Court Opinion

ID: 4688466
Source: CourtListenerOpinion
Date Created: 2021-05-20 14:11:09.455966+00
Date Added: 2024-06-11T08:04:47.986608
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
              APPROVAL OF THE APPELLATE DIVISION

                               SUPERIOR COURT OF NEW JERSEY
                               APPELLATE DIVISION
                               DOCKET NO. A-3976-19

BONNIE MARIE COTTRELL
and CHRISTOPHER DANIEL
LETRENT, Co-Executors of
the ESTATE OF MARYANN
                                 APPROVED FOR PUBLICATION
COTTRELL, deceased,
                                        May 20, 2021
     Plaintiffs-Respondents,
                                    APPELLATE DIVISION

v.

NATHAN HOLTZBERG, M.D.,
ORTHOPEDIC INSTITUTE OF
CENTRAL JERSEY, P.A.,
KIMBALL MEDICAL CENTER,
INC., MONMOUTH MEDICAL
CENTER SOUTHERN CAMPUS
FOUNDATION, INC., BARRY
GORDON, M.D., OCEAN
COUNTY INTERNAL
MEDICINE ASSOCIATES,
P.C., BHARAT PATEL, M.D.,
ALEX LANGMAN, M.D.,
MEDICAL RADIOLOGY
GROUP, P.A., BRUCE
MONASTERSKY, M.D.,
NEUROLOGICAL ASSOCIATES
OF OCEAN COUNTY, P.A.,
FOUNTAIN VIEW CARE
CENTER, SHORE HEALTH
CARE CENTER, INC.,
SATUYENDRA SINGH,
M.D., NORTH ATLANTIC
MEDICAL ASSOCIATES,
ST. BARNABAS MEDICAL
CENTER, ST. BARNABAS
CORPORATION, BARNABAS
HEALTH, INC., HARHPAL
SINGH, M.D., NORTH JERSEY
BRAIN & SPINE CENTER,
RAHUL PAWAR, M.D.,
SAIKIRAN MURTHY, D.O.,
OTAKAR HUBSCHMANN, M.D.,
SOMC MEDICAL GROUP, P.C.
D/B/A OCEAN COUNTY FAMILY
CARE, SUSAN BELTRA, R.N, and
ELIZABETH NOLLER, R.N.,

      Defendants,

and

1351 OLD FREEHOLD ROAD
OPERATIONS, LLC D/B/A BEY
LEA VILLAGE CARE CENTER,

      Defendant-Appellant/
      Cross-Respondent,

and

COMPLETE CARE AT BEY
LEA LLC,

     Defendant-Respondent/
     Cross-Appellant.
_____________________________

           Argued March 22, 2021 – Decided May 20, 2021

           Before Judges Messano, Suter, and Smith.

                                                          A-3976-19
                                    2
            On appeal from the Superior Court of New Jersey, Law
            Division, Middlesex County, Docket No. L-5557-16.

            Philip J. Anderson argued the cause for appellant/cross-
            respondent (Buchanan Ingersoll & Rooney, PC,
            attorneys; David L. Gordon, Eric D. Heicklen and Evan
            M. Goldsmith, of counsel and on the briefs).

            Desiree L. Wilfong argued the cause for
            respondent/cross-appellant (Lucas & Cavalier, LLC
            attorneys; Desiree L. Wilfong and Robert M. Cavalier,
            of counsel and on the brief).

            Alaina A. Gregorio argued the cause for respondents
            (Messa & Associates, PC, attorneys; Irene M.
            McLafferty and Alaina A. Gregorio, on the brief).

      The opinion of the court was delivered by

SUTER, J.A.D.

      Defendant 1351 Old Freehold Road Operations, LLC, d/b/a Bey Lea

Village Care Center (Bey Lea) appeals the April 9, 2020 order denying its

motion to compel arbitration, and the May 22, 2020 order denying

reconsideration. Defendant Complete Care at Bey Lea, LLC (Complete Care),

who purchased the facility in June 2018, filed a cross-appeal of the same orders.

Plaintiffs Bonnie Marie Cottrell and Christopher Daniel Letrent (plaintiffs) are

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                                       3
the children of Maryann Cottrell (Maryann) 1 and the co-executors of her estate.

