Lomax, D. v. Care One, LLC

J-S55004-20

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

DEBORAH A. LOMAX, : IN THE SUPERIOR COURT OF
ADMINISTRATRIX FOR THE ESTATE : PENNSYLVANIA
OF RUFUS LOMAX, DECEASED, :
:
:
v. :
:
:
CARE ONE, LLC; 4114 SCHAPER :
AVENUE OPERATING COMPANY, LLC. :
D/B/A PRESQUE ISLE :
REHABILITATION AND NURSING :
CENTER; CARE ONE MANAGEMENT, :
LLC; HEALTHBRIDGE MANAGEMENT, :
LLC; DES HOLDING CO., INC.; THCI :
HOLDING COMPANY, LLC; THCI :
COMPANY, LLC; CARE VENTURES, :
INC.; CARE REALITY, LLC; SHOLIN J. :
MONTGOMERY, NHA :
:
Appellants : No. 344 WDA 2020

Appeal from the Order Entered February 10, 2020
In the Court of Common Pleas of Erie County
Civil Division at No(s): No. 10167-2017

BEFORE: BOWES, J., McCAFFERY, J., and COLINS, J.*

MEMORANDUM BY BOWES, J.: FILED: MARCH 5, 2021

Care One, LLC, 4114 Schaper Avenue Operating Company, LLC. d/b/a

Presque Isle Rehabilitation and Nursing Center, Care One Management, LLC,

Healthbridge Management, LLC, Des Holding Co., Inc., THCI Holding

Company, LLC, THCI Company, LLC, Care Ventures, Inc., Care Reality, LLC,

____________________________________________

* Retired Senior Judge assigned to the Superior Court.
J-S55004-20

and Sholin J. Montgomery, NHA (collectively “the Facility”) appeal from the

order that overruled their preliminary objections to compel arbitration. We

affirm.

The following facts are pertinent to our review. Rufus Lomax

(“Decedent”) had both of his legs amputated below the knee. Decedent’s

vision was also impaired by cataracts, but he did not desire to undergo yet

another surgery. For approximately ten years, he resided in an apartment at

an assisted living facility designed for wheelchair-bound tenants. His niece,

Deborah A. Lomax (“Ms. Lomax”), provided additional care through preparing

meals, running errands, and attending medical appointments with him,

eventually becoming employed as his caregiver through a senior program

offered by the local community action agency.

Decedent was hospitalized in March 2015 due to complications from an

infection. Having also experienced a recent decline in his strength that caused

him to fall and develop sores, he decided to cease living on his own and enter

a rehabilitation facility upon discharge from the hospital. He opted for Presque

Isle Rehabilitation and Nursing Center since it “was one of the only open

facilities for him, due to his insurance.” N.T. Evidentiary Hearing, 7/30/19, at

95.

Nurse Darlene Stokes performed an assessment of Decedent upon his

admission and noted that Decedent suffered from dementia, depression, and

poor vision in both eyes with or without glasses. After Ms. Stokes performed

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her assessment, Admissions Coordinator Kara Calandrelli secured Decedent’s

signature on the paperwork attendant to his admission to the Facility. Ms.

Calandrelli followed her usual routine of meeting with the new resident in his

room and spending forty-five minutes to an hour going through the twenty-

page admission agreement. Her customary procedure was to involve a family

member or the Erie Office on Aging in the process if the new resident was

incompetent or visually impaired. However, she obtained Decedent’s

signature on the agreement despite his having been assessed by Ms. Stokes

as visually impaired and suffering from dementia without any family present.

