[Cite as Scharf v. Manor Care of Willoughby, OH, L.L.C., 2020-Ohio-1322.]
IN THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
LAKE COUNTY, OHIO
JACALYN SCHARF, P.O.A. FOR : OPINION
LOUISE KOVACH,
:
Plaintiff-Appellee, CASE NO. 2019-L-062
:
- vs -
:
MANOR CARE OF WILLOUGHBY, OH,
LLC, et al., :
Defendants-Appellants. :
Civil Appeal from the Lake County Court of Common Pleas, Case No. 2019 CV 000382.
Judgment: Affirmed.
Jeffrey A. Leikin, Weisman Law Firm, 25201 Chagrin Boulevard, Suite 270,
Beachwood, OH 44112; Scott A. Rumizen, Rumizen & Weisman Co., Ltd., 28601
Chagrin Boulevard, Suite 250, Eton Tower, Beachwood, OH 44122 (For Plaintiff-
Appellee).
Brian D. Sullivan & Holly Marie Wilson, Reminger Co., LPA, 101 West Prospect
Avenue, Suite 1400, Cleveland, OH 44115; Thomas A. Prislipsky, Reminger Co., LPA,
11 Federal Plaza Central, Suite 1200, Youngstown, OH 44503 (For Defendants-
Appellants).
TIMOTHY P. CANNON, P.J.
{¶1} Appellants—Manor Care of Willoughby, OH, LLC; Heartland of
Willoughby; HCR Manor Care Services, Inc.; HCR IV Healthcare, LLC; et al.—appeal
from the June 14, 2019 entry of the Lake County Court of Common Pleas, which denied
appellants’ motion to stay proceedings and compel arbitration. The judgment is
affirmed.
{¶2} On March 8, 2019, a complaint was filed against defendants-appellants by
plaintiff-appellee, Jacalyn Scharf (“Ms. Scharf”), P.O.A. for Louise Kovach (“Mrs.
Kovach”). Ms. Scharf, as power of attorney for Mrs. Kovach, brought claims against
appellants for nursing home neglect, negligence, civil assault, and wanton misconduct.
{¶3} According to the complaint, Mrs. Kovach, age 88, was admitted as a
resident to Heartland of Willoughby nursing facility on March 5, 2018, with a diagnosis
of dementia and other issues. It was alleged that Mrs. Kovach was seriously injured on
March 10, 2018, when she was physically attacked and assaulted by another nursing
home resident, whom appellants knew to be violent, aggressive, and a danger to
residents.
{¶4} Appellants answered the complaint on April 3, 2019. As an affirmative
defense, appellants alleged the trial court lacks jurisdiction over the matter because the
parties have agreed to binding arbitration.
{¶5} On April 10, 2019, appellants filed a motion to stay proceedings and
compel arbitration. Attached to the motion is a Voluntary Arbitration Agreement, signed
by Ms. Scharf, as Mrs. Kovach’s representative, and by a representative of Heartland of
Willoughby, LLC. The Voluntary Arbitration Agreement was executed by both parties on
March 12, 2018, two days after Mrs. Kovach was allegedly attacked and injured. The
relevant portions of the Voluntary Arbitration Agreement read as follows:
This is a Voluntary Arbitration Agreement (“Agreement”) between:
The “Center”: Heartland of Willoughby, LLC doing business as
Heartland of Willoughby;
The “Patient”: Louise Kovach; and
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The “Patient’s Representative” (if any): ____________
1. Voluntary Agreement to Arbitrate Disputes. The parties agree
that they will mutually benefit from the speedy and efficient
resolution of any dispute or controversy which may arise between
them. This is a voluntary Agreement to have all disputes resolved
through binding arbitration by an independent neutral Arbitrator who
will be selected by the parties as specified in this Agreement. THE
PARTIES AGREE THAT THEY ARE WAIVING THE RIGHT TO
TRIAL BY JURY. ANY DISPUTES BETWEEN THE PARTIES
WILL BE RESOLVED EXCLUSIVELY THROUGH BINDING
ARBITRATION.
