Burkett v. St. Francis Country House

• Decision Date: 25 January 2016
• Docket Number: No. 2633 EDA 2013,2633 EDA 2013
• Citation: 133 A.3d 22
• Parties: Roy J. BURKETT Jr., Administrator of the Estate of Nannie Burkett, Deceased and in his own right, Appellee v. ST. FRANCIS COUNTRY HOUSE, Catholic Healthcare Services and Archdiocese of Philadelphia, Appellants.
• Court: Pennsylvania Superior Court

133 A.3d 22

Roy J. BURKETT Jr., Administrator of the Estate of Nannie Burkett, Deceased and in his own right, Appellee

v.ST. FRANCIS COUNTRY HOUSE, Catholic Healthcare Services and Archdiocese of Philadelphia, Appellants.

No. 2633 EDA 2013

Superior Court of Pennsylvania.

Argued July 29, 2014.

Filed Jan. 25, 2016.

Reargument Denied March 23, 2016.

Frank R. Emmerich, Jr., Philadelphia, for appellants.

Rhonda H. Wilson, Philadelphia, for appellee.

BEFORE: BOWES, J., OTT, J., and STRASSBURGER, J.^*

OPINION BY OTT, J.:

St. Francis Country House, Catholic Healthcare Services and Archdiocese of Philadelphia (collectively, "St. Francis") appeal from the order of the Philadelphia County Court of Common Pleas, dated August 16, 2013, denying St. Francis's motion to compel arbitration of the professional liability action which was filed against St. Francis by Roy J. Burkett, Jr., Administrator of the Estate of Nannie Burkett, deceased, and in his own right as son (collectively, "Burkett"). St. Francis raises the following three arguments: (1) the trial court erred as a matter of law in refusing to order all of Burkett's claims to arbitration; (2) in the alternative, the court erred in refusing to sever and refer Burkett's Survival Action claims to arbitration (made on behalf of the Decedent's Estate), when the Federal Arbitration Act ("FAA")¹ required it to do so; and (3) the court's reliance on Pisano v. Extendicare Homes, Inc., 77 A.3d 651 (Pa.Super.2013), appeal denied,624 Pa. 683, 86 A.3d 233 (2014), cert. denied, ––– U.S. ––––, 134 S.Ct. 2890, 189 L.Ed.2d 838 (2014), is misplaced as that case was improperly decided and should be overturned.² Because this Court's recent decision in Taylor v. Extendicare Health Facilities, Inc., 113 A.3d 317 (Pa.Super.2015), allocatur granted, ––– Pa. ––––, 122 A.3d 1036 (2015), controls this matter, we are constrained to affirm the trial court's order.

The facts and procedural history are as follows. St. Francis owned and operated St. Francis Country House, a nursing home facility where the decedent, Nannie Burkett ("Decedent"), resided at the time of her death. Upon admission to the facility on June 14, 2010, Burkett executed a Nursing Facility Admission Agreement ("Admission Agreement") provided by St. Francis on behalf of Decedent. Pursuant to the Admission Agreement, Burkett was designated as a "Responsible Person." See Admission Agreement, 6/14/2010. The Admission Agreement contains a mandatory arbitration clause ("Arbitration Clause"), which reads, in pertinent part:

(b) Personal Injury or Medical Malpractice. Unless resolved or settled by mediation, any claim that the Resident may have against the Facility for any personal injuries sustained by the Resident arising from or relating to any alleged medical malpractice, inadequate care, or any other cause or reason while residing in the Facility, shall be settled exclusively by arbitration. This means that the Resident will not be able to file a lawsuit in any court to bring any claims that the Resident may have against the Facility for personal injuries incurred while residing in the Facility. It also means that the Resident is relinquishing or giving up all rights that the Resident may have to a jury trial to litigate any claims for damages or losses allegedly incurred as a result of personal injuries sustained while residing in the Facility.

Id. at ¶ 19.4(b). Burkett also signed a St. Francis Country House Responsible Person Agreement, indicating he was Decedent's representative. See St. Francis Country House Responsible Person Agreement, 6/14/2010. Decedent subsequently passed away on November 24, 2010.

On October 18, 2012, Burkett filed a complaint, alleging that while Decedent was a resident at the facility, she sustained serious and permanent injuries, which were directly and proximately caused by the negligence of the facility. The complaint included counts of negligence, vicarious liability, wrongful death, and survival action. St. Francis filed an answer and new matter on February 8, 2013. Seven days later, St. Francis also filed a motion to compel arbitration pursuant to 42 Pa.C.S. § 7304("Court proceedings to compel or stay arbitration"). Burkett responded with an opposition to the motion to compel arbitration, arguing inter alia, St. Francis was precluded from relying on the right to arbitrate, as it had failed to properly plead it as an affirmative defense as required by Pennsylvania Rule of Civil Procedure 1030. Oral argument was held on June 6, 2013.

