Rockledge NH, LLC v. Miley Ex Rel. Miley ( 2017 )

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FIFTH DISTRICT
NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
ROCKLEDGE NH, LLC, GREYSTONE
HEALTHCARE MANAGEMENT CORP.
AND JULIE D. MORRIS (AS ROCKLEDGE
HEALTH AND REHABILITATION CENTER),
Appellants,
v. Case No. 5D16-812
MARY ELIZABETH MILEY, BY AND
THROUGH, BRUCE W. MILEY,
ATTORNEY IN FACT,
Appellee.
________________________________/
Opinion filed May 19, 2017
Non-Final Appeal from the Circuit Court
for Brevard County,
George B. Turner, Judge.
Thomas A. Valdez, Karen M. Shimonsky,
and Jade M. Gummer, of Quintairos,
Prieto, Wood & Boyer, P.A., Tampa, for
Appellants.
Megan L. Gisclar, and Joanna Greber
Dettloff, of Wilkes & McHugh, P.A., Tampa,
for Appellee.
EVANDER, J.
Rockledge NH, LLC, Greystone Healthcare Management Corp., and Julie D.
Morris (“Appellants”) appeal an order denying their motion to compel arbitration. We
conclude that the arbitration agreement at issue contains an attorneys’ fee provision that
violates public policy. However, because the attorneys’ fee provision could be properly
severed from the arbitration agreement, it was error for the trial court to deny the motion
to compel arbitration.
In September 2013, Mary Miley was admitted to Rockledge Health and
Rehabilitation Center (“the facility”). During her admission process, Miley signed an
admission agreement that included an arbitration provision:
The facility and the resident or the resident’s
authorized representative recognize that future
disagreements or disputes may arise and these parties both
wish to agree now, in advance, to submit any disputes which
may arise between the parties which they cannot otherwise
resolve to binding arbitration instead of court litigation. The
parties believe binding arbitration to be a speedy and
economical alternative to what is generally a more protracted,
more expensive, more public and more unpredictable means
of resolving disputes. The parties hereto have entered into
the attached arbitration agreement which is hereby
incorporated by reference.
The foregoing arbitration clause does not apply to
actions brought by the facility to collect accounts receivable,
unless specifically set forth in writing in a separate instrument.
Attached to the admission agreement and incorporated by reference was an
“Addendum to Admission Agreement Optional Arbitration Agreement,” wherein the
parties agreed to resolve any disputes related to Miley’s stay at the facility by arbitration.
The arbitration agreement contained a fee provision that provided that each party would
be responsible for its own attorneys’ fees. Finally, the arbitration agreement contained
the following severability clause:
The foregoing notwithstanding, the Parties agree that
all of the provisions contained in this Agreement are
severable. In the event any provision of the agreement, or
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portion thereof, or any rule incorporated by reference in the
agreement, is held to be invalid by a court of competent
jurisdiction, this agreement shall be interpreted as if the invalid
provision or portion was not contained herein, and the
remaining provisions of the agreement will remain in full force
and effect. This agreement to arbitrate will not fail because
any part, clause or provision hereof is held to be indefinite or
invalid.
In June 2015, Miley, by and through her attorney-in-fact (and husband), Bruce
Miley, sued the facility owner—Rockledge NH, LLC, the facility management company—
Greystone Healthcare Management Corp., and the facility administrator—Julie Morris.
The four-count complaint included a count for violation of Florida’s Nursing Home
Residential Rights Act, sections 400.022-.023, Florida Statutes (2013), two counts for
violation of Florida’s Adult Protective Services Act, section 415.1111, Florida Statutes
(2013), and one count for breach of fiduciary duty.
Appellants responded to the complaint by filing a Motion to Dismiss and to Compel
Arbitration. The trial court denied the motion, finding that the attorneys’ fee provision
violated public policy because it effectively “replaced” the prevailing party provision set
forth in section 415.1111 with a provision requiring each party to be responsible for its
own attorneys’ fees. The trial court further found that the attorneys’ fee provision was not
severable. This appeal followed.
Florida’s Adult Protective Services Act is remedial in nature. Hochbaum v. Palm
Garden of Winter Haven, LLC, 201 So. 3d 218, 220 (Fla. 2d DCA 2016). Accordingly, an
arbitration agreement provision that purports to preclude application of the Act’s prevailing
party fee provision is unenforceable because it violates public policy. See id. at 221(holding that arbitration agreement that limits statutory remedy of attorneys’ fees pursuant
to section 415.1111 violates public policy).
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Based on the determination that the arbitration agreement attorneys’ fee provision
violates public policy, we must next determine whether the provision is severable. Here,
the parties’ arbitration agreement contained a severability clause expressly providing that
in the event a provision in the agreement was determined to be invalid, the agreement
was to be interpreted “as if the invalid provision or portion was not contained herein, and
the remaining provisions of the agreement [would] remain in full force and effect.”
The existence of a severability clause is not dispositive of whether a void clause
invalidates the entire arbitration agreement. Estate of Novosett v. Arc Villages II, LLC,
189 So. 3d 895, 896 (Fla. 5th DCA 2016). Rather, the controlling issue is whether an
offending clause goes to “the very essence of the agreement.” Shotts v. OP Winterhaven,
Inc., 86 So. 3d 456, 459, 478 (Fla. 2011); Estate of Novosett, 189 So. 3d at 896. On the
other hand, a contract provision can be severed from a bilateral contract “where the illegal
portion of the contract does not go to its essence, and where, with the illegal portion
eliminated, there still remains of the contract valid legal promises on one side which are
wholly supported by valid legal promises on the other.” Shotts, 86 So. 3d at 475.
In Hochbaum, our sister court was similarly confronted with an arbitration
agreement between a nursing home and one of its residents that contained an attorneys’
fee provision that was inconsistent with the prevailing party attorneys’ fee provision set
forth in section 415.1111. The Hochbaum court concluded that the attorneys’ fees
provision did not go to the essence of the parties’ agreement:
Here, the offending provision deals only with attorneys’
fees. The provision does not require the arbitration to be
conducted in accordance with certain rules, and it does not
limit the compensatory or punitive damages that Hochbaum
may recover in arbitration. . . . It is clear from the agreements
in this case that the parties agreed to bind themselves to
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arbitration for any disputes arising out of Donald Hochbaum’s
residency at the nursing home. The attorneys’ fees provision
does not go to the heart of the contracts, and severance of the
attorneys’ fees provision would not require a drastic rewriting
of the agreements and would preserve the intent of the parties
to adjudicate their disputes in arbitration.
Hochbaum, 201 So. 3d at 223 (citations omitted).
We agree with the reasoning of the Hochbaum court quoted above.1 Because the
offending attorneys’ fee provision was severable from the arbitration agreement, we
conclude that the trial court erred in denying the motion to compel arbitration.
REVERSED and REMANDED.
BERGER and EDWARDS, JJ., concur.
1 In Hochbaum, the arbitration agreements at issue did not contain a severability
clause. We do not address the question of whether we would have reached a different
result in this case in the absence of a severability clause.
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