Younce v. Heartland ( 2016 )

[Cite as Younce v. Heartland, 2016-Ohio-2965.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
MONTGOMERY COUNTY
ESTATE OF RICHARD L. YOUNCE, :
et al. :
: C.A. CASE NO. 26794
Plaintiffs-Appellees :
: T.C. NO. 15CV1383
v. :
: (Civil appeal from
HEARTLAND OF CENTERVILLE, et : Common Pleas Court)
al. :
:
Defendants-Appellants :
:
...........
OPINION
Rendered on the ___13th___ day of _____May_____, 2016.
...........
GARY J. LEPPLA, Atty, Reg. No. 0017172 and MIRANDA R. LEPPLA, Atty. Reg. No.
0086351 and PHILIP J. LEPPLA, Atty. Reg. No. 0089075, 2100 S. Patterson Blvd.,
Dayton, Ohio 45409
Attorneys for Plaintiffs-Appellees
DANNY M. NEWMAN, Atty. Reg. No. 0074740 and MICHAEL M. MAHON, Atty. Reg. No.
0087296, 525 Vine Street, Suite 1700, Cincinnati, Ohio 45202
Attorneys for Defendants-Appellants
.............
DONOVAN, P.J.
{¶ 1} This matter is before the Court on the Notice of Appeal of Heartland of
Centerville, Heartland of Centerville OH, L.L.C., and HCR Manor Services, L.L.C.
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(collectively “Heartland”). Heartland appeals from the July 13, 2015 decision of the trial
court that overruled its motion to stay proceedings, pending arbitration, on the complaint
of Josephine M. Goncy, as Executor of the Estate of Richard L. Younce, and on behalf of
herself individually as the spouse of the deceased, Richard L. Younce. We hereby reverse
and vacate the judgment of the trial court.
{¶ 2} Goncy filed a “Complaint for Medical Negligence, Wrongful Death and Other
Relief with Affidavit of Merit” on March 13, 2015, against multiple parties (“other
defendants”) in addition to Heartland. Goncy asserted claims for loss of consortium and
survivorship, as well as medical negligence and wrongful death. According to the
complaint, Younce “was a 64-year-old male who was admitted to Heartland of Centerville
on November 14, 2013” after suffering “a cerebral hemorrhage, with dense left
hemiparesis, left sided spatial neglect, dysphasia, and a mobility disorder.” Goncy
alleged that while at the Heartland facility, Younce “developed multiple wounds,”
specifically to the skin. Goncy asserted that the facility failed “to provide adequate
nutrition and hydration to Mr. Younce, which further complicated the development of his
wounds and his immobility status.” According to the complaint, laboratory evidence
indicated that Younce “had multiple episodes of dehydration, the worst episode
culminating on February 12, 2014, with a BUN of 67 and a creatinine of 2.3. These
laboratory figures represent renal insult as upon admission to the nursing home, Mr.
Younce’s kidney function was normal.”
{¶ 3} The complaint alleged that an examination of Younce in March 2014
revealed 13 separate pressure ulcers, and that the “ulcers are not mentioned again in the
Heartland of Centerville records.” The complaint alleged that Younce was admitted to
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Kettering Hospital on March 16, 2014, “where large, significant decubitus ulcers and lower
extremity contractures were documented.” Goncy alleged that blood cultures and “a
culture of the coccyx wound, obtained on March 18, 201[4], indicated the presence of
Methicillin-resistant Staphylococcus aureas within the coccyx wound and within the
blood.” Goncy alleged that “inadequate documentation, lack of physical assessment,
failure to provide adequate care and implement preventative measures fell below the
appropriate standard of care and proximately resulted in extreme pain and suffering by
Mr. Younce, and the death of Mr. Younce on March 24, 2014.”
{¶ 4} On April 17, 2015, Heartland filed the motion to stay proceedings pending
arbitration. Heartland argued that on “November 22, 2013, during the time of the
decedent’s admission to Heartland, both Plaintiff, as the decedent’s wife and legal
representative, and the decedent executed a binding Voluntary Arbitration Agreement * *
*.” (“VAA”). Heartland asserted that “Mrs. Goncy and the decedent knew (or should have
been aware of) the effect of their execution of the Arbitration Agreement.” Heartland
asserted that pursuant to the VAA and R.C. 2711.02, the action must be stayed and all
of Goncy’s claims “must be submitted to binding arbitration as a matter of law.”
Heartland asserted that there is a strong presumption in favor of arbitration, and that
“arbitration agreements between nursing homes and their residents are valid and
enforceable contracts.” Heartland asserted that “not only did the decedent, on his own
accord, execute the Arbitration Agreement on November 22, 2013, but Mrs. Goncy
herself, on that same day, also executed the [VAA].” Heartland asserted that the
disputes covered by the VAA “include any and all claims arising from, or relating to, the
decedent’s admission to Heartland, the care and/or treatment he received at Heartland’s
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nursing home, or the Arbitration Agreement itself * * *.” Heartland asserted that the
disputes covered by the VAA “clearly encompass all of Plaintiff’s claims herein.”
{¶ 5} Heartland asserted that the VAA is not procedurally unconscionable, and
that Younce “was in a sound bargaining position, as he was admitted to Heartland’s
nursing home on November 14, 2013, on his own free will and without the need for a legal
guardian or representative. Further, there is no allegation of any pressure exerted or
haste imposed on him to sign the [VAA].” Heartland asserted that in executing the VAA,
Younce and Goncy “acknowledged that they had the right to review the [VAA] with an
attorney or family member * * *; that they were explicitly provided thirty (30) days in which
they could cancel the [VAA] * * *; and all parties ‘stipulate[d] that there [were] other health
care facilities in this community currently available to meet [the decedent’s] needs.’ ”
Heartland asserted that the VAA “was written in plain language as an entirely separate
agreement from the Admission Agreement.” Heartland asserted that execution of the
VAA “was not a condition of admission.”
{¶ 6} Finally, Heartland asserted that the VAA is not “substantively
unconscionable.” Heartland argued that the VAA notified Goncy and Younce that
Younce would receive care at the facility whether or not the VAA was signed, that in
executing the VAA they were giving up their right to a trial, that they had 30 days to cancel
the VAA, and that they had the right to review the VAA with an attorney or family member.
