Court Opinion

ID: 4297705
Source: CourtListenerOpinion
Date Created: 2018-07-25 19:49:51.718546+00
Date Added: 2024-06-11T14:40:47.449149
License: Public Domain

J-A13034-18

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 FRANK N. SMOYER, ADMINISTRATOR       :   IN THE SUPERIOR COURT OF
 FOR THE ESTATE OF KATHERINE E.       :         PENNSYLVANIA
 SMOYER, DECEASED                     :
                                      :
                                      :
              v.                      :
                                      :
                                      :
 CARE ONE, LLC, 890                   :
 WEATHERWOOD LANE OPERATING           :
 COMPANY, LLC, D/B/A THE              :
 REHABILITATION AND NURSING           :
 CENTER AT GREATER PITTSBURGH,        :
 HEALTHBRIDGE MANAGEMENT, LLC,        :
 CARE ONE MANAGEMENT, LLC, DES        :
 HOLDING COMPANY, INC., CARE          :
 VENTURES, INC., THCI COMPANY,        :
 LLC, THCI HOLDING COMPANY, LLC,      :
 STRAUS CAPITAL HEALTHCARE            :
 PARTNERS (MT), LLC, STRAUS           :
 CAPITAL HEALTHCARE PARTNERS          :
 (MT) II, LLC, CARE HOLDINGS (MT),    :
 LLC, CARE PARTNERS (MT), LLC,        :
 CARE REALTY, LLC, AND BARBARA        :
 MALLONEE, NHA,                       :
                                      :
                   Appellants         :       No. 1417 WDA 2017

               Appeal from the Order Entered August 28, 2017
          in the Court of Common Pleas of Westmoreland County,
                      Civil Division at No(s): 16-05058

BEFORE: OLSON, J., DUBOW, J., and MUSMANNO, J.

MEMORANDUM BY MUSMANNO, J.:                        FILED JULY 25, 2018

     Care One, LLC; 890 Weatherwood Lane Operating Company, LLC, d/b/a

The Rehabilitation and Nursing Center at Greater Pittsburgh; Healthbridge

Management, LLC; Care One Management, LLC; Des Holding Company, Inc.;

Care Ventures, Inc.; THCI Company, LLC; THCI Holding Company, LLC; Straus
J-A13034-18

Capital Healthcare Partners (MT), LLC; Straus Capital Healthcare Partners

(MT) II, LLC; Care Holdings (MT), LLC; Care Partners (MT), LLC; Care Realty,

LLC; and Barbara Mallonee, NHA (collectively referred to as the “Defendants”)

appeal from the Order denying Defendants’ Petition to Compel Arbitration and

Motion to Stay Proceedings (hereinafter, the “Petition to arbitrate”).      We

affirm.

      On October 13, 2016, Frank N. Smoyer (hereinafter “Plaintiff”), as

Administrator for the Estate of his mother, Katherine E. Smoyer (hereinafter

“Decedent”), filed a Complaint against Defendants. Therein, Plaintiff averred

that Defendants negligently provided care for Decedent during her period of

residency at a nursing home collectively owned and operated by Defendants,

i.e., the Rehabilitation and Nursing Center at Greater Pittsburgh (hereinafter

the “Facility”). Plaintiff raised claims of, inter alia, negligence and wrongful

death, and demanded a jury trial.

      Decedent was admitted for care at the Facility on October 23, 2014.

That day, Decedent executed with Facility staff a one-page document entitled

“Consent to Treat.” That document provides as follows:

      It is agreed and understood that a comprehensive Admission
      Agreement will be executed on or shortly after arrival at the
      Healthcare Center[, i.e., the Facility,] and that this Consent to
      Treat merely constitutes [Decedent’s] agreement to permit the
      rendering of healthcare services prior to the execution of the
      Admission Agreement.

      The undersigned hereby consents to medical treatment by the
      Healthcare Center’s staff and authorized agents. The Healthcare
      Center is authorized to obtain and/or administer all medical tests,

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       treatments, procedures or medications which may be ordered by
       a physician.

       ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO
       THIS CONSENT TO TREAT AND BROUGHT BY [DECEDENT],
       HIS/HER PERSONAL REPRESENTATIVES, HEIRS, ATTORNEYS OR
       THE RESPONSIBLE PARTY SHALL BE SUBMITTED TO BINDING
       ARBITRATION[.] …

Consent to Treat, 10/23/14 (capitalization in original).1

       Decedent was a resident at the Facility from October 23, 2014, to

December 3, 2014, at which point she was transferred to a hospital for care.2

Decedent died shortly thereafter on January 4, 2015.

