Christopher, E. v. Golden Gate National ( 2019 )

J-A13007-18
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ERNEST EWING CHRISTOPHER, : IN THE SUPERIOR COURT OF
EXECUTOR FOR THE ESTATE OF : PENNSYLVANIA
MILDRED F. SNYDER :
:
:
v. :
:
:
GOLDEN GATE NATIONAL SENIOR : No. 864 WDA 2017
CARE, LLC; GGNSC UNIONTOWN, LP :
D/B/A GOLDEN LIVING CENTER :
UNIONTOWN; GGNSC UNIONTOWN :
GP, LLC; GGNSC HOLDINGS, LLC; :
GGNSC EQUITY HOLDINGS, LLC; :
GPH UNIONTOWN, LP; GGNSC :
ADMINISTRATIVE SERVICES, LLC; :
GGNSC CLINICAL SERVICES, LLC; :
GOLDEN GATE ANCILLARY, LLC; AND :
JOYCE HOCH, NHA :
:
Appellants :
Appeal from the Order May 23, 2017
In the Court of Common Pleas of Fayette County Civil Division at No(s):
No. 559 of 2016 GD
BEFORE: OLSON, J., DUBOW, J., and MUSMANNO, J.
MEMORANDUM BY OLSON, J.: FILED JANUARY 04, 2019
Appellants, Golden Gate National Senior Care, LLC, et al., appeal from
an order entered on May 23, 2017 in the Civil Division of the Court of Common
Pleas of Fayette County that overruled their preliminary objections which
sought to compel arbitration. We vacate and remand.
Appellee, Ernest Ewing Christopher, executor of the estate of Mildred F.
Snyder, commenced this action by filing a complaint in the Court of Common
J-A13007-18
Pleas of Fayette County on March 21, 2016. The complaint alleged survival
and wrongful death claims against Appellants arising from Mrs. Snyder’s
residency at the Golden Living Uniontown Facility (“the Facility”). Appellants
filed preliminary objections to the complaint on April 30, 2014 seeking, inter
alia, to compel Alternative Dispute Resolution (ADR) pursuant to an ADR
agreement signed by Mrs. Snyder’s husband, Donald Snyder, upon Mrs.
Snyder’s admission to the Facility in 2006. Following discovery, briefing and
argument, the trial court overruled Appellants’ preliminary objections on May
23, 2017.
Appellants timely appealed from the May 23, 2017 order on June 14,
2017. On June 27, 2017, the trial court issued an order pursuant to Pa.R.A.P.
1925(b) directing Appellants to file and serve a concise statement of errors
complained of on appeal pursuant to Pa.R.A.P. 1925(b). Appellants timely
complied on July 3, 2017 and the trial court issued its Rule 1925 opinion on
August 17, 2017. In sum, the court found that there was no meeting of the
minds because the ADR agreement did not clearly identify the parties to the
contract; additionally, the court found that Mr. Snyder lacked authority to
execute the agreement; and, finally, the court deemed the agreement to be
void due to lack of consideration and unconscionability.
Appellants raise the following claims in their brief:
I. Whether the order refusing to compel enforcement of the
ADR Agreement is immediately appealable as of right?
II. Whether the ADR Agreement is void due to either
inadequate consideration or unconscionability?
-2-
J-A13007-18
III. Whether the Trial Court correctly found that Donald Snyder
lacked authority to execute the ADR Agreement?
IV. Whether the ADR Agreement is unenforceable because it did
not adequately identify the parties to the Agreement?
Appellants’ Brief at 4.1
Before turning to the merits of this appeal, we consider the issue
involving the appealability of the instant interlocutory order since it pertains
to our authority to exercise jurisdiction of this dispute. See In re: Estate of
Cherwinski, 856 A.2d 165, 166 (Pa. Super. 2004) (“[Superior Court] may
raise the issue of appealability sua sponte because it affects our jurisdiction
over the case.”).
“Under Pennsylvania law, an appeal may [] be taken from an
interlocutory order as of right (Pa.R.A.P. 311), from a final order (Pa.R.A.P.
341), from a collateral order (Pa.R.A.P. 313), or from any interlocutory order
by permission (Pa.R.A.P. 31[2], [Pa.R.A.P.] 1311, 42 Pa.C.S.A. § 702(b)).”
Cont'l Bank v. Andrew Bldg. Co., 648 A.2d 551, 553 (Pa. Super. 1994).
