Court Opinion

ID: 2805420
Source: CourtListenerOpinion
Date Created: 2015-06-03 19:14:59.823516+00
Date Added: 2024-06-11T11:29:56.181814
License: Public Domain

J-A03026-15

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

BRANDON HETRICK, EXECUTOR OF THE                  IN THE SUPERIOR COURT OF
ESTATE OF: WILLIAM WASHINGTON,                          PENNSYLVANIA
DECEASED,

                            Appellee

                       v.

MANORCARE OF CARLISLE, PA, LLC,
D/B/A MANORCARE HEALTH SERVICES,
CARLISLE; HRC MANORCARE, INC., ET
AL.,

                            Appellants                 No. 266 MDA 2014

                Appeal from the Order entered January 13, 2014
              In the Court of Common Pleas of Cumberland County
                          Civil Division at No: 11-7979

BEFORE: MUNDY, STABILE, and FITZGERALD,* JJ.

MEMORANDUM BY STABILE, J.:                              FILED JUNE 03, 2015

        This case concerns the enforceability of a pre-dispute agreement to

arbitrate claims under a nursing home agreement. This Court recently has

decided appeals we find dispositive here.            In two cases, we held

unenforceable arbitration agreements similar to the agreement here.1

____________________________________________

*
    Former Justice specially assigned to the Superior Court.
1
  See Taylor v. Extendicare Health Facilities, Inc., 2015 PA Super 64,
2015 WL 1514487, 2015 Pa. Super. LEXIS 144 (filed Apr. 2, 2015), pet. for
allowance of appeal filed, No. 161 WAL 2015 (Pa. May 4, 2015); Pisano v.
Extendicare Homes, Inc., 77 A.3d 651, 663 (Pa. Super. 2013), appeal
denied, 86 A.3d 233 (Pa.), cert. denied, 134 S. Ct. 2890 (2014).
J-A03026-15

Pisano and Taylor compel us here to affirm the trial court’s order, which

overruled preliminary objections seeking to compel arbitration.

      Appellants (collectively, ManorCare) own and operate nursing homes.

On April 14, 2009, William Washington, the decedent, was admitted to

ManorCare’s nursing home in Carlisle, Cumberland County. According to his

admission documents, Washington generally was in poor health, and

specifically was suffering from complications of diabetes. The next day, he

signed   a   document    entitled   “Arbitration   and   Limitation   of   Liability

Agreement” (Arbitration Agreement).       The Arbitration Agreement contains

the following clauses:

      Any and all claims or controversies between [ManorCare] and
      [Washington] arising out of or in any way related to or
      connected to [Washington’s] stay and care at [ManorCare],
      including, but not limited to, disputes regarding alleged personal
      injury to [Washington] caused by improper or inadequate care,
      allegations of medical malpractice, and interpretation of this
      Agreement, whether arising out of State or Federal law, and
      whether based upon statutory duties, breach of contract, tort
      theories or other legal theories under Pennsylvania law, including
      unpaid nursing home or related charges, shall be submitted to
      final and binding arbitration. Except as expressly set forth
      herein, the provisions of the Pennsylvania Uniform Arbitration
      Act, 42 Pa. Cons. Stat. § 7301, et[] seq., shall govern the
      arbitration. Each party hereby waives its right to file a court
      action for any matter covered by this agreement.

                                      ***

      This Arbitration Agreement is intended to be enforceable to the
      extent permitted by law, and shall only be limited to the extent
      that it is expressly prohibited or limited under applicable federal,
      state or local law.

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ManorCare’s Prelim. Objections, 9/27/12, Exhibit B, Arbitration Agreement

¶¶ A(1.1), D(1.3).