Heartland argued the VAA is valid even though parties named in the lawsuit are not
parties to the VAA.
{¶ 7} A copy of the VAA is attached to Heartland’s motion. It provides in relevant
part as follows:
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VOLUNTARY ARBITRATION AGREEMENT (“AGREEMENT”)
THE PARTIES ARE WAIVING THEIR RIGHT TO A TRIAL BEFORE A
JUDGE OR JURY OF ANY DISPUTE BETWEEN THEM. PLEASE READ
CAREFULLY BEFORE SIGNING. THE PATIENT WILL RECEIVE
SERVICES IN THIS CENTER WHETHER OR NOT THIS AGREEMENT IS
SIGNED. ARBITRATION IS DESCRIBED IN THE VOLUNTARY
ARBITRATION PROGRAM BROCHURE COPY, ATTACHED AND MADE
PART OF THIS AGREEMENT.1
Made on 11/22/23 (date) by and between the Patient Richard L.Younce or
Patient’s Legal Representative __________________ (collectively referred
to as “Patient”) and the Center _________________2.
1. Agreement to Arbitrate “Disputes”: All claims arising out of or
relating to this Agreement, the Admission Agreement or any and all past or
future admissions of the Patient at this Center, or any sister Center operated
by any subsidiary of HCR ManorCare, Inc. (“Sister Center”), including
claims for malpractice, shall be submitted to arbitration. Nothing in the
Agreement prevents the Patient from filing a complaint with the Center or
appropriate governmental agency or from seeking review under any
applicable law of any decision to involuntarily discharge or transfer the
Patient.
1
A copy of the Voluntary Arbitration Program Brochure is not part of the record before
us.
2
The date in the above section was handwritten, and the subsequent lines indicating
the “Legal Representative” and the “Center” were left blank.
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***
8. Right to Change Your Mind: This Agreement may be cancelled by
written notice sent by certified mail to the Center’s Administrator within 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 subsequent
admissions to the Center or any Sister Center without any need for further
renewal.
9. Binding on Parties & Others: The Parties intend that this agreement
shall benefit and bind the Center, its parent, affiliates, and subsidiary
companies, and shall benefit and bind the Patient (as defined herein),
his/her successors, spouses, children, next of kin, guardians,
administrators, and legal representatives.
***
14. Health Care decision: The Parties hereby stipulate that the decision
to have the Patient move into this Center and the decision to agree to this
Agreement are each a health care decision. The Parties stipulate that
there are other health care facilities in this community currently available to
meet the Patient’s needs.
THE PARTIES CONFIRM THAT EACH OF THEM UNDERSTANDS THAT
EACH HAS WAIVED THE RIGHT TO TRIAL BEFORE A JUDGE OR JURY
AND THAT EACH CONSENTS TO ALL OF THE TERMS OF THIS
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VOLUNTARY AGREEMENT. PATIENT ACKNOWLEDGES THE RIGHT
TO REVIEW THIS AGREEMENT WITH AN ATTORNEY OR FAMILY
BEFORE SIGNING.
{¶ 8} Directly underneath the above language is a signature block for the
“Patient,” and Younce’s printed name and signature appear thereon. Additionally, there
is a signature block for the “Patient’s Legal Representative,” where Goncy’s printed name
appears, as well as her signature above a line that provides: “Signature of Patient’s
Legal Representative in his/her Representative capacity.” Beneath this signature line is
a second signature line which provides: “Signature of Patient’s Legal Representative in
his/her Individual capacity,” and this signature line is blank. A footnote provides:
“Patient’s Legal Representative should sign on both lines above containing the phrase
‘Patient’s Legal Representative.’ ” The signature blocks are dated “11-22-13.” The VAA
is also signed by a “Center Representative.”
{¶ 9} On May 23, 2015, Goncy filed her affidavit as well as a response to
Heartland’s motion to stay. Goncy averred that the VAA “provided by Defendants was
never reviewed with my husband and me, nor were any of the provisions explained to us
by anyone from Heartland of Centerville.” Goncy averred that on “November 22, 2013,
I did not have a ‘representative capacity’ for my husband * * *,” and that she “did not sign
the [VAA] in an individual capacity.” Goncy further averred that at “the time my husband
signed the [VAA], he was lucid and fully capable of making decisions for himself, as
verified by his medical records,” and that prior to “and at the time of my husband’s signing
of the [VAA], I am not aware of any physician or other medical provider determining that
my husband had lost the capacity to make informed health care decisions for himself.”
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Finally, Goncy averred that on December 10, 2013, Younce signed a Power of Attorney
(“PoA”), thereby granting her “the authority to sign documents, such as an Arbitration
Agreement, as my husband Richard Younce’s legal representative.” Goncy averred that
the PoA was not in effect when the VAA was signed.
{¶ 10} In her response, Goncy asserted that “Ohio Courts, including the Supreme
Court of Ohio, have held that a decedent cannot bind his or her beneficiaries to arbitrate
their wrongful death claims.” Goncy asserted that “judicial economy would not be served
by allowing [Heartland] to arbitrate certain claims while others proceed in the Court.”
Goncy argued that “despite the presumption favoring arbitration, a party cannot be
compelled to arbitrate a dispute * * * which they have not agreed to submit to arbitration.”
Goncy relied upon Peters v. Columbus Steel Castings Co., 115 Ohio St. 3d 134, 2007-
Ohio-4787, 873 N.E.2d 1258, and asserted that its holding “was based on common law
principles governing contracts and found that only signatories to an arbitration agreement
are bound by its terms.” Goncy asserted that “the holding in Peters requiring a real party
in interest to sign an arbitration agreement for such an agreement to be enforceable is
not in conflict with the Federal Arbitration Act (‘FAA’) as the FAA states that arbitration
agreements are enforceable except ‘upon such grounds as exist at law or in equity for the
revocation for any contract.’ ”
{¶ 11} Goncy further relied upon McFarren v. Emeritus at Canton, 2013-Ohio-
3900, 997 N.E.2d 1254 (5th Dist.), and Tedeschi v. Atrium Ctrs., L.L.C., 8th Dist.