We affirm the challenged orders for reasons that follow.

                                       I.

      Maryann was admitted to Bey Lea nursing facility on April 9, 2017. The

next day she signed a Voluntary Binding Arbitration Agreement (the

Agreement). Maryann was discharged twenty days later on April 29, 2017. She

was admitted again on January 23, 2018, and completed new intake forms, but

not a new arbitration agreement. Complete Care purchased the nursing facility

in June 2018. Maryann passed away on November 8, 2018, as a resident of the

facility. She was forty-eight years old.

      The first sentence of the Agreement she signed in 2017 provided it was

"intended to resolve by binding arbitration any dispute (as described below)

related to any admission at the Center." Bey Lea cites this language as support

for its claim the Agreement applies to Maryann's 2018 admission.

      The Agreement described arbitration as "an alternative means of resolving

a dispute without involving the courts." Paragraph two explained what disputes

were to be arbitrated. Specifically,

1
   We refer to Maryann Cottrell by her first name to avoid confusion because
another party has the same surname. We apologize for the necessity of this
informality.
                                                                          A-3976-19
                                            4
             2. Disputes to be Arbitrated. Any and all claims or
             controversies arising out of or in any way relating to
             this Agreement or the Patient's stay at the Center,
             including all prior stays at the Center, including
             disputes regarding interpretation and/or enforceability
             of this Agreement, whether arising out of state or
             federal law, whether existing now or arising in the
             future, whether for statutory, compensatory or punitive
             damages and whether sounding in breach of contract,
             negligence, tort or breach of statutory duties (including,
             without limitation, claims based on personal injury or
             death), regardless of the basis for any duty or of the
             legal theories upon which the claim is asserted, shall be
             submitted to binding arbitration.

      The Agreement was "voluntary," meaning it was not a "condition" for

admission. It expressly provided the parties were "waiving (giving up)" their

rights to a trial before a court or jury. It described the procedures for demanding

arbitration whether by the patient or Bey Lea. An arbitrator or arbitration panel

was to be selected. Under paragraph nine, the arbitrator or arbitration panel was

to "resolve all gateway disputes regarding the enforceability, validity,

severability and/or interpretation of this Agreement, as well as resolve issues

involving procedure, admissibility of evidence, discovery or any other issue."

The decision by the arbitrator or panel "binds the parties" and the "right to

appeal" was limited to what was allowed under the Federal Arbitration Act

(FAA), 9 U.S.C. §§ 1 to 16. Any award was to be confidential, as were "[a]ll

matters relating to the arbitration hearing . . . ."

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                                          5
      The Agreement was binding on a myriad of persons and entities including

"any person whose claim is derived through or on behalf of the [p]atient."

Parties were responsible for their own attorney's fees and costs "[i]n any dispute

. . . ." If any term of the Agreement was found to be "invalid or unenforceable,"

it could be severed, and the remaining portions of the Agreement enforced. The

Agreement provided it was the "entire agreement between the parties with

respect to arbitration . . . ." It provided "[t]his Agreement shall survive the

termination, cancellation or expiration of the Admission Agreement."

      On September 27, 2016, Maryann filed a lawsuit against several health

care providers and hospitals, alleging negligence and corporate negligence in

their diagnoses and treatment of her, which she alleged led to paralysis and other

medical conditions. After Maryann passed away, plaintiffs filed an amended

complaint, suing as the co-executors of Maryann's estate.

      The amended complaint added Bey Lea as a defendant, claiming that

through various actions and omissions, it breached its duty to Maryann "to

provide medical care and treatment in a safe and reasonable manner in

accordance with the existing standards of care" resulting in "serious personal

injuries," pain and suffering and her premature death. The new counts included

causes of action against Bey Lea alleging negligence, corporate negligence,

                                                                            A-3976-19
                                        6
negligence per se and violation of resident rights. None of the allegations related

to Maryann's 2017 admission; they all related to the 2018 admission. Bey Lea

filed an answer asserting affirmative defenses.

      On March 11, 2020, Bey Lea filed a motion to compel binding arbitration,

arguing the Agreement applied to the 2017 and 2018 admissions. The trial court

denied the motion on April 9, 2020, and subsequently denied reconsideration on

May 22, 2020.

