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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37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,
-2-
J-A13034-18
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.
-3-
J-A13034-18
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.
-4-
J-A13034-18
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
-5-
J-A13034-18
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
-6-
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
-7-
J-A13034-18
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-
J-A13034-18
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.,
-9-
J-A13034-18
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.
- 10 -
J-A13034-18
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
- 11 -