2. Parties. This Agreement and the definitions in this Section will be
interpreted as broadly as possible so as to bind and benefit any
person who asserts any claim or against whom a claim is asserted
by or on behalf of the Center or the Patient. The parties intend to
allow any person alleged to be liable for any actions or inactions of
the Center or the Patient or related to any care provided to the
Patient to demand arbitration pursuant to this Agreement.
a. “Center” includes the Center’s licensed operator, governing
body, officers, directors, members, shareholders, administrator,
employees, managers, agents, and any parent company,
subsidiary, or affiliates, including but not limited to HCR
ManorCare, Inc. and any of its affiliates, and any person or entity
alleged to be responsible for the Center’s activities.
b. “Patient” includes the Patient, the Patient’s Representative,
the Patient’s guardian, attorney-in-fact, agent, sponsor, or any
person whose claim is derived through or on behalf of the Patient,
including any spouse, child, parent, executor, administrator,
personal representative, heir, or survivor, as well as anyone entitled
to bring a wrongful death claim relating to the Patient. The Patient
is an intended third-party beneficiary of this Agreement.
{¶6} Appellee responded in opposition, arguing four reasons the motion should
be denied: (A) the Arbitration Agreement is unenforceable because it was executed
after Mrs. Kovach received care and already sustained injuries; (B) the Arbitration
Agreement violates R.C. 2711.23(C); (C) the Arbitration Agreement was not entered
into between all of the defendants to this lawsuit and is therefore not enforceable; and
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(D) defendants have waived any alleged right to arbitrate any claims in this case.
Appellants addressed each argument in a reply brief.
{¶7} The trial court issued a judgment entry on June 14, 2019, denying the
motion to stay proceedings and compel arbitration. Upon consideration, the trial court
found “it is uncontroverted that Louise Kovach’s representative Jacalyn Scharf signed
the Arbitration Agreement on March 12, 2018, two days after Ms. Kovach was injured in
the facility.” Thus, the court held the following:
Pursuant to R.C. 2711.22 and 2711.23, in order for any arbitration
agreement between a patient and a healthcare provider to be
enforceable it must be executed prior to the patient receiving care.
Therefore, while the Arbitration Agreement may be enforceable as
to injuries received after March 12, 2018, it is not enforceable as to
the March 10, 2018, injury Ms. Kovach allegedly sustained at the
facility.
The trial court did not address the other arguments that had been raised by appellee.
{¶8} From this entry, appellants assert one assignment of error:
{¶9} “The trial court committed reversible error when it failed to grant
appellants’ motion to stay proceedings and compel arbitration based on its opinion that
R.C. 2711.22 and R.C. 2711.23 prevent nursing homes from entering into retroactive
arbitration agreements after care has been rendered.”
{¶10} Within their assignment of error, appellants submit five topics for review.
The first four, however, were not addressed by the trial court in its decision, to wit: (1)
both Ohio and federal courts favor arbitration as an alternative means of dispute
resolution; (2) the arbitration agreement entered into by appellants and Scharf is a valid
contract; (3) the arbitration agreement includes all appellants; and (4) appellants did not
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waive their right to arbitrate when they filed an answer to Scharf’s complaint. These
need not be addressed to resolve this appeal, and we therefore decline to do so.
{¶11} The only argument raised in appellants’ brief relevant to the trial court’s
decision, and determinative of the appeal, is whether the Voluntary Arbitration
Agreement at issue needs to comply with R.C. 2711.22 and R.C. 2711.23 in order to be
enforceable.
{¶12} We accord due deference to the trial court’s factual finding that the
Voluntary Arbitration Agreement was signed two days after Mrs. Kovach was injured in
the nursing facility. See Jamison v. LDA Builders, Inc., 11th Dist. Portage No. 2011-P-
0072, 2013-Ohio-2037, ¶21, citing Taylor Building Corp. of Am. v. Benfield, 117 Ohio
St.3d 352, 2008-Ohio-938, ¶2. As to the trial court’s legal analysis based upon that
factual finding, we review the decision de novo. Moreover, the interpretation of
contractual and statutory provisions is subject to de novo review. See Alford v. Arbors
at Gallipolis, 4th Dist. Gallia No. 17CA11, 2018-Ohio-4653, ¶9 (citations omitted) (a trial
court’s decision whether to issue a stay pending arbitration is subject to de novo review
on issues of law, which commonly predominate because these cases generally involve
issues of contract interpretation).