      Just after Bey Lea filed the motion to compel arbitration, plaintiffs

amended the complaint for a second time. They added Complete Care as a

defendant because Complete Care purchased the facility from Bey Lea in June

2018. All the causes of action against Bey Lea were amended to include

Complete Care. None of the allegations against Bey Lea or Complete Care

related to the 2017 admission.

      On April 9, 2020, Judge Michael V. Cresitello, Jr. denied Bey Lea's

motion to compel binding arbitration. In his oral opinion, the judge found there

was "no agreement in place for [Maryann's] admission" from January 23, 2018

to her death on November 8, 2018. The only agreement for Maryann's admission

was signed on April 10, 2017, but she was discharged on April 29, 2017, and

did not come back until January 23, 2018. The judge concluded the Agreement

                                                                             A-3976-19
                                        7
from the earlier admission was "not enforceable" for the later admission. He

concluded it was not "supportable to suggest that [Maryann] can be

prospectively bound by an agreement that [she] signed . . . almost a year ago."

He found "there simply [was] . . . no enforceable agreement in place to cover

the admission from January 23rd of 2018, through November 8th of 2018."

      The judge noted the Agreement complied with the standards set forth in

Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 447 (2014). Referencing

the arbitration provision, the judge observed: "It's there. It's bold. It's obvious.

It's conspicuous. It clearly tells the person signing it . . . that they are waiving

their rights specifically to a jury trial and waiving their rights stepping foot in

the courthouse."

      Bey Lea requested reconsideration of the April 9, 2020 order. It argued

that paragraph nine of the Agreement was a "delegation" clause and that

plaintiffs never challenged the validity of this clause. Because of the delegation

clause, all issues — including whether the Agreement applied to Maryann's 2018

admission — should be decided by an arbitrator. Bey Lea argued that when

Maryann signed the Agreement, she agreed to arbitrate "anything prior and

subsequent." Plaintiffs opposed the reconsideration motion arguing the clear

language of the Agreement did not include or contemplate future admissions.

                                                                              A-3976-19
                                         8
      On May 22, 2020, the judge denied reconsideration, finding his prior

decision was not "palpably incorrect or contrary to the law." He reiterated there

was "no valid contract in place for the admission that happened nine months

later. There's not a separate, new contract signed." As for the second admission

in 2018, the judge agreed with plaintiffs' interpretation of the Agreement finding

"there was nothing in that contract that would bind them for a future admission

on the face of that agreement." 2

      Bey Lea appealed both orders. Complete Care cross-appealed. Bey Lea

argues:

            A. The Court's Review of this Appeal is De Novo.

            B. The Motion Court Erred by Determining the
            Enforceability of the Agreement notwithstanding the
            Delegation Language Contained within the Arbitration
            Agreement.

            i. Plaintiffs' Failure to Contest the Delegation Clause
            of the Agreement Required the Motion Court to Refer
            Plaintiff[s'] Objections to the Arbitrator.

            ii. The Federal Arbitration Act Requires Courts to
            Enforce Arbitration Agreements According to Their
            Terms, Including the Terms of a Delegation Clause.

2
  Complete Care did not participate in Bey Lea's motion to compel arbitration
or its motion for reconsideration, but on August 10, 2020, the trial court joined
Complete Care as a party to the trial court's April 9, 2020 and May 22, 2020
orders.
                                                                            A-3976-19
                                        9
              iii. The Appellate Division Has Already Decided that
              the Language in this Agreement Clearly and
              Unmistakably Delegates Threshold Issues of
              Arbitrability to an Arbitrator.

              iv. All Ancillary Arguments regarding Enforceability
              and Interpretation of the Arbitration Agreement are
              squarely Amongst the Issues to be Sent to the Arbitrator
              pursuant to the Delegation Clause.

       Complete Care raises the same issues but also contends the Agreement

applies to disputes that it is involved with because under paragraph fifteen, the

parties intended the Agreement to bind Bey Lea and its "successors, assigns and

agents . . . ."

                                        II.

       Bey Lea argues the trial court found the Agreement was validly entered

into in April 2017, and that plaintiffs did not challenge the validity of the

delegation paragraph. Bey Lea contends that under the delegation section,

Maryann agreed to submit all issues to the arbitrator for resolution, including

issues about "enforceability, validity, severability and/or interpretation of [the]

Agreement . . . ." This includes whether the Agreement applied to the 2018

admission. Bey Lea's position is the court erred by concluding there was no

agreement to arbitrate.

