Campbell v. St. John Hosp.
| Decision Date | 07 May 1990 |
| Docket Number | Docket Nos. 84112,84904 |
| Citation | 434 Mich. 608,455 N.W.2d 695 |
| Parties | Deborah CAMPBELL, Personal Representative of the Estate of Mamie Sutton, Deceased, Plaintiff-Appellee, v. ST. JOHN HOSPITAL, a Michigan nonprofit corporation, and Louis Gregory, M.D., Defendants, and Ronald E. Rourke, M.D., Defendant-Appellant. Deborah CAMPBELL, Personal Representative of the Estate of Mamie Sutton, Deceased, Plaintiff-Appellee, v. ST. JOHN HOSPITAL, a Michigan nonprofit corporation, and Ronald E. Rourke, M.D., Defendants, and Louis J. Gregory, M.D., Defendant-Appellant. |
| Court | Michigan Supreme Court |
Sachs, Nunn, Kates, Kadushin, O'Hare, Helveston & Waldman, P.C. by David K Barnes, Jr., Barbara M. Robinson, Detroit, for plaintiff-appellee.
Schureman, Frakes, Glass & Wulfmeier, Stephen A. Schaefer, J. Kelly Carley, Priscilla L. Schwarze, Detroit, for defendant-appellant Ronald E. Rourke, M.D.
Plunkett & Cooney, P.C. by Robert G. Kamenec, Detroit, for defendant-appellant Louis J. Gregory, M.D.
We granted leave to appeal in this case limited to the following two questions: (1) whether an agreement under the Malpractice Arbitration Act 1 (MAA) deprives a circuit court of jurisdiction to resolve a controversy, and (2) whether a defendant waives enforcement of an arbitration agreement by failing to assert the existence of the agreement in the first responsive pleading. 2 We find that such an agreement does not oust the court of jurisdiction and that it must be asserted in the first responsive pleading. We remand this case to the circuit court for further proceedings.
On January 3, 1982, Mamie Sutton was admitted to St. John Hospital in order to undergo a hysterectomy. She signed an agreement that day to arbitrate claims arising from health care provided at St. John. She died in the hospital following surgery on January 30, 1982.
On January 25, 1984, Deborah Campbell, as personal representative of the estate of her mother, Ms. Sutton, brought a wrongful death action in Wayne Circuit Court against Dr. Ronald Rourke and Dr. Louis Gregory. 3 The plaintiff filed an amended complaint on March 29, 1985.
Dr. Gregory answered the original complaint and included the following affirmative defenses:
1. The claim of the Plaintiff is barred by virtue of the application of the Michigan Arbitration Act;
2. The claim of the Plaintiff is time barred by virtue of the Michigan Statute of Limitations.
Dr. Gregory's response to the amended complaint indicated reliance upon his previously filed affirmative defenses. (Dr. Gregory's specific contention that his affirmative defenses "included a claim that plaintiff's case was barred by virtue of the Michigan Medical Malpractice Act" is not borne out by the record.)
Dr. Rourke's responsive pleadings did not refer in any way to an agreement to arbitrate.
The parties participated in discovery, including the taking of depositions and the exchange of interrogatories and responses.
In April, 1986, both defendants moved for summary disposition on the basis of a valid medical malpractice arbitration agreement. The trial court found the agreement to be valid and granted the defendants' motions. The Court of Appeals reversed, 170 Mich.App. 551, 428 N.W.2d 711 (1988). The Court first affirmed the trial court's ruling that the arbitration agreement was valid and binding under the MAA. Id., pp. 556-558, 428 N.W.2d 711. The existence of such an agreement, however, was held not to deprive a circuit court of subject matter jurisdiction. Id., p. 558, 428 N.W.2d 711. The Court determined that a defendant must raise the agreement as an affirmative defense in the first responsive pleading in order to preserve the rights to demand arbitration and to assert the agreement as the basis of a motion for summary disposition. Id., pp. 558-559, 428 N.W.2d 711. Rourke was deemed to have waived his rights under the arbitration agreement. Gregory's case was remanded to the trial court for a determination of whether his conduct following his answer to the complaint worked a waiver of his contractual right to arbitration notwithstanding his assertion of the arbitration defense in his first responsive pleadings. Id., pp. 559-560, 428 N.W.2d 711.
