J-S56018-15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
GLORIA J. GARCIA, AS ATTORNEY-IN- IN THE SUPERIOR COURT OF
FACT FOR GLORIA MARIE ECKERT PENNSYLVANIA
Appellee
v.
HCR MANORCARE, LLC; MANORCARE OF
SINKING SPRING PA, LLC D/B/A
MANORCARE HEALTH SERVICES -
SINKING SPRING; MANORCARE HEALTH
SERVICES, INC. A/K/A MANORCARE
HEALTH SERVICES, LLC; MANOR CARE
INC.; HCR MANORCARE, INC.; HCR IV
HEALTHCARE, LLC.; HCR III
HEALTHCARE, LLC; HCR II HEALTHCARE,
LLC; HCRMC OPERATIONS, LLC; HCR
MANORCARE OPERATIONS II, LLC &
HEARTLAND EMPLOYMENT SERVICES;
KINDRED HEALTHCARE, INC.,
PERSONACARE OF READING, INC. D/B/A
KINDRED TRANSITIONAL CARE &
REHABILITATION - WYOMISSING;
KINDRED NURSING CENTERS EAST, LLC;
KINDRED HEALTHCARE OPERATING,
INC.
APPEAL OF: HCRMC OPERATIONS, LLC;
HCR MANORCARE OPERATIONS II, LLC &
HEARTLAND EMPLOYMENT SERVICES
HCR MANORCARE, INC.; HCR IV
HEALTHCARE, LLC.; HCR III
HEALTHCARE, LLC; HCR II HEALTHCARE,
LLC HCR MANORCARE, LLC; MANORCARE
OF SINKING SPRING PA, LLC D/B/A
MANORCARE HEALTH SERVICES -
SINKING SPRING; MANORCARE HEALTH
SERVICES, INC. A/K/A MANORCARE
HEALTH SERVICES, LLC; MANOR CARE
INC.
Appellant No. 1743 MDA 2014
J-S56018-15
Appeal from the Order Entered September 2, 2014
In the Court of Common Pleas of Berks County
Civil Division at No(s): 13-27281
BEFORE: SHOGAN, J., JENKINS, J., and PLATT, J.*
MEMORANDUM BY JENKINS, J.: FILED JANUARY 12, 2016
Appellants HCRMC Operations, LLC et al. (collectively “Appellants” or
“Manor Care”)1 appeal from the trial court’s order overruling their
preliminary objections seeking to compel arbitration in this action filed by
Appellee, Gloria J. Garcia (“Garcia” or “Appellee”), as attorney-in-fact for her
mother, Gloria Marie Eckert (“Mother”). Appellants based the preliminary
objections on the existence of an arbitration agreement drafted by Manor
Care and signed by Robert Eckert, Mother’s husband (“Husband”), upon
Mother’s admission to Appellants’ facility (“Agreement”). For the reasons
that follow, we reverse and remand this case for referral to arbitration.
In September 2012, Mother broke her hip in a fall. On September 22,
2012, after undergoing a hip replacement surgery, Mother was admitted into
one of Manor Care’s skilled nursing facilities in Sinking Spring, Pennsylvania
____________________________________________
*
Retired Senior Judge assigned to the Superior Court.
1
Appellants are: HCRMC Operations, LLC; HCR ManorCare Operations II,
LLC & Heartland Employment Services; HCR ManorCare, Inc.; HCR IV
Healthcare, LLC; HCR III Healthcare, LLC; HCR II Healthcare, LLC; HCR
ManorCare, LLC; ManorCare of Sinking Spring PA, LLC d/b/a ManorCare
Health Services – Sinking Spring; ManorCare Health Services, Inc. a/k/a
ManorCare Health Services, LLC; and Manor Care, Inc.
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for the purpose of rehabilitation. On September 24, 2012, Husband, who
was Mother’s durable power of attorney (“DPOA”),2 signed the Agreement on
Mother’s behalf. Mother left the Manor Care facility on October 2, 2012,
after only 10 days, and became a resident of Kindred Transitional Care &
Rehabilitation-Wyomissing,3 where she resided until November 7, 2012.
