Fischer v. Colorow Health Care, LLC
| Citation | 421 P.3d 1176 |
| Decision Date | 08 September 2016 |
| Docket Number | Court of Appeals No. 15CA1252 |
| Parties | Amy FISCHER and Roger Fischer, Plaintiffs–Appellees, v. COLOROW HEALTH CARE, LLC ; QP Health Care Services, LLC, d/b/a Vivage; Beverly Cole; Michael Reinhardt; and Travis Young, Defendants–Appellants. |
| Court | Court of Appeals of Colorado |
Laszlo & Associates, LLC, Theodore E. Laszlo, Jr., Michael J. Laszlo, Boulder, Colorado, The Meyer Law Firm, P.C., William R. Meyer, Boulder, Colorado, for Plaintiff–Appellee
Fennemore Craig, David Gelman, Troy R. Rackham, Denver, Colorado, for Defendant–Appellants Colorow Health Care, LLC, QP Health Care Services, LLC, Beverly Cole, and Michael Reinhardt
Senter Goldfarb & Rice, L.L.C., Tiffaney A. Norton, Denver, Colorado, for Defendant–Appellant Travis Young
Opinion by JUDGE WEBB
¶ 1 In deciding the enforceability of an agreement to arbitrate under the Health Care Availability Act (HCAA), should the test be strict compliance or substantial compliance with the textual and typographical requirements of section 13–64–403, C.R.S. 2015? And if the test is strict compliance, does the absence of bold-faced type, required under section 13–64–403(4), doom the agreement? Neither of these questions has been answered in Colorado.
¶ 2 Plaintiffs, Amy Fischer and Roger Fischer, pleaded tort claims arising from the death of Charlotte Fischer (the decedent). Defendants, Colorow Health Care, LLC, QP Health Care Services, LLC, d/b/a Vivage, Travis Young, Beverly Cole, and Michael Reinhardt, appeal the trial court's order denying their motions to compel arbitration. Applying the strict compliance test, we conclude that because the arbitration agreement did not satisfy the bold-faced type requirement, it is unenforceable. Therefore, we affirm.
¶ 3 Colorow Health Care, LLC, and its management company, QP Health Care Services, LLC, d/b/a Vivage, operate a long-term health care facility. When the decedent was admitted to the facility, her daughter, acting under a power of attorney, signed an arbitration agreement. The decedent passed away while a resident of the facility. The circumstances of her death are disputed.
¶ 4 After plaintiffs brought this action, defendants moved to compel arbitration. Plaintiffs opposed the motions based on discrepancies between the wording and typography of the arbitration agreement and the requirements of section 13–64–403(3) and (4). Initially, the trial court granted the motion, but set a hearing on plaintiffs' attempt to rescind the agreement.
¶ 5 Following that hearing and additional briefing, the court reversed itself. It noted that while the arbitration agreement included most of the language required by section 13–64–403(3), "there are some typos and words omitted." It also pointed out that the agreement "contains the required language from section 13–64–403(4)," but this language is only in capital letters and is not in bold-faced type, as the statute requires. Explaining that "the entity seeking to enforce the arbitration agreement must be held to strict compliance with [the statutory] requirements," the court held that the agreement "is not valid and the Motions to Compel Arbitration are denied." However, the court did not make any findings whether the decedent's attorney-in-fact had misunderstood the agreement when she signed it.
¶ 6 Defendants then filed this interlocutory appeal as of right under section 13–22–228(1)(a), C.R.S. 2015.
¶ 7 The parties' motions, briefs, and arguments below preserved the issue of the validity of the arbitration agreement.
¶ 8 Statutory interpretation is subject to de novo review. Lewis v. Taylor , 2016 CO 48, ¶ 14, 375 P.3d 1205.
¶ 9 Section 13–64–403 is a gatekeeper. It sets out specific language that an arbitration agreement must include to comply with the HCAA. Subsection 403(4) provides language that must appear "[i]mmediately preceding the signature lines for such an agreement, ... [and] shall be printed in at least ten-point, bold-faced type...." § 13–64–403(4). And "an agreement may ... be declared invalid by a court if it is shown by clear and convincing evidence that ... [t]he agreement failed to meet the standards for such agreements." § 13–64–403(10)(a).
