Clanton v. Oakbrook Healthcare Centre, Ltd. , 2022 IL App (1st) 210984 ( 2022 )

2022 IL App (1st) 210984No. 1-21-0984
FIRST DIVISION
July 18, 2022
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
______________________________________________________________________________
NANCY CLANTON, as Independent Administrator of the ) Appeal from the
Estate of Laurel J. Jansen, Deceased, ) Circuit Court of
) Cook County.
Plaintiff-Appellee, )
)
v. )
) No. 2020 L 006460
OAKBROOK HEALTHCARE CENTRE, LTD., an )
Illinois Corporation, d/b/a Oak Brook Care; )
LANCASTER, LTD., an Illinois Corporation; and MAY )
FLOR ANDORA, ) Honorable
) Patricia O. Sheahan,
Defendants-Appellants. ) Judge, presiding.
JUSTICE PUCINSKI delivered the judgment of the court, with opinion.
Presiding Justice Hyman and Justice Walker concurred in the judgment and opinion.
OPINION
¶1 Plaintiff Nancy Clanton, as administrator for the estate of decedent Laurel Jansen, filed an
eight-count complaint against defendants Oakbrook Healthcare Centre, Ltd., d/b/a Oak Brook
Care (Oakbrook); Lancaster, Ltd. (Lancaster), and May Flor Andora, RN, alleging defendants’
negligence while decedent was a resident of a skilled nursing facility. Defendants subsequently
moved to compel mediation or arbitration with respect to the counts against Oakbrook and
No. 1-21-0984
Andora, premised on the Nursing Home Care Act (210 ILCS 45/1-101 et seq. (West 2018))
(count I) and the Survival Act (755 ILCS 5/27-6 (West 2018)) (counts II, VI, and VIII).
Defendants relied on the arbitration provision of the “Contract Between Resident and Facility,”
executed by Debbie Kotalik, a daughter of decedent who purportedly was the holder of
decedent’s healthcare power of attorney. Defendants moved to stay the remaining counts of
the complaint, which consisted of counts under the Wrongful Death Act (740 ILCS 180/0.01
et seq.(West 2018)) against Oakbrook and Andora (counts III and VII), as well as the counts
against the remaining defendant, Lancaster, under the Survival Act and Wrongful Death Act
(counts IV and V). The circuit court denied defendants’ motion in its entirety, finding that the
contract provision regarding arbitration was substantively unconscionable.
¶2 On appeal, defendants argue that the trial court erred in finding the contract was
unconscionable and that even if a portion of the contract was unenforceable, it was severable
from the arbitration agreement. Plaintiff argues that defendants waived the ability to rely on
the contract, the circuit court correctly found the arbitration provision was substantively
unconscionable, and that the arbitration provision is otherwise unenforceable on a number of
other grounds. Among these, plaintiff contends for the first time on appeal that since the
contract stated that it terminated “immediately upon the resident’s death,” the arbitration
agreement therein also terminated and was ineffective after decedent’s death.
¶3 For the following reasons, we conclude that although defendants’ litigation conduct did not
waive its right to invoke the arbitration provision, the agreement was no longer enforceable,
given the contract’s explicit language that it terminated upon decedent’s death. For that reason,
we affirm the trial court’s denial of defendants’ motion to compel arbitration with respect to
the Nursing Home Care Act count against Oakbrook (count I) as well as the negligence-based
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Survival Act counts against Oakbrook and Andora (counts II, VI and VIII). As defendants have
no right to compel arbitration, we also affirm the denial of their request to stay the Wrongful
Death Act counts against Oakbrook and Andora (counts III and VII) pending arbitration. As
defendants raise no argument regarding the trial court’s denial of defendants’ separate request
to stay the two remaining counts against Lancaster (counts IV and V), we also affirm that
portion of the trial court’s order.
¶4 I. BACKGROUND
¶5 Plaintiff Clanton is decedent’s daughter. The underlying lawsuit arises out of decedent’s
stay at a skilled nursing facility allegedly owned and operated by defendants Oakbrook and
Lancaster. Defendant Andora was allegedly employed as a nurse at the facility and was
allegedly “in charge of” decedent’s care and treatment.
¶6 According to plaintiff’s complaint, decedent, who was born in 1931, resided at the facility
from “approximately July 19, 2019 through September 17, 2019 exclusive of intermittent
hospitalizations.” Decedent allegedly had a number of unwitnessed falls in August 2019, after
which her condition deteriorated, and she was hospitalized. Decedent died on September 30,
2019.
¶7 Plaintiff filed the complaint on June 16, 2020. Plaintiff pleaded four counts against
Oakbrook. Count I pleaded a violation of the Nursing Home Care Act (210 ILCS 45/1-101
(West 2018)). Count II asserted a negligence claim under the Survival Act, under which
“actions to recover damages for an injury to the person” survive that person’s death. 755 ILCS
5/27-6 (West 2018)). Count III asserted a negligence claim under the Wrongful Death Act (740
ILCS 180/1 et seq. (West 2018). Count VIII asserted a “res ipsa loquitur” negligence claim
against Oakbrook, which also specified that it was brought under the Survival Act. In addition
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to these four counts against Oakbrook, the complaint also included Survival Act and Wrongful
Death counts against both Lancaster (counts IV and V) and Andora (counts VI and VII).
¶8 Defendants’ counsel filed an appearance on September 24, 2020, and moved for extension
of time to answer. 1 Plaintiff served discovery requests, including requests for documents, on
October 13, 2020. On October 15, 2020, the court entered a Case Management Order that
required Rule 213 interrogatories and Rule 214 document requests to be issued by December
16, 2020, and for such discovery to be completed by April 16, 2021.