Pursuant to Pa.R.A.P. 311(a)(8), “[a]n appeal may be taken as of right and
without reference to Pa.R.A.P. 341(c) from . . . [a]n order that is made final
or appealable by statute or general rule, even though the order does not
dispose of all claims and of all parties.” Pa.R.A.P. 311(a)(8). By statute, an
appeal may be taken from a court order denying an application to compel
arbitration made under 42 Pa.C.S.A. § 7304. See 42 Pa.C.S.A. § 7320(a)(1).
____________________________________________
1 We have re-ordered the issues raised in Appellants’ brief for ease of
disposition.
-3-
J-A13007-18
In this case, we consider a trial court order that overruled preliminary
objections seeking enforcement of an ADR agreement entered into between
Appellants and Mrs. Snyder. The gravamen of Appellants’ claim is that Mrs.
Snyder delegated her authority to sign an ADR agreement to her husband, Mr.
Snyder.
On August 22, 2017, this Court entered a rule to show cause against
Appellants, directing them to explain why the trial court’s order was
appealable. Our show cause order cited to this Court’s previous opinion in
Armstrong World Industries, Inc. v. Travelers Indemnity Company,
115 A.3d 342 (Pa. Super. 2015) (Armstrong). In Armstrong, a panel of
this Court concluded that while a request to compel arbitration was
immediately appealable as of right, a request to compel other types of dispute
resolution was not.2
After the issuance of our decision in Armstrong, our Supreme Court
decided Taylor v. Extendicare Health Facilities, Inc., 147 A.3d 490 (Pa.
2016). At issue in Taylor was the enforceability of an ADR provision that, like
the one presently before us, provided that the parties would first pursue
mediation and, if that failed, then pursue binding arbitration. See Taylor,
147 A.3d at 494. The trial court’s order overruling the Taylor defendants’
preliminary objections was appealed to this Court pursuant to 42 Pa.C.S.A.
____________________________________________
2The ADR provisions in the parties’ agreement in Armstrong ranged from
negotiation to binding arbitration.
-4-
J-A13007-18
§ 7320(a)(1) and, ultimately, our Supreme Court enforced the ADR provision.
Appellants argue, and we agree, that our Supreme Court’s decision in Taylor
displaces our prior ruling in Armstrong. Thus, we have jurisdiction to
consider this appeal.
We initially observe that our review of a claim challenging a trial court’s
order overruling preliminary objections in the nature of a petition to enforce
an arbitration clause found in a contractual agreement “is limited to
determining whether the trial court's findings are supported by substantial
evidence and whether the trial court abused its discretion in denying the
petition.” Cardinal v. Kindred Healthcare, Inc., 155 A.3d 46, 49-50 (Pa.
Super. 2017) (citation omitted), appeal denied 170 A.3d 1063 (Pa. 2017). “As
contract interpretation is a question of law, our review of the trial court's
decision is de novo and our scope is plenary.” Id.Appellants’ second issue challenges the trial court's conclusion that the
ADR agreement in question is unenforceable because it is unconscionable.
This Court recently explained:
Pennsylvania has a well-established public policy that favors
arbitration, and this policy aligns with the federal approach
expressed in the Federal Arbitration Act, 9 U.S.C. §§ 1–16
(FAA). The fundamental purpose of the [FAA] is to relieve
the parties from expensive litigation and to help ease the
current congestion of court calendars. Its passage was a
congressional declaration of a liberal federal policy favoring
arbitration agreements.
MacPherson v. Magee Meml Hosp. for Convalescence, 128
A.3d 1209, 1219 (Pa. Super. 2015) (en banc), quoting Pisano v.
Extendicare Homes, Inc., 77 A.3d 651, 661 (Pa. Super. 2013)
-5-
J-A13007-18
(citations, quotation marks, and footnote omitted). When
addressing the issue of whether there is a valid agreement to
arbitrate, courts generally should apply ordinary state-law
principles that govern the formation of contracts, but in doing so,
must give due regard to the federal policy favoring arbitration.
Gaffer, 936 A.2d at 1114.
Cardinal, 155 A.3d at 52-53.
Here, the trial court offered two conclusory determinations in finding the
ADR clause sub judice to be unconscionable. First, the court found, without
elaboration, that the ADR clause was substantively unconscionable because
the benefits to Appellants were “grossly disproportionate” to any value
received by Mrs. Snyder. See Trial Court Opinion, 8/17/17, at 5. Second,
the court concluded that the ADR clause was procedurally unconscionable
since the circumstances of its execution left Mr. Snyder without meaningful
choice. After careful review, we conclude that these assessments are contrary
to Pennsylvania law and unsupported by the record. We therefore cannot
agree that the Snyders met their burden of proving that the clause is
unenforceable. See Sally v. Option One Mort. Corp., 925 A.2d 115, 129
(Pa. 2007).
