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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
COLLEEN M. BAUER, AS EXECUTRIX FOR IN THE SUPERIOR COURT OF
THE ESTATE OF IRENE C. KARLOWICZ, PENNSYLVANIA
DECEASED
Appellee
v.
GOLDEN GATE NATIONAL SENIOR CARE,
LLC; GGNSC UNIONTOWN, LP D/B/A
GOLDEN LIVING CENTER-UNIONTOWN;
GPH UNIONTOWN, LP; GGNSC
UNIONTOWN GP, LLC; GGNSC
HOLDINGS, LLC; GGNSC EQUITY
HOLDINGS, LLC; GGNSC
ADMINISTRATIVE SERVICES, LLC;
GGNSC CLINICAL SERVICES, LLC;
GOLDEN GATE ANCILLARY, LLC; JOYCE
HOCH, NHA; AND DENISE CURRY, RVP,
Appellants No. 1252 WDA 2015
Appeal from the Order Entered July 30, 2015
In the Court of Common Pleas of Fayette County
Civil Division at No(s): 2473 OF 2014 GD
BEFORE: BOWES, DUBOW AND MUSMANNO, JJ.
MEMORANDUM BY BOWES, J: FILED NOVEMBER 07, 2016
Golden Gate National Senior Care, LLC, GGNSC Uniontown, LP d/b/a
Golden Living Center-Uniontown, GPH Uniontown, LP, GGNSC Uniontown GP,
LLC; GGNSC Holdings, LLC, GGNSC Equity Holdings, LLC, GGNSC
Administrative Services, LLC, GGNSC Clinical Services, LLC, Golden Cate
Ancillary, LLC, Joyce Hoch, NHA, and Denise Curry, RVP (collectively “Golden
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Gate”) appeal from the July 30, 2015 order overruling their preliminary
objections seeking to compel arbitration. We reverse the order based on the
Supreme Court’s recent decision in Taylor v. Extendicare Health
Facilities, Inc., 2016 Pa. LEXIS 2166 (Pa. September 28, 2016), and
remand to permit the parties to engage in discovery necessary to enable the
trial court to determine the validity and enforceability of the alternative
dispute resolution (“ADR”) Agreement.
Appellee Colleen M. Bauer (“Executrix”) commenced this wrongful
death and survival action against Golden Gate by writ of summons on
December 1, 2014. She subsequently filed a complaint seeking both
compensatory and punitive damages for the injuries and death of Irene C.
Karlowicz (“Decedent”). Golden Gate filed preliminary objections
challenging, inter alia, the court’s subject matter jurisdiction and seeking to
transfer the case to arbitration pursuant to an arbitration agreement
(“Agreement”) signed by Decedent when she was admitted to the facility.1
Executrix filed a response in opposition in which she maintained that the
Agreement was unenforceable and/or unconscionable under state contract
law principles. Specifically, she alleged that the Decedent lacked the legal
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1
On July 30, 2015, at the hearing on preliminary objections, Golden Gate
withdrew all preliminary objections except those related to arbitration,
reserving the right to present them later as motions in limine or summary
judgment.
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capacity to act when she signed the agreement; that she did so unknowingly
and involuntarily; that it was not binding on wrongful death claimants; that
it was void a) as against public policy, b) lacked consideration, c) was
procured by fraud, d) was signed under duress, e) was the product of undue
influence, and numerous other contract defenses.
Shortly thereafter, this Court decided Taylor v. Extendicare Health
Facilities, Inc., 113 A.3d 317 (Pa.Super. 2015). The trial court herein
applied Pisano v. Extendicare, 77 A.3d 651 (Pa.Super. 2013), and held
that wrongful death beneficiaries were not bound by Decedent’s agreement
to arbitrate. Then, acknowledging the potential for inconsistent liability and
duplicative damages determinations if the survival action was severed and
sent to arbitration, the court applied Taylor, overruled the preliminary
objections, and held that the wrongful death and survival actions had to be
consolidated in court. Golden Gate timely appealed and presents two issues
for our review:
1. Whether the trial court erred by refusing to sever Appellee’s
survival action from her wrongful death action and compel
arbitration of Appellee’s survival action?
2. Whether the trial court erred by refusing to compel all of
Plaintiff’s claims against Appellants to arbitration?
Appellants’ brief at 4.
Appellants’ first issue is a challenge to this Court’s holding in Taylor v.
Extendicare Health Facilities, Inc, 113 A.3d 317 (Pa.Super. 2015),
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allowance of appeal granted 122 A.3d 1036 (Pa. 2015), rev’d 2016 Pa.LEXIS
2166 (Pa. 2016), that the Federal Arbitration Act (“FAA”) does not pre-empt
Pa.R.C.P. 213(e) and 42 Pa.C.S. § 8301, and that under Pennsylvania law,
wrongful death and survival actions must be consolidated for trial. On
September 28, 2016, our Supreme Court agreed with the position advocated
by Golden Gate herein, finding Rule 213(e) pre-empted by the FAA.