¶9 Defendants filed their answer and affirmative defenses on November 17, 2020. Defendants
subsequently issued interrogatories and document requests to plaintiff. The record reflects that
on May 10, 2021, Oakbrook served its answers to plaintiff’s interrogatories and produced
documents.
¶ 10 On May 20, 2021, defendants’ counsel produced additional documents to plaintiff’s
counsel, including the “Contract Between Resident and Facility” (the contract), whose
provisions are at issue in this appeal. Defense counsel provided a letter with the production
stating that the contract was provided to defense counsel by Oakbrook two days earlier.
However, defense counsel did not include an affidavit from any Oakbrook manager or
representative, explaining how the contract was found or why it was not located earlier.
Defense counsel’s letter informed plaintiff’s counsel that the contract contained an “arbitration
agreement” and that defendants planned to “file a motion to enforce the arbitration agreement.”
1
The same law firm represented Oakbrook, Lancaster, and Andora in the circuit court and represents
all three defendants in this appeal.
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¶ 11 A. The Contract
¶ 12 The contract reflects that it was entered into by the decedent as “Resident” and Oak Brook
Healthcare & Rehabilitation Centre, Ltd. as the “Facility.” The signature block for the contract
reflects that it was signed by Paula Park, as “Facility Representative” on August 9, 2019. The
contract was signed on behalf of decedent by “Debbie Kotalik (POA).” According to plaintiff’s
submissions, in 2009 decedent executed a statutory short form healthcare power of attorney
(POA) appointing Kotalik. 2
¶ 13 The terms of the contract are set forth in a number of sections. Of particular relevance to
this appeal, section “E” of the contract states as follows:
“E. Dispute Resolution/Punitive Damages
1. Civil Disputes Subject To This Paragraph. Resident and Facility agree that all civil
claims arising in any way out of this Agreement, other than claims by Facility to collect
unpaid bills for services rendered, or to involuntarily discharge Resident, shall be resolved
exclusively through mandatory mediation, and, if such mediation does not resolve the
dispute, through binding arbitration using the commercial mediation and arbitration rules
and procedures of JAMS/Endispute in its Chicago, Illinois office.
2. Punitive/Treble Damages Waived. Resident and Facility also agree that both
Resident and Facility shall seek only actual damages in any such mediation or arbitration,
and that neither of them will pursue any claim for punitive damages, treble damages or any
2
In the trial court, plaintiff submitted a copy of the healthcare POA in response to defendants’
motion to compel arbitration, but defendants did not submit any affidavit from Kotalik attesting that the
healthcare POA was authentic or that she had executed the contract as the holder of decedent’s healthcare
POA. In any event, the authenticity of the healthcare POA need not be resolved to decide this appeal.
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other type of damages the purpose of which are to punish one party in an amount greater
than the actual damages caused by the other party.”
Section “F” of the contract sets forth circumstances that terminate the contract. Among these,
it specifies that “If the resident is compelled by a change in physical or mental health to leave
the facility, this Contract shall terminate on 7 days’ notice or immediately upon the resident’s
death.”
¶ 14 B. Defendants’ Motion
¶ 15 On May 28, 2021 (eight days after the contract was produced), defendants filed a “Motion
to Compel Mediation and/or Arbitration And Dismiss with Prejudice Counts I, II, VI, and VIII
and to Stay Prosecution of Plaintiff’s Wrongful Death Claims.” Defendants argued that the
contract required mediation or arbitration of the complaint’s counts against Oakbrook and
Andora, with the exception of the Wrongful Death Act claims. Defendants acknowledged that,
pursuant to our supreme court’s decision in Carter v. SSC Odin Operating Co., 2012 IL
113204, the contract’s arbitration provision did not apply to Wrongful Death Act claims, as
such claims are brought on behalf of the decedent’s relatives and not for the benefit of the
decedent’s estate. Defendants argued that the Wrongful Death Act counts against Oakbrook
and Andora should be stayed pending mediation or arbitration of the other claims.
¶ 16 Defendants’ motion separately sought to stay the two counts against Lancaster (counts IV
and V), maintaining that discovery would show that Lancaster “did not own, operate, or
manage” the facility. Defendants averred that once “appropriate discovery” had been
completed, Lancaster “intends to address such non-involvement and seek dismissal of Counts
IV and V.” Defendants further argued that since Lancaster’s “non-involvement may be
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addressed at mediation and/or arbitration” a stay of the counts against Lancaster would
promote judicial economy.
¶ 17 The motion thus included two separate stay requests with respect to different defendants
and on different grounds. First, defendants requested a stay of the Wrongful Death Act counts
against Oakbrook and Andora (counts III and VII) on the basis that the other claims against
those two parties should be mediated or arbitrated. Second, defendants separately requested a
stay of both counts asserted against Lancaster (counts IV and V) on the basis that Lancaster
had no involvement in the factual allegations underlying the complaint.
¶ 18 Elsewhere in the motion, defendants argued they had not waived their right to invoke the
arbitration provision of the contract, since they had “not submitted any arbitrable issue to the
Court for decision.” They asserted that the delay in filing the motion was not due to any lack
of diligence, but was due to the recent production of the contract by Oakbrook to defense
counsel.