“Unconscionability has generally been recognized to include an
absence of meaningful choice on the part of one of the parties
together with contract terms which are unreasonably favorable to
the other party.” MacPherson, 128 A.3d at 1221, quoting
Williams v. Walker–Thomas Furniture Company, 350 F.2d
445, 449 (D.C. Cir. 1965)[.]
An unconscionability analysis requires a two-fold determination:
(1) that the contractual terms are unreasonably favorable to the
drafter (“substantive unconscionability”), and (2) that there is no
meaningful choice on the part of the other party regarding the
acceptance of the provisions (“procedural unconscionability”).
-6-
J-A13007-18
MacPherson, 128 A.3d at 1221 (citations omitted). Courts have
refused to hold contracts unconscionable simply because of a
disparity of bargaining power between the two parties. Witmer
v. Exxon Corp., 434 A.2d 1222, 1228 (Pa. 1981); see also K &
C, Inc. v. Westinghouse Electric Corp., 263 A.2d 390 (Pa.
1970).
Cardinal, 155 A.3d at 53-54 (parallel citations omitted).
Our review of the parties’ agreement leads us to conclude that, because
the provision sub judice contains terms similar to the agreements examined
in our prior cases such as Cardinal and MacPherson, the ADR clause here is
neither procedurally nor substantively unconscionable, and that the trial court
wrongly refused to enforce it. Cf. MacPherson, 128 A.3d at 1221-1222
(arbitration agreement was neither procedurally nor substantively
unconscionable where it provided: “(1) the parties shall pay their own fees
and costs, similar to civil litigation practice in common pleas court; (2) a
conspicuous, large, bolded notification that the parties, by signing, are waiving
the right to a trial before a judge or jury; (3) a notification at the top of the
agreement, in bold typeface and underlined, that it is voluntary, and if the
patient refuses to sign it, the Patient will still be allowed to live in, and receive
services at the facility; (4) a provision that the facility will pay the arbitrators
fees and costs; (5) a statement that there are no caps or limits on damages
other than those already imposed by state law; and (6) a provision allowing
the patient to rescind within thirty days”) (internal quotations omitted);
Cardinal, 155 A.3d at 53-54 (same). Moreover, the trial court’s finding that
Mr. Snyder lack meaningful choice in signing the agreement is contrary to the
-7-
J-A13007-18
record. Mr. Snyder was not coerced into signing the agreement. In fact, he
admitted that he voluntarily signed the agreement and was not pressured to
do so. Also, both he and his wife understood that signing the agreement
meant Mrs. Snyder waived her right to a jury trial. In light of these factors,
we reject the trial court’s conclusion that the ADR clause here was
unconscionable.
As for the trial court’s finding that the ADR agreement is void for lack of
consideration, we disagree. In rendering this conclusion, the trial court found
that Mrs. Snyder “received no benefit whatsoever for her agreement for ADR.”
Trial Court Opinion, 8/17/17 at 5. Thus, the trial court determined that
consideration for the ADR agreement was lacking. In citing to this conclusion
reached by the trial court, Appellee acknowledges that the ADR agreement at
issue provides that the “speed, efficiency, and cost-effectiveness of the ADR
process . . . constitute good and sufficient consideration for the acceptance
and enforcement of this Agreement.” Appellee’s Brief at 36. However,
Appellee’s argument is that the stated purpose of this clause, i.e., speed,
efficiency and cost-effectiveness, would be undermined if the survival claim
was handled pursuant to the ADR agreement and the wrongful death claim
proceeded in the Court of Common Pleas. Thus, Appellee agrees with the trial
court that there is no benefit to Appellee to apply the ADR agreement. This
argument must fail. As our Supreme Court noted in Taylor, “the prospect of
inefficient, piecemeal litigation proceeding in separate forums is no
-8-
J-A13007-18
impediment to the arbitration of arbitrable claims. Indeed, where a plaintiff
has multiple disputes with separate defendants arising from the same
incident, and only one of those claims is subject to an arbitration agreement,
the [United States Supreme] Court requires, as a matter of law, adjudication
in separate forums.” Taylor, 147 A.3d at 507. Thus, any alleged lack of
benefit to Appellee to proceed with the survival claim under the ADR
agreement does not void the agreement.
Turning to Appellants’ third issue, we are also unable to agree with the
trial court’s conclusion that Mr. Snyder lacked authority to sign the agreement
on behalf of his wife. The following principles govern our examination of this
issue.