Consequently, the FAA controls and supersedes the state requirement that
the two actions be consolidated, opening the door to bifurcation and
resolution in two different forums. However, the Taylor Court stopped short
of transferring the survival action to arbitration, recognizing that the
plaintiffs had not had the opportunity to challenge the validity and
enforceability of the arbitration agreement in accord with generally
applicable contract defenses and the FAA’s savings clause.2 Hence, our High
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2
Section 2 of the FAA provides:
§ 2. Validity, irrevocability, and enforcement of
agreements to arbitrate
A written provision in any maritime transaction or a contract
evidencing a transaction involving commerce to settle by
arbitration a controversy thereafter arising out of such contract
or transaction, or the refusal to perform the whole or any part
thereof, or an agreement in writing to submit to arbitration an
existing controversy arising out of such a contract, transaction,
or refusal, shall be valid, irrevocable, and enforceable, save
upon such grounds as exist at law or in equity for the
revocation of any contract.
(Footnote Continued Next Page)
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Court in Taylor remanded the matter to the trial court for the resolution of
these issues prior to determining if arbitration of the survival claim was
mandated.
The instant case is in precisely the same procedural posture as Taylor.
As outlined above, Executrix alleged that the ADR Agreement was
“unenforceable, void, unconscionable, and/or a contract of adhesion.”
Plaintiff’s Response in Opposition to Defendants’ Preliminary Objections
Raising Questions of Fact, 3/13/15, at 4 ¶¶21-23.3 She also raised the
unenforceability of the clause on the above-enumerated contractual
grounds. As in Taylor, Executrix did not have the opportunity to offer proof
of these defenses and the trial court did not rule on their viability.
Accordingly, we must remand to the trial court for the same inquiry
mandated by the Supreme Court in Taylor: whether, under the FAA’s
savings clause and generally applicable contract defenses, the ADR
Agreement at issue is valid and enforceable.
_______________________
(Footnote Continued)
9 U.S.C.A. § 2 (emphasis added).
3
We note that the Centers for Medicare and Medicaid Services (“CMS”)
issued a final rule effective November 28, 2016, prohibiting facilities that
receive Medicare and Medicaid funding from using pre-dispute binding
arbitration agreements. Such facilities must not enter into an agreement for
binding arbitration with a resident or his or her representative until after a
dispute arises between the parties. 42 CFR § 483.70.
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We turn to Golden Gate’s second issue, which was not present in
Taylor. Golden Gate contends that Pisano created a categorical prohibition
of arbitration of wrongful death claims, and hence, that it is pre-empted by
the FAA. This issue is waived. Although Pisano had been decided on
August 13, 2013, and the Supreme Court of Pennsylvania denied allowance
of appeal on February 25, 2014, which was duly noted by Golden Gate in its
brief in support of its preliminary objections in this case, Golden Gate did not
argue below that Pisano was pre-empted by the FAA.4 See also N.T. Oral
Argument, 7/28/15, at 5. In fact, Golden Gate acknowledged the holding in
Pisano and argued that, “[a]t a minimum, the Court must direct that any
survival claims be arbitrated, as the Pisano decision did not preclude the
same and severance is required by the Federal Arbitration Act.” Brief in
Support of Preliminary Objections to Plaintiff’s Complaint, 2/25/15, at 8 n.2.
The trial court overruled the preliminary objections based upon this Court’s
decision in Taylor.
In its concise statement of errors complained of on appeal, although
Golden Gate charged generally that the trial court erred in refusing to
transfer the claims to arbitration, or at least to sever the survival action from
the wrongful death action and transfer it to arbitration in light of Pisano, it
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4
Such an argument, had it been articulated in the lower court, offered a
basis for avoiding the then-binding effect of our decision in Taylor v.
Extendicare Health Services, Inc., 113 A.3d 317 (Pa.Super. 2015).
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did not challenge Pisano on the basis that its holding was pre-empted by
the FAA.5
Thus, the preemption issue vis-à-vis Pisano is waived on two
grounds: Golden Gate did not raise it below, see Pa.R.A.P. 302(a) (“Issues
not raised in the lower court are waived and cannot be raised for the first
time on appeal.”), and it did not identify this position as error in its Pa.R.A.P.
1925(b) concise statement. See Pa.R.A.P. 1925(b)(4)(vii) (“Issues not
included in the Statement and/or not raised in accordance with the
provisions of this paragraph (b)(4) are waived.”).
Order reversed; case remanded to the trial court for further
proceedings consistent with our Supreme Court’s recent decision in Taylor
and this memorandum opinion.
Case remanded. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/7/2016
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5
Golden Gate expressly reserved the right to challenge on appeal this
Court’s decision in Taylor v. Extendicare Health Facilities, Inc., 113 A.3d
317 (Pa.Super. 2015). See Concise Statement of Errors Complained of on
Appeal, 9/8/15, at 1 n.1. No reservation was made as to our decision in
Pisano v. Extendicare, 77 A.3d 651 (Pa.Super. 2013).
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