¶ 19 In support of the motion to compel arbitration, defendants submitted the affidavit of Jina
Lebert-Davies, an administrator of the facility. She averred that, when she learned of plaintiff’s
lawsuit in August 2020, “the facility was in the midst of responding to the COVID crisis and
my attention was focused on keeping the facility’s residents and employees safe and
responding to the pandemic.” She stated that the contract was “inadvertently omitted from the
documents originally provided to counsel” but was provided to counsel on May 17, 2021
“immediately” after she located it.
¶ 20 Plaintiff’s response opposed the motion on several grounds. First, plaintiff urged that
defendants had waived their right to arbitrate because they had “extensively participated” in
the litigation for nearly one year. Plaintiff noted that defendants had answered the complaint,
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“filed multiple sets of discovery,” and issued subpoenas. Plaintiff claimed that defendants
“waited until after the Plaintiff had answered all written discovery to try to enforce the
arbitration contract.”
¶ 21 Second, plaintiff argued that Kotalik lacked authority to execute an arbitration agreement
on decedent’s behalf. Plaintiff asserted that decedent executed a POA for health care,
appointing Kotalik, but that decedent separately appointed Clanton (plaintiff herein) as POA
for property. As exhibits, plaintiff attached a copy of an “Illinois Statutory Short Form Power
of Attorney for Health Care” appointing Kotalik and a copy of an Illinois Statutory Short Form
Power of Attorney for Property” appointing Clanton, which reflected that the documents were
both executed in January 2009. Plaintiff argued that the separate POAs indicated that decedent
wished to divide responsibilities between her daughters, and that Kotalik’s authority to make
healthcare decisions did not include “authority to bind [decedent] to an arbitration agreement.”
¶ 22 Plaintiff separately urged that the arbitration provision was procedurally unconscionable
because Kotalik lacked bargaining power and “had no opportunity to participate in the
agreement’s drafting.” Plaintiff also contended that the arbitration provision was substantively
unconscionable because it sought to deprive residents of their statutory right to recover attorney
fees for violations of the Nursing Home Care Act. See 210 ILCS 45/3-602 (West 2020).
¶ 23 In their reply, defendants maintained that they had not taken any actions inconsistent with
an intent to arbitrate, that they had promptly produced the contract once it was discovered, and
that they otherwise acted in good faith in responding to plaintiff’s discovery requests.
Defendants otherwise argued that Kotalik had authority to execute the contract and that Kotalik
was given the opportunity to ask questions about the contract before signing it. Defendants
disputed that the arbitration provision sought to extinguish plaintiff’s ability to recover attorney
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fees and costs under the Nursing Home Care Act. On this point, defendants noted that JAMS
rules permit an arbitrator to “grant any remedy or relief allowed by the Parties’ Agreement or
law” and that an award “may allocate attorneys’ fees and expenses *** if provided by the
Parties’ Agreement or allowed by applicable law.”
¶ 24 C. The Trial Court Denies Defendants’ Motion
¶ 25 On July 14, 2021, the trial court issued an order denying defendant’s motion. In explaining
its reasoning, the court first rejected plaintiff’s contention that defendants waived the ability to
seek arbitration or mediation. The court acknowledged that defendants had answered the
complaint, served interrogatories, and responded to written discovery, yet it found those
actions were not “inconsistent with defendants’ right to rely on the mediation and/or arbitration
clause.” The court also noted that it was “sympathetic to the impact the Covid-19 pandemic
had on nursing home facilities.” The court emphasized that, only two days after receiving the
contract, defense counsel produced it and notified plaintiff of their intent to file the motion to
compel arbitration.
¶ 26 The court also rejected the plaintiff’s argument that the arbitration provision was
procedurally unconscionable. The court noted that the relevant language was “in the same font
and size of the other clauses of the contract” and that its language was “clear and
unambiguous.”
¶ 27 The court also found that Kotalik had the “opportunity to ask questions before signing the
contract.”
¶ 28 The trial court nonetheless held that the arbitration provision was “unenforceable as
substantively unconscionable.” Citing the Fifth District’s decision in Glass v. Burkett, 64 Ill.
App. 3d 676, 683 (1978), the trial court found that “[b]y limiting plaintiff’s ability to recover
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punitive damages, the provision effectively limits plaintiff’s ability to recover attorney’s fees.”
The court found the arbitration provision was “an attempt to nullify the primary reason for the
attorneys’ fees provision of the Illinois Nursing Home Care Act,” i.e., to “give residents
incentive to bring claims to police nursing homes.” The court thus found the arbitration clause
substantively unconscionable because it attempted to extinguish the statutory right to attorney
fees.
¶ 29 The trial court proceeded to state that, “in its discretion,” it declined to sever the limitation
on damages from the rest of the arbitration agreement. That is, the court held that “the
offending provision renders the entirety of the mediation and/or arbitration clause
unenforceable.” The court thus denied the motion to compel mediation or arbitration of any of
counts I, II, VI, or VIII. The court also denied as moot the defendants’ request to stay any of
the remaining counts.
¶ 30 On August 13, 2021, defendants filed a notice of interlocutory appeal from the denial of
the motion.
¶ 31 II. ANALYSIS
¶ 32 On appeal, defendants raise two lines of argument to challenge the court’s denial of their
motion to compel arbitration. First, they contend that the trial court erred in concluding that
the contract’s language on punitive damages was substantively unconscionable as a bar against
the recovery of attorney fees pursuant to the Nursing Home Care Act. That is, defendants claim
that the language regarding “punitive damages” did not affect the statutory right to recover
attorney fees, as they are distinct from punitive damages.
¶ 33 Defendants alternatively argue that, even assuming the limitation on damages was
substantively unconscionable, the trial court erred in finding that it rendered the entire
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arbitration provision unenforceable. That is, they argue that the court should have severed the
purportedly offending limitation on damages but otherwise enforced the language compelling
mediation or arbitration.