       Following a procedural history that is not relevant to the instant appeal,

on June 23, 2017, Defendants filed a Petition to arbitrate.             Therein,

Defendants asserted that the Arbitration Clause contained in the Consent to

Treat required that the claims raised in Plaintiff’s Complaint be resolved via

arbitration.    In response, Plaintiff argued that the Arbitration Clause was

unenforceable (1) for lack of consideration; (2) because it was contained in

the Consent to Treat, which merely authorized the Facility to provide

____________________________________________

1 We will hereinafter refer to the third, capitalized paragraph in the Consent
to Treat as the “Arbitration Clause.” We will refer to the first paragraph in the
Consent to Treat as the “Second Agreement Clause.”

2 Notably to the instant appeal, because Decedent was a resident at the Facility
for only a brief period, she never executed with Defendants or the Facility a
“comprehensive Admission Agreement” pursuant to the Second Agreement
Clause.

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treatment to Decedent; and (3) as being an unconscionable contract of

adhesion. The trial court scheduled a hearing on the matter.

        Following the hearing, on August 28, 2017, the trial court entered an

Order denying Defendants’ Petition to arbitrate. Therein, the trial court found,

inter alia, that “the claims raised by Plaintiff [are] not controversies or claims

arising out of the Consent to Treat[,] and therefore[,] not subject to the

arbitration provision[.]” Order, 8/28/17, at 2 (unnumbered).

        Defendants timely filed a Notice of Appeal,3 followed by a court-ordered

Pa.R.A.P. 1925(b) Concise Statement of errors complained of on appeal. The

trial court then issued a Rule 1925(a) Opinion.

        Defendants now present the following issues for our review:

        1. Did the trial court err by failing to take into account or apply
           the strong presumption in favor of arbitration emphasized in
           both the Federal Arbitration Act [(“FAA”)4] and Pennsylvania
           state law?

        2. The [D]ecedent signed an agreement[, i.e., the Consent to
           Treat,] which provides that “any controversy or claim arising
           out of or relating to” the agreement must be arbitrated. Are
           [Defendants’] claims related to the treatment provided by the
           [F]acility within the scope of the arbitration agreement?

        3. The executed [Consent to Treat] agreement also provides
           that[,] at some point in the future[,] the resident may sign a
           second agreement, [i.e., a] “comprehensive Admission
           Agreement.” Does the lack of a secondary agreement impact
____________________________________________

3 We note that an appeal may properly “be taken from … [a] court order
denying an application to compel arbitration[.]” 42 Pa.C.S.A. § 7320(a)(1);
see also Pa.R.A.P. 311(a)(8).

4   See 9 U.S.C. § 1 et seq.

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         in any way the arbitration provision in the executed [Consent
         to Treat] agreement?

Brief for Defendants at 4 (footnote added).        As Defendants’ issues are

interrelated, we will address them together.

      Our standard and scope of review is as follows:

             We review a trial court’s denial of a motion to compel
      arbitration for an abuse of discretion and to determine whether
      the trial court’s findings are supported by substantial evidence. In
      doing so, we employ a two-part test to determine whether the trial
      court should have compelled arbitration. The first determination
      is whether a valid agreement to arbitrate exists. The second
      determination is whether the dispute is within the scope of the
      agreement.

            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. The scope of
      arbitration is determined by the intention of the parties as
      ascertained in accordance with the rules governing contracts
      generally. These are questions of law and our review is plenary.

            Arbitration 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. Even though it
      is now the policy of the law to favor settlement of disputes by
      arbitration and to promote the swift and orderly disposition of
      claims, arbitration agreements are to be strictly construed and
      such agreements should not be extended by implication.

Setlock v. Pinebrook Pers. Care & Ret. Ctr., 56 A.3d 904, 907-08 (Pa.

Super. 2012) (emphasis in original, citation omitted).

      In their first issue, Defendants argue that “the FAA governs this dispute,

and the public policy of the FAA compels this Court to enforce the arbitration

agreement between the parties.” Brief for Defendants at 11 (citing KPMG

LLP v. Cocchi, 565 U.S. 18, 21 (2011) (stating that the FAA “reflects an

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emphatic policy in favor of arbitral dispute resolution.”) (citation and quotation

marks omitted), and Fastuca v. L.W. Molnar & Assocs., 10 A.3d 1230, 1250

(Pa. 2011) (explaining that “the settlement of disputes by arbitration is

favored by the public policy of this Commonwealth and is, therefore,

encouraged by our courts and by statute.”)).

      In their second issue, Defendants contend that under the two-part test

set forth in Setlock (i.e., concerning whether the trial court should have

compelled arbitration), the trial court was obligated to enforce the Arbitration

Clause. See Brief for Defendants at 12-22. According to Defendants, (1) a

valid agreement to arbitrate exists between Decedent (as well as her heirs)

and Defendants, i.e., via the Arbitration Clause; and (2) the dispute is within

the scope of the Arbitration Clause, which “is broad and encompasses ‘any

controversy or claim arising out of or relating to th[e] [C]onsent to [T]reat.’”