On December 23, 2013, Appellee initiated the underlying litigation on
Mother’s behalf by filing a complaint that alleged Mother suffered injuries as
the result of medical professional negligence perpetrated by Manor Care and
the Kindred defendants at their respective nursing care facilities. Manor
Care filed preliminary objections alleging, inter alia, that the claims against
Manor Care were subject to arbitration pursuant to the terms of the
Agreement.4 Following initial briefing, discovery that included the
depositions of Mother, Husband, and Lynette Seiler Wirth, the Nursing Home
Administrator at the Manor Care facility where Mother had stayed, and
____________________________________________
2
Husband was Mother’s DPOA from September 5, 2006 through November
12, 2012, when Mother removed Husband and appointed Appellee, her
daughter, as her DPOA.
3
The underlying litigation also included the following as additional named
defendants: Kindred Healthcare, Inc.; PersonaCare of Reading, Inc. d/b/a
Kindred Transitional Care & Rehabilitation – Wyomissing; Kindred Nursing
Centers East, LLC; and Kindred Healthcare Operating, Inc. (collectively “the
Kindred defendants”). The Kindred defendants did not appeal the trial
court’s order.
4
The Kindred defendants filed similar preliminary objections on their own
behalf.
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subsequent post-discovery briefing, the trial court heard oral argument on
Manor Care’s preliminary objections. The trial court overruled Manor Care’s
preliminary objections by order dated September 2, 2014. Manor Care
timely appealed.5
Manor Care raises the following issues for our review:
1. Did the trial court err by failing to take into account or apply
the emphatic federal and state policies favoring arbitration and
the presumption of arbitrability contained in the Federal
Arbitration Act, 9 U.S.C. §§ 1-16 (“FAA”), the Pennsylvania
Uniform Arbitration Act, 42 Pa.C.S.[] § 7301, et seq. (“PUAA”),
and extensive case law interpreting those provisions?
2. Did the trial court err by finding that the Voluntary Arbitration
Agreement was both substantively and procedurally
unconscionable?
3. Did the trial court err by finding that Robert Eckert was
incompetent to sign the Voluntary Arbitration Agreement that he
signed on behalf of Gloria Marie Eckert?
4. Did the trial court err by finding that there was no knowing
waiver of the right to a trial by jury?
Appellants’ Brief, p. 4.
The Agreement in dispute in this matter reads as follows:
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
____________________________________________
5
Both Manor Care and the trial court complied with Pa.R.A.P. 1925.
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ARBITRATION PROGRAM BROCHURE COPY, ATTACHED
AND MADE PART OF THIS AGREEMENT.
Made on __________ (date) by and between the Patient
__________ or Patient’s Legal Representative __________[6]
(collectively referred to as “Patient”) and the Center
___________.
1. Agreement to Arbitrate “Disputes”: All claims arising out
of or relating to this Agreement, the Admission Agreement or
any and all past or future admissions of the Patient at this
Center, or any sister Center operated by any subsidiary of HCR
ManorCare, Inc. (“Sister Center”), including claims for
malpractice, shall be submitted to arbitration. Nothing in this
Agreement prevents the Patient from filing a complaint with the
Center or appropriate governmental agency or from seeking
review under any applicable law of any decision to involuntarily
discharge or transfer the Patient.
2. Demand for Arbitration: [S]hall be written, sent to the
other Party by certified mail, return receipt requested.
3. FAA: The Parties agree and intend that this Agreement, the
Admission Agreement and the Patient’s stays at the Center
substantially involve interstate commerce, and stipulate that the
Federal Arbitration Act (“FAA”) and applicable federal case law
apply to this Agreement, preempt any inconsistent State law and
shall not be reverse preempted by the McCarran-Ferguson Act;
United States Code Title 15, Chapter 20, or other law. Any
amendment to such version of the FAA is hereby expressly
waived.
4. Arbitration Panel: Three (3) arbitrators (the “Panel”) shall
conduct the arbitration. Each Party will select one Arbitrator, the
two selected Arbitrators will select a third. Each Arbitrator must
be a retired State or Federal Judge or a Member of the State Bar
where the Center is located with at least 10 years of experience
as an attorney. The Panel will elect a Chief Arbitrator who will
be responsible for establishing and resolving issues pertaining to
____________________________________________
6
Mother’s name was handwritten on the line for “Patient”, and Husband’s
name was handwritten as “Patient’s Legal Representative”. Agreement, p.