¶ 34 In response, plaintiff suggests a number of grounds upon which we should affirm the denial
of the defendants’ motion, including grounds not discussed in the trial court’s order. First,
plaintiff maintains the trial court correctly found the contract’s language on punitive damages
was substantively unconscionable because it limited the right to recover statutory attorney fees.
¶ 35 Plaintiff otherwise argues that defendants’ participation in the litigation waived their right
to rely on the arbitration provision. Plaintiff further contends that, apart from the damages
limitation, the arbitration provision is otherwise substantively unconscionable because it is
“one-sided” as to which claims are subject to arbitration. Plaintiff independently argues that
we may affirm because (1) the arbitration clause was procedurally unconscionable, (2) Kotalik
lacked authority to enter into the arbitration agreement, or (3) the arbitration agreement was
unenforceable because the entire contract terminated upon the decedent’s death.
¶ 36 For the following reasons, we agree with defendants that their participation in litigation did
not waive their right to move to compel the arbitration. However, we conclude that the
arbitration provision was unenforceable, albeit for a different reason than that relied on by the
trial court. Specifically, the contract unequivocally provided that it would terminate
“immediately upon the resident’s death.” In turn, the entire contract, including the arbitration
agreement, was no longer enforceable by the time this action was commenced. For that reason,
we will affirm the denial of defendants’ request to compel arbitration with respect to counts I,
II, VI, and VIII against Oakbrook and Andora, as well as the denial of the request to stay the
Wrongful Death Act counts against those defendants (counts III and VII). Finally, as
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defendants do not raise any argument with respect to the trial court’s denial of the request to
stay the counts against Lancaster (counts IV and V), we affirm that portion of the order.
¶ 37 A. Appellate Jurisdiction
¶ 38 We note that we have jurisdiction pursuant to Illinois Supreme Court Rule 307(a)(1) (eff.
Nov. 1, 2017), which permits a party to appeal from an interlocutory order of the circuit court
“granting, modifying, refusing, dissolving, or refusing to dissolve or modify an injunction.”
“An injunction is a judicial process requiring a party to do a particular thing or refrain from
doing a particular thing.” Herns v. Symphony Jackson Square LLC, 2021 IL App (1st) 201064,
¶ 14 (citing In re A Minor, 127 Ill. 2d 247, 261 (1989)). “An order granting or denying a motion
to compel arbitration is injunctive in nature and is appealable under Rule 307(a)(1).” Id.¶ 39 B. Standard of Review
¶ 40 “A motion to compel arbitration is essentially a section 2-619(a)(9) motion to dismiss or
stay an action in the trial court based on an affirmative matter, the exclusive remedy of
arbitration. [Citation.]” Sturgill v. Santander Consumer USA, Inc., 2016 IL App (5th) 140380,
¶ 21. “Section 2-619(a)(9) allows for a dismissal where the claim is barred by an affirmative
matter that avoids the legal effect of or defeats the claim. (735 ILCS 5/2-619(a)(9) (West
2010)).” Id.¶ 41 “In an appeal from the denial of a motion to compel arbitration without an evidentiary
hearing, our review is de novo.” Id. ¶ 20 (citing Hollingshead v. A.G. Edwards & Sons, Inc.,
396 Ill. App. 3d 1095, 1099 (2009)). This is consistent with the principle that issues of
contractual interpretation, including with respect to arbitration provisions, are reviewed
de novo. Fiala v. Bickford Senior Living Group, LLC, 2015 IL App (2d) 141160, ¶ 17 (“We
review de novo the trial court’s decision on a motion to dismiss pursuant to section 2-619.
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[Citation.] Likewise, the scope of [an] arbitration provision presents a question of contract
interpretation, and this is also reviewed de novo.”); Coe v. BDO Seidman, L.L.P., 2015 IL App
(1st) 142215, ¶ 12 (“An agreement to arbitrate is a matter of contract, and the interpretation of
a contract is a question of law subject to de novo review.”). Thus, de novo review applies, to
the extent the trial court’s conclusions involved issues of contract interpretation rather than
findings of fact.
¶ 42 A different standard applies with respect to the trial court’s determination as to whether
defendants waived their contractual right to arbitrate. “A number of decisions from the First
District of this court have determined an abuse of discretion standard applies to a review of the
circuit court’s decision regarding waiver of arbitration rights. [Citation.]” Bovay v. Sears,
Roebuck & Co., 2013 IL App (1st) 120789, ¶ 24; see also Woods v. Patterson Law Firm, P.C.,
381 Ill. App. 3d 989 (2008) (applying abuse of discretion review to whether defendants waived
right to compel arbitration); Glazer’s Distributors of Illinois, Inc. v. NWS-Illinois, LLC, 376
Ill. App. 3d 411, 423-24 (2007) (following First District precedent applying abuse of discretion
standard). Application of deferential review stems from recognition that the circuit court must
“ ‘engage in a factual inquiry to determine if a party’s actions constitute waiver.’ ” Glazer’s,
376 Ill. App. 3d at 423 (quoting Schroeder Murchie Laya Associates, Ltd. v. 1000 West Lofts,
LLC, 319 Ill. App. 3d 1089, 1093 (2001)).
