Fosler v. Midwest Care Ctr. Ii Inc

• Decision Date: 01 March 2010
• Docket Number: No. 2-08-1005.,2-08-1005.
• Citation: 928 N.E.2d 1,398 Ill.App.3d 563,340 Ill.Dec. 282
• Parties: Marie FOSLER, by Janice Saxton, Attorney-in-Fact, Plaintiff-Appellee,v.MIDWEST CARE CENTER II, INC., d/b/a Fair Oaks Rehabilitation and Health Care Center, Brenna Kolk, and Tonya Nielsen, Defendants-Appellants (The People of the State of Illinois, Intervenor).
• Court: United States Appellate Court of Illinois

398 Ill.App.3d 563

928 N.E.2d 1

340 Ill.Dec. 282

Marie FOSLER, by Janice Saxton, Attorney-in-Fact, Plaintiff-Appellee,v.MIDWEST CARE CENTER II, INC., d/b/a Fair Oaks Rehabilitation and Health Care Center, Brenna Kolk, and Tonya Nielsen, Defendants-Appellants (The People of the State of Illinois, Intervenor).

No. 2-08-1005.

Appellate Court of Illinois Second District.

May 8, 2009.

As Modified Upon Denial of Rehearing March 1, 2010.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

C. Thomas Hendrix, Michael R. Webber, Kominiarek, Bresler, Harvick & Gudmundson, LLC, Chicago, IL, for Brenna Kolk C.N.A., Midwest Care Center II, Inc. and Tonya Nielsen C.N.A.

Steven M. Levin, Eric J. Wittmer, Levin & Perconti, Chicago, IL, for Marie Fosler and Janice Saxton Attorney-In-Fact.

Lisa Madigan, Attorney General, State of Illinois, Michael A. Scodro, Solicitor General, Brian F. Barov, Assistant Attorney General, Chicago, IL, for People of the State of Illinois.

Modified Upon Denial of Rehearing

Justice BURKE delivered the opinion of the court:

Plaintiff, Marie Fosler, filed a complaint against defendants, Midwest Care Center II, Inc., d/b/a Fair Oaks Rehabilitation and Health Care Center, Brenna Kolk, and Tonya Nielsen, for relief under the Nursing Home Care Act (210 ILCS 45/1-101 et seq. (West 2006)) and for negligence. Plaintiff alleges wrongful injuries suffered during her stay at defendants' long-term care facility, Fair Oaks Rehabilitation and Health Care Center (Fair Oaks). As part of the admission to Fair Oaks, plaintiff, through her daughter, Janice Saxton, entered into a written agreement. The agreement contained a provision stating that any dispute arising from plaintiff's stay would be resolved through arbitration, as governed by the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq. (2000)).

Defendants answered the complaint with a motion to enforce the arbitration provision, arguing that plaintiff had waived her right to sue. Plaintiff responded that certain provisions of the Nursing Home Care Act nullify a resident's waiver of the right to commence an action in circuit court and to a trial by jury. Faced with deciding whether the FAA or the Nursing Home Care Act applies to the arbitration provision, the trial court denied defendants' motion based on Carter v. SSC Odin Operating Co., LLC, 381 Ill.App.3d 717, 319 Ill.Dec. 524, 885 N.E.2d 1204 (2008), in which the Appellate Court, Fifth District, concluded that the FAA does not preempt the Nursing Home Care Act.

Defendants appeal, arguing that Carter was wrongly decided and that, therefore, the trial court erred in denying the motion to compel arbitration. We agree. Carter cannot be reconciled with Perry v. Thomas, 482 U.S. 483, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987), in which the United States Supreme Court held that the FAA preempts state statutes that require “that litigants be provided a judicial forum for resolving * * * disputes.” Perry, 482 U.S. at 491, 107 S.Ct. at 2526, 96 L.Ed.2d at 436. In agreement with Perry and similar decisions issued by the Court, we hold that section 2 of the FAA preempts the provisions of the Nursing Home Care Act that purport to nullify a resident's waiver of the right to commence an action in the circuit court and to a jury trial. We reverse the denial of defendants' motion to compel arbitration and remand the cause for further proceedings consistent with this opinion.

FACTS

The factual background is simple and undisputed. Plaintiff was a resident of Fair Oaks from September 1, 2004, to August 17, 2007. On the date of admission, Saxton, acting as plaintiff's authorized representative, executed the admission agreement, which contained the contractual terms for plaintiff's stay.