Cuyahoga No. 97647, 2012 WL 2459147 (June 28, 2012) and asserted as follows:
The facts in the abovementioned cases, especially the McFarren
case, are nearly identical to the facts in the instant matter. Here, the Estate
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of Richard Younce, by Executrix Josephine M. Goncy, brought medical
malpractice, wrongful death, loss of consortium and survivorship actions
against Defendants. * * * Pursuant to the Supreme Court of Ohio’s holding
in Peters, only the medical malpractice claim could be subject to [an]
arbitration agreement pursuant to the subject document. Josephine Goncy
did not have the authority to sign the [VAA] as a legal representative for
Richard Younce. * * * Ms. Goncy’s [PoA] for Richard Younce was not
effective at the time she signed the [VAA] as Richard Younce’s “legal
representative.” * * * The [PoA] was not effective until it was signed on
December 10, 2013. * * *
{¶ 12} Goncy asserted that she “had no authority to bind the principal.” She
asserted that she did not sign the VAA in an individual capacity. Goncy argued that
“none of Richard Younce’s surviving children signed the [VAA]. Likewise, as
beneficiaries under R.C. 2125 et seq., they cannot be forced to arbitrate the wrongful
death claim.”
{¶ 13} Finally, Goncy asserted that if she is “forced to arbitrate this case, the typical
economy and efficiency of arbitration would be lost.” This is so, she asserted, “because
Plaintiffs would be forced to participate in two proceedings, instead of one, not to mention
the possibility of two different findings on liability. Rather than achieve cost savings,
there would be a substantial increase in costs.” Goncy argued that judicial economy
would be lost because none of the claims against the other defendants are subject to
arbitration, and “all claims against these Defendants would proceed in this Court.”
{¶ 14} On June 1, 2015, Heartland filed a reply, initially noting that “Plaintiffs
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neither dispute the validity of the [VAA], nor do they dispute that the survivorship claim is
subject to arbitration. Rather, Plaintiffs argue simply that (1) the wrongful death claim[]
is not abitrable, and (2) judicial economy would not be served because other parties and
claims exist that are not subject to the [VAA].” Heartland asserted that “even where
courts find that the wrongful death claim is not subject to arbitration, the case must
nevertheless be stayed pending the arbitration of those claims that are subject to a valid
arbitration provision.” Heartland asserted that it “is well-settled Ohio law that when an
action involves both arbitrable and non-arbitrable claims, the entire proceeding must be
stayed until the issues and claims that are subject to arbitration are resolved.” According
to Heartland, Younce’s “execution of the [VAA], therefore, requires that Plaintiffs’
survivorship claim, which belongs to the decedent, be arbitrated.” Finally, Heartland
asserted that the “the fact that other party-defendants and non-abitrable claims exist is
not a sufficient basis to deny Heartland’s Motion to Stay.”
{¶ 15} In denying Heartland’s motion to stay the proceedings, the trial court noted
as follows:
* * * In reality, Heartland is seeking an order compelling binding
arbitration between two of the parties to this litigation while others wait even
though other defendants are named as agents or employees of Heartland
and vicarious liability would require individual liability to be established.
None of those defendants or the decedent’s beneficiaries were parties to
the VAA. Persons who are not parties to the VAA cannot be compelled to
arbitrate. * * *
Presumably, Heartland’s assertion that “all claims” be arbitrated,
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refers to all of plaintiff’s claims against the other defendants. The plaintiff
has not discussed the scope of the VAA and whether the subject claims
arise out of the VAA itself even though “abitrability” is not a claim presented
by plaintiff. * * * Neither Heartland nor plaintiff has provided the Court with
the Admission Agreement. However, the VAA uses the words “including
claims for malpractice.” * * * The alleged medical negligence does not arise
from or relate to the VAA, but may relate to duties or representations for
care in the admission agreement. Nevertheless, the intent of the drafter is
assumed to refer to malpractice as a claim by Richard against Heartland
that would be subject to arbitration. There is no indication in the record as
to the extent of knowledge that the signatories to the VAA had about what
a claim for malpractice might entail. Instead, plaintiff focuses the Court’s
inquiry on the authority of those signing the VAA to waive the constitutional
right to a jury trial.
{¶ 16} The court noted Goncy’s argument that she was not appointed Younce’s
PoA until 18 days after the VAA was signed. It further noted as follows in determining
that “the wrongful death claim is not required to be arbitrated”:
* * * There is no claim that plaintiff had healthcare (sic) authority.
As indicated, the VAA states that “the decision to agree to this Agreement
is a health care decision.” There is no indication that plaintiff had authority
to make health care decisions for Richard. Thus, her signature on the VAA
does not bind the estate or Richard’s beneficiaries.
Heartland’s motion seeks to stay this case involving the interests of
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Josephine individually and their children, as well as the other defendants. *
* * As indicated, neither plaintiff nor her children were signatories to the
VAA. She had no authority to waive the constitutional right to trial by jury
for the beneficiaries. The VAA is not binding on the beneficiaries. * * *
{¶ 17} The court next addressed “whether Richard’s signing of the VAA is binding
on his estate with regard to the survivorship claims.” According to the trial court, “the
issue is whether Heartland has shown that Richard waived the right of his estate to trial
by judge or jury.” The court found that, “since the VAA itself describes the decision to
agree to arbitration and waive the constitutional right to a jury trial as a ‘health care’
decision, there would have to be ‘informed consent’ for such a decision.” The court
determined as follows:
Plaintiff’s affidavit says nothing about the circumstances when the
VAA was signed except that it “was never reviewed with my husband and
me, nor were any of the provisions explained to us by anyone from
Heartland of Centerville.” * * * Plaintiff images Richard’s signature on the
December 10, 2013 [PoA] in her memorandum * * * and the one on the
VAA, 18 days earlier. Arguably, the signatures on the VAA look to be the
writing of the same person. However, plaintiff does not argue that Richard
did not sign the VAA.
