Davis, B. v. Center Management Group, LLC

J-A08037-18
2018 PA Super 189
BRENDA DAVIS, ADMINISTRATRIX OF : IN THE SUPERIOR COURT OF
THE ESTATE OF RUTH ROBERTS, : PENNSYLVANIA
DECEASED, :
:
v. :
:
CENTER MANAGEMENT GROUP, LLC, :
10400 ROOSEVELT OPERATING, LLC :
D/B/A ST. JOHN NEUMANN CENTER :
FOR REHABILITATION AND :
HEALTHCARE, CATHOLIC HEALTH :
SERVICES, LLC, 10400 ROOSEVELT :
INVESTMENTS, LLC, 10400 ROOSEVELT :
LIC, LLC, 10400 ROOSEVELT LOT, LLC, :
10400 ROOSEVELT PARTNERS LLC, :
10400 ROOSEVELT REALTY, LLC, :
10400 ROOSEVELT VENTURES, LLC, :
CHARLES-EDOUARD GROS, MOSHE :
ROSENBERG, CAROLYN BOEHM, ST. :
JOHN NEUMANN NURSING HOME, AND :
ARCHDIOCESE OF PHILADELPHIA :
D/B/A CATHOLIC HEALTH CARE :
SERVICES, :
:
BRENDA DAVIS, ADMINISTRATRIX OF :
THE ESTATE OF RUTH ROBERTS, :
DECEASED, :
v. :
:
GERMANTOWN HOME AND NEW :
COURTLAND ELDER SERVICES, INC., :
:
APPEAL OF: ARCHDIOCESE OF :
PHILADELPHIA D/B/A CATHOLIC :
HEALTH CARE SERVICES AND ST. :
JOHN NEUMANN NURSING HOME : No. 452 EDA 2017

Appeal from the Order January 24, 2017
in the Court of Common Pleas of Philadelphia County
Civil Division at No(s): July Term, 2016 No. 00108
November Term, 2015 No. 03740

BRENDA DAVIS, ADMINISTRATRIX OF : IN THE SUPERIOR COURT OF
THE ESTATE OF RUTH ROBERTS, : PENNSYLVANIA
J-A08037-18

DECEASED, :
:
v. :
:
GERMANTOWN HOME AND NEW :
COURTLAND ELDER SERVICES, INC., :
:
BRENDA DAVIS, ADMINISTRATRIX OF :
THE ESTATE OF RUTH ROBERTS, :
DECEASED, :
:
v. :
:
CENTER MANAGEMENT GROUP, LLC, :
10400 ROOSEVELT OPERATING, LLC :
D/B/A ST. JOHN NEUMANN CENTER :
FOR REHABILITATION AND :
HEALTHCARE, CATHOLIC HEALTH :
SERVICES, LLC, 10400 ROOSEVELT :
INVESTMENTS, LLC, 10400 ROOSEVELT :
LIC, LLC, 10400 ROOSEVELT LOT, LLC, :
10400 ROOSEVELT PARTNERS LLC, :
10400 ROOSEVELT REALTY, LLC, :
10400 ROOSEVELT VENTURES, LLC, :
CHARLES-EDOUARD GROS, MOSHE :
ROSENBERG, CAROLYN BOEHM, ST. :
JOHN NEUMANN NURSING HOME, AND :
ARCHDIOCESE OF PHILADELPHIA :
D/B/A CATHOLIC HEALTH CARE :
SERVICES, :
:
APPEAL OF: CENTER MANAGEMENT :
GROUP, LLC, 10400 ROOSEVELT :
OPERATING, LLC D/B/A ST. JOHN :
NEUMANN CENTER FOR :
REHABILITATION AND HEALTHCARE, :
CATHOLIC HEALTH SERVICES, LLC, :
10400 ROOSEVELT REALTY, LLC, :
10400 ROOSEVELT LOT, LLC, :
CHARLES-EDOUARD GROS, MOSHE :
ROSENBERG, AND CAROLYN BOEHM : No. 562 EDA 2017

Appeal from the Order Entered January 24, 2017
in the Court of Common Pleas of Philadelphia County

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Civil Division at No(s): July Term, 2016 No. 00108
November Term, 2015 No. 03740

BEFORE: PANELLA, LAZARUS, and STRASSBURGER,* JJ.