1.
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procedure, discovery, admissibility of evidence, or any other
issue.
5. Sole Decision Maker: Except as otherwise provided in 6
below, the Panel is empowered to, and shall, resolve all disputes,
including without limitation, any disputes about the making,
validity, enforceability, scope, interpretation, voidability,
unconscionability, preemption, severability and/or waiver of this
Agreement or the Admission Agreement, as well as resolve the
Parties’ underlying disputes, as it is the Parties’ intent to avoid
involving the court system. The Panel shall not have jurisdiction
to certify any person as a representative of a class of persons
and, by doing so, adjudicate claims of persons not directly taking
part in Arbitration.
6. Procedural Rules and Substantive Law: The Panel shall
apply the State Rules of Evidence and State Rules of Civil
Procedure except where otherwise stated in this Agreement.
Also, the Panel shall apply, and the arbitration award shall be
consistent with, the State substantive law, including statutory
damage caps, for the State in which the Center is located,
except as otherwise stated in this Agreement or where
preempted by the FAA. The Panel’s award must be unanimous
and shall be served no later than 7 working days after the
arbitration hearing. The award must state the Panels’ [sic]
findings of fact and conclusions of law, shall be marked
“confidential”, and must be signed by all three Arbitrators. If
any damages are awarded, the award must delineate specific
amounts for each type of damages awarded, i.e., economic, non-
economic, etc. The failure of the Panel to issue a unanimous
award creates an appealable issue, appealable to the appropriate
court, in addition to those set forth in paragraph 7, below. In
the event the appellate court finds a non-unanimous award
invalid as against law or this Agreement, the award shall be
vacated and the arbitration dismissed without prejudice. A
subsequent arbitration, if any, of the same claim or claims shall
remain subject to the terms of the Agreement.
7. Final with Limited Rights to Review (Appeal): The
Panel’s award binds the parties. The Parties have a limited right
of appeal for only the express reasons allowed by the FAA or as
provided in 6, above.
8. Right to Change Your Mind: This Agreement may be
cancelled by written notice sent by certified mail to the Center’s
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Administrator within 30 calendar days of the Patient’s date of
admission. If alleged acts underlying the dispute occur before
the cancellation date, this Agreement shall be binding with
respect to those alleged acts. If not cancelled, this Agreement
shall be binding on the Patient for this and all of the Patient’s
subsequent admissions to the Center or any Sister Center
without need for further renewal.
9. Binding on Parties & Others: The Parties intend that this
Agreement shall benefit and bind the Center, its parent,
affiliates, and subsidiary companies, and shall benefit and bind
the Patient (as defined herein), his/her successors, spouses,
children, next of kin, guardians, administrators, and legal
representatives.
10. Fees and Costs: The Panels’ [sic] fees and costs will be
paid by the Center except in disputes over non-payment of
Center charges wherein such fees and costs will be divided
equally between the Parties. The Parties shall bear their own
attorney fees and costs in relation to all preparation for and
attendance at the arbitration hearing.
11. Confidentiality: The arbitration proceedings shall remain
confidential in all respects, including all filings, deposition
transcripts, discovery documents, or other material exchanged
between the Parties and the Panels’ [sic] award. In addition,
following receipt of the Panels’ [sic] award, each Party agrees to
return to the producing Party within 30 days the original and all
copies of documents exchanged in discovery and at the
arbitration Hearing.
12. Non-waiver of this Agreement: A waiver of the right to
arbitrate a specific Dispute or series of Disputes, as described
above, does not relieve any Party from the obligation to arbitrate
other Disputes, whether asserted as independent claims or as
permissive or mandatory counterclaims, unless each such claim
is also individually waived. With multiple Patient admissions, the
presentation of an arbitration agreement at a later admission to
the Center or a Sister Center shall not constitute a waiver by the
Center of a prior signed arbitration agreement.