The only evidence before the Court is the affidavit of plaintiff,
Josephine Goncy, that Heartland provided no information about the benefits
and risks of waiving rights in favor of arbitration. There is no basis to find
that Richard’s signing was voluntarily and knowingly made after being
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properly informed of the risks involved. A “knowing” waiver may be valid,
but an “unknowing” waiver may not. There is no presumption in favor of
waiver. Heartland must show that Richard’s alleged waiver was informed
and knowing. On the other hand, plaintiff asserts Richard was competent,
but nothing was explained. * * *
Nevertheless, the Court finds that such a waiver of rights requires
evidence that Richard was fully informed. There is no indication that he
was knowledgeable about legal terminology or the differences between an
arbitration and a trial to a jury of his peers or the benefits and risks of such
a choice at this time when he was in need of rehabilitation therapy.
The court finds that Heartland has not shown that Richard knowingly
and intelligently signed the VAA and finds that the VAA is invalid based on
“grounds that exists at law or in equity for the revocation of any contract.”
See Federal Arbitration Act, 9 U.S.C. § 2, quoted in Marmet Health Care
Ctr., Inc. v. Brown, [ ___U.S.___, 132 S. Ct. 1201, 182 L. Ed. 2d 42 (2012)].
There is no evidence before the Court to assess whether or not the
VAA was unconscionable. * * * It is undisputed that Richard was admitted
to Heartland after “a mild stroke and subsequent surgery.” * * * There is
no evidence of the actual stress or of cognitive difficulties on November 22,
2013. The Court accepts that Richard may have been under unusual
stress, but in the absence of evidence, does not find that to be a determining
factor. * * * The Court finds that the circumstances involved in the process
of being admitted to a nursing home after a serious medical procedure or
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hospitalization certainly require that the Court carefully scrutinize the
evidence about whether the entity asserting a waiver of rights provided any
meaningful information to the patient to assure the waiver was knowingly
made. In this case, it is undisputed that no information was provided.
The Court cannot determine on the basis of Richard’s signature
alone, questionable on its face, that he knowingly waived the rights of his
estate to a jury trial guaranteed by Article I, § 16 of the Ohio Constitution.
Heartland has failed to show that Richard’s alleged waiver was informed
and knowing. Moreover, the Court finds that an arbitration of some of the
plaintiff’s claims and a trial of claims against the other defendants, as well
as the interests of the beneficiaries, would undermine the purposes of using
arbitration to reduce the costs of resolving a dispute. The Court also
concludes that the scope of the VAA does not include claims between the
patient and the center under such circumstances where they are
interrelated with claims not subject to it.
{¶ 18} Heartland asserts one assignment of error herein as follows:
THE TRIAL COURT ERRED BY NOT STAYING PLAINTIFF’S
WRONGFUL DEATH AND SURVIVORSHIP CLAIMS AGAINST
HEARTLAND PENDING THE ARBITRATION OF PLAINTIFF’S
SURVIVORSHIP CLAIM.
{¶ 19} Heartland asserts that in “light of the strong presumption favoring
arbitration, all doubts should be resolved in favor of arbitrating the dispute,” and “if parties
contract to resolve their disputes in arbitration rather than in the courts, a party may not
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renege on that contract absent the most extreme circumstances.” Heartland asserts that
“the trial court incorrectly shifted the burden to Heartland,” requiring that Heartland
establish that Younce’s waiver was informed and knowing. Heartland asserts that this
“is simply not the law in Ohio, and the trial court cites to no legal authority to support this
contention.” According to Heartland, “it was not Heartland’s burden to show that the
decedent knew the import of his execution of the [VAA]; the decedent, by his execution
of the [VAA], is presumed to have known the import of his execution.”
{¶ 20} Heartland notes that Goncy admitted in her affidavit that Younce signed the
[VAA] and that he was lucid when he did so. Heartland asserts that whether or not
Heartland personnel reviewed the VAA with Younce “is completely irrelevant.”
According to Heartland, “the provisions of the [VAA] informing the decedent of the effect
of its execution could not be clearer or more apparent within the contract.” Heartland
asserts that “[o]rdinarily, one who is of full age in possession of his faculties and able to
read and write, and who signs an instrument and remains acquiescent to its operative
facts, may not thereafter escape its consequences by urging that he did not read or
understand it, or that he relied upon representations of another as to its contents or
significance.”
{¶ 21} Heartland directs our attention to a recent decision by this Court in Brown
v. Extendicare, Inc., 2015-Ohio-3059, 39 N.E.3d 896 (2d Dist.) and asserts that therein,
“it was the decedent’s daughter, not the decedent, who executed the at-issue arbitration
agreement, yet [this Court] nevertheless enforced the agreement in part due to the ‘strong
public policy favoring arbitration.’ ” Heartland argues that “[u]nlike Brown where only the
decedent’s daughter executed the arbitration agreement, in this case both the decedent
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and Plaintiff executed the [VAA]. They are, therefore, charged with the knowledge of its
contents. There is absolutely no evidence of fraud or that the decedent was forced to
sign the [VAA].” Heartland asserts that the VAA “constitutes a written, valid and
enforceable agreement between the parties,” and that the disputes covered thereunder
“clearly encompass all of Plaintiff’s claims herein against Heartland.”
{¶ 22} Regarding the trial court’s assertion that it was required to “scrutinize” any
evidence relating to whether Heartland provided meaningful information to Younce to
assure he made a knowing waiver, Heartland again asserts, “[t]his is simply not the law
in Ohio.” Heartland argues that where an arbitration agreement is clear in terms of the
effect of its execution, “a nursing home is not required to explain its provisions to the
patient to ensure that the waiver of a jury trial was knowingly made.”
{¶ 23} Heartland again asserts that the VAA is neither procedurally nor
substantively unconscionable. Finally, Heartland asserts that the presence of non-
arbitrable claims and parties who cannot be compelled to arbitrate is not a valid basis to
deny a stay pending arbitration, and that all of Goncy’s claims, including wrongful death,
should be stayed pending the arbitration of the survivorship claim. According to
Heartland, “the trial court erred in not staying both the survivorship claim and the wrongful
death claim.”
{¶ 24} Goncy responded that in filing the motion for stay, Heartland “attempted to
defend against unconscionability rather than also confronting a primary problem with the
[VAA], i.e. the attempt to bind decedent’s beneficiaries to arbitration which they never
accepted.” Goncy again cites Peters and argue that a decedent cannot bind his
beneficiaries to arbitrate their wrongful death claim. Goncy asserts that “the holding in
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Peters was based on common law principles governing contracts and found that only
signatories to an arbitration agreement are bound by its terms.” Goncy asserts that “the
Peters case is controlling in Ohio, holding that arbitration agreements are not enforceable
against non-signing beneficiaries to a wrongful death claim.”