Page sixteen of the twenty-page admission agreement “between Presque Isle

Rehabilitation and Nursing Center (‘the Facility’) and Rufus Lomax,”1

contained the following provision:

ARTICLE XIV
DISPUTE RESOLUTION AND ARBITRATION

ANY CONTROVERSY OR CLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND BROUGHT BY THE
RESIDENT, HIS/HER PERSONAL REPRESENTATIVES, HEIRS,
ATTORNEYS, OR THE RESPONSIBLE PARTY SHALL BE SUBMITTED
TO BINDING ARBITRATION BY A SINGLE ARBITRATOR SELECTED
AND ADMINISTERED PURSUANT TO THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION. A CLAIM SHALL BE WAIVED AND FOREVER
BARRED IF, ON THE DATE THE DEMAND FOR ARBITRATION IS
RECEIVED, THE CLAIM (IF ASSERTED IN A CIVIL ACTION) WOULD
BE BARRED BY THE APPLICABLE STATE OF FEDERAL STATUTE OF
LIMITATIONS. ANY CLAIMANT CONTEMPLATED BY THIS
PARAGRAPH HEREBY WAIVES ANY AND ALL RIGHTS TO BRING
SUCH CLAIM OR CONTROVERSY IN ANY MANNER NOT EXPRESSLY
____________________________________________

1 See Admission Agreement, 3/27/15, at 1.

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SET FORTH IN THIS PARAGRAPH INCLUDING, BUT NOT LIMITED
TO, THE RIGHT TO A JURY TRIAL.

Admission Agreement, 3/27/15, at 16.2 Nowhere in the written agreement

does it indicate that the arbitration provision was optional or voluntary, and

Ms. Calandrelli did not advise Decedent that he did not have to sign this

agreement to receive care at the Facility. Notably, the arbitration provision

of the agreement lacked spaces for checking “yes” or “no” that were used

elsewhere in the document to accept or reject other “voluntary” provisions.

See, e.g., id. at 3 (regarding consent to allow the Facility to manage financial

affairs); id. at 10 (concerning use of name in the Facility directory and photo

for promotional purposes). Rather, there was merely a line where Decedent

affixed his initials.

After completing the admission process, Decedent resided at the facility

for six months until he was admitted to the hospital with a fever, tachycardia,

altered mental status, oxygen saturation of 84%, sepsis, and previously-

____________________________________________

2 Additionally, Article XVII of the admission agreement stated: “The Resident
parties understand that the Facility may change any or all terms and
conditions of the Agreement at any time, by serving appropriate notice to the
Resident Parties together with the offer of a revised Agreement or an
addendum revising the existing Agreement.” Admission Agreement, 3/27/15,
at 18. A resident thereafter was required to execute the new agreement or
give written notice to the Facility “of an intention to terminate the Agreement.”
Id. Termination would trigger provisions regarding transfer or discharge of
the patient. Id. Thus, because the arbitration agreement was a term of the
admission agreement, the Facility in effect reserved the right to change any
or all of the substance of the arbitration agreement unilaterally.

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uncharted pressure ulcers. Decedent did not recover, dying in the hospital on

September 26, 2015.

Ms. Lomax was appointed as administratrix of Decedent’s estate and

initiated this wrongful death and survival action against the Facility. In her

complaint, Ms. Lomax stated claims of negligence, negligence per se, breach

of fiduciary duty, and wrongful death, seeking compensatory and punitive

damages. Each of the defendants filed preliminary objections to compel

arbitration.3 Ms. Lomax responded opposing arbitration, the trial court

conducted an evidentiary hearing, and the parties submitted proposed

____________________________________________

3 As noted earlier, the admission agreement is between Decedent and
“Presque Isle Rehabilitation and Nursing Center (‘the Facility’).” Admission
Agreement, 3/27/15, at 1. The arbitration clause does not purport to govern
claims against the Facility’s employees, agents, contractors, or other affiliates.
Cf. Kohlman v. Grane Healthcare Co., 228 A.3d 920, 921 (Pa.Super. 2020)
(reviewing arbitration clause that governed disputes between the patient and
the facility, “its agents, servants, employees, officers, contractors and
affiliates”); MacPherson v. Magee Mem’l Hosp. for Convalescence, 128
A.3d 1209, 1217 (Pa.Super. 2015) (“The Parties intend that this Agreement
shall inure to the direct benefit of and bind the Center, its parent, affiliates,
and subsidiary companies, management companies, executive directors,
owners, officers, partners, shareholders, directors, medical directors,
employees, successors, assigns, agents, insurers and any entity or person
(including health care providers) that provided any services, supplies or
equipment related to the Patient’s stay at the Center . . . .”). Defendants
other than the entity doing business as Presque Isle Rehabilitation and Nursing
Center each asserted that Ms. Lomax’s claims are governed by the agreement
without specifying how it is a party to the agreement or otherwise is entitled
to benefit from it. However, given our determination that Decedent did not
have a valid agreement to arbitrate with any entity, we need not examine
whether each defendant established that it was a party to the contract and
thus entitled to enforce it.