Subsequently, on August 21, 2013, the trial court entered an order denying St. Francis's motion to compel arbitration. St. Francis then filed a motion for reconsideration, which was denied on September 23, 2013. St. Francis filed this timely appeal.³

Initially, we begin with two procedural matters. First, Burkett claims St. Francis has waived the right to arbitration because it did not so plead pursuant to Pa.R.C.P. 1030.⁴ Rule 1030, with certain exceptions not relevant here, provides: "[A]ll affirmative defenses including but not limited to the defense[ ] of ... arbitration and award ... shall be pleaded in a responsive pleading under the heading 'New Matter [.]' " Pa.R.C.P. 1030(a). Furthermore, Pa.R.C.P. 1032requires that, subject to certain exceptions not relevant to the present matter, "[a] party waives all defenses and objections which are not presented either by preliminary objection, answer or reply[.]" Pa.R.C.P. 1032(a). We find that although Burkett is accurate in stating that, generally, a defense of arbitration should be pled as new matter, "our Rules of Civil Procedure must be liberally construed so that actions are resolved in a just, speedy and inexpensive manner consistent with [Pa.R.C.P.] 126." Blumenstock v. Gibson, 811 A.2d 1029, 1039 (Pa.Super.2002). Rule 126provides:

The rules shall be liberally construed to secure the just, speedy and inexpensive determination of every action or proceeding to which they are applicable. The court at every stage of any such action or proceeding may disregard any error or defect of procedure which does not affect the substantial rights of the parties.

Pa.R.C.P. 126.

Here, St. Francis did not plead the right to arbitration in its answer and new matter, filed on February 8, 2013. However, within seven days, St. Francis did file a motion to compel arbitration. A review of the docket reveals that with the exception of Burkett's reply to new matter, no other pleadings or motions were exchanged during this time. Therefore, while we find St. Francis's assertion of arbitration was nominally belated and procedurally inaccurate, it did not affect the substantial rights of the parties, and therefore, the facility did not waive its right to compel arbitration by failing to set forth the assertion in new matter or preliminary objection.

Turning to the second procedural matter, which concerns appealability, we note the following:

"As a general rule, an order denying a party's preliminary objections is interlocutory and, thus, not appealable as of right. There exists, however, a narrow exception to this oft-stated rule for cases in which the appeal is taken from an order denying a petition to compel arbitration." Shadduck v. Christopher J. Kaclik, Inc., 713 A.2d 635, 636 (Pa.Super.1998)(citations omitted). See also 42 Pa.C.S. § 7320(a)(1)(stating appeal may be taken from court order denying application to compel arbitration); Pa.R.A.P. 311(a)(8)(stating appeal may be taken as of right and without reference to Pa.R.A.P. 341(c)from order "which is made appealable by statute or general rule.").

Elwyn v. DeLuca, 48 A.3d 457, 460 (Pa.Super.2012). Accordingly, the present appeal is properly before us.

Based on the nature of St. Francis's first two claims, we will address them together. First, St. Francis contends the trial court erred in denying its motion to compel arbitration because this dispute is governed by the FAA⁵ and all of Burkett's claims should be submitted to arbitration based on the following: (1) a valid agreement to arbitrate exists in the Admission Agreement; and (2) all claims made against St. Francis, including those pursuant to the Survival Act⁶ and the Wrongful Death Act,⁷ fall within the scope of the Arbitration Clause. See St. Francis's Brief at 9–13. St. Francis argues the court improperly focused on one aspect of the Arbitration Clause, that it referred to the "Resident" and not to a "third party." Id. at 12. Therefore, it claims the court mistakenly concluded Burkett was not a party to or bound by the provision. Id. at 12. Further, St. Francis states that "[e]ven if this Court were to conclude that Pennsylvania law does not require such a result, federal law unquestionably does" pursuant to the FAA. Id. at 13. Second, St. Francis alleges that regardless of whether the claims Burkett makes on his behalf fall outside of the Arbitration Clause, the FAA requires the survival action be severed from the wrongful death action and referred to arbitration. Id. at 14–17.

We are guided by the relevant standard of review:

We review a trial court's denial of a motion to compel arbitration for an abuse of discretion and to determine whether the trial court's findings are supported by substantial evidence. In doing so, we employ a two-part test to determine whether the trial court should have compelled arbitration. The first determination is whether a valid agreement to arbitrate exists. The second determination is whether the dispute is within the scope of the agreement.

Smay v. E.R. Stuebner, Inc., 864 A.2d 1266, 1270 (Pa.Super.2004)(citations omitted). With regard to the first element, Burkett does not dispute that he entered into an agreement on the behalf of the Decedent with St. Francis. Therefore, we need not examine whether a valid agreement to arbitrate exists.

With respect to the second element, we note that "[w]hether a claim is within the scope of an arbitration provision is a matter of contract, and as with all questions of law,...