OPINION BY STRASSBURGER, J.: FILED JUNE 28, 2018

In these consolidated appeals, Archdiocese of Philadelphia d/b/a

Catholic Health Care Services and St. John Neumann Nursing Home

(collectively, AOP) and Center Management Group, LLC, 10400 Roosevelt

Operating LLC d/b/a St. John Neumann Center for Rehabilitation and

Healthcare, Catholic Health Services, LLC, 10400 Roosevelt Realty, LLC,

10400 Roosevelt Lot, LLC, Charles-Edouard Gros, Moshe Rosenberg, and

Carolyn Boehm (collectively, CMG)1 appeal from the January 24, 2017 orders

overruling their respective preliminary objections in the nature of a petition

to compel arbitration.2 We vacate the orders and remand for proceedings

consistent with this opinion.

*Retired Senior Judge assigned to the Superior Court.

1
We refer to AOP and CMG collectively as Appellants.

2
The instant case stems from an action filed by Davis as administratrix of
the estate of Ruth Roberts (Decedent), filed at docket number 00108 of the
July Term, 2016. Davis had filed a similar complaint against Germantown
Home and New Courtland Elder Services, Inc. at docket number 03740 of
the November Term, 2015. On January 19, 2017, the trial court granted
Davis’s request to consolidate No. 00108 and No. 03740 for purposes of
discovery and trial. The court designated No. 00108 as the lead case.
Germantown Home and New Courtland Elder Services, Inc. filed an answer
to Davis’s complaint instead of preliminary objections; that action is still
pending. Germantown Home and New Courtland Elder Services, Inc. are not
participating in this appeal.

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J-A08037-18

Decedent passed away on October 31, 2015. This action involves

claims of negligence relating to care rendered to Decedent during her stay in

2014 and 2015 as a patient at a skilled nursing facility, St. John Neumann

Nursing Home (St. John Neumann), which was owned and operated first by

AOP, and later, by CMG.

Decedent was admitted to St. John Neumann on May 5, 2014. She

remained there until she was hospitalized for several weeks in March 2015.

On April 3, 2015, Decedent was re-admitted to St. John Neumann. Upon

Decedent’s re-admission to St. John Neumann, Decedent’s daughter, Davis,

signed an agreement relating to Decedent’s stay at St. John Neumann

(Admission Agreement) which, inter alia, details the nature of the services

provided and the resident’s financial obligations.3 Prior to Davis’s signing of

the Admission Agreement, Decedent had granted Davis certain powers

pursuant to a written general durable power of attorney dated February 25,

2015 (Power of Attorney).4

3
There is no indication in the record whether or not Decedent or Davis
signed a similar Admission Agreement upon Decedent’s first admission. In
light of our disposition today, we need not decide whether the Arbitration
Clause was limited to acts or omissions occurring after the date it was
signed, or whether it required the parties to arbitrate disputes regarding acts
or omissions occurring prior to Davis’s signing of the Admission Agreement.

4
By its terms, the Power of Attorney instructed the principal to initial in front
of (N) and to “ignore” the lines in front of (A) through (M) if the principal
wished to grant all of the powers listed in (A) through (M) to the agent.
Power of Attorney, 2/25/2015, at 2 (unnumbered; numbering supplied). If
the principal wished to grant one or more but fewer than all of the powers,
(Footnote Continued Next Page)

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The Admission Agreement purports to make the following parties to

the agreement: St. John Neumann, Decedent (known in the agreement as

“Resident”), and Davis as Decedent’s “legal representative,” (known in the

agreement as “Responsible Person”). Admission Agreement, 4/3/2015, at 1.

Decedent did not sign the Admission Agreement. Davis signed on the line

designated for Decedent’s “Responsible Person.”5

(Footnote Continued) _______________________

the Power of Attorney instructed the principal to initial in front of each
specific power he/she wanted to grant. Id. To withhold a power, the Power
of Attorney instructed the principal to refrain from initialing in front of the
power. Id.

“R.R.” is handwritten in front of (N), indicating that Decedent wished to
grant Davis all of the listed powers at (A) through (M). Id. at 4. This would
appear to include power (I), which permits the agent to “defend, settle,
adjust, make allowances, compound, submit to arbitration, and compromise
all accounts, reckonings, claims, and demands whatsoever that now are, or
hereafter shall be, pending between me and any person, firm, corporation,
or other legal entity, in such manner and all respects as my Agent shall
deem proper.” Id. at 3. However, contrary to the instructions regarding the
method to grant all powers in (N), there is difficult-to-read writing that may
be Decedent’s initials in front of power (K). Id.