{¶13} R.C. 2711.22 and R.C. 2711.23 read as follows, in pertinent part:
Except as otherwise provided in this section, a written contract
between a patient and a hospital or healthcare provider to settle by
binding arbitration any dispute or controversy arising out of the
diagnosis, treatment, or care of the patient rendered by a hospital
or healthcare provider, that is entered into prior to the diagnosis,
treatment, or care of the patient is valid, irrevocable, and
enforceable once the contract is signed by all parties. The contract
remains valid, irrevocable, and enforceable until or unless the
patient or the patient’s legal representative rescinds the contract by
written notice within thirty days of the signing of the contract. A
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guardian or other legal representative of the patient may give
written notice of the rescission of the contract if the patient is
incapacitated or a minor.
R.C. 2711.22(A) (emphasis added).
To be valid and enforceable any arbitration agreements pursuant to
sections 2711.01 and 2711.22 of the Revised Code for
controversies involving a medical, dental, chiropractic, or
optometric claim that is entered into prior to a patient receiving
any care, diagnosis, or treatment shall include or be subject to the
following conditions: [(A)-(J)].
R.C. 2711.23 (emphasis added).
{¶14} According to the plain text of these statutes, a dispute or controversy may
be settled by binding arbitration only if the written contract is entered into prior to the
diagnosis, treatment, or care that gives rise to the dispute or controversy. Thus, these
provisions cannot apply to appellee’s complaint, because the Voluntary Arbitration
Agreement was not entered into prior to Mrs. Kovach receiving the care that gave rise to
the controversy.
{¶15} Appellants first contend the trial court mistakenly applied these statutes
when it held that, “pursuant to R.C. 2711.22 and 2711.23, in order for any arbitration
agreement between a patient and a healthcare provider to be enforceable it must be
executed prior to the patient receiving care.” Appellants read this sentence, in isolation,
as a complete bar to the validity and enforceability of the Voluntary Arbitration
Agreement. This is not a correct reading of the trial court’s analysis, however, when
read in conjunction with the entry’s next sentence: “Therefore, while the Arbitration
Agreement may be enforceable as to injuries received after March 12, 2018, it is not
enforceable as to the March 10, 2018 injury Ms. Kovach allegedly sustained at the
facility.”
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{¶16} The trial court correctly applied R.C. 2711.22 and R.C. 2711.23, in that the
Voluntary Arbitration Agreement is unenforceable under those provisions as to the
March 10, 2018 injury, but it may be enforceable as to any disputes or controversies
arising after March 12, 2018, the date the agreement was entered into by the parties.
{¶17} Appellants’ first issue is not well taken.
{¶18} Appellants next contend the trial court erred in holding that the Voluntary
Arbitration Agreement is not enforceable as to the March 10, 2018 injury Mrs. Kovach
allegedly sustained at the facility. They rely on R.C. 2711.01, which governs arbitration
agreements generally. R.C. 2711.01(A) provides for two distinct types of arbitration
agreements:
[1] A provision in any written contract * * * to settle by arbitration a
controversy that subsequently arises out of the contract, or out of
the refusal to perform the whole or any part of the contract, or
[2] any agreement in writing between two or more persons to
submit to arbitration any controversy existing between them at
the time of the agreement to submit, or arising after the
agreement to submit, from a relationship then existing between
them or that they simultaneously create,
shall be valid, irrevocable, and enforceable, except upon grounds
that exist at law or in equity for the revocation of any contract.
[Emphasis added.]
{¶19} Appellants interpret this provision to mean that any agreement to arbitrate
an existing controversy between parties is valid. Thus, they argue the trial court’s
decision was in error even under this more general statute.
{¶20} Appellee responds that the trial court’s decision was proper because it
found that the dispute between the parties fell outside the scope of the arbitration
agreement. Appellee argues the March 12, 2018 Voluntary Arbitration Agreement is
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unenforceable as to Mrs. Kovach’s March 10, 2018 injury because it was executed after
the fact, and the parties did not agree to submit to arbitration any controversy already
existing between them at the time of execution.
{¶21} When faced with a motion to stay proceedings and compel arbitration, trial
courts are governed by R.C. 2711.02(B):
If any action is brought upon any issue referable to arbitration under
an agreement in writing for arbitration, the court in which the action
is pending, upon being satisfied that the issue involved in the action
is referable to arbitration under an agreement in writing for
arbitration, shall on application of one of the parties stay the trial of
the action until the arbitration of the issue has been had in
accordance with the agreement, provided the applicant for the stay
is not in default in proceeding with arbitration.