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findings of fact and conclusions of law. Thereafter, the trial court made

findings of fact and conclusions of law, determining both that (1) there was

no meeting of the minds between the parties as to the arbitration provision,

and (2) the provision was unconscionable. Accordingly, the trial court

overruled the Facility’s preliminary objections.

The Facility filed a timely notice of appeal,4 and both the Facility and the

trial court complied with Pa.R.A.P. 1925. The Facility states the following

questions, which we have reordered for ease of disposition:

1. The trial court found that an arbitration clause was
unconscionable, because [D]ecedent needed nursing home care
when he signed it, and because the clause only required
[D]ecedent to arbitrate. But this Court has found that, because
public policy favors arbitration, issues like these do not make an
arbitration clause unconscionable. Was the trial court’s decision a
reversible error?

2. When [D]ecedent was admitted to a nursing home, he
signed an admissions agreement and initialed its arbitration
clause. The trial court found that [he] was not bound by that
contract, because he had poor eyesight. But under Pennsylvania
law, a signed contract is presumed to be binding, and evidence of
poor eyesight will not overturn this presumption. Was the trial
court’s decision a reversible error?

The Facility’s brief at 5.

We begin with a review of the pertinent legal principles. In an appeal

from an order overruling preliminary objections in the nature of a petition to

compel arbitration, this Court’s review “is limited to determining whether the

____________________________________________

4 We have jurisdiction over this appeal from an interlocutory order pursuant
to 42 Pa.C.S.§ 7320(a)(1).

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trial court’s findings are supported by substantial evidence and whether the

trial court abused its discretion in denying the petition.” Pisano v.

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

quotation marks omitted). “In doing so, we employ a two-part test to

determine whether the trial court should have compelled arbitration. First,

we examine whether a valid agreement to arbitrate exists. Second, we must

determine whether the dispute is within the scope of the agreement.”

MacPherson v. Magee Mem’l Hosp. for Convalescence, 128 A.3d 1209,

1219 (Pa.Super. 2015) (en banc) (cleaned up). On the issues of contractual

interpretation, our review is de novo and our scope of review is plenary. See

Cardinal v. Kindred Healthcare, Inc., 155 A.3d 46, 50 (Pa.Super. 2017).

Pursuant to the mandates of the Federal Arbitration Act (“FAA”), “courts

are obligated to enforce arbitration agreements as they would enforce any

other contract,” and, in considering whether a claim is subject to arbitration,

must exhibit “a healthy regard for the federal policy favoring arbitration[.]”

Taylor v. Extendicare Health Facilities, Inc., 147 A.3d 490, 504, 509 (Pa.

2016) (cleaned up). Nonetheless, “a party cannot be compelled to arbitrate

in the absence of a valid agreement to do so[.]” McIlwain v. Saber

Healthcare Grp., Inc., 208 A.3d 478, 486 (Pa.Super. 2019) (cleaned up).

The following principles pertain to determining the existence of a valid

agreement to arbitrate. “It is black letter law that in order to form an

enforceable contract, there must be an offer, acceptance, consideration, or

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mutual meeting of the minds.” Id. at 485 (internal quotation marks omitted).

“Under Pennsylvania law, it is presumed that an adult is competent to enter

into an agreement, and a signed document gives rise to the presumption that

it accurately expresses the state of mind of the signing party.” Cardinal,

supra at 50. As such, “[c]ontracting parties are normally bound by their

agreements, without regard to whether the terms thereof were read and fully

understood and irrespective of whether the agreements embodied reasonable

or good bargains.” Nicholas v. Hofmann, 158 A.3d 675, 693 (Pa.Super.