Although Davis asserted her lack of authority in her response to Appellants’
preliminary objections before the trial court, she does not argue that she
lacked authority to enter into the Admission Agreement in her brief to this
Court. Based upon our disposition today, we need not decide whether Davis
had such authority.

5
Davis also signed a second agreement (Responsible Person Agreement),
the purpose of which is “to facilitate the provision of care to [Decedent].”
Responsible Person Agreement, 4/3/2015, at 1. The parties to the
Responsible Person Agreement are St. John Neumann and Davis. Id.
Decedent did not sign the Responsible Person Agreement. Essentially, the
Responsible Person Agreement obligates the Responsible Person to fulfill the
duties of the Resident under the Admission Agreement, most of which are
(Footnote Continued Next Page)

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Relevant to this appeal, the Admission Agreement contains an

arbitration clause (Arbitration Clause), which requires the parties to submit

to arbitration all disputes relating to the Admission Agreement, with the

exception of guardianship proceedings and disputes involving amounts in

controversy less than $8,000. Id. at 16-20. The Arbitration Clause

indicates specifically that it applies to disputes relating to personal injury or

medical malpractice. Id. at 18.

On July 5, 2016, Davis, in her capacity as administratrix of Decedent’s

estate, filed a praecipe for a writ of summons against Appellants. The writ

of summons was issued and served upon Appellants. On November 9, 2016,

Appellants filed a joint petition to compel arbitration, which alleged that

Decedent’s estate was bound to arbitrate any disputes pursuant to the

Arbitration Clause. Davis filed an answer to the petition to compel on

November 29, 2016, arguing that the case should remain in the court of

common pleas. The following day, Davis filed a complaint against

Appellants, alleging various negligence claims relating to the care Decedent

received while at St. John Neumann.

On December 6, 2016, the trial court denied Appellants’ petition to

compel without prejudice, holding that Appellants could not petition the

court to compel arbitration in response to a writ of summons. Trial Court

(Footnote Continued) _______________________

financial in nature, and subjects the Responsible Person to liability for failure
to do so.

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Order, 12/6/2016, at 1 (“A plaintiff must first file a formal [c]omplaint, after

which a defendant may move to compel arbitration following the procedures

set forth in Pa.R.C.P. 1028.”).6 The court further specified that “[Appellants]

6
The trial court based its holding upon PaineWebber Inc. v. Faragalli, 61
F.3d 1063 (3d. Cir. 1995), wherein the United States Court of Appeals for
the Third Circuit held that because a writ of summons in this Commonwealth
is not a pleading, is silent as to the claims asserted by a plaintiff, and does
not require the defendant to take any responsive action, the plaintiff’s
obtaining a writ is not evidence of a refusal to arbitrate, and thus did not
start the clock on the statute of limitations under the Federal Arbitration Act.
We question whether this case applied to the situation presented to the trial
court. The Third Circuit is correct that in Pennsylvania, a writ of summons is
not a pleading, and the Pennsylvania Rules of Civil Procedure do not permit
a party to file preliminary objections to a writ of summons. Monaco v.
Montgomery Cab Co., 208 A.2d 252, 255 (Pa. 1965). We agree with the
Third Circuit that filing a praecipe for a writ of summons alone does not
constitute a refusal to arbitrate, and the opposing party is not compelled to
take responsive action upon service of the writ of summons. Nevertheless, a
preliminary objection pursuant to Pa.R.C.P. 1028(a)(6) is not the only
mechanism to attempt to compel another party to arbitrate; courts are
required to consider applications to compel arbitration pursuant to
subsection 7304(a) of the Uniform Arbitration Act. That section provides:

On application to a court to compel arbitration made by a party
showing an agreement described in section 7303 (relating to
validity of agreement to arbitrate) and a showing that an
opposing party refused to arbitrate, the court shall order the
parties to proceed with arbitration. If the opposing party denies
the existence of an agreement to arbitrate, the court shall
proceed summarily to determine the issue so raised and shall
order the parties to proceed with arbitration if it finds for the
moving party. Otherwise, the application shall be denied.