{¶22} “As the wording of * * * R.C. 2711.02(B) strongly suggests, two basic facts
must be proven before a stay of the trial proceeding can be justified: (1) the existence of
a valid written agreement to arbitrate disputes between the parties; and (2) the scope of
the agreement is sufficiently broad to cover the specific issue which is the subject of the
pending case.” Dodeka, L.L.C. v. Keith, 11th Dist. Portage No. 2011-P-0043, 2012-
Ohio-6216, ¶25 (citation omitted). “Both factual requirements are predicated upon the
legal proposition that, while the arbitration of disputes is strongly encouraged under the
law, a party should not be forced to proceed to arbitration unless she expressly agreed
to do so.” Id. (citations omitted). “Furthermore, in determining whether an enforceable
agreement to arbitrate exists, state-law contract principles must be applied.” Id. (citation
omitted).
{¶23} R.C. 2711.01 “acknowledges that an arbitration clause is, in effect, a
contract within a contract, subject to revocation on its own merits.” ABM Farms, Inc. v.
Woods, 81 Ohio St.3d 498, 501 (1998); Taylor Bldg., supra, at ¶41. “‘A contract is
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generally defined as a promise, or a set of promises, actionable upon breach. Essential
elements of a contract include an offer, acceptance, contractual capacity, consideration
(the bargained for legal benefit and/or detriment), a manifestation of mutual assent and
legality of object and of consideration.’” Westerfield v. Three Rivers Nursing & Rehab.
Ctr., LLC, 2d Dist. Montgomery No. 25347, 2013-Ohio-512, ¶20, quoting Minster
Farmers Coop. Exchange Co., Inc. v. Meyer, 117 Ohio St.3d 459, 2008-Ohio-1259, ¶28.
“The parties must have a ‘meeting of the minds’ as to the essential terms of the contract
in order to enforce the contract.” Id., citing Episcopal Retirement Homes, Inc. v. Ohio
Dept. of Indus. Relations, 61 Ohio St.3d 366, 369 (1991).
{¶24} “When reviewing a contract, the court’s primary role is to ascertain and
give effect to the intent of the parties.” Id. at ¶21, citing Hamilton Ins. Serv., Inc. v.
Nationwide Ins. Cos., 86 Ohio St.3d 270, 273 (1999). “A contract that is, by its terms,
clear and unambiguous requires no real interpretation or construction and will be given
the effect called for by the plain language of the contract.” Id., citing Aultman Hosp.
Assn. v. Community Mut. Ins. Co., 46 Ohio St.3d 51, 55 (1989).
{¶25} Again, the Voluntary Arbitration Agreement states, in pertinent part: “The
parties agree that they will mutually benefit from the speedy and efficient resolution of
any dispute or controversy which may arise between them.” (Emphasis added.)
{¶26} We find no ambiguity in the language of this provision that requires
interpretation or construction. The effect called for by the plain language is that the
Voluntary Arbitration Agreement, executed on March 12, 2018, was to have prospective
application, governing future disputes or controversy, if any. There is no reference to
the alleged injury that occurred in the facility on March 10, 2018, and there is no
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express statement that the parties agree to submit to arbitration any controversy that
already existed between them at the time of the agreement. Appellee, in agreeing to
arbitration, gave up her right to a jury trial. There is no stated or known consideration
that would bind the arbitration provision to an already-existing claim. Nor is there any
evidence of a “meeting of the minds” in this regard.
{¶27} Accordingly, the trial court did not err in holding that the March 12, 2018
Voluntary Arbitration Agreement is not enforceable as to the March 10, 2018 injury that
is the subject of appellee’s complaint. See, e.g., Hussein v. Hafner & Shugarman Ents.,
Inc., 176 Ohio App.3d 127, 2008-Ohio-1791, ¶31 (6th Dist.) (where the appellees’ fraud
claims alleged acts that occurred prior to the execution of the contract, the trial court did
not err when it declined to order arbitration on those claims).
{¶28} Appellants’ second issue is not well taken.
{¶29} Appellants’ sole assignment of error is without merit.
{¶30} The judgment of the Lake County Court of Common Pleas is affirmed.
CYNTHIA WESTCOTT RICE, J.,
THOMAS R. WRIGHT, J.,
concur.
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