       A little over one year later, on May 3, 2010, Washington died intestate

after spending several days in hospice care.           One of Washington’s three

children, Appellee, Brandon Hetrick, was appointed executor of Washington’s

estate.     Hetrick filed a wrongful death and survival action against

ManorCare.       ManorCare filed preliminary objections seeking to compel

arbitration under the Arbitration Agreement.             In his response to the

preliminary objections, Hetrick claimed that Washington did not sign the

Arbitration Agreement.        Following oral argument, the trial court en banc

granted discovery “on the issue of whether [Appellee’s] decedent signed the

[A]rbitration [A]greement at issue.”           Trial Court Order, 4/19/13.   After

completing discovery, the parties submitted supplemental memoranda of

law.   Hetrick abandoned his argument that Washington did not sign the

Arbitration Agreement, but instead argued the Arbitration Agreement was

unenforceable, unconscionable, or void. On January 13, 2014, the trial court

overruled ManorCare’s preliminary objections.

       ManorCare timely appealed, and filed a concise statement of errors

complained of on appeal as ordered.2 In its opinion issued under Pa.R.A.P.

____________________________________________

2
   An order overruling preliminary objections to compel arbitration is
interlocutory, but is appealable as of right. See Pa.R.A.P. 311(a)(8); 42
Pa.C.S.A. § 7320; see also Pisano, 77 A.3d at 654.

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1925(a), the trial court explained that Pisano precluded enforcement of the

arbitration agreement as to the wrongful death claim, and Pennsylvania Rule

of Civil Procedure 213(e)3 precluded severance of the survival action. The

trial   court   overruled     ManorCare’s      preliminary   objections   to   compel

arbitration. It did not address Hetrick’s unconscionability argument.

        On appeal, ManorCare, argues the trial court erred in failing to order

severance of the survival action claims. See Appellants’ Brief at 4. Appellee

contends that, if we find the survival action severable, we may affirm on the

alternative ground that the Arbitration Agreement is unconscionable.

        “Our review of a claim that the trial court improperly denied the

appellant’s 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.”           Pisano, 77 A.3d at 654 (quoting

Walton v. Johnson, 66 A.3d 782, 787 (Pa. Super. 2013)).

        In doing so, we employ a two-part test to determine whether the
        trial court should have compelled arbitration.”      Elwyn[ v.
____________________________________________

3
    Rule 213(e) provides, in relevant part:

        A cause of action for the wrongful death of a decedent and a
        cause of action for the injuries of the decedent which survives
        his or her death may be enforced in one action, but if
        independent actions are commenced they shall be consolidated
        for trial.

Pa.R.C.P. No. 213(e).

                                           -4-
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       DeLuca, 48 A.3d 457, 461 (Pa. Super. 2012)] (quoting Smay v.
       E.R. Stuebner, Inc., 864 A.2d 1266, 1270 (Pa. Super. 2004)).
       First, we examine whether a valid agreement to arbitrate exists.
       Second, we must determine whether the dispute is within the
       scope of the agreement.

Id. at 654-55.       “Whether a claim is within the scope of an arbitration

provision is a matter of contract, and as with all questions of law, our review

of the trial court’s conclusion is plenary.” Elwyn, 48 A.3d at 461.

       In Pisano, we held that “wrongful death actions are derivative of

decedents’ injuries but are not derivative of decedents’ rights.” Id. at 660.

Therefore, an agreement to arbitrate between the decedent and the nursing

home does not bind the decedent’s beneficiaries who have the right to bring

a wrongful death claim.4 Id. at 660-62. Such beneficiaries were neither a

party to, nor a third-party beneficiary of, the agreement. Id. Accordingly,

we rejected the nursing home’s argument that the Federal Arbitration Act

(FAA), 9 U.S.C. §§ 1-16, required the decedent’s representative to arbitrate

the wrongful death claim. Pisano, 77 A.3d at 660-62. The FAA expresses a

policy in favor of arbitration, but it does not make arbitration agreements

more enforceable than other contracts. Id. Thus, in Pisano, we held the

arbitration agreement between the decedent and the nursing home was

unenforceable under general principles of contract law.