2017) (internal quotation marks omitted).

Nonetheless, as is the case in any action upon a contract, “defenses

such as fraud, duress, or unconscionability” are available to challenge the

validity of an arbitration agreement. Taylor, supra at 509. We have

explained that “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.” MacPherson, supra at

1221 (cleaned up). “The aspects entailing lack of meaningful choice and

unreasonableness have been termed procedural and substantive

unconscionability, respectively.” Salley v. Option One Mortgage Corp.,

925 A.2d 115, 119 (Pa. 2007). “[P]rocedural and substantive

unconscionability are generally assessed according to a sliding-scale approach

(for example, where the procedural unconscionability is very high, a lesser

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degree of substantive unconscionability may be required).” Id. at 125 n.12

(citing Delta Funding Corp. v. Harris, 912 A.2d 104, 111 (N.J. 2006)).

While “the determination of whether an agreement is unconscionable is

ultimately a question of law, . . . the necessary inquiry is often fact sensitive.”

Id. at 124. Factual issues pertinent to the Court’s inquiry in cases involving

arbitration agreements between nursing homes and patients include: (1) the

physical and mental state of the patient; (2) whether the patient was alone at

the time of its execution; (3) the nature of the admission agreement and

whether the arbitration agreement “was part of, or buried within, a potentially

lengthy admissions packet that decedent was required to complete, while in

ill health;” (4) whether the patient was sent to the facility directly from the

hospital; (5) whether the patient had awareness of and the opportunity to

research options to instead enter other facilities; (6) whether the patient “was

economically constrained” to enter into an agreement with the facility at issue

to provide care; and (7) whether the patient had the means to pay for

arbitration. See Kohlman v. Grane Healthcare Co., 228 A.3d 920, 927

(Pa.Super. 2020) (listing non-exhaustive factors).

Concerning the procedural prong of the unconscionability examination,

our Supreme Court has observed that “[a]n adhesion contract is a standard-

form contract prepared by one party, to be signed by the party in a weaker

position, usually a consumer, who adheres to the contract with little choice

about the terms.” Chepkevich v. Hidden Valley Resort, L.P., 2 A.3d 1174,

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1190 (Pa. 2010) (cleaned up). However, “merely because a contract is one

of adhesion does not render it unconscionable and unenforceable as a matter

of law.” Salley, supra at 127.

For example, this Court reversed trial court findings of unconscionability

of arbitration agreements in both MacPherson and Cardinal, cases

significant to the trial court’s ruling and the Facility’s arguments in this appeal.

MacPherson and Cardinal each concerned challenges to four-page

arbitration agreements between nursing homes and patients that were

executed at the time of admission separately from the respective admission

agreements. The arbitration agreement at issue in McPherson provided as

follows:

VOLUNTARY AGREEMENT: If you do not accept this
Agreement, the Patient will still be allowed to live in, and
receive services in, this Center.

ARBITRATION AGREEMENT (“AGREEMENT”)

BY ACCEPTING THIS AGREEMENT, THE PARTIES ARE
WAIVING THEIR RIGHT TO A TRIAL BEFORE A JUDGE
AND/OR A JURY OF ANY DISPUTE BETWEEN THEM. PLEASE
READ THIS AGREEMENT CAREFULLY AND IN ITS ENTIRETY
BEFORE ACCEPTING ITS TERMS.

This Agreement made on ____ (date) by and between the Parties,
Patient Richard MacPherson [handwritten] and/or Patient’s Legal
Representative ____ (collectively referred to as “Patient”), and
the Center Manor Care Yeadon [handwritten], is an Agreement
intended to require that Disputes be resolved by arbitration. The
Patient’s Legal Representative agrees that he is signing this
Agreement as a Party, both in his representative and individual
capacity.

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A. What is Arbitration?: Arbitration is a cost effective and time
saving method of resolving disputes without involving the courts.
In using arbitration, the disputes are heard and decided by a
private individual called an arbitrator. The dispute will not be
heard or decided by a judge or jury.