¶ 43 In sum, “in interlocutory appeals of orders denying a motion to compel arbitration,
questions of law are reviewed de novo, while any findings of fact are reviewed for an abuse of
discretion in light of a proper understanding of the law.” Bovay, 2013 IL App (1st) 120879,
¶ 26. “An abuse of discretion occurs only when the ruling is arbitrary, fanciful, or
unreasonable, or when no reasonable person would take the same view. [Citations.]” Id.- 13 -
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¶ 44 C. Whether Defendants Waived the Right to Rely on the Arbitration Provision
¶ 45 Before addressing the parties’ arguments regarding the content of the contract, we first
address plaintiff’s contention that defendants waived the right to invoke the arbitration clause
because they did not move to compel arbitration until approximately 11 months after plaintiff’s
complaint was filed. Plaintiff points out that defendants’ answer and affirmative defenses filed
on November 2020 did not reference arbitration, and that in the ensuing months defendants
issued subpoenas and served discovery requests. Plaintiff maintains that such actions were
inconsistent with a right to arbitrate and indicated defendants’ abandonment of any such
contractual right.
¶ 46 “While arbitration is a favored method of settling disputes in Illinois, a party may waive
its contractual right to arbitration. [Citation.]” TSP-Hope, Inc. v. Home Innovators of Illinois,
LLC, 382 Ill. App. 3d 1171, 1174 (2008). However, “Illinois courts are reluctant to find a party
waived its contractual right to arbitration. [Citation.]” Id.¶ 47 “Although disfavored, waiver will be found where ‘a party conducts itself in a manner
inconsistent with the arbitration clause, thereby demonstrating an abandonment of that right.’ ”
Koehler v. The Packer Group, Inc., 2016 IL App (1st) 142767, ¶ 22 (quoting Northeast Illinois
Regional Commuter R.R. Corp. v. Chicago Union Co., 358 Ill. App. 3d 985, 996 (2005)). In
deciding whether there was waiver, the “ ‘crucial inquiry’ ” is “ ‘whether the party has acted
inconsistently with its right to arbitrate.’ ” Id. (quoting Glazer’s, 376 Ill. App. 3d at 42). “A
party acts inconsistently with its right to arbitrate when it submits arbitrable issues to a court
for decision. [Citation.]” TSP-Hope, Inc., 382 Ill. App. 3d at 1174. “[T]he operative distinction
between judicial filings and actions that constitute a waiver of the right to compel arbitration
and those that do not is whether, prior to seeking to compel arbitration, the party has placed
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substantive issues before the court.” Watkins v. Mellen, 2016 IL App (3d) 140570, ¶ 15. First
District precedent does not explicitly require prejudice to the other party to find waiver,
although it may be considered. See Woods, 381 Ill. App. 3d at 994 (“Illinois courts also
consider the delay in a party’s assertion of its right to arbitrate and any prejudice the delay
caused the plaintiff. [Citation.]”) 3
¶ 48 Keeping in mind that the trial court’s determination is reviewed for an abuse of discretion
(Glazer’s, 376 Ill. App. 3d at 424) here, we cannot say that the trial court abused its discretion
in determining that defendants did not waive their right to rely on the arbitration provision.
Although defendants answered the complaint and conducted some discovery, they did not
“submit[ ] arbitrable issues to a court for decision. [Citation.]” TSP-Hope, Inc., 382 Ill. App.
3d at 1223. Before filing the motion to compel arbitration, defendants did not ask the court to
rule on any substantive issue. Cf. Midland Funding LLC v. Hilliker, 2016 IL App (5th) 160038,
¶ 29 (finding waiver where party “repeatedly sought a substantive judicial determination of a
disputed issue and a judicial termination of the litigation”). Defendants’ actions were clearly
responsive to the complaint and in compliance with the trial court’s case management order. It
was not unreasonable for the trial court to conclude that such actions were not inconsistent
with defendants’ reliance on the arbitration provision. Moreover, as the trial court noted, the
record reflects that defendants promptly asserted their right to arbitrate after the discovery of
the contract. The trial court apparently found that defendants had not abandoned the right to
arbitrate but diligently pursued it once the contract was discovered.
3
We note that the United States Supreme Court recently held that federal courts cannot condition
a waiver of the right to arbitrate on a showing of prejudice, as the Federal Arbitration Act (9 U.S.C. § 3(2018)) does not authorize federal courts to create an arbitration-specific procedural rule. Morgan v.
Sundance, Inc., ___ U.S. ___, 142 S. Ct. 1708 (2022).
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¶ 49 We note plaintiff’s claims that she suffered prejudice because (1) plaintiff answered
interrogatories, which are not contemplated by JAMS rules, and (2) defendants’ delay
prevented a “speedy resolution” of the dispute. Plaintiff’s prejudice arguments do not convince
us that the trial court was unreasonable in deciding that defendants’ conduct did not amount to
waiver. We note that plaintiff does not articulate how she was prejudiced by responding to the
interrogatories. Moreover, the interrogatories and plaintiff’s responses are not in the record on
appeal, which limits our ability to evaluate the claim of prejudice.
¶ 50 We are also not convinced that the delay resulting from defendants’ motion, filed 11
months after the complaint, is so prejudicial that it was unreasonable for the trial court not to
find waiver. Our precedent indicates that the relevant inquiry is not simply the length of prior
litigation or the number of prior filings by the party seeking arbitration, but whether that party
put substantive issues before the trial court. See, e.g., Bishop v. We Care Hair Development
Corp., 316 Ill. App. 3d 1182, 1192 (2000) (defendants’ two-year delay in seeking arbitration
did not establish waiver where they “did not submit any substantive questions to the trial court
for determination”).