                                                                             A-3976-19
                                        10
       We review the validity of an arbitration agreement on a de novo basis.

Morgan v. Sanford Brown Inst., 225 N.J. 289, 302-03 (2016). "[A]ny order

either compelling arbitration . . . or denying arbitration shall . . . be deemed a

final judgment of the court for appeal purposes." R. 2:2-3(a)(3). "[A]rbitration

. . . is a favored means of dispute resolution." Hojnowski v. Vans Skate Park,

187 N.J. 323, 342 (2006). "State law governs not only whether the parties

formed a contract to arbitrate their disputes, but also whether the parties entered

an agreement to delegate the issue of arbitrability to an arbitrator." Morgan, 225

N.J. at 303.   To determine enforceability, courts "apply ordinary state-law

principles that govern the formation of contracts." Kernahan v. Home Warranty

Adm'r of Fla., Inc., 236 N.J. 301, 307, 317-18 (2019) (quoting First Options of

Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995)). "In dispensing even treatment

to arbitration agreements, basic contract formation and interpretation principles

still govern, for there must be a validly formed agreement to enforce." Id. at

307.

       The FAA applies to nursing home arbitration agreements. However, it

"simply requires that arbitration agreements be placed 'on an equal footing with

other contracts' and enforced according to their terms." Morgan, 225 N.J. at 303

(quoting Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 67 (2010)). "The

                                                                             A-3976-19
                                       11
statutory policies of the FAA and [the] New Jersey [Arbitration Act, N.J.S.A.

2A:23B-1 to -32] are in synchronicity." Kernahan, 236 N.J. at 319. The "initial

inquiry" in determining enforceability is whether the contract is based on

"mutual assent." Ibid. (quoting Atalese, 219 N.J. at 442). No "talismanic

recitations" are required. Id. at 320 (citing Atalese, 219 N.J. at 445, 447). Under

New Jersey law, the language of an arbitration agreement "must be clear and

unambiguous that a [party] is choosing to arbitrate disputes rather than have

them resolved in a court of law." Atalese, 219 N.J. at 447.

      Defendants rest their arguments on the delegation clause. This type of

clause in an arbitration agreement delegates authority to resolve certain issues

to the arbitrator. See Rent-A-Center, 561 U.S. at 68-69. ("[P]arties can agree

to arbitrate 'gateway' questions of 'arbitrability,' such as whether the parties have

agreed to arbitrate or whether their agreement covers a particular controversy.").

A delegation provision that is not challenged can be enforced. See id. at 72

(explaining that "unless [the party opposing enforcement of the arbitration

agreement] challenged the delegation provision specifically, we must treat [the

provision] as valid . . . leaving any challenge to the validity of the Agreement as

a whole for the arbitrator"). Defendants contend that because plaintiffs did not

                                                                               A-3976-19
                                        12
challenge the validity of the delegation clause, the arbitrator — not the court —

must decide whether the Agreement applies to the 2018 admission.

      The proper analysis commences with the 2018 admission, not the

delegation clause from the 2017 Agreement. Maryann simply did not sign an

arbitration agreement for her second admission to Bey Lea. "[A]rbitration is a

matter of contract." Angrisani v. Fin. Tech. Ventures, L.P., 402 N.J. Super. 138,

148 (App. Div. 2008) (quoting AT&T Techs. v. Commc'ns Workers of Am., 475

U.S. 643, 648 (1986)). There must be mutual assent to arbitrate. Kernahan, 236

N.J. at 319. Under the FAA, "[judges] retain the primary power to decide

questions of whether the parties mutually assented to a contract containing or

incorporating a delegation provision." MXM Constr. Co. v. N.J. Bldg. Laborers

Statewide Benefit Funds, 974 F.3d 386, 401 (3d Cir. 2020). Therefore, a judicial

forum generally is appropriate "when a party rightfully resists arbitration on

grounds that it never agreed to arbitrate at all." Ibid. Once a court makes the

threshold decision that a valid agreement to arbitrate exists, it then considers the

next issue, whether there is "clear and unmistakable" evidence that the parties

intended to delegate arbitrability questions to the arbitrator. Henry Schein, Inc.