B. AGREEMENT TO ARBITRATE “DISPUTES”: Any and all
claims or controversies arising out of or in any way relating to this
Agreement, the Admission Agreement or any of the Patient’s stays
at this Center, or any Center operated by any subsidiary of HCR–
Manor Care, Inc., whether or not related to medical malpractice,
including but not limited to disputes regarding the making,
execution, validity, enforceability, voidability, unconscionability,
severability, scope, interpretation, preemption, waiver, or any
other defense to enforceability of this Agreement or the Admission
Agreement, whether arising out of State or Federal law, whether
existing now or arising in the future, whether for statutory,
compensatory or punitive damages and whether sounding in
breach of contract, tort or breach of statutory duties (including,
without limitation except as indicated, any claim based on
Patients’ Rights or a claim for unpaid Center charges), regardless
of the basis for the duty or of the legal theories upon which the
claim is asserted, shall be submitted to binding arbitration.
Notwithstanding the above, nothing in this Agreement prevents
the Patient from filing a grievance or complaint with the Center or
appropriate governmental agency; from requesting an inspection
of the Center from such agency; or from seeking review under any
applicable federal, state or local law of any decision to
involuntarily discharge or transfer the Patient from the Center.

....

E. RIGHT TO CHANGE YOUR MIND: This Agreement may be
cancelled by written notice sent by certified mail to the Center’s
Administrator within thirty (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 other
admissions to the Center without any need for further renewal.

F. OTHER PROVISIONS:

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1. No Caps/Limits on Damages: There are no caps/limits on
the amount of damages the Panel can award other than those
already imposed by law in the state in which this Center is located.
All state laws, statutes and regulations that limit awardable
damages and define the scope of admissible and inadmissible
evidence (i.e. regulatory surveys, incident reports, etc.) expressly
apply to any arbitration hearing held pursuant to this Agreement.

2. Opportunity to Review & Right to Consult with Attorney:
The patient (if competent) and the Patient’s Legal Representative
acknowledge that the Patient and Legal Representative have each
received a copy of this Agreement, and have had an opportunity
to read it (or have it read to him/her) and ask questions about it
before accepting it. Please read this Agreement very carefully and
ask any questions that you have before signing it. Feel free to
consult with an attorney of your choice before signing this
Agreement.

....

6. Fees and Costs: The Panels’ 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. NAF’s administrative fees shall be divided equally among
the Parties. To the extent permitted by law, any Party who
unsuccessfully challenges the enforcement of this Agreement shall
be required to pay the successful Parties’ reasonable attorney fees
and costs incurred to enforce such contract (i.e., Motion to Compel
Arbitration). The Parties shall bear their own attorney fees and
costs in relation to all preparation and attendance at the
arbitration hearing, unless the Panel concludes that the law
provides otherwise. Except as stated above, the Parties waive any
right to recover attorneys’ fees and costs.

....

BY SIGNING BELOW, THE PARTIES CONFIRM THAT EACH
OF THEM HAS READ ALL FOUR (4) PAGES OF THIS
AGREEMENT AND UNDERSTANDS THAT EACH HAS WAIVED
THE RIGHT TO A TRIAL BEFORE A JUDGE OR JURY AND
THAT EACH OF THEM CONSENTS TO ALL OF THE TERMS OF
THIS VOLUNTARY AGREEMENT.

MacPherson, supra at 1213–18 (emphases in original).

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Although the trial court found the agreement to arbitrate in

MacPherson invalid, this Court reversed, concluding that it was neither

procedurally nor substantively unconscionable. We observed the following.

At the outset, in prominent styling, the agreement indicated that it was

voluntary and made it clear that “the Patient will still be allowed to live in, and

receive services at Manor Care.” Id. at 1222 (internal quotation marks

omitted). Further, the patient was conspicuously notified that he had thirty

days to change his mind. Hence, we concluded that there was no lack of

meaningful choice on the part of the patient.