¶ 51 In this case, the record reflects that defendants did not ask the court to make any
determination on the merits before moving to compel arbitration. Further, their submissions
reflect that the delay in filing the motion was due to Oakbrook’s inadvertent failure to discover
the contract earlier. Once it was discovered, defendants promptly produced the contract and
filed their motion. On this record, the trial court could reasonably find that defendants’ actions
were not inconsistent with asserting a right to arbitration. We thus decline to find that the trial
court erred in finding defendants had not waived their right to seek arbitration. Nevertheless,
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as explained below, we proceed to conclude that the arbitration provision was ineffective after
decedent’s death, by operation of the contract’s termination provision.
¶ 52 D. The Contract Expressly Terminated Upon Decedent’s Death, Rendering
the Arbitration Provision Unenforceable
¶ 53 Although plaintiff asserts a number of arguments for why we should find the arbitration
provision unenforceable, we only need discuss one of them to resolve this appeal. Specifically,
we agree with plaintiff that section F of the contract—which provides that the contract shall
terminate “immediately upon the resident’s death”—is dispositive. That is, the entire contract,
including the arbitration agreement, terminated upon decedent’s death.
¶ 54 Plaintiff did not raise this argument in the trial court, yet that does not preclude us from
considering it.
“While an appellant who fails to raise an issue in the trial court waives that issue, an
appellee may raise an issue on review that was not presented to the trial court in order to
sustain the judgment, as long as the factual basis for the issue was before the trial court.
[Citation.]” DOD Technologies v. Mesirow Insurance Services, Inc., 381 Ill. App. 3d 1042,
1050 (2008).
Further, “[w]e can affirm the trial court on any basis that appears in the record, regardless of
whether the trial court relied upon such ground.” (Internal quotation marks omitted.) Cooney v.
Magnabosco, 407 Ill. App. 3d 264, 268 (2011). We will thus consider the merits of this argument.
¶ 55 Plaintiff acknowledges that “the general rule is that a contract survives the death of a party,”
subject to certain exceptions, such as contracts requiring performance from a particular person.
Plaintiff does not argue that the instant contract is a personal performance contract but asserts
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that “the contract did not survive [decedent’s] death because the parties agreed it terminated
upon her death.” That is, defendants have “nothing to enforce because the arbitration clause
ceased to exist” upon decedent’s death.
¶ 56 In response, defendants assert that plaintiff’s interpretation violates the principle that “all
parts of a contract should be constructed harmoniously” to avoid conflicting provisions, and
that there was “no intention for the entire contract to terminate” upon a resident’s death.
According to defendant, the proper application of the termination provision is that “Oakbrook
no longer has to provide services to [decedent], however, lawsuits arising from the care
[decedent] received while at Oakbrook remain enforceable under the Oakbrook Contract.” We
find that defendants’ position is undermined by the unambiguous and unequivocal language of
the termination provision.
¶ 57 As both parties acknowledge, “[t]he general rule is that a contract survives the death of a
party [citation] except *** when the contract requires the continued existence of a particular
person or thing for its performance.” In re Estate of Bajonksi, 129 Ill. App. 3d 361, 366-67
(1984). Regardless of the general rule, we must consider the effect of the clause that the
contract shall terminate “immediately upon the resident’s death,” including whether it renders
the arbitration provisions unenforceable after a resident’s death. We apply these well-settled
principles of contract interpretation:
“In construing a contract, the primary objective is to give effect to the intention of the
parties. [Citation.] The court will first look to the language of the contract itself to
determine the parties’ intent, and the contract must be construed as a whole, viewing each
provision in light of the other provisions. [Citation.] The parties’ intent is not determined
by viewing a clause or provision in isolation, or in looking at detached portions of the
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contract. [Citation.] If the words in the contract are clear and unambiguous, they must be
given their plain, ordinary and popular meaning. [Citation.] A court will not interpret a
contract in a manner that would nullify or render provisions meaningless, or in a way that
is contrary to the plain and obvious meaning of the language used.” (Internal quotation
marks omitted.) Insurance Benefit Group, Inc. v. Guarantee Trust Life Insurance Co., 2017
IL App (1st) 162808, ¶ 38.
¶ 58 In this case, Section F. 1 stated “this Contract shall terminate on 7 days’ notice or
immediately upon the resident’s death.” We find (and defendants do not dispute) that this
language is clear and unambiguous. Thus, we must apply the provision’s plain meaning. That
is, the entire contract terminated upon decedent’s death in 2019. In turn, we agree with plaintiff
that there was no longer any enforceable arbitration agreement when the instant action
commenced.
¶ 59 Defendants argue “it is clear that there is no intention for the entire contract to terminate
upon death of a resident,” yet that is precisely what the plain language of the termination
provision reflects. “The best indication of the parties’ intent is found in the plain and ordinary
meaning of the language of the contract.” St. Paul Mercury Insurance v. Aargus Security
Systems, Inc., 2013 IL App (1st) 120784, ¶ 59. The termination provision states, without
limitation, that “This Contract” terminates upon a resident’s death. Thus, it indicates that the
resident’s death applies to terminate all contractual provisions.
¶ 60 By urging that we should not read the termination provision so broadly, defendants
essentially ask us to assume or read into the agreement limitations or exceptions that are simply
not present. However, “[w]e will not ‘alter, change, or modify existing terms of a contract, or
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add new terms or conditions to which the parties do not appear to have assented.’ ” Id. (quoting
Thompson v. Gordon, 241 Ill. 2d 428, 449 (2011)).