{¶ 25} Goncy asserts that if “the conditions required for the [PoA] to come into
being are not fulfilled, the representative has no authority to bind the principal.”
According to Goncy, since the PoA was signed after Younce granted Goncy his PoA,
Goncy lacked authority to sign the VAA and her signature as Younce’s legal
representative on the VAA is “ineffective.” Goncy again cites McFarren and Tedeschi in
support of her arguments. According to Goncy, she did not sign the VAA in an “individual
capacity.” Goncy again asserts that Younce was lucid when he signed the VAA. Goncy
notes that “none of Richard Younce’s surviving children signed the [VAA],” and that “they
cannot be forced to arbitrate the wrongful death claim.”
{¶ 26} Goncy asserts that it “is inherent that a consumer contract for healthcare
on a near emergency basis cannot include an adhesion contract for arbitration.” Goncy
argues that in “addition to the fact that [Heartland’s] arbitration clause was part of an
adhesion contract, evidenced by the obviously unequal bargaining power held by [Younce
and Goncy], if the parties are forced to arbitrate this case the economy and efficiency of
arbitration would also be lost,” citing in part Wascovich v. Personacare of Ohio, 190 Ohio
App.3d 619, 2010-Ohio-4563, 943 N.E.2d 1030 (11th Dist.). Goncy asserts that judicial
economy would also be lost because none of the claims against the other defendants
“would be subject to arbitration, as none of the other Defendants are parties to the [VAA].”
Goncy argues that additional defendants have not been added to the matter herein in an
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attempt to defeat the arbitration clause.
{¶ 27} In a footnote, Goncy asserts as follows:
Adhesive nursing home arbitration contracts are disfavored as a
matter of public policy. See, e.g., Center for Justice and Democracy, “Stop
Forced Arbitration in Nursing Homes”, https://centerjd.org/content/letter-
stop-forced-arbitration-nursing-homes, “Under forced arbitration programs,
negligence and abuse cases must be resolved in private, secretive,
corporate-designed dispute systems. Anti-patient bias infects this
process. Nursing home arbitration companies have a financial incentive to
side with repeat players who generate most of the cases they handle.
Arbitrators are also not required to have any legal training and they need
not follow the law. Court rules of evidence and procedures that protect
plaintiffs do not apply. There is limited discovery, making it much more
difficult for individuals to have access to important documents that may help
their claim. Arbitration proceedings are secretive, often protected by
confidentiality rules. There is no public record to inform industry practice
or to notify the public or regulators. Decisions are enforceable with the full
weight of the law even though they may be legally incorrect. This is
especially disturbing because these decisions are binding. Sometimes,
victims must split the sizeable costs of arbitration with the nursing home.”
{¶ 28} In reply, Heartland argues that all of Goncy’s claims, including wrongful
death, should be stayed pending arbitration. Heartland argues that “the issue on appeal
is not whether the wrongful death claim is arbitrable; the issue on appeal is whether the
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wrongful death claim (and survivorship claim) must be stayed pending the arbitration of
those claims that are arbitrable, which, in this case, is clearly Plaintiff’s survivorship
claim.” Heartland asserts that “if unequal bargaining power were, by itself, enough to
render an arbitration agreement unenforceable, as Plaintiff posits herein, no court would
ever enforce such an agreement in the nursing home setting. However, this Court
recently held that a nursing home arbitration agreement similar to [VAA] in this case was
both valid and enforceable,” citing Brown v. Extendicare.
{¶ 29} Heartland argues that “the presence of non-arbitrable claims and parties
who cannot be compelled to arbitrate does not require a trial court to deny a stay pending
arbitration, and concerns regarding judicial economy and inconsistent verdicts should not
override the enforcement of an arbitration agreement.” Heartland asserts that since
Plaintiff’s survivorship claim is subject to arbitration, “the entire case must be stayed until
arbitration is resolved.”
{¶ 30} Heartland again asserts that “it was not Heartland’s burden to show that
the decedent knew the import of his execution of the [VAA]; the decedent, by his execution
of the [VAA], is * * * presumed to have known the import of his execution.” According
to Heartland, Younce’s “execution of the [VAA] requires that the survivorship claim, which
belongs to the decedent, be arbitrated.”
{¶ 31} Heartland argues that although “Plaintiff all but conceded the validity of the
[VAA] at the trial court level, Plaintiff now passingly states in her Brief that the [VAA] ‘was
part of an adhesion contract, evidence by the obviously unequal bargaining power held
by [Plaintiff and the decedent].’ ” According to Heartland, “[n]otwithstanding the fact that
Plaintiff provides no analysis for this new position, it must nevertheless fail for two (2)
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reasons.” First, Heartland asserts that Wascovich and Manley v. Personacare, 11th Dist.
Lake No. 2005-L-174, 2007-Ohio-343, “are easily distinguishable from the facts of the
instant case.” Second, according to Heartland, “even if Plaintiff’s argument regarding the
unequal bargaining position were valid, such a basis is still not grounds to find that the
[VAA] is unenforceable. Factors such as bargaining position go to the determination of
whether an arbitration agreement is procedurally unconscionable.” Heartland asserts that
“as even the Manley court points out, an arbitration agreement can be procedurally
unconscionable, yet still be enforceable as long as it is also not substantively
unconscionable.” According to Heartland, “regardless of whether Plaintiff’s unequal-
bargaining-position argument supports a finding of procedural unconscionability, the
[VAA] is not substantively unconscionable as a matter of law.”
{¶ 32} Regarding Goncy’s concern for judicial economy, Heartland asserts that her
reliance upon Wascovich is misplaced since “Wascovich was recently rejected by the
Tenth District in [Harrison v. Winchester Place Nursing & Rehab. Ctr., 2013-Ohio-3161,
996 N.E.2d 1001 (10th Dist.)].” Heartland argues that this Court “also rejected a similar
argument that a stay pending arbitration is inappropriate where some of the defendants
are not parties to the arbitration agreement and cannot be compelled to arbitrate,” citing
Jones v. Unibilt Industries, Inc., 2d Dist. Montgomery No. 20578, 2004-Ohio-5983.
