Gessa v. Manor Care of Fla., Inc.

• Decision Date: 17 April 2012
• Docket Number: No. SC09–768.,SC09–768.
• Citation: 86 So.3d 484
• Parties: Angela I. GESSA, etc., Petitioner, v. MANOR CARE OF FLORIDA, INC., et al., Respondents.
• Court: Florida Supreme Court

86 So.3d 484

Angela I. GESSA, etc., Petitioner,

v.MANOR CARE OF FLORIDA, INC., et al., Respondents.

No. SC09–768.

Supreme Court of Florida.

Nov. 23, 2011.

Rehearing Denied April 17, 2012.

Susan B. Morrison, of the Law Office of Susan Morrison, Tampa, FL, James L. Wilkes, III, Isaac R. Ruiz–Carus, and Blair N. Mendes of Wilkes and McHugh, P.A., Tampa, FL, for Petitioners.

Matthew J. Conigliaro, Sylvia J. Walbolt, and Annette Marie Lang of Carlton Fields, P.A., St. Petersburg, FL, for Respondents.

Karen L. Goldsmith and Jonathan S. Grout of Goldsmith and Grout, P.A., on behalf of Florida Health Care Associations; Cynthia S. Tunnicliff and Ashley P. Mayer of Pennington, Moore, Wilkinson, Bell, and Dunbar, P.A., on behalf of Florida Justice Reform Institute and Florida Medical Association; and Steven Geoffrey Sieseler, Stuart, Florida, on behalf of Pacific Legal Foundation, As Amici Curiae.

PERRY, J.

Angela I. Gessa seeks review of the decision of the Second District Court of Appeal in Gessa v. Manor Care of Florida, Inc., 4 So.3d 679 (Fla. 2d DCA 2009), on the ground that it expressly and directly conflicts with a decision of another Florida district court of appeal on a question of law. ¹ We have jurisdiction. Seeart. V, § 3(b)(3), Fla. Const.

I. BACKGROUND

Angela Gessa was admitted as a resident to Manor Care of Florida, Inc., a nursing home. Upon admission, her daughter, acting as her attorney-in-fact, signed admissions documents that included an arbitration agreement. During her stay, Gessa filed suit against Manor Care, alleging negligence, violation of resident's rights, and breach of fiduciary duty. Manor Care moved to compel arbitration. At the hearing on the motion, Gessa argued that the arbitration agreement was unconscionable and contrary to public policy due to the limitation of liability provisions in the agreement that capped noneconomic damages at $250,000 and waived punitive damages. The trial court, however, granted the motion to compel, ruling that, because any offensive clauses can be severed, the agreement was not unconscionable. The court declined to rule on the public policy issue, leaving it for the arbitrator. Gessa appealed, arguing that the limitation of liability provisions violated public policy and were not severable. The district court affirmed, agreeing with the trial court that the provisions were severable. Also, the district court did not rule on the public policy issue, leaving it for the arbitrator. Gessa sought discretionary review, which we granted.

Gessa raises several issues, including the following: (i) whether the limitation of liability provisions are severable, (ii) whether the court or the arbitrator must decide whether the arbitration agreement violates public policy, and (iii) whether the limitation of liability provisions violate public policy. Manor Care, in counterpoint, contends that the United States Supreme Court's recent decision in Rent–A–Center, West, Inc. v. Jackson, –––U.S. ––––, 130 S.Ct. 2772, 177 L.Ed.2d 403 (2010), is applicable here and entitles Manor Care to relief on its motion to compel.

As explained more fully below, our decision in this case is controlled in part by our recent decision in Shotts v. OP Winter Haven, Inc., 86 So.3d 456 (Fla.2011), another nursing home arbitration case. Pursuant to our reasoning in that case, we hold that the district court below erred in the following respects: (i) in ruling that the limitation of liability provisions in this case, which place a $250,000 cap on noneconomic damages and waive punitive damages, are severable; (ii) in failing to rule that the court, not the arbitrator, must decide whether the arbitration agreement violates public policy; and (iii) in failing to rule that the above limitation of liability provisions violate public policy. As in Shotts, we also conclude that the United States Supreme Court's decision in Jackson is inapplicable here.

A. Facts and Procedural History

The relevant facts of this case are set forth in the district court decision under review:

Angela I. Gessa, by and through Miriam G. Falatek, her attorney-in-fact, challenges the trial court's order granting Manor Care of Florida, Inc.'s motion to compel arbitration in Gessa's action against Manor Care for negligence, violation of resident's rights, and breach of fiduciary duty....