42 Pa.C.S. § 7304(a). See also 42 Pa.C.S. § 7318 (“The making of an
agreement described in section 7303 (relating to validity of agreement to
arbitrate) providing for arbitration in this Commonwealth confers jurisdiction
on the courts of this Commonwealth to enforce the agreement under this
subchapter and to enter judgment on an award made thereunder.”).

(Footnote Continued Next Page)

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J-A08037-18

shall have [20] days from the date of this order to file a [p]etition in

response to [Davis’s] formal [c]omplaint.” Id.

Appellants each filed preliminary objections to the complaint on

December 27, 2016. Inter alia, the preliminary objections were filed in the

nature of a petition to compel arbitration pursuant to Pa.R.C.P. 1028(a)(6),

and sought to enforce the Arbitration Clause in the Admission Agreement.

Davis filed responses in opposition to each set of Appellants’ preliminary

objections, asserting, inter alia, that the Arbitration Clause was

“unenforceable, void, voidable, invalid, and/or revocable on numerous

grounds….” Davis’s Responses, 1/17/2017, at 2. Davis included a laundry

list of various grounds, including the three grounds Davis discusses in her

appellee brief: (1) that the Arbitration Clause is a contract of adhesion and is

unconscionable; (2) that the Arbitration Clause violates 42 U.S.C.

§ 1396r(c)(5)(iii) (prohibiting nursing homes from “charg[ing], solicit[ing],

accept[ing,] or receiv[ing] … any other consideration as a precondition of

admit[ance]”) because it required Davis to waive her right to a jury trial as a

condition of admittance in addition to payments provided by
(Footnote Continued) _______________________

Thus, while the obtaining of a writ of summons alone does not constitute a
refusal to arbitrate, if Appellants had some other basis to demonstrate that
Davis refused to arbitrate, the lack of a complaint at that junction did not
render Appellants’ petition to compel arbitration premature, as the trial court
could have considered it pursuant to subsection 7304(a) of the Uniform
Arbitration Act. Nevertheless, Appellants do not contest the trial court’s
December 6, 2016 order on appeal, and at any rate, Davis did file eventually
a complaint to which Appellants filed preliminary objections, as discussed
infra.

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J-A08037-18

Medicaid/Medicare; and (3) that the Arbitration Clause is void due to the

doctrine of impracticability because the non-arbitrable Wrongful Death Act

claim should be consolidated with the Survival Act claims.7 Id. at 3-5;

Davis’s Brief at 9-18.

Meanwhile, Appellants filed a motion for reconsideration of the

December 6, 2016 order declining to compel arbitration due to Davis’s not

having filed a complaint. The trial court denied Appellants’ motion for

reconsideration on January 4, 2017. In the order denying the motion, the

trial court clarified that it had issued its December 6, 2016 order solely due

to Appellants’ purported procedural error in filing prematurely a petition to

compel, and the issue of arbitrability of the dispute was preserved until

Appellants cured the errors in procedure. Trial Court Order, 1/4/2017, at 1.

The trial court noted that Appellants had filed preliminary objections raising

the issue of arbitration in response to Davis’s formal complaint, which

preserved their objection. Id. As such, the trial court expressly held that

Pa.R.A.P. 311(g)(1)(iv) (“Failure to file an appeal from an interlocutory order

refusing to compel arbitration, appealable under 42 Pa.C.S. § 7320(a)(1)

and subparagraph (a)(8) of this rule, shall constitute a waiver of all

objections to such an order.”) did not apply. Id.

7We note our Supreme Court has rejected Davis’s impracticability argument.
See Taylor v. Extendicare Health Facilities, Inc., 147 A.3d 490 (Pa.
2016).

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On January 24, 2017, the trial court8 issued the orders in question

overruling Appellants’ preliminary objections in the nature of petitions to

compel arbitration. Trial Court Order, 1/24/2017, at 1. The trial court did

not explain its ruling and ordered Appellants to file answers to the complaint

within 20 days from the date of the orders. Id.

Appellants timely filed notices of appeal. The trial court did not order

Appellants to file a concise statement of errors complained of on appeal, but

did issue an opinion pursuant to Pa.R.A.P. 1925(a).