13. Severability: Except as provided in 6, any provision
contained in this Agreement is severable, and if a provision is
found to be unenforceable under State or Federal law, the
remaining provisions of this Agreement shall remain in force and
effect. This Agreement represents the Parties’ entire agreement
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regarding Disputes, supersedes any other agreement relating to
disputes, and may only be changed in writing signed by all the
Parties. This Agreement shall remain in full force and effect
notwithstanding the termination, cancellation or natural
expiration of the Admission Agreement.
14. Health Care Decision: The Parties hereby stipulate that
the decision to have the Patient move into this Center and the
decision to agree to this Agreement are each a health care
decision. The Parties stipulate that there are other health care
facilities in this community currently available to meet the
Patient’s needs.
THE PARTIES CONFIRM THAT EACH OF THEM
UNDERSTANDS THAT EACH HAS WAIVED THE RIGHT TO
TRIAL BEFORE A JUDGE OR JURY AND THAT EACH
CONSENTS TO ALL OF THE TERMS OF THIS VOLUNTARY
AGREEMENT. PATIENT ACKNOWLEDGES THE RIGHT TO
REVIEW THIS AGREEMENT WITH AN ATTORNEY OR
FAMILY BEFORE SIGNING.
PATIENT: PATIENT’S LEGAL REPRESENTATIVE:
_______________________ __________________________
Printed Name (Date) Printed Name (Date)
_______________________ __________________________
Signature of Patient[7] Signature of Patient’s Legal
Representative1 in his/her
Representative Capacity
CENTER REPRESENTATIVE __________________________
____________________________________________
7
Mother’s name was handwritten on the “Printed Name” line, but not signed
on the “Signature of Patient” line. Agreement, p. 2.
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Signature of Patient’s Legal
________________________ Representative in his/her
Signature of Center Individual Capacity
Representative
________________________
1
Patient’s Legal Representative should sign on both lines above
containing the phrase “Patient’s Legal Representative.”[8]
Arbitration Agreement, Reproduced Record, pp. 1-2 (R.R., pp. 463a-464a)
(all emphases in original).
“While an order denying preliminary objections is generally not
appealable, there exists ... a narrow exception to this oft-stated rule for
cases in which the appeal is taken from an order denying a petition to
compel arbitration.” Midomo Co., Inc. v. Presbyterian Hous. Dev. Co.,
739 A.2d 180, 184 (Pa.Super.1999) (internal quotations and brackets
omitted). A separate petition to compel arbitration is not required, however.
Stewart v. GGNSC-Canonsburg, L.P., 9 A.3d 215, 218 (Pa.Super.2010).
A party may appeal from an order denying a preliminary objection in the
form of a petition to compel arbitration. Id.
“Our review of a claim that the trial court improperly denied
appellants’ preliminary objections in the nature of a petition to compel
arbitration is limited to determining whether the trial court’s findings are
____________________________________________
8
Husband’s name was handwritten on the “Printed Name” line for Patient’s
Legal Representative. Agreement, p. 2. Husband signed both lines provided
for Patient’s Legal Representative. Id.
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supported by substantial evidence and whether the trial court abused its
discretion in denying the petition.” Midomo, 739 A.2d at 186.
When one party to an agreement seeks to prevent another from
proceeding to arbitration, judicial inquiry is limited to
determining (1) whether a valid agreement to arbitrate exists
between the parties and, if so, (2) whether the dispute involved
is within the scope of the arbitration provision. An agreement to
arbitrate a dispute is an agreement to submit oneself as well as
one’s dispute to the arbitrators’ jurisdiction.
Furthermore, arbitration is a matter of contract and, as such, it
is for the court to determine whether an express agreement
between the parties to arbitrate exists. Because the
construction and interpretation of contracts is a question of law,
the trial court’s conclusion as to whether the parties have agreed
to arbitrate is reviewable by this Court. Our review is plenary,
as it is with any review of questions of law.
Midomo, 739 A.2d at 186-87 (internal citations, quotations, and footnotes
omitted); Gaffer Ins. Co., Ltd. v. Discover Reinsurance Co., 936 A.2d
1109, 1112-13 (Pa.Super.2007) (viewing question of whether, under the
terms of an agreement, the parties are required to submit their dispute to
arbitration as strictly one of contract interpretation).