{¶ 33} In considering the above arguments, we initially note the distinction
between survival and wrongful death claims as follows:
* * * [W]hen an individual is killed by the wrongful act of another, the
personal representative of the decedent's estate may bring a survival action
for the decedent's own injuries leading to his or her death as well as a
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wrongful-death action for the injuries suffered by the beneficiaries of the
decedent as a result of the death. Although they are pursued by the same
nominal party, we have long recognized the separate nature of these claims
in Ohio.
Peters v. Columbus Steel Castings Co., ¶ 11.
{¶ 34} As Heartland asserts and as this Court previously noted in Brown v.
Extendicare, Inc.:
* * * “ ‘Ohio has a strong public policy favoring arbitration.’ * * *
Arbitration is favored because it allows parties to bypass expensive and
time-consuming litigation and ‘provides the parties thereto with a relatively
expeditious and economical means of resolving a dispute.’ * * * ”
Westerfield v. Three Rivers Nursing & Rehab. Ctr., 2d Dist. Montgomery
No. 25347, 2013-Ohio-512, ¶ 16. “Indeed, the Ohio courts recognize a
‘presumption favoring arbitration’ that arises ‘when the claim in dispute falls
within the scope of the arbitration provision.’ * * *.” Taylor Bldg. Corp. of
Am. v. Benfield, 117 Ohio St. 3d 352, 2008-Ohio-938, 884 N.E.2d 12, ¶ 27.
“The Ohio Arbitration Act sets forth a trial court's role in construing
and enforcing arbitration agreements.” Lindsey v. Sinclair Broadcast Group,
Inc., 2d Dist. Montgomery No. 19903, 2003-Ohio-6898, ¶ 15.
Brown v. Extendicare Inc., at ¶ 41-42.
{¶ 35} R.C. 2711.01(A) provides:
A provision in any written contract * * * to settle by arbitration a
controversy that subsequently arises out of the contract, * * * or any
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agreement in writing between two or more persons to submit to arbitration
any controversy existing between them at the time of the agreement to
submit, or arising after the agreement to submit, from a relationship then
existing between them or that they simultaneously create, shall be valid,
irrevocable, and enforceable, except upon grounds that exist at law or in
equity for the revocation of any contract.
{¶ 36} R.C. 2711.02(B) provides:
If any action is brought upon any issue referable to arbitration under
an agreement in writing for arbitration, the court in which the action is
pending, upon being satisfied that the issue involved in the action is
referable to arbitration under an agreement in writing for arbitration, shall on
application of one of the parties stay the trial of the action until the arbitration
of the issue has been had in accordance with the agreement, provided the
applicant for the stay is not in default in proceeding with arbitration.
{¶ 37} As this Court further noted in Brown v. Extendicare:
* * * R.C. 2711.01 “ ‘acknowledges that an arbitration clause is, in
effect, a contract within a contract, subject to revocation on its own merits.’
” Westerfied, ¶ 18. “The arbitrability of a claim is question of law, which we
review de novo. * * *.” Id., ¶ 19. “Whether the parties have executed a valid
written arbitration agreement is a matter of state contract law.” Id., ¶ 20.
Brown v. Extendicare, at ¶ 44.
{¶ 38} As this Court further noted:
* * * “A contract is generally defined as a promise, or a set of
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promises, actionable upon breach. Essential elements of a contract include
an offer, acceptance, contractual capacity, consideration (the bargained for
legal benefit and/or detriment) a manifestation of mutual assent and legality
of object and of consideration.” * * * The parties must have a “meeting of
the minds” as to the essential terms of the contract in order to enforce the
contract. * * *
When reviewing a contract, the court's primary role is to ascertain
and give effect to the intent of the parties.* * *
Westerfield, at ¶ 20–21.
{¶ 39} “The law does not require that each aspect of a contract be explained orally
to a party prior to signing.” ABM Farms, Inc. v. Woods, 81 Ohio St. 3d 498, 692 N.E.2d
574 (1998). As this Court has further noted:
* * * The Ohio Supreme Court recognizes the “legal and common-
sensical axiom that one must read what one signs.” ABM Farms v. Woods,
81 Ohio St. 3d 498, 503, 692 N.E.2d 574 (1998). “A person of ordinary mind
cannot be heard to say that he was misled into signing a paper which was
different from what he intended, when he could have known the truth by
merely looking when he signed.” Ball v. Ohio State Home Servs., Inc., 168
Ohio App. 3d 622, 627–28, 2006-Ohio-4464, 861 N.E.2d 553, 557, ¶ 11 (9th
Dist.), quoting McAdams v. McAdams, 80 Ohio St. 232, 240–241, 88 N.E.
542, 544 (1909).
Mishler v. Hale, 2014-Ohio-5805, 26 N.E.3d 1260, ¶ 36 (2d Dist.).
{¶ 40} As this Court further noted:
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Absent indicia that the contract at issue is an adhesion contract, and
that the arbitration clause itself appears to be adhesive in nature, an
arbitration clause is to be upheld just as any other provision in a contract.[]
An arbitration clause may similarly be enforceable notwithstanding a
disparity in bargaining power or the fact that the contract had not been
subject to negotiation.[]
Garcia v. Wayne Homes, LLC, 2d Dist. Clark No. 2001 CA 53, 2002-Ohio-1884, 2002 WL
628619 at *11, (footnotes with citations omitted). We note that an “adhesion contract” is
a contract prepared by one party in a standard form, to be signed by the other party, who
is typically a consumer in a weaker position, who adheres to the contract with minimal
choice as to the terms thereof. Wascovich, at ¶ 41. As this Court further noted in
Garcia, “[A] contracting party is presumed to know the reasonable import of the contents
of a signed agreement, including the existence and scope of an arbitration clause.[]”
Garcia, id. (footnote with citation omitted).
{¶ 41} In its motion to stay, Heartland argued in part that the VAA was not
unconscionable as a matter of law. Goncy opposed Heartland’s motion to stay based
upon the fact that the PoA was signed after the VAA was executed, and on the basis of
the impact of arbitration on judicial economy and efficiency. Regarding unconscionability,
the trial court merely noted that there “is no evidence before the court to assess whether
or not the VAA was unconscionable.” We disagree.