Appellants ask this Court to resolve three issues on appeal.9 First,

Appellants disagree with the trial court’s conclusion in its Rule 1925(a)

opinion that their claims are untimely, waived, and/or moot. AOP’s Brief at

5; CMG’s Brief at 8. Second, Appellants contend that the trial court erred by

refusing to compel arbitration of all claims Davis is making on behalf of

Decedent and her estate, because such claims are (a) subject to the

Arbitration Clause in the Admission Agreement executed by Davis on

Decedent’s behalf pursuant to a valid power of attorney and (b) within the

scope of the Arbitration Clause. Id. Finally, Appellants argue that the trial

court should not have overruled their preliminary objections because Davis

failed to raise a dispute of material fact or legal argument precluding

8
Whereas the Honorable Denis P. Cohen issued the December 6, 2016, and
January 4, 2017 orders, the Honorable Angelo Foglietta issued the January
24, 2017 orders.

9
We have reordered Appellants’ issues for ease of disposition.

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J-A08037-18

enforcement of the Arbitration Clause in response to Appellants’ preliminary

objections. Id. Alternatively, Appellants argue the trial court erred by

failing to take evidence in accordance with Pa.R.C.P. 1028(c)(2) prior to

overruling the preliminary objections. Id.

“[O]ur review of a claim that the trial court improperly denied

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.” Cardinal v. Kindred Healthcare, Inc., 155 A.3d 46,

49–50 (Pa. Super. 2017). “We employ a two-part test to determine whether

the trial court should have compelled arbitration: [(1)] whether a valid

agreement to arbitrate exists, and [(2)] whether the dispute is within the

scope of the agreement.” Washburn v. Northern Health Facilities, Inc.,

121 A.3d 1008, 1012 (Pa. Super. 2015).

Before we address the merits of Appellants’ issues, we first address

whether we have jurisdiction over this appeal. The trial court contends this

Court should quash this appeal because the orders appealed from are

interlocutory. Trial Court Opinion, 9/18/2017, at 5-6. While the orders are

indeed interlocutory, “[a]n order overruling preliminary objections seeking to

compel arbitration is immediately appealable as an interlocutory appeal as of

right pursuant to 42 Pa.C.S.[] § 7320(a) and Pa.R.A.P. 311(a)(8).”

Petersen v. Kindred Healthcare, Inc., 155 A.3d 641, 644 n.1 (Pa. Super.

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2017). See Pa.R.A.P. 311(a)(8) (“An appeal may be taken as of right and

without reference to Pa.R.A.P. 341(c) from … [a]n order that is made final or

appealable by statute … even though the order does not dispose of all claims

and of all parties.”); 42 Pa.C.S. § 7320(a)(1), (5) (“An appeal may be taken

from … [a] court order denying an application to compel arbitration made

under section 7304 (relating to proceedings to compel or stay arbitration).”).

The trial court states that it did not refuse to compel arbitration, as

“Appellants would have been free to file a petition or motion on this issue at

a later time and without any prejudice to them.” Trial Court Opinion,

9/18/2017, at 6. However, not only did nothing about the trial court’s order

indicate that it entered the order without prejudice, the order plainly denied

Appellants’ application to compel arbitration (made in the form of

preliminary objections).10 Thus, we decline to quash these appeals.

Next, the trial court requests that this Court dismiss Appellants’

appeals because the court granted Appellants permission to re-file their

petition to remove the matter to arbitration, but they failed to do so. Trial

Court Opinion, 9/18/2017, at 4. However, the fundamental flaw in the trial

court’s reasoning is that Appellants did renew their request to compel

arbitration – they just did so in the form of preliminary objections instead of

10
As such, Appellants had to file an appeal to preserve their objections to the
orders. See Pa.R.A.P. 311(g)(1)(iv) (“Failure to file an appeal from an
interlocutory order refusing to compel arbitration, appealable under 42
Pa.C.S. § 7320(a)(1) and subparagraph (a)(8) of this rule, shall constitute a
waiver of all objections to such an order.”).

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petition form. This is permissible under the rules. See Pa.R.C.P. 1028(a)(6)

(permitting preliminary objections based upon an “agreement for alternative

dispute resolution;” official note to rule states that “[a]n agreement to

arbitrate may be asserted by preliminary objection or by petition to compel

arbitration pursuant to the Uniform Arbitration Act, 42 Pa.C.S. § 7304, or

the common law, 42 Pa.C.S. § 7342(a).”). Accordingly, we will not dismiss

these appeals on this basis.

