a power of attorney but was unable to produce it,

did not have express authority to bind the patient to arbitration).

      We next consider whether Traver had apparent authority to act on

Decedent’s behalf in signing the Arbitration Agreement.

      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. An agent
      cannot simply[,] by his own words, invest himself with apparent
      authority. Such authority emanates from the action of the
      principal and not the agent.

Wisler, 124 A.3d at 324 (internal citations and quotation marks omitted).

      The ManorCare Defendants’ argument concerning apparent authority

relies primarily on Traver’s alleged representation to Delevan that she was

permitted to sign the necessary admissions documents on his behalf.

However, apparent agency “emanates from the action of the principal and

not the agent.” Id. (emphasis added). The trial court concluded, and we

agree, that “the record is devoid of the type of evidence on which the [c]ourt

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could conclude that [Decedent’s] conduct, as the purported principal, could

establish an agency relationship with [Traver] based upon apparent

authority….”   Trial Court Opinion, 5/1/19, at 3.    There had been no prior

dealings between Decedent and the ManorCare Defendants at the time of his

2013 admission, and it is unclear from the record whether Decedent was

aware that Traver was signing the admissions documents, including the

Arbitration Agreement, on his behalf.        See Wisler, 124 A.3d at 324-25

(declining to enforce an arbitration agreement signed by patient’s son at the

time of admission, even where son had a power of attorney, because the

defendants had failed to obtain a copy of the power of attorney or confirm

with the patient whether his son’s authority extended to signing such

agreement); Washburn, 121 A.3d at 1015 (concluding that, despite wife’s

practice of signing joint tax returns and healthcare forms on her husband’s

behalf, the nursing home was unaware of such arrangement at the time of

signing, and had no basis to infer that wife was authorized to act as her

husband’s agent). Additionally, Delevan had no specific recollection of her

interactions with Decedent and Traver, and could therefore offer no additional

insight into the alleged agency relationship. See Wisler, 124 A.3d at 325

(noting that the admissions coordinator of father’s nursing home could not

remember his admission to the facility).

      Finally, we consider the ManorCare Defendants’ assertion that Traver is

estopped from denying her authority to sign the Arbitration Agreement.

“Authority by estoppel occurs when the principal fails to take reasonable steps

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to disavow the third party of his or her belief that the purported agent was

authorized to act on behalf of the principal.”      Wisler, 124 A.3d at 325

(citation, quotation marks and brackets omitted). Additionally, the third party

must justifiably rely on its belief that an agency relationship existed. Walton,

66 A.3d at 788.

      The ManorCare Defendants offered no evidence that Decedent was

aware of the Arbitration Agreement or had authorized Traver to sign the

Agreement on his behalf.      See Wisler, 124 A.3d at 32.         Although the

ManorCare Defendants argue that Decedent had an opportunity to review the

documents two days after Traver had signed them, our review of the record

confirms that Decedent did not, in fact, separately sign the Arbitration

Agreement, as he had the Admissions Agreement.                See Preliminary

Objections, 10/11/16, Exhibit B (Arbitration Agreement). As the ManorCare

Defendants concede in their brief, the Arbitration Agreement is a stand-alone

agreement. Brief for Appellants at 9. Indeed, the Arbitration Agreement itself

states that “the patient will receive services … whether or not this agreement

is signed.”    Objections, 10/11/16, Exhibit B (Arbitration Agreement)

(capitalization omitted). Thus, we cannot agree that Decedent ratified the

Arbitration Agreement after Traver had signed it. See Wisler, 124 A.3d at

325 (declining to enforce an arbitration agreement, which had been signed by

the patient’s son, because the nursing home failed to establish that patient

knew about the agreement or had authorized his son to sign it; there was no

evidence of patient’s conduct when the agreements were executed; and the

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agreement was not presented to patient later for ratification); Washburn,

121 A.3d at 1015-16 (explaining that arbitration agreement was “not part of

the contractual quid pro quo for admission to the [nursing home] facility and

its attendant benefits,” where the arbitration agreement was separate from

the admissions agreement, and admission was not conditioned on agreeing to

arbitration).

      Based upon the foregoing, we conclude that the ManorCare Defendants

failed to establish that Traver had legal authority to execute the Arbitration

Agreement on Decedent’s behalf. Accordingly, as the trial court’s findings are

supported by substantial evidence, and we otherwise discern no abuse of the

court’s discretion, we affirm the Order denying the ManorCare Defendants’

Preliminary Objection in the nature of a Motion to Enforce the Arbitration

Agreement.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 02/06/2020

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