{¶ 42} “Unconscionability is a ground for revocation of an arbitration agreement. *
* * .” (citation omitted). Hayes v. Oakridge Home, 122 Ohio St. 3d 63, 2009-Ohio-2054,
908 N.E.2d 408 ¶ 19. “The party asserting unconscionability of a contract bears the
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burden of proving that the agreement is both procedurally and substantively
unconscionable.” Id., ¶ 20. As the Ohio Supreme Court noted in Hayes:
In determining whether an arbitration agreement is procedurally
unconscionable, courts consider “the circumstances surrounding the
contracting parties' bargaining, such as the parties' ‘ “age, education,
intelligence, business acumen and experience, * * * who drafted the
contract, * * * whether alterations in the printed terms were possible, [and]
whether there were alternative sources of supply for the goods in question.”
’”
***
An assessment of whether a contract is substantively
unconscionable involves consideration of the terms of the agreement and
whether they are commercially reasonable. John R. Davis Trust 8/12/05 v.
Beggs, 10th Dist. No. 08AP–432, 2008-Ohio-6311, ¶ 13; Dorsey v.
Contemporary Obstetrics & Gynecology, Inc. (1996), 113 Ohio App. 3d 75,
80, 680 N.E.2d 240. * * * No bright-line set of factors for determining
substantive unconscionability has been adopted by this court. The factors
to be considered vary with the content of the agreement at issue.
Hayes, at ¶ 23, 33.
{¶ 43} Regarding procedural unconscionability, in her affidavit, Goncy asserted
that Younce, at the age of 64, was “lucid and fully capable of making decisions for
himself,” after suffering a mild stroke, when he signed the document, and there were no
allegations that he or Goncy were coerced into signing it. In executing the VAA, they
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both acknowledged that they had a right to review the document with a lawyer or family
member, or to cancel the VAA by written notice sent by certified mail within 30 days of
Younce’s admission. Finally, in signing the VAA, Goncy and Younce stipulated that there
were other health care facilities in their community currently available to meet Younce’s
needs. Finally, we note that, unlike the “forced arbitration programs” referred to in the
footnote from Goncy’s brief, quoted above, the VAA is clearly entitled, in bold print and
all caps, “Voluntary Arbitration Agreement.”
{¶ 44} Regarding substantive unconscionability, in Hayes, the Ohio Supreme
Court held that “an arbitration agreement voluntarily executed by a nursing-home resident
and not as a precondition to admission that eliminates the right to trial and to seek punitive
damages and attorney fees is not substantively unconscionable.” Id., at ¶ 44. The VAA
provided that Younce would receive services whether or not he executed the document.
We agree with Heartland that the VAA is neither procedurally nor substantively
unconscionable.
{¶ 45} Further, having thoroughly reviewed the record, we agree with Heartland
that the trial court improperly shifted the burden to it to show that Younce’s waiver was
informed and knowing. We conclude that the presumption that Younce understood the
import of signing the VAA is supported by Goncy’s assertion in her affidavit regarding
Younce’s lucidity. While the trial court asserted that Younce’s signature on the VAA is
“questionable on its face,” due to its alleged resemblance to Goncy’s signature, Goncy
averred that Younce himself signed the VAA. As noted above, Heartland was not
required to advise Younce and Goncy regarding the import of executing the VAA, and
they cannot now assert that they were misled into signing something distinct from what
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they intended.
{¶ 46} Heartland asserts that the presence of non-arbitrable claims and parties
who cannot be compelled to arbitrate is not a valid basis to deny a stay pending
arbitration. We agree. In Harrison v. Winchester Nursing, 2013-Ohio-3163, 996 N.E.2d
1001 (10th Dist.), the appellant therein argued, “like in Wascovich, enforcement of the
arbitration agreement will create two proceedings because some of the defendants are
not subject to the arbitration agreement, and thus, their claims will have to go through the
litigation process, rather than the arbitration process.” Harrison, at ¶ 18. In Wascovich,
“the court found the agreement to be substantively unconscionable in large part because
of the negative impact that arbitration would have on judicial economy.” Harrison, id.
Specifically, the Eleventh District in Wascovich determined that the “normal factors
favoring arbitration” did not apply therein, noting that “there is no economy or efficiency
achieved.” Id., at ¶ 51. According to the Eleventh District:
* * * In fact, the contrary is true, because a party may be forced to
participate in two proceedings, instead of one. Rather than achieve a cost
savings, there would be a substantial increase in costs. The potential
exists for an increase in the number of depositions and hearings, duplicate
discovery, and expert testimony and expense in two forums. The addition
of these factors outweighs the factors that will weigh in favor of substantive
conscionability.
Most importantly, enforcement of the agreement in this case may
result in inconsistent decisions on the issue of liability – something that
should be avoided in every case.
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Id., at ¶ 51-52.
{¶ 47} We agree with the rationale set forth in Harrison as follows:
* * *Several courts have found that the presence of non-arbitrable
claims and parties who cannot be compelled to arbitrate does not require a
trial court to deny a stay pending arbitration.
In Krafcik v. USA Energy Consultants, Inc., 107 Ohio App. 3d 59, 667
N.E.2d 1027 (8th Dist.1995), the rationale of courts in other jurisdictions
was adopted to conclude that an applicable arbitration agreement must be
enforced, despite the presence of parties who are parties to the underlying
dispute, but not subject to the arbitration agreement. The court found: “[I]t
would be patently unfair to permit a plaintiff who has agreed to arbitration to
escape that agreement by adding a defendant who is not a party to the
arbitration contract.” Id. at 64, 667 N.E.2d 1027. The court further stated,
“failing to enforce the agreement simply because the plaintiffs have joined
unrelated claims against a second defendant would fly in the face of Ohio's
strong presumption in favor of arbitrability.” Id.
In DH–KL Corp. v. Stampp Corbin, 10th Dist. No. 97APE02–206,
[1997 WL 467319] (Aug. 12, 1997), our court referenced the Federal
Arbitration Act, noting that it is “virtually identical to the Ohio statute” and
stating that, under the Federal Arbitration Act, “a party cannot avoid an
arbitration agreement simply by adding as a defendant a person not a party
to the arbitration agreement.” Id. We further stated that, pursuant to R.C.