____________________________________________

4
 42 Pa.C.S.A. § 8301(b) limits beneficiaries to spouses, children, or parents.
The beneficiaries in Pisano and this case are children of the decedents.

                                           -5-
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        Pisano is controlling vis-à-vis Hetrick’s wrongful death claims, which

ManorCare implicitly recognizes. As a remedy, ManorCare requests that we

reverse and remand for the trial court to sever and send to arbitration the

survival action claims. We decline to do so, as we find Taylor dispositive of

this argument.

        In Taylor, the decedent was hospitalized several times for various

maladies while living in an assisted living facility.       Taylor, 2015 WL

1514487, at *1, 2015 Pa. Super. LEXIS 144, at *1-3. She was eventually

transferred to a nursing home, and then to hospice care, where she passed

away.      The decedent’s co-executors sued the hospital, the assisted living

facility, and the nursing home for negligence.        The nursing home filed

preliminary objections, contending that the claims against it were subject to

arbitration.    The trial court overruled the preliminary objections, and the

nursing home appealed.

        We first held that Pisano precluded arbitration of the co-executors’

wrongful death claim against the nursing home. Id. at *2, 2015 Pa. Super.

LEXIS 144, at *5-6. We then held that the survival action claim also was

not subject to arbitration.    We began by noting that Rule 213(e) requires

consolidation of wrongful death and survival action claims.          We stated

further:

        Nor does Pa.R.C.P. 213(e) provide the only support for
        consolidating the wrongful death and survival actions.[n.4] In the
        wrongful death statute, 42 Pa.C.S. § 8301(a), the legislature
        acknowledged the overlap in the wrongful death and survival

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     actions and the potential for duplicate recovery, and mandated
     consolidation of the actions:

        (a) General rule.—An action may be brought, under
        procedures prescribed by general rules, to recover
        damages for the death of an individual caused by the
        wrongful act or neglect or unlawful violence or negligence
        of another if no recovery for the same damages claimed in
        the wrongful death action was obtained by the injured
        individual during his lifetime and any prior actions for
        the same injuries are consolidated with the wrongful
        death claim so as to avoid a duplicate recovery.

     42 Pa.C.S. § 8301(a) (emphasis added). We find both the rule
     and the statute applicable.

        [n.4] Pa.R.C.P. 1020(d)(1) is also implicated herein. It
        provides for the mandatory joinder in separate counts of
        all causes of action against the same person arising from
        the same transaction or occurrence to avoid waiver. The
        basis for both Rule 213 and Rule 1020 “is the avoidance of
        multiple trials and proceedings involving common facts or
        issues or arising from the same transaction or occurrence.
        The avoidance of duplication of effort is a benefit to both
        the parties and the courts.” 1990 Explanatory Comments
        to Pa.R.C.P. 213.

Taylor, 2015 WL 1514487, at *4 & n.4, 2015 Pa. Super. LEXIS 144, at *9-

10 & n.4.

     Next, we rejected the nursing home’s claim that the FAA preempts

Rule 213(e) insofar as it operates to preclude arbitration of survival action

claims joined with non-arbitral wrongful death claims:

     Preemption stems from the Supremacy Clause of the United
     States Constitution, Article VI, cl. 2, which provides that federal
     law is paramount, and that laws in conflict with federal law are
     without effect.   Altria Group, Inc. v. Good, 555 U.S. 70
     (2008). There are several types of preemption, one being
     express preemption, where the federal law contains a provision
     announcing its intention to supplant state law. There is also field
     preemption, where the federal statute “reflect[s] a Congressional

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     intent to occupy the entire field” of law. Volt Information
     Sciences, Inc. v. Bd. of Trs. of Leland Stanford Junior
     Univ., 489 U.S. 468, 477 (1989). The [FAA] does not contain
     an express preemption provision and Congress did not intend to
     occupy the field of arbitration. Id.

