Lowther v. Roxborough Memorial Hosp.

• Decision Date: 10 September 1999
• Citation: 738 A.2d 480
• Parties: Heather LOWTHER, a minor by her parent and natural guardian, and Ann Lowther, in her own right, Appellee, v. ROXBOROUGH MEMORIAL HOSPITAL and Roxborough Memorial Hospital Emergency Medical Services and Russell Stahl, M.D., and John N. Childs, III M.D., and Michael Rutberg, M.D., Appeal of John N. Childs, III, M.D., Appellants (at 460). John N. Childs, III, M.D., Appellant (at 786), v. Heather Lowther, Appellee.
• Court: Pennsylvania Superior Court

738 A.2d 480

Heather LOWTHER, a minor by her parent and natural guardian, and Ann Lowther, in her own right, Appellee, v. ROXBOROUGH MEMORIAL HOSPITAL and Roxborough Memorial Hospital Emergency Medical Services and Russell Stahl, M.D., and John N. Childs, III M.D., and Michael Rutberg, M.D., Appeal of John N. Childs, III, M.D., Appellants (at 460).

John N. Childs, III, M.D., Appellant (at 786), v. Heather Lowther, Appellee.

Superior Court of Pennsylvania.

Argued September 15, 1998.

Filed September 10, 1999.

Roseann L. Brenner, Philadelphia, for John N. Childs, III, M.D.

Dale G. Larrimore, Philadelphia, for Heather Lowther.

Before KELLY, J., EAKIN, J., and OLSZEWSKI, J.

KELLY, J.:

¶ 1 Appellant, John N. Childs, III, M.D., has filed an appeal at No. 460 Philadelphia 1998, from the order of the Philadelphia County Court of Common Pleas, dated December 15, 1997 and docketed December 22, 1997, which granted Appellees' Petition to Confirm Arbitration Award. We affirm.

¶ 2 In his second appeal at No. 786 Philadelphia 1998, Appellant challenges the order of the Philadelphia County Court of Common Pleas, dated February 17, 1998 and docketed February 18, 1998, which sustained Appellees' preliminary objections to Appellant's Declaratory Judgment action. We affirm.

¶ 3 The relevant facts underlying both appeals are concisely set forth in the trial court opinion as follows:

[Appellees] Heather Lowther and her mother, Ann, sued [Appellant] for medical malpractice alleging negligent treatment of Heather's appendicitis. The parties agreed to submit to [binding] arbitration and to this end, their attorneys signed an agreement to arbitrate with ADR Options.¹ The agreement provided that ADR Options Rules of Procedure would govern the arbitration. Those rules provided that the rules of evidence and substantive law of the appropriate jurisdiction would apply.

The malpractice in question consisted of [Appellant] failing initially to diagnose Heather's acute appendicitis and then failing to order post-operative antibiotics after the removal of a ruptured appendix.

The arbitrator stated at the outset that the credibility of the witnesses was paramount and concluded that [Appellant]'s explanation for his failure to administer antibiotics did not comport with his notations in the medical records and discharge summary. The arbitrator stated that his conclusions were based on having inspected hundreds of medical records over the years in the course of his employment as an Assistant U.S. Attorney and U.S. Magistrate. This reasoning, [Appellant] contends, indicates that the arbitrator improperly considered facts not in evidence and is a basis for vacating the award....

(Trial Court Opinion, dated March 17, 1998 and docketed March 18, 1998, at 1-2).

¶ 4 We add the following procedural history relevant to these appeals. Arbitration was held on September 25, 1997. The Arbitrator rendered his decision on September 30, 1997.

¶ 5 On October 28, 1997, Appellant filed a separate Declaratory Judgment action, pursuant to 42 Pa.C.S.A. § 7531, seeking the court's declaration that the parties' agreement to arbitrate had been rendered void and unenforceable as a matter of law. In the Declaratory Judgment complaint, Appellant alleged that the arbitrator acted contrary to the arbitration rules in reaching his decision and rendering the award. Specifically, Appellant contended that the arbitrator chose to ignore the evidence of record and relied instead upon records in unrelated matters, which he had previously reviewed in his capacity as a former prosecutor and Magistrate Judge. Therefore, according to Appellant, he was denied the benefit of his bargain to arbitrate and was entitled to declaratory relief in the form of voiding the arbitration agreement.

¶ 6 On November 3, 1997, Appellees filed a petition with the Court of Common Pleas to confirm the arbitration award. In Appellant's answer in opposition to Appellees' petition to confirm the arbitration award, Appellant raised the same claim as set forth in his Declaratory Judgment complaint.

¶ 7 The Common Pleas Court confirmed the arbitration award by order dated December 15, 1997 and docketed December 22, 1997. On January 13, 1998, Appellant filed a motion to reconsider the order confirming the arbitration award. On January 22, 1998, Appellant filed the appeal at No. 460 Philadelphia 1998 while his motion to reconsider the order confirming the arbitration was still pending.

¶ 8 On February 17, 1998, the trial court sustained Appellees' preliminary objections to Appellant's October 28, 1997 Declaratory Judgment action and dismissed it. The dismissal of Appellant's Declaratory Judgment action is the subject of his appeal at No. 786 Philadelphia 1998.

