Knight v. Altercare Post-Acute Rehab. Ctr., Inc.

• Decision Date: 24 July 2017
• Docket Number: NO. 2016–P–0045,2016–P–0045
• Citation: 94 N.E.3d 957,2017 Ohio 6946
• Parties: Phyllis KNIGHT, Executrix of the Estate of Peggy J. Young, deceased, Plaintiff–Appellee, v. ALTERCARE POST–ACUTE REHABILITATION CENTER, INC., et al., Defendants–Appellants.
• Court: Ohio Court of Appeals

94 N.E.3d 957

2017 Ohio 6946

Phyllis KNIGHT, Executrix of the Estate of Peggy J. Young, deceased, Plaintiff–Appellee,

v.ALTERCARE POST–ACUTE REHABILITATION CENTER, INC., et al., Defendants–Appellants.

NO. 2016–P–0045

Court of Appeals of Ohio, Eleventh District, Portage County.

Decided July 24, 2017

Martin S. Delahunty, III, Slater & Zurz, One Cascade Plaza, Suite 2210, Akron, OH 44308, (For Plaintiff–Appellee).

Steven J. Hupp, Ronald A. Margolis, and Brian F. Lange, Bonezzi Switzer Pilito & Hupp Co., LPA, 1300 East Ninth Street, Suite 1950, Cleveland, OH 44114, (For Defendants–Appellants).

CYNTHIA WESTCOTT RICE, P.J.

{¶ 1} Appellants, Altercare Post–Acute Rehabilitation Center and Altercare of Ohio, Inc., appeal from the judgment entered by the Portage County Court of Common Pleas staying proceedings pending arbitration and denying their motion for summary judgment. At issue is whether the trial court erred in staying the matter for arbitration where appellee, Phyllis Knight, Executrix of the Estate of Peggy J. Young ("the decedent"), was not a party to the underlying arbitration agreement and whether the denial of appellants' motion for summary judgment is a final, appealable order. We reverse the court's judgment of the former issue and dismiss the appeal as it relates to the latter issue.

{¶ 2} The decedent was a resident of appellee, Altercare Post–Acute Rehabilitation Center, Inc., a long-term nursing home. Upon entering the facility, the decedent and/or her legal representative entered into an arbitration agreement with the facility to arbitrate any and all claims that arise between the parties. On June 25, 2012, the decedent passed away while a resident of the facility.

{¶ 3} On June 10, 2014, appellee, through counsel, sent appellants a letter advising them of appellee's intention to invoke the arbitration agreement "with respect to her wrongful death claim and any and all claims which exists as of this point and time." Appellants subsequently refused to participate in arbitration, citing the expiration of the statute of limitations on both survivorship and wrongful-death claims. Appellants further stated that the agreement is only binding in a wrongful-death claim when executed by all beneficiaries to the decedent's estate, not merely the decedent's representative.

{¶ 4} On October 14, 2014, appellee filed a complaint alleging negligence surrounding the circumstances of the decedent's death; appellee asserted she attempted to invoke the arbitration agreement to submit the claims to arbitration, but appellants refused. As a result, appellee claimed appellants breached the arbitration agreement and intentionally interfered with the contract between the decedent and the facility. Appellants answered the complaint and later filed a motion for summary judgment. In their motion, they argued the statute of limitations had expired on the wrongful-death claim and a request for arbitration could not be used to toll the statute of limitations. They further asserted appellee could not style her complaint as a breach of contract claim as a means to avoid the expiration of the limitations period on the wrongful-death claim. Appellants also maintained they could not be required to arbitrate a wrongful-death claim for beneficiaries who did not sign the underlying agreement.

{¶ 5} Appellee filed a response to appellants' motion, arguing the arbitration agreement was a valid, enforceable contract. She attached a copy of a residency agreement, signed by representatives for the facility and the decedent. The contract included an "Agreement to Resolve Legal Disputes Through Arbitration," which provided, inter alia, that "[a]ny legal controversy, dispute, disagreement or claim of any kind now existing or occurring in the future between the parties arising out of or in any way relating to this Agreement or the Resident's stay at Facility shall be settled by binding arbitration * * *." According to appellee, the language bound the facility to arbitrate the underlying wrongful-death claim. Appellants filed a reply to appellee's memorandum in opposition.

{¶ 6} After considering the parties' positions, the trial court denied appellants' motion for summary judgment. It additionally ordered: "[p]ursuant to the agreement of the parties, this matter is hereby stayed and the parties shall Arbitrate Plaintiff's claim of wrongful death pursuant to the terms of the Arbitration agreement entered into with Altercare."

{¶ 7} Appellants now appeal and raise two assignments of error. The first provides:

{¶ 8} "The trial court erred in staying this action pending arbitration since the plaintiff did not execute any arbitration agreement with the defendants."