     However, as this Court noted in Trombetta v. Raymond
     James Fin. Servs., 907 A.2d 550, 564 (Pa. Super. 2006),
     “[e]ven when Congress has not completely displaced state
     regulation in an area, . . . state law may nonetheless be pre-
     empted to the extent that it conflicts with federal law; that is, to
     the extent that it stands as an obstacle to the accomplishment
     and execution of the full purposes and objectives of Congress.”
     Trombetta, 907 A.2d at 564 (quoting Volt, 489 U.S. at 477).
     This concept is known as conflict preemption, and may arise in
     two contexts. First, a conflict occurs when compliance with both
     state and federal law is an impossibility. Holt’s Cigar Co. v.
     City of Phila., 10 A.3d 902, 918, (Pa. 2011). Second, conflict
     preemption may be found when state law “stands as an obstacle
     to the accomplishments and execution of the full purposes and
     objectives of Congress.” Id.; Barnett Bank of Marion County
     v. Nelson, 517 U.S. 25, 31 (1996). It is this type of conflict
     preemption that [the nursing home] contends is applicable
     herein.

     Pennsylvania applies a presumption against federal preemption
     of state law. Dooner v. DiDonato, 971 A.2d 1187 (Pa. 2009)
     (citing Altria Group, Inc., 555 U.S. at 77) (When addressing
     questions of express or implied preemption, we begin our
     analysis “with the assumption that the historic police powers of
     the States [are] not to be superseded by the Federal Act unless
     that was the clear and manifest purpose of Congress.”). This
     presumption flows from the existence of “dual jurisdiction” and
     arises “from reasons of comity and mutual respect between the
     two judicial systems that form the framework” of our federalist
     system. Kiak v. Crown Equip. Corp., 989 A.2d 385, 390 (Pa.
     Super. 2010).

     With these principles in mind, we turn to the federal law that
     [the nursing home] contends pre-empts state law herein, the
     FAA. The FAA was promulgated because the judiciary was
     reluctant to enforce arbitration agreements, and the act was
     intended to place arbitration agreements on the same footing as
     other contracts. Volt, 489 U.S. 468. The Supreme Court
     reiterated in Dean Witter Reynolds Inc. v. Byrd, 470 U.S.

                                    -8-
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     213, 219 (1985), that “the overriding goal of the Arbitration Act
     was [not] to promote the expeditious resolution of claims,” but
     to “ensure judicial enforcement of privately made agreements to
     arbitrate.” Although the Dean Witter Court downplayed the
     notion that a desire for efficiency motivated the passage of the
     FAA, the House Report on the FAA, quoted therein, suggests that
     efficiency, both temporal and financial, played a role in the
     passage of the FAA.        The Report stated, “It is practically
     appropriate that the action should be taken at this time when
     there is so much agitation against the costliness and delays of
     litigation.   These matters can be largely eliminated by
     agreements for arbitration, if arbitration agreements are made
     valid and enforceable.” H.R. Rep. No. 96, 68th Cong., 1st Sess.,
     2 (1924).

     Consistent with the goal of ensuring that arbitration agreements
     are enforced, however, the FAA does not require parties to
     arbitrate absent an agreement to do so. See Prima Paint
     Corp. v. Conklin Mfg. Co., 388 U.S. 395, 404 n. 12 (1967)
     (construing the Act as designed “to make arbitration agreements
     as enforceable as other contracts, but not more so”).
     Pennsylvania has a well-established public policy that favors
     arbitration, and this policy aligns with the federal approach
     expressed in the FAA. Gaffer Ins. Co. v. Discover Reins. Co.,
     936 A.2d 1109, 1113 (Pa. Super. 2007). However, as this Court
     stated in Pisano, “compelling arbitration upon individuals who
     did not waive their right to a jury trial” infringes upon a
     constitutional right conferred in Pa. Const. art. 1, § 6 (“Trial by
     jury shall be as heretofore, and the right thereof remain
     inviolate.”). See Bruckshaw v. Frankford Hosp. of City of
     Phila., 58 A.3d 102, 108–109 (Pa. 2012) (recognizing
     constitutional right to jury trial in both civil and criminal cases).
     We added in Pisano that denying wrongful death beneficiaries
     their right to a jury trial “would amount to this Court placing
     contract law above that of both the United States and
     Pennsylvania Constitutions.” Pisano, 77 A.3d at 660–61.