¶ 61 Moreover, “ ‘there is a presumption against provisions that easily could have been included
in a contract but were not.’ ” Id. (quoting Thompson, 241 Ill. 2d at 449). Here, the drafters of
the contract could quite easily have used other language to indicate the more limited
interpretation of the termination provision that defendants now seek. Rather than broadly
stating that “this Contract” (i.e., the whole contract) would terminate upon the resident’s death,
the drafters could have specified which provisions would remain in effect. For instance, the
contract could have stated that the death of a resident extinguished obligations for future
performance of services, but did not extinguish the parties’ agreement to arbitrate claims that
accrued during a resident’s lifetime. Or the termination provision could have simply included
a carve-out to preserve the arbitration provision, for example, by stating that “this Contract,
other than the arbitration agreement in Section E, shall terminate” upon the resident’s death.
While we cannot know why the drafters inserted such a broad termination provision,
defendants cannot avoid the effect of the plain meaning of its language.
¶ 62 We also note defendants’ reliance on the proposition that we should attempt to harmonize
contractual provisions. See Wolfensberger v. Eastwood, 382 Ill. App. 3d 924, 934 (2008)
(“When possible, courts should construe a contract so that different provisions are harmonized,
not conflicting with one another. [Citation.]”); Zannis v. Lake Shore Radiologists, Ltd., 73 Ill.
App. 3d 901, 906 (1979) (citing the “well-established principle in the law of contracts that a
construction should be adopted ‘which harmonizes all the various parts so that no provision is
deemed conflicting with, or repugnant to, or neutralizing of any other’ ” (quoting Coney v.
Rockford Life Insurance Co., 67 Ill. App. 2d 395, 399 (1966)). Contrary to defendants’
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suggestion, our conclusion does not violate this principle. We are not neutralizing the
arbitration provision, which remains in effect prior to termination. That is, our construction
gives effect to both the arbitration and termination provisions. Read together, the provisions
indicate that, while the parties may be obligated to arbitrate claims during a resident’s lifetime,
the arbitration agreement (like every other part of the contract) terminates upon the resident’s
death. Our application of the broad termination provision does not conflict with the arbitration
provision, any more than a termination provision affects every other provision in the
agreement. We are simply giving effect to the contract’s unequivocal language that all of its
provisions terminate upon the resident’s death.
¶ 63 We recognize that our conclusion conflicts with Mason v. St. Vincent’s Home, Inc., 2022
IL App (4th) 210458, which appears to be the only appellate court precedent addressing such
a situation. However, we are not bound to follow the Fourth District’s decision. See O’Casek
v. Children’s Home & Aid Society of Illinois, 229 Ill. 2d 421, 440 (2008) (“[T]he opinion of
one district, division, or panel of the appellate court is not binding on other districts, divisions,
or panels. [Citation.]”). Although Mason presented similar facts, we disagree with its
reasoning.
¶ 64 Similar to this case, the plaintiff in Mason asserted negligence claims under the Nursing
Home Care Act, Wrongful Death Act, and Survival Act against a nursing home following the
death of plaintiff’s mother, a nursing home resident. Mason, 2022 IL App (4th) 210458, ¶¶ 4-
6. The governing contract provided that “ ‘In the event of Resident’s death, this Contract
terminates automatically.’ ” Id. ¶ 4. Elsewhere, the contract contained an arbitration provision
stating that “ ‘any action, dispute, claim, or controversy related to the quality of health care
services provided pursuant to this Contract *** now existing or hereafter arising between
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Resident and [nursing home] *** shall be resolved by binding arbitration.’ ” Id. ¶ 21. After
defendant moved to compel arbitration, plaintiff argued, inter alia, that the contract was
unenforceable because it terminated upon decedent’s death. Id. ¶ 10. The trial court granted
the motion to compel arbitration but stayed the Wrongful Death Act counts. Id. ¶ 13.
¶ 65 Upon plaintiff’s appeal, one of plaintiff’s arguments was that “the contract, including the
arbitration clause, terminated by its own terms on decedent’s death.” Id. ¶ 43. In response,
defendants relied on our supreme court’s decision in Carter, 2012 IL 113204, to argue that
“the arbitration agreement applies to plaintiff’s claims brought pursuant to the Survival Act.”
Mason, 2022 IL App (4th) 210458, ¶ 43.
¶ 66 The Fourth District in Mason agreed with defendants that Carter supported enforcement
of the arbitration agreement to claims that accrued before decedent’s death. Mason explained
that our supreme court in Carter addressed whether a plaintiff could be compelled to arbitrate
a wrongful death claim pursuant to an arbitration agreement between the plaintiff’s decedent
and a defendant nursing home. Id. ¶ 44. Our supreme court explained that “[w]hile the
Wrongful Death Act [citation] created a new cause of action that did not accrue until death, the
Survival Act allowed the decedent’s representative to maintain those statutory or common law
actions that had already accrued prior to the decedent’s death.” Id. (Emphasis in original.)
(citing Carter, 2012 IL 113204, ¶ 34). Thus, the Carter plaintiff was not obligated to arbitrate
a wrongful death claim but was bound to arbitrate the Nursing Home Care Act claim brought
under the Survival Act, as that claim had “already accrued to the decedent prior to death.” Id.(citing Carter, 2012 IL 113204, ¶ 34).
¶ 67 The Fourth District in Mason extrapolated from Carter to conclude that the termination
clause did not preclude arbitration of claims that accrued before decedent’s death:
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“While the facts in Carter do not suggest the arbitration agreement was part of
another contract with a termination upon death clause like the one in this case, the
supreme court’s analysis is instructive. The supreme court noted a cause of action
brought pursuant to the Survival Act accrued prior to the death of the decedent. Carter,
2012 IL 113204, ¶ 34. Thus, even with a termination upon death clause, the contract
including the arbitration provision would still have been valid when the cause of action
accrued. The language of the arbitration clause does not suggest it is inapplicable to
claims that accrued before the resident’s death but were brought after the resident’s
death.” Mason, 2022 IL App (4th) 210458, ¶ 45.