The agreement contains an arbitration section, which provides that “any dispute between you and us and any dispute relating to services rendered for any condition, and any dispute arising out of the diagnosis, treatment, or care of the Resident, including the scope of this arbitration clause and the arbitrability of any claim or dispute, against whomever made (including, to the full extent permitted by applicable law, third parties who are not signatories to this Agreement) shall be resolved by binding arbitration by the National Arbitration Forum, under the Code of Procedure then in effect. * * * This Agreement shall be governed by and interpreted under the Federal Arbitration Act, 9 U.S.C. Sections 1-16.” The arbitration section also states in bold text that “Resident understands that the result of this arbitration agreement is that claims, including malpractice claims that Resident may have against the Facility or its employees cannot be brought as a lawsuit in court before a judge or jury, and agrees that all such claims will be resolved as described in this section.”

On January 23, 2008, plaintiff filed a complaint alleging violations of the Nursing Home Care Act and negligence.¹ Defendants responded to the complaint with a motion to compel arbitration. Defendants asserted that plaintiff was contractually bound by the arbitration section of the admission agreement to resolve any dispute according to the FAA. Defendants contended that the FAA preempted any provision of the Nursing Home Care Act that would otherwise bar enforcement of the contract's arbitration section. On September 26, 2008, relying upon Carter, the trial court denied defendants' motion to compel arbitration. Defendants filed their timely notice of appeal on October 23, 2008.

ANALYSIS

On appeal, defendants argue that the trial court erred in denying their motion to compel arbitration. Ruling on a motion to compel arbitration is injunctive and, therefore, is appealable under Supreme Court Rule 307(a)(1) (188 Ill.2d R. 307(a)(1)). Salsitz v. Kreiss, 198 Ill.2d 1, 11, 260 Ill.Dec. 541, 761 N.E.2d 724 (2001). Where a trial court makes no factual findings and its decision is based purely on a question of law, the decision to grant or deny a motion to compel arbitration is subject to de novo review. Vassilkovska v. Woodfield Nissan, Inc., 358 Ill.App.3d 20, 24, 294 Ill.Dec. 207, 830 N.E.2d 619 (2005); Ragan v. AT & T Corp., 355 Ill.App.3d 1143, 1147, 291 Ill.Dec. 933, 824 N.E.2d 1183 (2005) (when a motion to compel arbitration is denied without an evidentiary hearing, the standard of review on appeal is de novo ); cf. In re Marriage of Rife, 376 Ill.App.3d 1050, 1061, 316 Ill.Dec. 53, 878 N.E.2d 775 (2007) (“Under the discretionary provision of the [Declaratory Judgment] Act, the trial court's decision whether a declaratory judgment proceeding is proper at all is subject to deferential, if ‘searching,’ review. However, nothing in the Act requires that a trial court's resolution of the merits of the complaint be entitled to deference. To impose such a requirement would make the trial court the primary authority on questions of law, inverting the hierarchy of lower court and higher court”). We review the trial court's decision de novo because the court heard no evidence and considered only argument, which the parties restate on appeal.

Plaintiff contends that sections 3-606 and 3-607 of the Nursing Home Care Act nullify the arbitration provision of the admission agreement, in which she purportedly waived her right to initiate an action in circuit court and to have her claims heard by a jury. Section 3-606 of the Nursing Home Care Act provides that “[a]ny waiver by a resident or his legal representative of the right to commence an action under Sections 3-601 through 3-607, whether oral or in writing, shall be null and void, and without legal force or effect.” 210 ILCS 45/3-606 (West 2006). Section 3-607 further provides that “[a]ny party to an action brought under Sections 3-601 through 3-607 shall be entitled to a trial by jury and any waiver of the right to a trial by a jury, whether oral or in writing, prior to the commencement of an action, shall be null and void, and without legal force or effect.” 210 ILCS 45/3-607 (West 2006).

Defendants rely upon the FAA. In 1925, Congress enacted the FAA “ ‘to reverse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts[ ] and to place arbitration agreements upon the same footing as other contracts.’ ” Borowiec v. Gateway 2000, Inc., 209 Ill.2d 376, 384, 283 Ill.Dec. 669, 808 N.E.2d 957 (2004), quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, 111 S.Ct. 1647, 1651, 114 L.Ed.2d 26, 36 (1991). Section 2 of the FAA provides in relevant part that “a written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction * * * shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2 (2000). Section 4 of the FAA provides for court orders compelling arbitration when one party has failed, neglected, or refused to comply with an arbitration agreement. 9 U.S.C. § 4 (2000). Defendants contend that section 2 of the FAA conflicts with sections 3-606 and 3-607 of the Nursing Home Care Act and that, therefore, the former preempts the latter.

The preemption doctrine is based on the supremacy clause of article VI of the United States Constitution, which provides that the “Laws of the United States * * * shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const., art. VI, cl. 2. Thus, when a state law conflicts with a federal statute, the state law is preempted under the supremacy clause and application of the state law is unconstitutional. Board of Education, Joliet Township High School District No. 204 v. Board of Education, Lincoln Way Community High School District No. 210, 231 Ill.2d 184, 195, 325...