     [The nursing home] maintains that the survival claim against it
     must be severed and enforced in arbitration, and that state law
     to the contrary is pre-empted. We disagree. Neither Pa.R.C.P.
     213 nor 42 Pa.C.S. § 8301 prohibits the arbitration of wrongful
     death and survival claims. Thus, the instant case does not
     mirror the categorical prohibition of arbitration of wrongful death
     and survival actions that the Marmet Court viewed as a clear
     conflict between federal and state law. See also e.g., Preston

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      v. Ferrer, 552 U.S. 346, 356 (2008) (FAA pre-empts state law
      granting state commissioner exclusive jurisdiction to decide
      issue the parties agreed to arbitrate); Mastrobuono v.
      Shearson Lehman Hutton, Inc., 514 U.S. 52, 56 (1995) (FAA
      pre-empts state law requiring judicial resolution of claims
      involving punitive damages); Perry v. Thomas, 482 U.S. 483,
      491 (1987) (FAA pre-empts state-law requirement that litigants
      be provided a judicial forum for wage disputes); Southland
      Corp., 465 U.S. 1, 16 (1984) (FAA pre-empts state financial
      investment statute’s prohibition of arbitration of claims brought
      under that statute).

                                     ***

      The statute and rule at issue are not “aimed at destroying
      arbitration” and do not demand “procedures incompatible with
      arbitration.” AT&T Mobility LLC v. Concepcion, 131 S. Ct.
      1740, 1747–48 (2011). Nor are they so incompatible with
      arbitration as to “wholly eviscerate arbitration agreements.” Id.
      On the facts herein, the wrongful death beneficiaries’
      constitutional right to a jury trial and the state’s interest in
      litigating wrongful death and survival claims together require
      that they all proceed in court rather than arbitration. In so
      holding, we are promoting one of the two primary objectives of
      arbitration, which is “to achieve streamlined proceedings and
      expeditious results.” Concepcion, 131 S. Ct. at 1742. For
      these reasons, we affirm the trial court’s order overruling [the
      nursing home’s] preliminary objection seeking to compel
      arbitration.

Taylor, 2015 WL 1514487, at *5-7, 9, 2015 Pa. Super. LEXIS 144, at *12-

17, 24 (some internal citations altered and parallel citations omitted).

      In Taylor, we thus rejected an argument identical to the argument

ManorCare makes here. Under Pisano, Hetrick’s wrongful death claims are

not arbitral, because he is not a party to the Arbitration Agreement between

his deceased father and ManorCare. Moreover, under Taylor, Rule 213(e),

which is not preempted by the FAA, requires the survival action claims to be

consolidated with the wrongful death claims.

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       Since Pisano and Taylor are dispositive here, we need not address

Hetrick’s argument that the unconscionability of the Arbitration Agreement

provides an alternative basis to affirm. In sum, the trial court did not err in

overruling ManorCare’s preliminary objections.5 Consequently, we affirm.

       Order affirmed. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 6/3/2015

____________________________________________

5
  We recognize that legal issues similar to the ones raised in this case are
pending before this Court en banc. See MacPherson v. The Magee Mem.
Hosp. for Convalescence, No. 80 EDA 2013 (argued Mar. 24, 2015). In
MacPherson, however, no beneficiaries under 42 Pa.C.S.A. § 8301(b)
existed, so the decedent’s personal representative brought a wrongful death
claim on behalf of the estate under § 8301(d).

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