Gessa was admitted as a resident of Manor Care of Carrollwood on two occasions. Upon each admission, she or Falatek signed admissions documents that included an arbitration agreement. One document, entitled “Admission Agreement,” was a nine-page document to which Attachments A through I were appended. In addition, a form entitled “Attestation of Admission Agreement and Attachment” was executed. However, the crux of this appeal centers on the form that bears no specific title but is captioned with the following warning: “THIS AGREEMENT CONTAINS A WAIVER OF STATUTORY RIGHTS. PLEASE READ CAREFULLY.” This document was not designated as an attachment to the Admissions Agreement, nor does the attestation form include any reference to it.

The document is composed of two sections: A. Arbitration Provisions and B. Limitation of Liability Provision[s]. The last paragraph of section A reads: “The Limitation of Liability Provision[s] below [are] incorporated by reference into this Arbitration Agreement.” At the time of Gessa's first admission, this document was signed by a representative of Manor Care and by Gessa. Falatek and a Manor Care representative signed it upon Gessa's return to the facility.

During her second stay, Gessa filed suit against Manor Care under chapter 400, Florida Statutes (2004), the Nursing Home Residents Act (the Act). In her complaint, Gessa sought damages for the improper treatment she received at the facility. In response to the complaint, Manor Care moved to compel arbitration pursuant to the parties' arbitration agreement. Gessa filed her memorandum in opposition to the motion, arguing that the arbitration agreement was both substantively and procedurally unconscionable. Additionally, Gessa argued that the arbitration agreement was unenforceable because it was contrary to public policy. These arguments were premised on the terms of the limitation of liability provision[s] contained in section B of the document that the parties signed during the admissions process. [These provisions] prohibited the award of punitive damages and capped any award of noneconomic damages at $250,000. Gessa argued that these limitations were contrary to the rights specifically granted by the Act, and that they invalidated the entire agreement to arbitrate. Gessa repeated these arguments at the hearing held on the motion to compel arbitration.

Gessa, 4 So.3d at 680 (citation omitted).

The trial court, in its written order, granted the motion to compel, concluding that the agreement was severable and was not unconscionable:

This cause came before the Court on March 1, 2007, concerning the Defendant's Motion to Stay Proceedings and to Compel Arbitration. The Court, having reviewed the memoranda, considered the arguments presented, and being otherwise fully advised, grants the Defendant's Motion to Stay Proceedings and Compel Arbitration. The Court finds no procedural unconscionability, as there was a three day right of rescission contained in the arbitration agreement. Further, the agreement was not substantively unconscionable because offensive clauses can be severed, as they are not integral to the contract and are separate from the arbitration provision.

(Emphasis added.) The court declined to rule on the public policy issue, leaving it for the arbitrator.

Gessa appealed, arguing that the limitation of liability provisions violated public policy and were not severable. The district court affirmed, agreeing with the trial court that the provisions were severable. Also, the district court declined to rule on the public policy issue, leaving it for the arbitrator:

Here, the trial court reviewed the document that contained the arbitration agreement and limitation provision[s] and determined that the limitation [provisions were] not an integral part of the parties' agreement to settle claims by arbitration. This factual finding is supported by competent evidence. Based on the test defined in Local No. 234 [ v. Henley & Beckwith, Inc., 66 So.2d 818, 821–22 (Fla.1953) ], we agree with the trial court that the limitation provision[s] [are] severable, even though the contract lacks a specific severability clause. Although the inclusion of such ... provision[s] would expressly demonstrate the intent of the parties, pursuant to Local No. 234, the trial court is not bound by the inclusion or omission of such a clause when determining the issue of severability. Accordingly, the trial court, having found the limitations provision[s] here to be severable, properly directed that the case proceed to arbitration.Gessa, 4 So.3d at 682. Gessa sought discretionary review, which we granted. Gessa raises several claims,² and we address three of them.³

B. Arbitration Agreement

The arbitration agreement that Gessa's daughter signed when Gessa was admitted to Manor Care bore no title. Instead, the document bore the following heading: “THIS AGREEMENT CONTAINS A WAIVER OF STATUTORY RIGHTS. PLEASE READ CAREFULLY.” The document was divided into four parts: A, B, C and D. Part A was titled “ ARBITRATION PROVISIONS ” and was approximately three and one-half pages long. The following provisions were included at various points in Part A:

—Except as expressly set forth herein, the provisions of the Florida Arbitration Code, Florida Statutes §§ 682.01, et seq., shall govern the arbitration.

—Discovery in the arbitration proceeding shall be governed by the Florida Rules of Civil Procedure [except as otherwise provided herein].

—[T]he only depositions allowed shall be of experts and any treating physicians. No other individuals may be deposed.

—The arbitrator shall apply the ...