Id. at 13-16 (quoting Consent to Treat).        Concerning this second prong,

Defendants assert that the language “any controversy or claim” “sweeps in

any tort or contract claim[,]” and thus, “Plaintiff’s claims based on purported

negligence are the types of controversies the parties intend the [A]rbitration

[Clause] to reach.” Id. at 18-19. More specifically, Defendants contend as

follows:

      Here, the subject of the agreement was [Decedent’s] admission
      to and treatment by the Facility during her residency. The
      agreement’s purpose is stated in plain language as “[Decedent’s]
      agreement to permit the rendering of healthcare services.” It was
      only under this agreement that [Decedent] was able to be
      admitted to the Facility and receive healthcare services. After

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J-A13034-18

      [Decedent] received healthcare services from the Facility, Plaintiff
      brought negligence claims based on the healthcare services
      provided. Thus, Plaintiff’s negligence claims “aris[e] out of” and
      “relat[e] to” [Decedent’s] receipt of healthcare services, and are
      within the scope of the agreed[-]upon [A]rbitration [Clause].

Id. at 20 (citation to record omitted); see also id. at 21 (pointing out that

“[w]ithout the [Consent to Treat] agreement, [Decedent] could not have

received treatment.”).

      In their third issue, Defendants argue that Decedent’s “agreement to

arbitrate is unaffected by the lack of a contemplated second agreement[,]”

which is referenced in the Second Agreement Clause. Id. at 23. According

to Defendants, “[t]he trial court’s ruling [improperly] looks beyond the

contents of the [Second Agreement Clause] to speculate about a second

agreement.” Id. Defendants urge that

      [b]ecause the [Second Agreement Clause] is based on a second
      agreement and the second agreement was not executed, the first
      agreement[, i.e., the Consent to Treat,] has not terminated.
      Indeed, the first agreement was in effect during [Decedent’s]
      entire residency because that is the only way the Facility could
      continue to provide healthcare services to [Decedent].

Id. at 24 (footnote omitted).

      In its Opinion, the trial court concisely addressed each of Defendants’

issues as follows:

            As to the existence of the agreement, [under the first prong
      of the above-mentioned test in Setlock,] Defendants presented a
      document entitled “Consent to Treat” that was signed by
      [Decedent] on October 23, 2014. The document did contain an
      arbitration provision.     Although Plaintiff argued that the
      agreement lacked consideration and was unconscionable,
      Defendants provided case law that supported the enforceability of

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     such agreements, including Lander Co. v. MMP Inv’s., Inc., 107
F.3d 476, 480 (7th Cir. 1997) and Blair v. Scott Specialty
     Gases, 283 F.3d 595, 603-[]04 (3d Cir. 2011). Therefore, [the
     trial c]ourt found that Defendants satisfied the first prong of the
     applicable test by providing [the trial c]ourt with a valid
     agreement between the parties that contained an arbitration
     provision.

            T[he] [trial c]ourt then focused on the second prong of the
     applicable test to determine if Plaintiff’s claims fell within the
     scope of the Consent to Treat [A]rbitration [Clause]. Although
     Defendants may be correct that the [FAA] sets forth a
     presumption in favor of arbitration, the [A]ct only “mandates that
     district courts shall direct the parties to proceed to arbitration on
     issues as to which an arbitration agreement has been signed.”
     Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985)
     (emphasis added). Also, “arbitration agreements are to be strictly
     construed and such agreements should not be extended by
     implication.” Setlock …, 56 A.[3]d [at] 907 []. The applicable
     [A]rbitration [Clause] in the current matter reads as follows:

        “ANY CONTROVERSY OR CLAIM ARISING OUT OF OR
        RELATING TO THIS CONSENT TO TREAT AND BROUGHT
        BY    THE     RESIDENT,    HIS/HER    PERSONAL
        REPRESENTATIVES,   HEIRS,  ATTORNEYS   OR   THE
        RESPONSIBLE PARTY SHALL BE SUBMITTED TO BINDING
        ARBITRATION [….]”