¶ 10 The arbitration agreement between defendants and the decedent's daughter, as her representative, covers two-and-a-half pages. The first page and two-thirds of the second page define the claims and the parties subject to the agreement. Next, the agreement parrots the required language from subsection 403(3), in regular typeface, but with a few typographical errors and minor departures from the statutory text.
¶ 11 After the subsection 403(3) text, the agreement quotes the required language from subsection 403(4). This text was capitalized, and in twelve-point font, but in regular—as opposed to bold—typeface:
Except as noted, this language nearly mirrors the text required by subsection 403(4).
¶ 12 Defendants concede that the text required by subsection 403(4) is not in bold-faced type and that this text, as well as the text required by subsection 403(3), contained some typographical errors. But they contend section 13–64–403 requires only substantial compliance with its provisions. And according to defendants, the arbitration agreement satisfies a substantial compliance test because the errors were minor and the language that should have been in bold-faced type was in all caps and in a larger font than the statute requires—twelve-point, while the statute only requires "at least ten-point."
¶ 13 Plaintiffs respond that the arbitration agreement must strictly comply with section 13–64–403, and because admittedly it did not, it is invalid. We agree with plaintiffs that the statute requires strict compliance. And based on the complete lack of bold-faced type, we also agree that the agreement is invalid. By affirming denial of the motions to compel arbitration on this basis, however, we need not consider whether other anomalies in the agreement—dismissed by defendants as trivial typographical errors—would survive a strict compliance test.
¶ 14 When interpreting a statute, a court's primary goal is to discern the legislature's intent. See Pinnacol Assurance v. Hoff , 2016 CO 53, ¶ 48, 375 P.3d 1214. "To divine this intent, our first recourse is the plain language of the statute, and we refrain from rendering judgments that are inconsistent with the intent evidenced by such language." Colo. Motor Vehicle Dealer Bd. v. Freeman , 2016 CO 44, ¶ 8, 375 P.3d 111. A court may discern the legislature's intent by examining the plain language "within the context of the statute as a whole." Lewis , ¶ 20.
¶ 15 If a statute is ambiguous, a court may examine its legislative history to discern legislative intent. United Guar. Residential Ins. Co. v. Dimmick , 916 P.2d 638, 641 (Colo.App.1996). Wherever possible, a statute should be construed "in a manner that gives effect to all its ... policy objectives, and not in a way that renders one or more of its ... goals inoperative." Copeland v. MBNA Am.Bank, N.A. , 907 P.2d 87, 90 (Colo.1995). But in all events, a court must avoid an interpretation that "leads to an absurd result." Concerned Parents of Pueblo, Inc. v. Gilmore , 47 P.3d 311, 313 (Colo.2002).
¶ 16 These principles are familiar. But applying them to section 13–64–403 involves several twists.
¶ 17 According to plaintiffs, the arbitration agreement fails because it did not strictly comply with section 13–64–403 in two ways: first, the statutory language was not in bold-faced type, and, second, the text did not precisely mirror the statutory language.
¶ 18 The initial contention raises two related questions of first impression. Colorado courts have not decided whether section 13–64–403 demands strict compliance. Nor have they addressed whether failure to satisfy a statutory bold-faced type requirement means that the document must be invalidated under a strict compliance test.1 We begin with the first question, as answering it in the negative would moot the second question, considering the criteria of plain language, context, and purpose.
¶ 19 Section 13–64–403 says that an arbitration agreement "shall" satisfy the statute's various requirements. See, e.g. , § 13–604–403(3) () (emphasis added); § 13–64–403(4) () (emphasis added); § 13–64–403(6) () (emphasis added).
¶ 20 "The word ‘shall’ connotes a mandatory requirement." Willhite v. Rodriguez–Cera , 2012 CO 29, ¶ 17, 274 P.3d 1233. Colorado courts have held that mandatory statutory language requires strict compliance with its terms. See, e.g. , E. Lakewood Sanitation Dist. v. Dist. Court , 842 P.2d 233, 236 (Colo.1992) (); Postlewait v. Midwest Barricade , 905 P.2d 21, 23–24 (Colo.App.1995) (); see also 3 Norman J. Singer & J.D. Shambie Singer, Sutherland Statutory Construction § 57:12 (7th ed. 2012) (...
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