In this matter, the trial court denied Appellants’ request to compel
arbitration in the form of preliminary objections because the court found the
contract in question was an unconscionable contract of adhesion, and further
that Husband was not competent to enter the Agreement. See 1925(a)
Opinion, pp. 7-13. The trial court’s opinion consists of a review of multiple
Agreement terms, together with the court’s critical editorial comments based
on those Agreement terms, which comments are not necessarily based on
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the record or any cited law. Id. The trial court ultimately determined that,
based on the terms of the Agreement and the circumstances under which it
was executed, the Agreement was unconscionable and thus no valid
agreement to arbitrate existed. Id.
1. Both Federal policy and State policy support arbitration.
Initially, Appellants claim the trial court erred in refusing to enforce the
Agreement based on erroneous policy arguments. See Appellants’ Brief, pp.
19-24. We agree that the trial court failed to recognize and apply to the
Agreement the liberal policy favoring arbitration contained in both the
Federal Arbitration Act, 9 U.S.C. §§ 1-16 (“FAA”), and Pennsylvania law.
Discussing this exact claim, this Court recently observed:
Pennsylvania has a well-established public policy that
favors arbitration, and this policy aligns with the federal
approach expressed in the [FAA]. The fundamental
purpose of the [FAA] is to relieve the parties from
expensive litigation and to help ease the current
congestion of court calendars. Its passage was a
congressional declaration of a liberal federal policy favoring
arbitration agreements.
Pisano [v. Extendicare Homes, Inc.], 77 A.3d [651,] 661
[(Pa.Super.2013)] (citations, quotation marks, and footnote
omitted); see also Taylor v. Extendicare Health Facilities,
Inc., 113 A.3d 317, 324 (Pa.Super.2015) (“Pennsylvania has a
well-established public policy that favors arbitration, and this
policy aligns with the federal approach expressed in the FAA”);
petition for allowance of appeal granted on other grounds, 161
WAL 2015, 2015 WL 5569766 (Pa. September 23, 2015). This
policy applies equally to all arbitration agreements, including
those involving nursing homes. See Marmet Health Care
Center, Inc. v. Brown, [__ U.S. __,] 132 S.Ct. 1201, 1203–
1204 (2012) (holding that the FAA preempts state law that
categorically prohibits arbitration of particular types of claims,
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which is “contrary to the terms and coverage of the FAA”);
accord Pisano, 77 A.3d at 661 n. 7 (same). Thus, “when
addressing the specific issue of whether there is a valid
agreement to arbitrate, courts generally should apply ordinary
state-law principles that govern the formation of contracts, but
in doing so, must give due regard to the federal policy favoring
arbitration.” Gaffer [], 936 A.2d [at] 1114 [].
MacPherson v. Magee Mem’l Hosp. for Convalescence, ___ A.3d ___,
2015 WL 7571937 **7-8 (Pa.Super. Nov. 25, 2015). After discussing these
policy concerns, the Court in MacPherson concluded:
[T]he trial court’s opinion includes cursory findings, a lack of
substantive analysis, and a failure to discuss applicable law. As
such, the decision below fails to recognize and apply the
standards of the FAA and its liberal policy favoring arbitration.
MacPherson, 2015 WL 7571937 at *8.
Likewise, the trial court’s opinion in the instant matter fails to discuss
applicable law and instead relies on incredulous cursory findings based on
conjecture, rhetorical questions, and hypotheticals. As in MacPherson, the
trial court has failed to recognize and apply the standards of the FAA and its
liberal policy favoring arbitration.
2. The Agreement is neither substantively nor procedurally
unconscionable.
In their second issue, Appellants challenge the trial court’s
determination that the Agreement was unenforceable as an unconscionable
contract of adhesion. See Appellants’ Brief, pp. 24-32. After reviewing and
commenting on multiple Agreement terms, the trial court ruled as follows:
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For all the above reasons[9], this court found that the
Agreement in the instant case is unconscionable and voidable.