Regarding substantive unconscionability, we noted that the requirement

that each side pay its own fees and costs in preparation of arbitration, which

was a significant basis for the trial court’s conclusion that the agreement

unreasonably favored Manor Care, was the same as would be the case in

common pleas court. Id. at 1221. Manor Care agreed to pay the arbitration

panel’s costs and fees, and placed no limits on the type or amount of available

damages. Additionally, the agreement contained a large, bold indication that

both Manor Care and the patient were waiving their rights to a jury trial. Id.

Thus, we concluded that the terms of the agreement did not unreasonably

favor Manor Care. Accordingly, we reversed the trial court’s order overruling

the preliminary objections.

In Cardinal, this Court likened the agreement at issue to that in

MacPherson. We indicated that it contained “a capitalized, bold-faced

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notification at the very top of the agreement stating: ‘THIS AGREEMENT IS

NOT A CONDITION OF ADMISSION TO OR CONTINUED RESIDENCE IN

THE FACILITY.’” Cardinal, supra at 53 (emphasis in original). The first

page of the agreement additionally provided:

THE PARTIES UNDERSTAND, ACKNOWLEDGE, AND
AGREE THAT BY ENTERING INTO THIS AGREEMENT
THEY ARE GIVING UP THEIR CONSTITUTIONAL RIGHT
TO HAVE THEIR DISPUTES DECIDED BY A COURT OF
LAW OR TO APPEAL ANY DECISION OR AWARD OF
DAMAGES RESULTING FROM THE ADR PROCESS
EXCEPT AS PROVIDED HEREIN.

Id. at 53-54 (emphasis in original). Moreover, as in MacPherson, “[t]he

agreement state[d] that the parties will each bear their own fees and costs,

that [the facility] shall pay the arbitrators fees and costs, and that the

monetary relief available via arbitration is the same as that which would be

available in a court of law”. Id. at 54. Finally, the agreement also specified

that the patient had thirty days to revoke the agreement. Id. Thus, we

concluded that the agreement was not unconscionable and the trial court erred

in overruling the facility’s preliminary objections.

Turning to the case sub judice, the Facility maintains that the trial court

erroneously found the arbitration agreement procedurally unconscionable

“simply because it considered the Admission Agreement to be a contract of

adhesion that [Decedent] had to sign if he wanted to remain at the facility.”

The Facility’s brief at 46. It argues that the facts of this case are “very similar”

to those in Cardinal since Ms. Calandrelli testified that Decedent would not

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be discharged if he had failed to sign the arbitration agreement. Id. at 47-

48. The Facility asserts that there was no evidence that Decedent felt time-

pressured to sign the arbitration agreement or that he was unable to

understand what he was doing. Id. at 51-52.

The Facility further contends that the arbitration agreement was not

substantively unconscionable, as our Supreme Court has expressly held that

non-reciprocal arbitration agreements are not ipso facto unconscionable. Id.

at 56 (citing Salley, supra at 117-18, 129). It maintains that “[a] non-

reciprocal arbitration agreement makes sense in this situation” because a

collection action, the type of claim most likely to have been brought by the

Facility against Decedent, “is more efficient to pursue” in a court. Id. at 57.

Finally, the Facility asserts that the trial court misread the Cardinal

decision, improperly concluding that the specific contract terms noted

favorably in Cardinal and MacPherson evidencing a lack of unconscionability

were now required elements for any arbitration agreement to be valid under

Pennsylvania law. Id. at 60. It argues that by holding that the arbitration

agreement had “to be identical to the contract discussed in Cardinal to be

enforceable,” the trial court “turned the burden of proving unconscionability

on its head” and runs afoul of the FAA’s prohibition against discrimination

against arbitration provisions. Id. at 61. Nonetheless, the Facility posits, its

arbitration agreement passes the trial court’s Cardinal-based litmus test. Id.

at 62-67.