v. Archer & White Sales, Inc., 139 S. Ct. 524, 530 (2019) (quoting First Options,

514 U.S. at 944).

                                                                              A-3976-19
                                        13
      We agree with the trial judge there was no agreement by Maryann to

arbitrate issues arising from the 2018 admission.       She did not sign a new

agreement upon her admission in January 2018. The court did not err by

concluding that there was no arbitration agreement for that admission. Without

mutual agreement, there is no contract. "As a general principle of contract law,

there must be a meeting of the minds for an agreement to exist before

enforcement is considered."     Kernahan, 236 N.J. at 319 (citing Johnson &

Johnson v. Charmley Drug Co., 11 N.J. 526, 538 (1953)).

      By its express language, the 2017 Agreement did not apply to subsequent

admissions. Paragraph two addressed the types of disputes that were subject to

arbitration, describing them as "[a]ny and all claims or controversies arising out

of or in any way relating to this Agreement or the [p]atient's stay at the Center,

including all prior stays at the Center . . . ." (Emphasis added). There is no

reference in this language to subsequent admissions by the patient. Under the

Agreement, the types of disputes could involve "interpretation and/or

enforceability of this Agreement," and that is so "whether existing now or

arising in the future . . . ." (Emphasis added). A straight-forward reading of this

reference to "arising in the future" means a claim about the 2017 admission that

                                                                             A-3976-19
                                       14
is asserted in the future, not about future admissions. This addressed timing; it

did not add a new type of claim.

      The Agreement provides that it is "intended to resolve by binding

arbitration any dispute (as described below) related to any admission at the

Center." (Emphases added). Defendants cite this language for their claim the

Agreement applies to any future admission to the facility. However, their focus

on "any admission" gives no credit to the reference in the same sentence to "any

dispute (as described below)." That phrase logically refers to the "Disputes to

be Arbitrated" section of the contract that follows immediately after. Section

two — "Disputes to be Arbitrated" — does not refer to future admissions.

      Defendants' arguments give no consideration to the Agreement's context

or reason. "A court's role is to consider what is 'written in the context of the

circumstances' at the time of drafting and to apply 'a rational meaning in keeping

with the expressed general purpose.'" Sachau v. Sachau, 206 N.J. 1, 5-6 (2011)

(quoting Atl. N. Airlines, Inc. v. Schwimmer, 12 N.J. 293, 302 (1953)).

Defendants do not contend that Maryann intended to be readmitted to Bey Lea

in the future once she left in April 2017. Under defendants' interpretation of the

Agreement, Maryann would have given up any right to a jury trial for any future

admission regardless of the number of times she was admitted just by being a

                                                                            A-3976-19
                                       15
patient for twenty days. Neither defendant argued that it was customary for new

patients to sign just one agreement for all future admissions, or for an arbitration

agreement entered into for a short-term stay to apply to a long-term residence.

Therefore, there is no factual support in the record to conclude that Maryann

assented to the Agreement's applicability for future admissions.

      Even if the Agreement were interpreted as ambiguous about future

admissions — which we do not conclude — the result would be the same.

"Courts should not assume that the parties agreed to arbitrate arbitrability unless

there is 'clea[r] and unmistakabl[e]' evidence that they did so." First Options,

514 U.S. at 944 (alterations in original) (quoting AT&T Techs., 475 U.S. at 649).

Without such evidence, a court, not an arbitrator, should decide. Id. at 945.

      Defendants cite Rent-A-Center, 561 U.S. at 72, and Morgan, 225 N.J. at

311, in support of their argument that the arbitrator must decide issues about

arbitrability where the delegation clause is not challenged. However, neither of

those cases involved the situation here. In both cases, there was an underlying

arbitration agreement.     In this case, there is no agreement for the 2018

admission.

      We conclude that Judge Cresitello correctly denied the motion to compel

binding arbitration of plaintiffs' claims related to the 2018 admission. The fact

                                                                              A-3976-19
                                        16
that the delegation clause was not challenged in the Agreement does not control

the outcome here. Because there was no agreement to arbitrate issues arising

from the 2018 admission, the Agreement's language had no bearing on the

subsequent admission.

      Affirmed.

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                                     17