Neither [Mother] nor Husband was competent on the day of her
admission. [Mother] was in so much pain that [Appellants]
agreed with her that she was unable to sign admission
documents. [Appellants] rushed to conclude the paperwork by
having [Husband] sign even though he was not competent to
even realize he was [Mother’s] power of attorney.
The Agreement is procedurally unconscionable because it
was presented to Husband who basically signed the paperwork,
including the Agreement, without full knowledge of its binding
terms and conditions. It was not [Mother] who executed the
Agreement; Husband simply signed as a formality because he
was told that he could do so as a spouse.
There was also a great disparity in the bargaining positions
between the parties. Even if Husband understood what he was
doing – that he was doing it because he had a power of attorney,
and what the entire agreement said and meant, he still could not
negotiate this agreement in any way. He had to take the
Agreement as is.
The Agreement is substantively unconscionable because it
violates public policy. In the case sub judice, [Mother’s]
voluntary waiver of a right to a jury trial is not a knowing waiver.
Neither she nor Husband understood what they might be waiving
– she, because of the pain and he because of his incompetency.
There is no evidence that [Mother] even knew that Husband
waived a jury trial or even a court proceeding. Neither [Mother]
nor Husband is an attorney or a businessperson experienced in
the law. This court cannot conclude that [Mother] or Husband
understood their rights. Therefore, this court concluded that
Husband lacked informed consent when he agreed to waive the
resolution of all future disputes in a court of law in favor of
private arbitration, even if he had legal authority to bind his
wife.
____________________________________________
9
See 1925(a) Opinion, pp. 8-11, for extended discussion of reasons
discussed in this block quote.
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1925(a) Opinion, pp. 12-13 (emphasis in original). This conclusion is
unsupported by the record.
The party challenging a contract bears the burden of proving
unconscionability. Salley v. Option One Mortg. Corp., 925 A.2d 115
(Pa.2007). “‘Unconscionability’ is a defensive contractual remedy which
serves to relieve a party from an unfair contract or from an unfair portion of
a contract.” Germantown Mfg. Co. v. Rawlinson, 491 A.2d 138, 145
(Pa.Super.1985). In Pennsylvania, “[u]nconscionability has generally been
recognized to include an absence of meaningful choice on the part of one of
the parties together with contract terms which are unreasonably favorable to
the other party.” Witmer v. Exxon Corp., 434 A.2d 1222, 1228 (Pa.1981);
see also McNulty v. H&R Block, Inc., 843 A.2d 1267, 1273
(Pa.Super.2004) (“[a] determination of unconscionability requires a two-fold
determination: 1) that the contractual terms are unreasonably favorable to
the drafter, and 2) that there is no meaningful choice on the part of the
other party regarding the acceptance of the provisions.”). Otherwise stated,
contractual unconscionability is shown by the illustration of both procedural
and substantive unconscionability, although not necessarily in equal
proportion.
[Procedural] unconscionability involves contractual terms which
are not typically expected by the party who is being asked to
“assent” to them. An unexpected clause often appears in the
boilerplate of a printed form and, if read at all, is often not
understood. By signing such a form, a party is bound only to
those terms which such party would reasonably expect such a
printed form to contain. If the form contains a material, risk-
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shifting clause which the signer would not reasonably expect to
encounter in such a transaction, courts have held that the clause
may be excised as it is unconscionable.
Germantown Mfg., 491 A.2d at 146. “Substantive unconscionability”
refers to contractual terms that are “unreasonably favorable to the
drafter[.]” Huegel v. Mifflin Const. Co., Inc., 796 A.2d 350, 357
(Pa.Super.2002). However, courts have refused to hold contracts
unconscionable simply because of a disparity in bargaining power. Witmer,
434 A.2d at 1228.
“An adhesion contract is a ‘standard-form contract prepared by one
party, to be signed by the party in a weaker position, usu[ally] a consumer,
who adheres to the contract with little choice about the terms.’”
Chepkevich v. Hidden Valley Resort, L.P., 2 A.3d 1174, 1190 (Pa.2010)
(quoting Black’s Law Dictionary (8th Ed. 2004), p. 342). “[T]he
determination that an adhesion contract is at issue, by definition fulfills the
second prong of the unconscionability test.” McNulty, 843 A.2d at 1273
n.6.
