Emory Healthcare, Inc. v. Farrell

• Decision Date: 02 June 2021
• Docket Number: A21A0173
• Citation: 359 Ga.App. 621,859 S.E.2d 576
• Court: Georgia Court of Appeals
• Parties: EMORY HEALTHCARE, INC. et al. v. FARRELL.

359 Ga.App. 621

859 S.E.2d 576

EMORY HEALTHCARE, INC. et al.

v.FARRELL.

A21A0173

Court of Appeals of Georgia.

June 2, 2021

Bendin Sumrall & Ladner, Robert W. Stannard, Alan J. Payne ; Owen Gleaton Egan Jones & Sweeney, Kyle H. Sparwath, Stephen H. Sparwath ; Huff Powell & Bailey, Anna B. Fretwell, Kristin E. Malcolm, for Appellants.

Kastorf Law, Kurt G. Kastorf, amicus curiae.

Kenneth M. Sissel, Lilburn, for Appellee.

Dillard, Presiding Judge.

Georgia has a robust policy of favoring the resolution of legal disputes through arbitration. But arbitration agreements are still contracts, and the presumption of arbitrability—strong as it is—cannot displace the traditional rules of contract formation. And here, we are asked to consider the contractual effect of a hospital's practice of re-presenting patients with admission forms that include an ostensibly indefinite arbitration agreement on any previously signed arbitration agreements by those patients. So, here is how it works. A patient seeks admittance to a hospital for healthcare services and is presented with paperwork to sign as a condition of being admitted. These admissions forms include an arbitration agreement governing this visit and all future admittances. If the patient signs the arbitration agreement during each hospital stay, then there is no issue as to the formation of those agreements. But what if—as in this case—a patient signs an indefinite arbitration agreement during one visit, later seeks admission for additional or other healthcare services, is re-presented with the same arbitration agreement, refuses to sign it, and is still admitted to the hospital? Can the hospital rely upon the prior arbitration agreement to force the patient to arbitrate any claims arising out of the subsequent hospital stay? The short answer is: No. By re-presenting an indefinite arbitration agreement to a patient who has already executed one, the hospital has contractually abandoned the prior agreement.

This brings us to Richard Farrell's lawsuit against the Emory Defendants,¹ in which he alleges that he suffered injuries as a result of the defendants’ professional negligence in performing a surgical procedure. The Emory Defendants filed a motion to compel arbitration based on an agreement contained in admissions paperwork signed by Farrell several months earlier, when he sought treatment unrelated to that at issue in his lawsuit. The trial court denied the Emory Defendants’ motion, and they now appeal. In doing so, they argue the trial court erred in ruling that their practice of re-presenting an arbitration agreement to a previously admitted patient constitutes an abandonment of any prior arbitration agreement signed by that patient. For the reasons set forth infra , we affirm.

This Court reviews the grant or denial of a motion to compel arbitration de novo to see if the trial court's decision is correct as a matter of law;² but we defer to the trial court's factual findings unless they are clearly erroneous.³ So viewed, the record shows that in March and April 2018, Farrell sought treatment with Emory for medical issues on several occasions. Each time, Emory presented Farrell with an identical Admission/Registration Agreement, which outlined the terms of his admission. Paragraph VI of this agreement is titled "Agreement to Alternative Dispute Resolution," and provides as follows:

I agree that any claim or dispute arising out of or related to the provision of health care services to me by Emory University, Inc. d/b/a [numerous Emory-related entities], or their employees or agents ("Emory"), except as otherwise provided herein, shall be resolved by final and binding arbitration. I agree that this provision is governed by the terms of the Federal Arbitration Act. I understand and agree that this agreement includes and encompasses any claims arising out of or relating to health care services which shall be provided to me upon this admission as well as all health care services provided to me by Emory in the future, provided, however, that this agreement does not include and encompass any claim or dispute by either party arising out of or related to the billing or payment for health care services. I understand and agree that by agreeing to arbitrate, I am waiving my right to a jury trial (if otherwise available). I understand that this agreement is also binding on any individual or entity claiming by or through me or on my behalf. I understand that this agreement is voluntary and is not a precondition to receiving health care services.... I understand that I have the right to revoke this agreement no later than ten (10) days following signature and that, if I choose to revoke, I must request and execute a revocation form within this time period.