As noted by the Court of Appeals and the parties, various panels of that Court have reached different results regarding the effect of a valid medical malpractice arbitration agreement on the subject matter jurisdiction of the circuit court. Id., p. 558, n. 1, 428 N.W.2d 711, and accompanying text. In this regard, we agree with and adopt the result of the Court of Appeals panel in the instant case, id., pp. 558-559, 428 N.W.2d 711, which in turn was based on the analysis in Hendrickson v. Moghissi, 158 Mich.App. 290, 294-298, 404 N.W.2d 728 (1987):
Although we find no Michigan cases directly relating to medical malpractice arbitration agreements, a detailed blueprint for analyzing the jurisdictional effects of arbitration agreements has been developed in the context of automobile insurance policies. In DAIIE v Maurizio, 129 MichApp 166; 341 NW2d 262 (1983), lv den 419 Mich 877 (1984), the plaintiff insurer sought a declaratory ruling as to the "stacking" of insurance coverage. The trial court ruled in favor of the plaintiff and enjoined the defendant from proceeding with arbitration. Nearly three years later, the defendant filed a motion to vacate the judgment and injunction as void for lack of subject matter jurisdiction. The trial court granted the defendant's motion. The sole issue on appeal was whether a statutory arbitration agreement deprives the circuit court of subject matter jurisdiction over an arbitrable controversy, thus allowing a party to challenge a judicial decision as void, undeterred by any time constraints.
In rejecting the defendant's position in DAIIE v Maurizio, regarding lack of subject matter jurisdiction, this Court first observed that the Michigan Constitution vests the circuit court with broad original jurisdiction over all matters, particularly civil, so long as jurisdiction is not expressly prohibited by law. Const.1963, art 6, Sec. 13. 129 MichApp [at] 172 . Subject matter jurisdiction in particular is defined as the court's ability " 'to exercise judicial power over that class of cases; not the particular case before it, but rather the abstract power to try a case of the kind or character of the one pending.' " 129 MichApp [at] 172 , citing Joy v Two-Bit Corp, 287 Mich 244, 253; 183 NW 45 (1938). Circuit court jurisdiction over a particular subject matter is denied only by constitution or statute. MCL 600.605; MSA 27A.605. In construing such statutes or constitutional provisions, retention of jurisdiction is presumed and any intent to divest the circuit court of jurisdiction must be clearly and unambiguously stated. 129 MichApp 174 , citing Leo v Atlas Industries, Inc, 370 Mich 400, 402; 121 NW2d 926 (1963), and Crane v Reeder, 28 Mich 527, 532-533 (1874).
Application of the above analysis to the instant case persuades us that the circuit court is not deprived of subject matter jurisdiction over medical malpractice controversies governed by arbitration agreements. Medical malpractice claims constitute traditional civil actions for money damages and clearly fall within the circuit court's original subject matter jurisdiction. Neither party disputes this proposition. Defendants contend, however, that Sec. 5044(2) of the Malpractice Arbitration Act, MCL 600.5040 et seq.; MSA 27A.5040 et seq., and the uniform arbitration act, MCL 600.5001 et seq.; MSA 27A.5001 et seq., expressly deprive the circuit court of jurisdiction to hear medical malpractice claims where the complaining party has signed a valid and binding arbitration agreement. We disagree.
* * * * * *
Contrary to defendants' claim, Sec. 5044(2) does not vest exclusive jurisdiction in a three-member panel of arbitrators. Moreover, our review of the entire Malpractice Arbitration Act fails to disclose a single sentence which could be construed as such a legislative mandate.
Even when we read the Malpractice Arbitration Act in conjunction with the uniform arbitration act, we are unable to infer any intent on the part of the Legislature to deprive circuit courts of subject matter jurisdiction in these controversies.
* * * * * *
In our view, an arbitration agreement is in the nature of a release or a statute of limitations, narrowing a party's legal rights to pursue a particular claim in a particular forum. These rights are enforceable by the courts such that a valid release or the expiration of an applicable limitations period will defeat an otherwise valid claim. The circuit court is thus bound to apply and enforce the law as to releases or statute of limitations defenses, but is not deprived of subject matter jurisdiction over the controversy. The same principles are true with regard to medical malpractice arbitration agreements.
We also agree with the result of the Court of Appeals regarding the defendants' waiver of their arbitration rights. Campbell, supra, pp. 559-560, 428 N.W.2d 711. Our court rules require that affirmative defenses be stated in a party's responsive pleading, and they provide that defenses not asserted in the responsive pleading are waived. MCR 2.111(F). While it is true that an arbitration agreement is not among the defenses enumerated in MCR 2.111(F)(3)(a), the inclusion of the words "such as" in that subsection indicates that the enumerated defenses were not intended to form a closed class, but were included by way of illustration only. See also F.R.Civ.P. 8(c) ().
We first note our agreement with the observation in Hendrickson that "an arbitration agreement is in the nature of a release or a statute of limitations, narrowing a party's legal rights to pursue a particular claim...
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