Initially, at the top of the first page, in bold, capitalized typeface and
underlined, the Agreement states that it is voluntary, and that the patient
will receive services in the center regardless of whether the Agreement is
signed. Agreement, p. 1. The Agreement also contains, directly above the
signature lines on the second page, another conspicuous, large, bolded
notification that by signing, the parties agree to waive their right to a trial
before a judge or jury. See id. at 2. The Agreement states that Manor Care
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will pay the arbitrators’ fees and costs, and that there are no award caps or
damage limitations beyond those already imposed by law. Id. at ¶ 6. The
Agreement provides a 30-day period during which the parties have an
opportunity to review and rescind acceptance. Id. at ¶ 8. Further, the
Agreement includes a standard confidentiality provision. Id. at ¶ 11. Our
review of these and the other provisions of the Agreement compel the
conclusion that the Agreement is neither procedurally nor substantively
unconscionable under Pennsylvania law.10 See MacPherson, 2015 WL
7571937, at **9-10 (holding substantially similar arbitration agreement not
unconscionable).
____________________________________________
10
The trial court summed up its conclusion that the Agreement was
unconscionable by stating:
Husband is not a sophisticated businessman or a health services
worker. He is eighty-seven years old and has memory
problems. Husband did not even read the Agreement. No
evidence was produced that showed Husband had the acumen to
negotiate with [Appellants] on an equal footing even if he read
and understood the Agreement.
1925(a) Opinion, p. 11. We find that Husband’s age, education level, and
business acumen at the time he entered into the Agreement on Mother’s
behalf were not of Appellants’ creation, were beyond Appellants’ control, and
are immaterial to the enforceability of the terms of the Agreement. In short,
Husband’s age, education level, and business acumen do not render the
Agreement procedurally unconscionable.
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3. No competent evidence indicates Husband was incompetent at the
time he signed the Agreement on Mother’s behalf.
Third, Appellants argue the trial court erred as a matter of law in
finding, sua sponte, that Husband lacked capacity to sign the Agreement.
See Appellants’ Brief, pp. 35-38. Appellants are correct.
Under Pennsylvania law, a signed document gives rise to
the presumption that it accurately expresses the state of mind of
the signing party. The presumption is rebutted where the
challenger presents clear and convincing evidence of mental
incompetence. Mental incompetence is established through
evidence that the person is unable to understand the nature and
consequences of the transaction. A presumption of mental
incapacity does not arise merely because the disposition of the
property seems unreasonable.
Forman v. Pub. Sch. Employes’ Ret. Bd., 778 A.2d 778, 780
(Pa.Commw.Ct.2001) (internal citations omitted).11 “It is well settled that
mere weakness of intellect resulting from sickness or old age is not legal
grounds to set aside an executed contract if sufficient intelligence remains to
comprehend the nature and character of the transaction, and no evidence of
fraud, mutual mistake or undue influence is present.” Taylor v. Avi, 415
A.2d 894, 897 (Pa.Super.1979). Testimony of the party arguing incapacity
alone, even where credible, is insufficient as a matter of law to establish a
claim of mental incompetence. See Forman, 778 A.2d at 780.
____________________________________________
11
“Although decisions of the Commonwealth Court are not binding on this
Court, we may rely on them if we are persuaded by their reasoning.”
Charlie v. Erie Ins. Exch., 100 A.3d 244, 253 n.9 (Pa.Super.2014)
(citation omitted).
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Here, Husband was Mother’s DPOA at the time he signed the
Agreement on her behalf. Mother testified that she removed Husband as her
DPOA three months after he signed the Agreement because he was forgetful
and unstable. At his deposition one year and ten months after the
Agreement was signed, Husband stated the incorrect address of his
residence. Husband did not testify, however, that he was incompetent at
the time he entered into the Agreement. In fact, the only testimony
regarding Husband’s mental capacity at the time Husband signed the
Agreement came from Lynette Seiler Wirth, Manor Care’s Nursing Home
Administrator. Ms. Wirth testified that, at the time he signed the
Agreement, Husband was very alert and asked multiple questions about the
Agreement. Ms. Wirth further testified that, after she went over the
Agreement with Husband, he accepted some contractual provisions on his
wife’s behalf and declined others.12 Based on this evidence, the trial court
concluded sua sponte that Husband was incompetent when he entered into
the Agreement. See 1925(a) Opinion, pp. 7.