2711.02, once it is determined that the issues raised were covered by a
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written arbitration agreement, the statute mandates that the trial be stayed
until arbitration of those issues has been conducted.
Additionally, in Murray v. David Moore Builders, Inc., 177 Ohio
App.3d 62, 2008-Ohio-2960, 893 N.E.2d 897 (9th Dist.), the court of
appeals determined that if any of the claims are subject to an arbitration
agreement, R.C. 2711.02 requires a stay of the trial proceedings, regardless
of whether the dispute also involves parties who are not a party to the
agreement and who cannot be compelled to arbitrate. Id. at ¶ 11. To the
extent there were claims subject to a valid arbitration provision, it was
determined the trial court erred by denying the stay due to the presence of
non-arbitrable claims and parties who could not be compelled to arbitrate.
Id.
Finally, in Marquez v. Koch, 4th Dist. No. 11CA3283, 2012-Ohio-
5466, the court held: “the presence of non-arbitrable claims and parties not
subject to an arbitration agreement does not justify the denial of Appellants'
motion to stay.” Id. at ¶ 11. See also Cheney v. Sears, Roebuck and Co.,
10th Dist. No. 04AP–1354, 2005-Ohio-3283, ¶ 12 (because some of the
claims are clearly within the scope of contracts containing valid arbitration
provisions, the entire case must be stayed until arbitration is resolved); Pyle
v. Wells Fargo Fin., 10th Dist. No. 05AP–644, 2005-Ohio-6478, ¶ 12 (a
presumption favoring arbitration over litigation applies even when the case
involves some arbitrable claims and some non-arbitrable claims, with the
non-arbitrable claims being determined by a court after completion of
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arbitration); and Jones v. Unibilt Industries, Inc., 2d Dist. No. Civ.A. 20578,
2004-Ohio-5983, ¶ 19 (rejecting the argument that a stay pending
arbitration is inappropriate where one of the defendants is not a party to the
arbitration agreement).
Harrison, at ¶ 20-24.
{¶ 48} Having found that the VAA is not “invalid,” as the trial court indicated, and
having determined that the presence of other claims and parties is not a valid basis to
deny a stay, we must next address which of Goncy’s claims herein are subject to the
VAA. In Peters, the decedent signed an arbitration agreement through his employment
which stated that “it applied to the ‘heirs, beneficiaries, successors, and assigns’ of the
employee.” Id., at ¶ 2. After his death, which occurred in the course of his employment,
his widow and the administrator of his estate brought a survival action and a wrongful
death action against Peters’s employer. Id., ¶ 3. “The trial court determined that while a
survival claim for Peters’s injuries could be resolved only pursuant to the plan, the
wrongful-death claim could be brought in court.” Id., at ¶ 4. On the company’s appeal,
the issue was “whether an individual may bind his or her beneficiaries to arbitrate their
wrongful-death claims by agreeing to arbitrate any claims that he or she may have against
a particular defendant.” Id., at ¶ 6.
{¶ 49} The Ohio Supreme Court noted in part that “only signatories to an arbitration
agreement are bound by its terms.” Id., ¶ 7. The Peters Court concluded that “[w]hen
Peters signed the arbitration agreement, he agreed to arbitrate his claims against the
company, whether brought during his life or after his death. Thus, the provision in the
agreement binding Peters’s heirs, beneficiaries, successors, and assigns applies to a
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survival action, which is the vessel used to pursue his claims after his death.” Id., at ¶
18. The court concluded, however, that “Peters could not restrict his beneficiaries to
arbitration of their wrongful-death claims, because he held no right to those claims; they
accrued independently to his beneficiaries for the injuries they personally suffered as a
result of the death.” Id., at ¶ 19.
{¶ 50} We initially note Goncy’s argument, based upon McFarren and Tedeschi,
that if “the conditions required for the PoA to come into being are not fulfilled, then the
representative has no authority to bind the principal.” As noted by the Fourth District in
Primmer v. Healthcare Indus. Corp., 2015-Ohio-4104, 43 N.E.3d 788 (4th Dist.):
* * * In McFarren, the court held that a nursing home resident’s
grandson, who had a power of attorney for health care for the resident,
lacked authority to bind the resident to an arbitration agreement he signed
on her behalf because there was no evidence that she was unable to make
informed health care decisions at the time. In Tedeschi the court similarly
held that the daughter of a nursing home resident who had a power of
attorney for health care could not bind the resident by signing an arbitration
agreement because there was no determination that the resident had lost
the capacity to make informed healthcare decisions for herself.
Id., ¶ 17.
{¶ 51} In both matters, lack of capacity to make healthcare decisions was a
condition precedent to the effectiveness of the PoAs. For the reasons that follow, we
conclude that Goncy’s reliance upon the above authorities is misplaced, since the
effective date of Goncy’s PoA has no bearing on the outcome herein.
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{¶ 52} Pursuant to Peters, we find that Goncy’s survivorship claim on behalf of
Younce is subject to arbitration based upon Younce’s execution of the VAA, and that the
provision in Paragraph 9 of the VAA regarding its binding nature on Younce’s
“successors, spouses, children, next of kin, guardians, administrators and legal
representative,” applies to the survivorship claim.
{¶ 53} We agree with Goncy, as reflected in the VAA, that although she signed the
document, she did so in the capacity of Younce’s “legal representative,” and she did not
do so in her individual capacity. Accordingly, we find that Goncy did not agree to arbitrate
the wrongful death claims on behalf of herself and Younce’s beneficiaries. In other words,
as it pertains to Goncy’s wrongful death claims, the VAA is not enforceable.
{¶ 54} Since Goncy’s survivorship claim is subject to arbitration, we conclude that
the trial court erred in denying Heartland’s motion to stay all proceedings pending
arbitration. Accordingly, Heartland’s assigned error is sustained, and the judgment of
the trial court is vacated to the extent the trial court denied the stay pending arbitration of
the survivorship claim.
..........
HALL, J. and WELBAUM, J., concur.
Copies mailed to:
Gary J. Leppla
Miranda R. Leppla
Philip J. Leppla
Danny M. Newman
Michael M. Mahon
Hon. Richard Skelton