Mason proceeded to affirm the circuit court’s conclusion that plaintiff was bound to arbitrate
claims other than those under the Wrongful Death Act.
¶ 68 We disagree with Mason’s analysis for multiple reasons. First, Mason’s reliance on Carter
to assess the effect of a termination clause is questionable. As Mason acknowledged, nothing
in Carter indicates that the contract in that case included a similar termination clause. Id. ¶ 44
(“the facts [in Carter] did not state whether the arbitration agreement had a provision the
agreement terminated upon the decedent’s death”). Although Carter recognized that Survival
Act claims on behalf of a deceased resident could be subject to arbitration, the supreme court
had no occasion to decide whether a termination upon death clause would affect the validity
of an arbitration agreement.
¶ 69 More fundamentally, the Mason court’s analysis did not attempt to discuss the intent
reflected by the termination clause’s plain and unequivocal language that “ ‘In the event of
Resident’s death, this Contract terminates automatically.’ ” Id. ¶ 21. Rather than discussing the
meaning of that broad termination clause, the Mason court elected to focus on the lack of
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limitation in the arbitration provision. See id. ¶ 45 (reasoning that “[t]he language of the
arbitration clause does not suggest it is inapplicable to claims that accrued before the resident’s
death but were brought after the resident’s death”). In this manner, the Mason court essentially
created an exception to the termination provision, in order to allow arbitration claims that
accrued before resident’s death. In our view, the Mason court’s approach did not give effect to
the clear and unequivocal language of the termination provision. Thus, we decline to follow
that decision.
¶ 70 In summary, we agree with plaintiff that the termination upon death provision is dispositive
with respect to defendants’ attempt to compel arbitration. That is, the arbitration agreement
terminated with the rest of the contract upon decedent’s death. As we affirm on that basis, we
need not discuss whether the trial court correctly found that the arbitration provision was
substantively unconscionable due to its punitive damages clause. Nor do we need to discuss
plaintiff’s alternative arguments, including whether the contract was otherwise substantively
or procedurally unconscionable or whether Kotalik as healthcare POA lacked authority to bind
decedent to the arbitration agreement.
¶ 71 Having found the arbitration provision unenforceable by operation of the termination
clause, we affirm the trial court’s denial of the motion to compel arbitration or mediation with
respect to the counts against Oakbrook and Andora that are not based on the Wrongful Death
Act (counts I, II, VI, and VIII). As defendants were not entitled to arbitration, we also affirm
denial of their request to stay the Wrongful Death Act counts against Oakbrook and Andora
(counts III and VII) pending arbitration.
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¶ 72 E. Defendants Do Not Challenge the Order with Respect to the Counts Against Lancaster
¶ 73 Finally, we recognize that defendants’ motion also sought to stay the counts against
Lancaster, which consist of a Survival Act count (count IV) and a Wrongful Death Act count
(count V). In the trial court, defendants asserted that Lancaster was not involved in the events
underlying the complaint and that after, “appropriate discovery,” Lancaster would separately
“seek dismissal of Counts IV and V by way of motion practice.”
¶ 74 Defendants’ brief does not raise any argument challenging the trial court’s order, to the
extent it denied the request to stay the counts against Lancaster. Thus, defendants have
forfeited any challenge to that aspect of the order. Ill. S. Ct. R. 341(h)(7) (eff. Oct. 1, 2020).
(“Points not argued are forfeited and shall not be raised in the reply brief, in oral argument, or
on petition for rehearing.”). In any event, the record is insufficient to determine whether there
is merit to Lancaster’s contention that it had no involvement in the underlying events. Thus,
we will not disturb the trial court’s order insofar as it denied defendants’ request to stay the
counts against Lancaster (counts IV and V). We express no view as to whether Lancaster will
ultimately be able to show that it is entitled to dismissal in subsequent proceedings.
¶ 75 III. CONCLUSION
¶ 76 In summary, we affirm all aspects of the trial court’s order. Specifically, we affirm denial
of defendants’ motion to dismiss and compel arbitration with respect to the Nursing Home
Care Act claim against Oakbrook (count I), the Survival Act negligence counts against
Oakbrook (counts II and VIII), and the Survival Act negligence claim against Andora (count
VI). We also affirm the denial of defendants’ request to stay the Wrongful Death Act counts
against Oakbrook (count III) and Andora (count VII). Finally, we affirm the denial of
defendants’ motion to stay the counts against Lancaster under the Survival Act and Wrongful
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No. 1-21-0984
Death Act (counts IV and V). We remand for further proceedings in accordance with this
decision.
¶ 77 Affirmed and remanded.
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Clanton v. Oakbrook Healthcare Centre, Ltd.,2022 IL App (1st) 210984Decision Under Review: Appeal from the Circuit Court of Cook County, No. 2020-L-
006460; the Hon. Patricia O. Sheahan, Judge, presiding.
Attorneys Carter A. Korey, Dana N. Raymond, and Chaniece M. Hill, of
for Korey Richardson LLP, of Chicago, for appellants.
Appellant:
Attorneys Michael W. Rathsack, Steven M. Levin, Michael F. Bonamarte IV,
for and Daisy Ayllon, all of Chicago, for appellee.
Appellee:
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