The trial court also urges this Court to dismiss the appeals based upon

its contention that Appellants rendered the appeals moot by filing an answer

to the complaint after they filed notices of appeal. Trial Court Opinion,

9/18/2017, at 4, 7-8. According to the trial court, Appellants waived their

right to rely upon the Arbitration Clause by continuing through the judicial

system. Id. at 7. However, Appellants have not done so voluntarily. As

they point out, the trial court ordered Appellants to file an answer within

twenty days or risk judgment being entered against them. See Trial Court

Order, 1/23/2017, at 1. Appellants promptly filed notices of appeal, as well

as a joint motion for a stay, which was still pending at the time their

answers to the complaint were due. “[A] waiver of a right to proceed to

arbitration pursuant to the term of a contract providing for binding

arbitration should not be [inferred lightly]….” Kwalkick v. Bosacco, 478

A.2d 50, 52 (Pa. Super. 1984). “Moreover, the mere filing of … an answer

without resulting prejudice to the objecting party will not justify a finding of

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waiver of the right to arbitration.” Id. Therefore, we decline to dismiss the

appeal under these circumstances. See Smay v. E.R. Stuebner, Inc., 864

A.2d 1266, 1278 (Pa. Super. 2004) (“Likewise, since Appellant consistently

has asserted its right to arbitration and only used the judicial system to

preserve that right and protect its … interests, we conclude that it did not

voluntarily avail itself of the regular channels of judicial process under the

aforementioned standard.”).

Finally, the trial court contends that because Appellants did not file

their preliminary objections within 20 days of service of the complaint, their

filing was untimely. Trial Court Opinion, 9/18/2017, at 2. We disagree. As

described supra, the December 6, 2016 order, which denied Appellants’

initial petition to compel arbitration without prejudice, explicitly provided

Appellants with 20 days from the date of the order in which to file a petition

to compel arbitration in response to Davis’s complaint. Appellants complied

with that timeframe by filing such a petition in the form of preliminary

objections pursuant to Pa.R.C.P. 1028(a)(6) within 20 days of the December

6, 2016 order. Thus, to the extent the trial court denied the preliminary

objections based upon their purported untimeliness, it abused its discretion.

We turn now to the merits. The essence of Appellants’ arguments is

that the trial court abused its discretion by declining to decide the issue of

arbitrability at the preliminary objections stage of the proceedings. In its

1925(a) opinion, the trial court explained that in addition to its

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determination that the preliminary objections were filed late, it overruled the

objections because the issue of “[w]hether a valid agreement exists between

the parties in this particular case is a question of fact that is well beyond the

scope of the [p]reliminary [o]bjections.”11 Trial Court Opinion, 9/18/2017,

at 7. It elaborated on its reasoning as follows.

[G]iven the underlying factual scenario of the manner in which
the agreement to arbitrate was entered into, [the trial] court
was unable to determine from [Davis’s] complaint alone whether
the agreement to arbitrate was in fact a valid agreement which
could be determined through preliminary objections.

Clearly, [the trial] court’s January 23, 2017 order did not
prevent or preclude any party from seeking such relief through
the filing of a petition to compel arbitration to proceed in that
manner or once discovery was conducted on that specific issue
in order for [the trial] court to determine the validity of the
arbitration agreement.[12] In light of the blanket assertion of the
requirement to arbitrate by Appellants, [the trial] court had
nothing more to rely upon which would have warranted
sustaining the preliminary objections in Appellant[s’] favor. This
case was not comparable to a basic contract case where the
parties thereto would have been on equal footing in negotiating
terms and conditions of the contract[,] which would then provide
a clear right to remand to private arbitration. In this case, it
involves much more tha[n] simply application of the law to
negotiated terms. It involves a multipage (24 pages) Admission
Agreement to Appellants’ facility that was signed by [] Davis, as

11 Based on the language of the Arbitration Clause, the trial court
determined that the parties’ dispute fell within the scope of the Arbitration
Clause. Id. at 7. Davis does not appear to challenge this ruling.

12As discussed supra, this assertion is erroneous, as nothing about the trial
court’s order indicated that it entered the order without prejudice.
Furthermore, because the order plainly denied Appellants’ application to
compel arbitration (made in the form of preliminary objections), Appellants
needed to file an immediate appeal to avoid waiving their objections to the
order pursuant to Pa.R.A.P. 311(g)(1)(iv).