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We disagree with the Facility’s characterization of the trial court’s

determination. The trial court offered the following explanation of its finding

that the Facility’s arbitration provision5 was both procedurally and

substantively unconscionable:

Taken as a whole, this Arbitration Clause in the instant case
was meant to be a part of the Admissions Agreement, without the
ability for Decedent to rescind this clause. Decedent was not
provided any notice that his acquiescence to this Arbitration
Clause was not required to obtain treatment in the facility. This
Arbitration Clause was only explained to a resident if the resident
specifically asked questions about the Arbitration Clause and even
then Ms. Calandrelli did not sufficiently explain the significant
impact of this Arbitration Clause on a resident’s life. . . . Ms.
Calandrelli introduced the Arbitration Clause to residents as
follows: “So I would say arbitration is where parties meet and an
arbitrator would be there to hear both sides. And then the
____________________________________________

5 To reiterate, the arbitration agreement at issue herein provides, in toto, as
follows:

ANY CONTROVERSY OR CLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND BROUGHT BY THE
RESIDENT, HIS/HER PERSONAL REPRESENTATIVES, HEIRS,
ATTORNEYS, OR THE RESPONSIBLE PARTY SHALL BE SUBMITTED
TO BINDING ARBITRATION BY A SINGLE ARBITRATOR SELECTED
AND ADMINISTERED PURSUANT TO THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION. A CLAIM SHALL BE WAIVED AND FOREVER
BARRED IF, ON THE DATE THE DEMAND FOR ARBITRATION IS
RECEIVED, THE CLAIM (IF ASSERTED IN A CIVIL ACTION) WOULD
BE BARRED BY THE APPLICABLE STATE OF FEDERAL STATUTE OF
LIMITATIONS. ANY CLAIMANT CONTEMPLATED BY THIS
PARAGRAPH HEREBY WAIVES ANY AND ALL RIGHTS TO BRING
SUCH CLAIM OR CONTROVERSY IN ANY MANNER NOT EXPRESSLY
SET FORTH IN THIS PARAGRAPH INCLUDING, BUT NOT LIMITED
TO, THE RIGHT TO A JURY TRIAL.

Admission Agreement, 3/27/15, at 16.

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arbitrator would make the decision, just like a judge. And it's
binding and it's a legal – like whatever the outcome is, it's a legal
finding, so.” . . .

After review of the entire Admission Agreement, this
agreement did not require Decedent to initial after every clause,
but rather, just a few select clauses chosen by the drafters of the
Admissions Agreement such as the Arbitration Clause. Residents
were not made aware they were not required to sign said
Admission Agreement and still could receive medical care and
treatment; residents were not aware they were not required to
consent to the Arbitration Clause; and residents were not
permitted to rescind their consent to the Arbitration Clause within
thirty (30) days. By initialing this Arbitration Clause, residents
were forever relinquishing their fundamental rights to a trial by
jury and to pursue an action in a court of law. This Arbitration
Clause is also not reciprocal in that Presque Isle Rehabilitation and
Nursing Center still retained its right to a trial by jury and its right
to pursue a legal action in a court of law. A review of this
Arbitration Clause in the Admissions Agreement demonstrates all
terms described in Cardinal are not present.

Trial Court Opinion, 2/10/20, at 21-23.

The trial court further addressed the procedural prong of the

unconscionability inquiry as follows:

Decedent was unable to negotiate or counter the terms of the
Arbitration Clause. Decedent also knew he needed a significant
amount of assistance daily such as help with transferring from his
bed, using the toilet, dressing himself, daily hygienic needs, and
bathing. Decedent was never informed he would be allowed to
remain in the facility if he chose not to agree to the Arbitration
Clause. Decedent had no realistic choice as to the terms of the
Arbitration Clause. Decedent knew he needed medical care and
treatment, and if he did not sign the Admissions Agreement he
would not receive said medical care and treatment he needed.

Trial Court Opinion, 2/10/20, at 24.

The Facility seeks to have us overturn the trial court’s finding by

attacking particular facts piecemeal and contrasting in isolation statements

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from other cases. Properly viewing the attendant circumstances of this case

as a whole and applying the sliding-scale analysis approved by our Supreme

Court in Salley, supra at 125 n.12, 128, we find no basis to conclude that

the trial court erred or abused its discretion by finding that there was no valid

agreement to arbitrate based upon the unconscionability of the arbitration

provision proffered by Defendants.