An agency relationship may be created by any of the following:
(1) express authority, (2) implied authority, (3) apparent
authority, and/or (4) authority by estoppel. Express authority
exists where the principal deliberately and specifically grants
authority to the agent as to certain matters. See Bolus v. United
Penn Bank, 525 A.2d 1215 (Pa. Super. 1987). Implied authority
exists in situations where the agent's actions are “proper, usual
and necessary” to carry out express agency. See Passarelli v.
Shields, 156 A.2d 343 (Pa. Super. 1959). Apparent agency exists
where the principal, by word or conduct, causes people with whom
the alleged agent deals to believe that the principal has granted
the agent authority to act. See Turner Hydraulics v.
Susquehanna Construction Co., 606 A.2d 532 (Pa. Super.
1992). Authority by estoppel occurs when the principal fails to
take reasonable steps to disavow the third party of their belief
that the purported agent was authorized to act on behalf of the
principal. See Turnway Corp. v. Soffer, 336 A.2d 871 (Pa.
1975).
Walton v. Johnson, 66 A.3d 782, 787 (Pa. Super. 2013) (parallel citations
omitted).
-9-
J-A13007-18
We have described the formation of agency relationships in the following
manner:
The basic elements of agency are the manifestation by the
principal that the agent shall act for him, the agent's acceptance
of the undertaking and the understanding of the parties that the
principal is to be in control of the undertaking. Lapio v. Robbins,
729 A.2d 1229, 1234 (Pa. Super. 1999) (citation omitted). The
creation of an agency relationship requires no special formalities.
Lincoln Avenue Indus. Park v. Norley, 677 A.2d 1219, 1222
(Pa. Super. 1996). The existence of an agency relationship is a
question of fact. Volunteer Fire Co. v. Hilltop Oil Co., 602 A.2d
1348, 1351 (Pa. Super. 1992). The party asserting the existence
of an agency relationship bears the burden of proving it by a fair
preponderance of the evidence. Id. “In establishing agency, one
need not furnish direct proof of specific authority, provided it can
be inferred from the facts that at least an implied intention to
create the relationship of principal and agent existed.”
Commonwealth v. Maker, 716 A.2d 619, 623 (Pa. Super.
1998), [affirmed 761 A.2d 1167 (Pa. 2000) (per curiam)].
However, we do not assume agency by a mere showing that one
person does an act for another. Ferry v. Fisher, 709 A.2d 399,
405 n.5 (Pa. Super. 1998).
Walton, 66 A.3d at 787, quoting B & L Asphalt Industries, Inc. v. Fusco,
753 A.2d 264, 269 (Pa. Super. 2000).
The record confirms that Mr. Snyder executed the arbitration agreement
with express authority. After Appellants’ representative presented and
explained the agreement to both Mr. and Mrs. Snyder, Mrs. Snyder, who
understood the nature of the document at issue, expressly instructed her
husband, Mr. Snyder, to sign the arbitration agreement. The record before us
leaves little doubt that Mr. Snyder enjoyed express authority to sign the
arbitration contract.
- 10 -
J-A13007-18
Lastly, we cannot agree that the contract did not adequately identify the
parties. Citing our decision in Bair v. Manor Care Elizabethtown, PA, LLC,
108 A.3d 94 (Pa. Super. 2015), the trial court concluded that the absence of
Mildred Snyder’s name on the first page of the agreement meant that there
was no meeting of the minds concerning the agreement. Bair is easily
distinguished, however. In that case, the facility did not execute the
agreement, which implied that there was no meeting of the minds and that
the form agreement failed to adequately identify the parties. Here, in
contrast, Mrs. Snyder is identified as the resident at the end of the agreement,
just above her husband’s signature, and the document was signed by an
authorized representative of the Facility. Thus, the agreement in this case
properly identified the parties to be bound by the agreement.
For each of the foregoing reasons, we are compelled to conclude that
the ADR agreement executed by the parties is valid and enforceable. Thus,
the trial court should have directed the parties to proceed in accordance with
the ADR agreement as applicable under Pennsylvania law. Specifically,
Appellee’s survival claims are subject to the ADR provision while the wrongful
death claims may proceed before the Court of Common Pleas. See Pisano,
77 A.3d at 661-662 (survival claims of decedent signatories are subject to
compulsory arbitration but non-signatory wrongful death claimants cannot be
compelled to arbitrate claims under Pennsylvania’s Wrongful Death Act). The
trial court’s contrary ruling was in error.
- 11 -
J-A13007-18
Order vacated. Case remand with instructions. Jurisdiction relinquished.
Judge Dubow joins this Memorandum.
Judge Musmanno notes dissent.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/4/2019
- 12 -