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the responsible party of the patient, [Decedent]. Aside from the
signed [Admission A]greement, [the trial] court had nothing
more to rely upon at the preliminary objections stage. A proper
and more analytical determination would have been and could
have been made upon motion after discovery on the issue.

Trial Court Opinion, 9/18/2017, at 2-3 (unnecessary capitalization omitted).

We agree with Appellants that the trial court’s failure to determine

whether the dispute was arbitrable at the preliminary objection stage was an

abuse of discretion. “Our decisional law has made clear that the issue of

whether a party agreed to arbitrate a dispute is a threshold, jurisdictional

question that must be decided by the court.” Pisano v. Extendicare

Homes, Inc., 77 A.3d 651, 654 (Pa. Super. 2013) (internal citations

omitted). When presented with a petition to compel arbitration, the trial

court must determine whether an agreement to arbitrate the controversy

exists. Smith v. Cumberland Grp., Ltd., 687 A.2d 1167, 1171 (Pa. Super.

1997). “If a valid arbitration agreement exists between the parties and

appellants’ claim is within the scope of the agreement, the controversy must

be submitted to arbitration.”13 Id.

13 Our Supreme Court has instructed courts to “consider questions of
arbitrability with a healthy regard for the federal policy favoring arbitration.”
Taylor, 147 A.3d at 509 (citations and quotation marks omitted). Section 2
of the Federal Arbitration Act binds state courts to compel arbitration of
claims subject to an arbitration agreement. Id. (citing 9 U.S.C. § 2
(providing that arbitration agreements “shall be valid, irrevocable, and
enforceable”)). “The only exception to a state’s obligation to enforce an
arbitration agreement is provided by the savings clause, which permits the
application of generally applicable state contract law defenses such as fraud,
(Footnote Continued Next Page)

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Moreover, Pa.R.Civ.P. 1028(c)(2) states that the trial court “shall

determine promptly all preliminary objections. If an issue of fact is raised,

the court shall consider evidence by depositions or otherwise.” Pa.R.C.P.

1028(c)(2) (emphasis added). Furthermore, preliminary objections in the

nature of a petition to compel arbitration filed pursuant to Pa.R.C.P.

1028(a)(6) cannot be determined from facts of record. See id., Note

(“Preliminary objections raising an issue under subdivision (a)(1), (5), (6),

(7) or (8) cannot be determined from facts of record. In such a case, the

preliminary objections must be endorsed with a notice to plead or no

response will be required under Rule 1029(d).”). “In other words, a dispute

[raising an issue under Rule 1028(a)(1), (5), (6), (7) or (8)] cannot be

resolved by reference to facts pled in the complaint. Additional evidence is

required.” Trexler v. McDonald’s Corp., 118 A.3d 408, 412 (Pa. Super.

2015) (stating that the trial court properly permitted the parties to conduct

discovery after receiving preliminary objections and an answer thereto

raising a question of fact).

In their preliminary objections, Appellants contended that a valid

agreement to arbitrate exists, and attached a copy of the agreement along

with the Power of Attorney they claim established Davis’s authority to bind

Decedent. After receiving Appellants’ preliminary objections, each set of

(Footnote Continued) _______________________

duress, or unconscionability, to determine whether a valid contract exists.”
Id.

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which was endorsed with a notice to plead, Davis responded by denying that

a valid enforceable agreement to arbitrate existed. Davis’s Responses,

1/17/2017, at 2-3. Davis based her denials upon various state law contract

defenses, including unconscionability. Pursuant to the aforementioned law,

the trial court was required to determine, at the time it ruled upon

Appellants’ preliminary objections, whether the parties had a valid

agreement to arbitrate. Moreover, had the trial court required additional

facts to make such a determination, it should have considered “evidence by

deposition or otherwise.” Pa.R.C.P. 1028(c)(2). Because the trial court

erred in failing to determine at the outset whether a valid agreement to

arbitrate exists, questions of law and fact remain outstanding and

unaddressed by the trial court. Accordingly, we vacate the trial court’s

orders and remand this matter for the trial court to consider Appellants’

preliminary objections consistent with Pa.R.C.P. 1028(c)(2), and to

determine whether a valid agreement to arbitrate exists between the

parties.

Orders vacated. Case remanded for proceedings consistent with this

opinion. Jurisdiction relinquished.

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Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 6/28/18

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