Simply stated, the record does not support the trial court’s conclusion.
Mother’s testimony, standing alone, is insufficient to establish her claim of
Husband’s incompetence. See Forman, 778 A.2d at 780. Further, neither
____________________________________________
12
For example, Husband declined to sign and participate in the Resident’s
Personal Trust Fund Agreement, which Ms. Wirth explained and proposed
contemporaneously with the Agreement.
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Mother’s testimony regarding her assessment of Husband’s mental
capabilities three months after he signed the Agreement, nor Husband’s
performance at his deposition nearly two years after the signing of the
Agreement, suffice to illustrate Husband’s lack of capacity at the time he
entered into the Agreement. See Taylor, 415 A.2d at 897 (“(W)here
mental capacity is at issue, the real question is the condition of the person at
the very time he executed the instrument . . .”). Ms. Wirth’s testimony
certainly did not establish by clear and convincing evidence that Husband
was incompetent to enter the Agreement. To the contrary, that Ms. Wirth
indicated Husband was alert and asked questions about the Agreement
serves to illustrate his capacity to understand that he was entering a
contract on Mother’s behalf. Accordingly, the trial court erred by sua sponte
concluding Husband was incompetent to enter into the Agreement.
4. Husband knowingly waived the right to a jury trial on Mother’s
behalf.
Finally, Appellants claim that the trial court erred in concluding
Husband did not knowingly waive Mother’s right to a jury trial when he
signed the Agreement without reading it. See Appellants’ Brief, pp. 33-35.
We agree.
The Agreement adequately informed Husband he was waiving Mother’s
right to a jury trial. The following warning appears at the very top of the
Agreement in conspicuous, bold, all-uppercase printing:
THE PARTIES ARE WAIVING THEIR RIGHT TO A TRIAL
BEFORE A JUDGE OR JURY OF ANY DISPUTE BETWEEN
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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.
See Agreement, p. 1. Again, immediately preceding the signature lines, the
Agreement states, once more in bold, all-uppercase printing:
THE PARTIES CONFIRM THAT EACH OF THEM
UNDERSTANDS THAT EACH HAS WAIVED THE RIGHT TO
TRIAL BEFORE A JUDGE OR JURY AND THAT EACH
CONSENTS TO ALL OF THE TERMS OF THIS VOLUNTARY
AGREEMENT. PATIENT ACKNOWLEDGES THE RIGHT TO
REVIEW THIS AGREEMENT WITH AN ATTORNEY OR
FAMILY BEFORE SIGNING.
Id. at 2.
Even if Husband, as the trial court suggests, did not read the
Agreement because he “simply took [the administrator’s] word about what
he was supposed to sign . . . and had just agreed to sign whatever
document had been placed before him[,]”13 such an argument would not
afford Appellee relief. 1925(a) Opinion, p. 4 (internal quotations and citation
omitted). This Court has repeatedly instructed that “[i]t is well established
that, in the absence of fraud, the failure to read a contract before signing it
is ‘an unavailing excuse or defense and cannot justify an avoidance,
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13
We note that Husband signed the Agreement two days after Manor Care
admitted Mother. Accordingly, he could not have believed her admission
was contingent on his signing the Agreement.
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modification or nullification of the contract’; it is considered ‘supine
negligence.’” In re Estate of Boardman, 80 A.3d 820, 823
(Pa.Super.2013) (citing Germantown Sav. Bank v. Talacki, 657 A.2d
1285, 1289 (Pa.Super.1995)).
Further, the Agreement provided Mother and Husband with a period
during which they could review and revoke acceptance of the Agreement if
they changed their minds. See Arbitration Agreement ¶ 8. They did not
avail themselves of this opportunity.
In light of the liberal policy favoring arbitration agreements, and for
the reasons stated above, we reverse and remand this case for proceedings
consistent with this memorandum.
Order reversed. Case remanded. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/12/2016
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