¶ 9 This Court denied Appellant's motion to consolidate the appeals. Instead, it directed the appeals to be listed consecutively for oral argument and disposition. Accordingly, we will separately address and dispose of the two appeals within this memorandum opinion.

Appeal at No. 460 Philadelphia 1998

¶ 10 On appeal at No. 460 Philadelphia 1998, Appellant raises the following issues for our review:

WHETHER THE [TRIAL] COURT ERRED IN CONFIRMING AN ARBITRATION AWARD AND APPLYING COMMON LAW ARBITRATION RULES WHERE THE PARTIES CONTRACTUALLY AGREED TO HAVE THEIR DISPUTE RESOLVED OUTSIDE THE COURT SYSTEM AND THE CONTRACT TO ARBITRATE IS BREACHED BY THE ARBITRATOR'S FLAGRANT VIOLATION OF THE ARBITRATION RULES CONTRACTUALLY AGREED [UPON] AND THE VERY BASIS OF THE AWARD IS IN CONTRAVENTION OF PENNSYLVANIA LAW?

WHETHER THE ARBITRATION AWARD BASED UPON AN ARBITRATOR'S CONDUCT DIRECTLY IN CONTRAVENTION OF PENNSYLVANIA LAW, AS WELL AS IN CONFLICT WITH THE RULES OF ARBITRATION CONTRACTUALLY AGREED UPON BY THE PARTIES IS ENFORCEABLE UNDER EITHER THE LAW OF CONTRACTS OR COMMON LAW ARBITRATION?

(Appellant's Brief at 3).

¶ 11 As a preliminary matter, the parties agree that, pursuant to their arbitration agreement, they waived their right to a trial by jury in favor of arbitration, the result of which to be final and binding on the parties. However, Appellant argues, the parties also agreed that Pennsylvania law would govern all evidentiary and legal issues. Appellant maintains that the arbitrator's award was based upon evidence outside the record in violation of Pennsylvania evidentiary law. Thus, Appellant states, the agreement to arbitrate was violated by the arbitrator's actions and is, therefore, void and unenforceable as against either party with respect to any resultant award.

¶ 12 Appellant further argues that the agreement to arbitrate contained no mention of the Pennsylvania Arbitration Act. Appellant concludes, therefore, that the parties' arbitration is not subject to any of the statute's provisions, including the provisions governing the enforcement of a common-law arbitration award. We disagree.

¶ 13 Chapter 73 of the Pennsylvania Judicial Code governs statutory, common law and judicial arbitration. 42 Pa.C.S.A. §§ 7301-7362. Sections 7301-7320 of Subchapter A apply to statutory arbitration proceedings and are known collectively as the Pennsylvania Uniform Arbitration Act ("UAA"). Sections 7341 and 7342 of Subchapter B apply to common law arbitration proceedings. Sections 7361 and 7362 apply to judicial arbitration proceedings, which include compulsory arbitration and voluntary arbitration. Id.

¶ 14 Whether an arbitration agreement is subject to the UAA (Sections 7301-7320 of Subchapter A) or common law (Sections 7341 and 7342 of Subchapter B) arbitration principles depends on whether the agreement is in writing and expressly provides for arbitration under the UAA. 42 Pa.C.S.A. § 7302(a). The general rule, set forth in this statutory provision, states:

§ 7302. Scope of subchapter

(a) General rule.—An agreement to arbitrate a controversy on a nonjudicial basis shall be conclusively presumed to be an agreement to arbitrate pursuant to Subchapter B (relating to common law arbitration) unless the agreement to arbitrate is in writing and expressly provides for arbitration pursuant to this subchapter [Subchapter A] or any other similar statute....

Id. Pennsylvania law makes clear that, absent an express statement in the arbitration agreement, or a subsequent express or implied agreement by the parties, which calls for the application of the UAA statutory provisions in Subchapter A, an agreement to arbitrate is conclusively presumed to be at common law and subject to the provisions of Subchapter B at 42 Pa.C.S.A. §§ 7341, 7342. Id.; Runewicz v. Keystone Ins. Co., 476 Pa. 456, 383 A.2d 189 (1978). Likewise, absent an agreement for the application of the UAA provisions, the common law arbitration rules set forth in Subchapter B control the enforcement of an arbitration award. Id.

¶ 15 The arbitration agreement in the instant case provides in full as follows:

ARBITRATION AGREEMENT AND STIPULATION

It is hereby stipulated by and between the parties that the above case is to be decided by a binding arbitration. The undersigned parties also agree that the arbitration will be final, binding and conducted under the current ADR OPTIONS, INC., Rules of Procedure which are enclosed.

Each party and participating attorney has disclosed any past or present relationship with the arbitrator, direct or indirect, whether financial, professional, social or any other kind. The arbitrator has also disclosed any past or present relationship with any party or attorney. It is understood that any doubt has been resolved in favor of disclosure.

The parties agree not to call the arbitrator or any employee or agent of ADR Options, Inc., as a witness or an expert in any pending or subsequent litigation as to any matter related to this arbitration. The parties will defend the arbitrator, ADR Options, Inc., and any employee or agent of ADR Options, Inc., from any subpoena from any party as to the subject of this arbitration. The arbitrator and ADR Options, Inc., and its

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