{¶ 9} Generally, a trial court's decision to stay proceedings pending arbitration is reviewed for an abuse of discretion. River Oaks Homes, Inc. v. Krann , 11th Dist. Lake No. 2008-L-166, 2009-Ohio-5208, 2009 WL 3154460, ¶ 41. When the trial court's grant or denial of a stay is premised upon questions of law, we review the judgment de novo.

Naylor Family Partnership v. Home S. & L. Co. of Youngstown , 11th Dist. Lake No. 2013-L-096, 2014-Ohio-2704, 2014 WL 2881917, ¶ 13. "Therefore, this court reviews de novo a trial court's legal conclusion as to whether a party is contractually bound by an arbitration clause." Id.

{¶ 10} Under their first assignment of error, appellants argue the trial court erred by staying the matter for arbitration because appellee was not a party to the arbitration agreement. They further maintain appellee cannot seek to have a wrongful-death claim arbitrated under the agreement because such a claim belongs to the decedent's individual beneficiaries and these individuals were not parties to the agreement. Appellants cite Peters v. Columbus Steel Castings Co. , 115 Ohio St.3d 134, 2007-Ohio-4787, 873 N.E.2d 1258, in support.

{¶ 11} In Peters , the Ohio Supreme Court addressed the question of "whether the personal representative of a decedent's estate is required to arbitrate a wrongful-death claim when the decedent had agreed to arbitrate all claims against the alleged tortfeasor." Id. at ¶ 1. The Court held that, in a wrongful-death claim, the beneficiaries could not be restricted to arbitration by an agreement executed by the decedent. Id. at ¶ 19. The Court explained that the "wrongful death claim belongs to the decedent's beneficiaries" and requiring the beneficiaries to arbitrate their wrongful-death claim without them signing the arbitration agreement would be "unconstitutional, inequitable and in violation of a century of established precedent." Id. at ¶ 10, 20.

{¶ 12} Here, the decedent and/or her representative executed the agreement with appellants. And, although appellee could have utilized the arbitration agreement to pursue a survival action, no survival claim was initiated by the estate. Once the statute of limitations on the survival claim ran, the agreement to arbitrate all claims against the facility had no effect and appellee possessed no authority to demand arbitration of the wrongful-death claim. In Peters , supra , the Court observed:

{¶ 13} As opposed to a survival claim, through which a decedent's estate may recover for the injuries suffered by the decedent before his death, a wrongful-death claim belongs to the decedent's beneficiaries. Compare R.C. 2125.02(A)(1) with R.C. 2305.21. "Except as provided in this division, a civil action for wrongful death shall be brought in the name of the personal representative of the decedent for the exclusive benefit of the surviving spouse, the children, and the parents of the decedent * * * and for the exclusive benefit of the other next of kin of the decedent ." (Emphasis added.) R.C. 2125.02(A)(1). * * *. (Emphasis sic.) Peters , supra , at ¶ 10.

{¶ 14} The Court further emphasized that "survival claims and wrongful-death claims are distinct claims that belong to separate individuals, even though they are generally brought by the same nominal party (the personal representative of the estate)." Id. at ¶ 17. Accordingly, the Court continued:

{¶ 15} When [the decedent] signed the arbitration agreement, he agreed to arbitrate his claims against the company, whether brought during his life or after his death. Thus, the provision in the agreement binding [the decedent's] heirs, beneficiaries, successors, and assigns applies to a survival action, which is the vessel to pursue his claims after death.

{¶ 16} However, [the decedent] could not restrict his beneficiaries to arbitration of their wrongful-death claims, because he held no right to those claims; they accrued independently to his beneficiaries for their injuries personally suffered as a result of his death. * * * Thus, a decedent cannot bind his or her beneficiaries to arbitrate their wrongful-death claims. * * * The beneficiaries can agree to arbitrate these claims themselves, but they are not required to do so. (citations omitted). Id. at ¶ 18–19.

{¶ 17} Here, appellee, as personal representative of the decedent, brought the underlying claims, which sought to utilize the arbitration agreement to arbitrate a wrongful-death claim. As discussed above, appellee was not a party to the agreement and neither were any of the decedent's beneficiaries. We acknowledge that the beneficiaries, in this instance, have "agreed" to arbitrate their wrongful-death claims. We do not, however, read Peters to permit beneficiaries to use an arbitration agreement between a decedent and a facility, to which they are not signatories, as a vehicle to arbitration. Indeed, such a scenario places the proverbial cart before the horse.

{¶ 18} Initially, in order to propose arbitration as a means to resolve a claim, it stands to reason that a party must first, in fact, have a claim. As a wrongful-death claim involves an independent right that beneficiaries are entitled to assert, and the beneficiaries are not parties to the agreement, appellants breached no agreement between themselves and the...