We begin by noting that almost all of the factors this Court identified in

Kohlman as relevant to procedural unconscionability support the trial court’s

finding. See Kohlman, supra at 927. The testimony credited by the trial

court at the evidentiary hearing establishes that Decedent was elderly,

depressed, and had documented dementia; he arrived at the Facility directly

from the hospital, alone, and burdened by recently accepting that he was not

able to care for himself any longer; the arbitration provision was buried deep

within a lengthy admission agreement that took forty-five minutes to an hour

to complete; the Facility was one of few that had an opening and accepted his

insurance, thus rendering him economically constrained to agree to the

Facility’s terms, which were non-negotiable and not presented with an option

to decline or to revoke agreement upon further reflection.6 See N.T.

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6 The Facility contends that the trial court’s finding that Decedent knew that
he needed medical care and would not receive it if he did not sign the
Admission Agreement, thereby agreeing to the arbitration provision, was
“contradicted by Ms. Calandrelli’s testimony that [Decedent] would not have
been discharged if he failed to sign the Admission Agreement.” The Facility’s

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Evidentiary Hearing, 7/30/19, at 45-47 (describing Decedent’s condition on

admission); id. at 79-80, 95 (concerning Decedent’s need for professional

assistance and lack of options); id. at 121 (Ms. Calandrelli testifying that she

did not tell residents that the arbitration agreement was mandatory or

voluntary). See also Admission Agreement, 3/27/15, at 16 (containing no

statement that the agreement to arbitrate is voluntary).

As to its substance, the provision purported to require binding

arbitration only of claims brought by Decedent without reciprocally requiring

the Facility to waive its jury trial rights in any claims it might have under the

agreement. Moreover, Article XVII of the admission agreement, under

miscellaneous provisions, specified that the Facility retained the right to

“change any or all terms and conditions of the Agreement at any time,” that

a resident’s failure to execute a modified agreement would constitute a

material breach of the Agreement, and that such would terminate the

Agreement and subject the resident to transfer or discharge.7 See Admission

Agreement, 3/27/15, at 18.

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brief at 48. The Facility neglects to acknowledge that Ms. Calandrelli conceded
that she never shared the information that the agreement was voluntary with
Decedent or any other new patient. See N.T. Evidentiary Hearing, 7/30/19,
at 121-22.

7 Although the trial court did not rely upon Article XVII of the admission
agreement, which by its terms is applicable to the arbitration provision, in its
finding of substantive unconscionability, we reiterate that the ultimate
question is one of law, to which we apply a de novo, plenary review. See

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In our view, the trial court’s contrast of the sparse, one-sided arbitration

provision included in Decedent’s agreement that was never disclosed to

Decedent as voluntary with the detailed, stand-alone, voluntary arbitration

agreements at issue in Cardinal and MacPherson did not amount to an

improper litmus test. Rather, it served to highlight why the trial court’s

unconscionability finding in this case should not be overturned as were the

findings in those cases.

In sum, the Facility offered a classic contract of adhesion to a vulnerable

man in need of medical assistance, not as a voluntary agreement but as a

requirement for his admission. The arbitration agreement unreasonably

favored the Facility, not requiring it to waive any litigation rights and allowing

it to unilaterally change the terms and evict Decedent if he did not accept the

modification. The trial court did not err, abuse its discretion, or violate the

FAA in concluding that the arbitration agreement herein was invalid based

upon the generally applicable contract defense of unconscionability. As there

was no valid agreement to arbitrate, the trial court properly overruled

Defendants’ preliminary objections.8

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Cardinal v. Kindred Healthcare, Inc., 155 A.3d 46, 50 (Pa.Super. 2017).
As such, we are not bound by the trial court’s rationale.

8 Given our conclusion that the trial court did not err or abuse its discretion
of finding that there was no valid agreement to arbitrate based upon the
unconscionability of the arbitration provision proffered by the Facility, we need
not consider the propriety of the trial court’s determination that there was no
meeting of the minds due to Decedent’s poor vision.

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Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 3/5/2021

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