           Th[e trial c]ourt strictly construed the above provision and
     determined that it only mandates arbitration if Plaintiff[’]s claims
     arise out of or relate to the Consent to Treat. In making this
     determination, the Court must look to the “intention of the
     parties[,] as ascertained in accordance with the rules governing
     contracts generally.” Pittsburgh Logistics Systems, Inc. v.
     Professional Tran[s]p. And Logistics, Inc.[,] 803 A.2d 776,
     779 (Pa. Super. 2002). In this case, the Consent to Treat
     document clearly states the scope of the agreement and sets forth
     the intention of the parties. In the [Second Agreement Clause],
     the Consent to Treat states as follows:

        “It is agreed and understood that a comprehensive
        Admission Agreement will be executed on or shortly after
        arrival at the Healthcare Center and that this Consent to
        Treat merely constitutes Resident’s agreement to permit

                                     -8-
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          the rendering of healthcare services prior to the execution
          of the Admission Agreement.” ([bold] emphasis added [by
          trial court; italics emphasis added by this panel])

          Clearly, the intention of the parties was to limit the scope of
      the Consent to Treat to [Decedent’s] agreement to permit care.
      This is evident by the use of the term “merely” when setting forth
      the scope of the Consent to Treat. To arise out of or relate to the
      Consent to Treat, the claim or controversy must relate to an issue
      with [Decedent’s] grant of consent. If, for example, Plaintiff
      brought a claim alleging that [Decedent’s] consent was made
      under duress, or that she was incapable of providing consent, then
      that claim would arise out of and relate to the scope of the Consent
      to Treat[,] and would be subject to the [A]rbitration [Clause].
      Plaintiff’s claims are negligence, custodial abuse and neglect, and
      wrongful death. These claims do not fall within the scope of the
      [A]rbitration [Clause] because they do not arise or relate to
      [Decedent’s] grant of consent to treat.

          Th[e trial c]ourt’s position was further supported by the fact
      that the language of the Consent to Treat[, i.e., the Second
      Agreement Clause,] contemplates the signing of a comprehensive
      Admission Agreement, which does set forth [] Defendants’
      services, duties, and liabilities. There would have been no
      purpose for the Admission Agreement if the Consent to Treat
      already set forth the entire agreement between the parties.
      Therefore, there is no arbitration provision that applies to the
      claims set forth by Plaintiff[,] and Defendants failed to satisfy the
      second prong of the applicable [Setlock] test.

Trial Court Opinion, 11/16/17, at 2-5. We agree with the trial court’s sound

rationale and determination, and affirm on this basis in rejecting each of

Defendants’ issues, see id., with the following addendum.

      The limited scope and purpose of the Consent to Treat was Decedent’s

grant of consent to the Facility to provide her treatment and care; this is not

germane to the issue of negligence pled in Plaintiff’s Complaint, and Plaintiff’s

claims do not “arise out of” or “relate to” the Consent to Treat. See, e.g.,

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Setlock, 56 A.3d at 911-12 (in a nursing home negligence case alleging tort

liability for the wrongful death of a resident, holding that a “Resident

Agreement” executed by the deceased upon her admission to the nursing

home, which contained an arbitration provision similar to that in the instant

case, did not contemplate or encompass plaintiff’s tort claims);5 accord

Brady v. Urbas, 111 A.3d 1155, 1162 (Pa. 2015) (stating that “[t]he patient’s

actual, affirmative consent … is irrelevant to the question of negligence[,]”

and the patient’s “assent to treatment does not amount to consent to

negligence ….”).

       Moreover, we are unpersuaded by Defendants’ claim that the trial court

placed undue weight upon the inclusion of the word “merely” in the Second

Agreement Clause, and their position that “‘merely’ modifies ‘constitutes’

rather than the subject of the agreement (‘to permit the rendering of

healthcare services’)[.]” Brief for Defendants at 21 n.3. The trial court did

not err in finding that the use of the term “merely” announced “the intention

of the parties [] to limit the scope of the Consent to Treat to [Decedent’s]

agreement to permit care.” Trial Court Opinion, 11/16/17, at 4.

____________________________________________

5We are unpersuaded by Defendants’ argument that “Setlock is inapposite
because the agreement [in that case] ‘primarily governed the financial options
and obligations of the residents.’” Reply Brief for Defendants at 4 (quoting
Setlock, 56 A.3d at 911). Despite this factual difference, the main holding of
Setlock nevertheless applies here.

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      Finally, contrary to Defendants’ assertion, we discern no error by the

trial court in “look[ing] beyond the contents of the [Second Agreement Clause]

to speculate about a second agreement.” Id. at 23. Rather, in construing

this Clause, the trial court was merely, and properly, considering the entire

agreement between Decedent and the Facility, which expressly referenced

Decedent’s contemplated execution of a later “Admission Agreement.” See

Huegel v. Mifflin Constr. Co., 796 A.2d 350, 354 (Pa. Super. 2002) (stating

that “[i]n order to determine the meaning of [an] agreement, we must

examine the entire contract[,] since it is well settled that in construing a

contract[,] the intention of the parties governs[,] and that intention must be

ascertained from the entire instrument ….” (emphasis added, citation

omitted)).

      Accordingly, none of Defendants’ issues entitle them to relief, and the

trial court properly denied their Petition to arbitrate.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 7/25/2018

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