Immediately below this paragraph is a date and signature line for the patient to indicate whether he or she consents to arbitration. And importantly, on the March and April admissions forms, Farrell did not sign underneath Paragraph VI. But on May 21, 2018, Farrell again sought treatment with Emory, and on this occasion, he did sign the line underneath Paragraph VI, indicating his consent to arbitration.

Farrell later sought treatment with Emory again on June 4 and August 6, 2018, but he did not sign his specific consent to Paragraph VI on either of those two admissions forms. And then, on August 18, 2018, while still admitted and receiving treatment under the August 6 admission form, Farrell underwent a Transjugular Intrahepatic Portosystemic Shunt

procedure,⁴ during which he claims the Emory Defendants’ professional negligence resulted in an injury to one of his major blood vessels.

Less than one year later, Farrell filed a medical malpractice lawsuit against the Emory Defendants based on the foregoing incident, and the defendants filed separate answers. At the same time, the Emory Defendants filed motions to dismiss Farrell's complaint, or, alternatively, to compel arbitration. In doing so, they argued that Farrell's May 21, 2018 admissions forms—which included his signature consenting to the arbitration agreement in Paragraph VI—required him to submit the malpractice claims arising out of his August 6, 2018 admission to arbitration. Farrell responded, and the trial court held a hearing before taking the matter under advisement. Subsequently, the court issued an order denying the Emory Defendants’ motion to compel arbitration but also granted them a certificate of immediate review. We granted the Emory Defendants’ application for interlocutory review, and this appeal follows.

The Emory Defendants contend that the trial court erred in denying their motions to compel arbitration. Specifically, they argue that the court erroneously concluded that presenting an arbitration agreement with admissions forms every time a patient is admitted constitutes an abandonment of any existing arbitration agreement signed in previous admissions forms. We disagree.

It is well established that, under both Georgia and federal law, arbitration is "a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit."⁵ Importantly, as the parties seeking arbitration, the Emory Defendants bear "the burden of proving the existence of a valid and enforceable agreement to arbitrate, which is generally governed by state law principles of contract formation."⁶ So, we must first determine if "the contract language is ambiguous, and, if so, then we apply the appropriate rules of construction set forth in OCGA § 13-2-2."⁷ And while ambiguities in the language of an agreement "should be resolved in favor of arbitration[,] we do not override the clear intent of the parties, or reach a result inconsistent with the plain text of the contract, simply because the policy favoring arbitration is implicated."⁸ In contrast, when the language of a contract is "plain and unambiguous, ... no construction is required or permissible and the terms of the contract must be given an interpretation of ordinary significance."⁹ Furthermore, the question of arbitrability—i.e. , whether an agreement creates a duty for the parties to arbitrate the particular grievance—is "undeniably an issue for judicial determination."¹⁰

In this matter, we are not called upon to mine the vagaries of "ambiguities in the language of the agreement."¹¹ Rather, the issue is whether Farrell consented to arbitrate his medical malpractice claims.¹² And as previously noted, the Emory Defendants contend that Farrell's signed consent to the arbitration agreement in his May 21, 2018 admissions forms applied to all future admissions for treatment with Emory. They maintain that the subsequent presentation to Farrell of identical admissions forms—in which he did not sign the arbitration agreement for the admission during which he suffered his injury—is of no consequence. More simply put, the Emory Defendants argue that re-presenting the identical admissions forms had no effect on the previously signed arbitration agreement. We disagree. By re-presenting the arbitration agreement to Farrell each time he sought treatment, the Emory Defendants engaged in behavior unmistakably demonstrating their abandonment of the prior agreement.¹³

Under Georgia law, parties may "by mutual consent abandon an existing contract between them so as to make it not thereafter binding and the contract may be rescinded by conduct as well as by words."¹⁴ Indeed, for purposes of rescission, a meeting of the minds may be shown by "the conduct of one party inconsistent with the continued existence of a contract, or abandonment or repudiation of the contract, and knowledge of, and acquiescence to, such abandonment or repudiation by the other."¹⁵ And here, the Emory Defendants’ conduct in re-presenting an identical arbitration agreement in the August 6, 2018 admissions forms is behavior fundamentally inconsistent with the continued viability of the earlier identical arbitration agreement, which...