Moffett v. Life Care Centers of America

• Decision Date: 15 May 2008
• Docket Number: No. 07CA0376.,07CA0376.
• Citation: 187 P.3d 1140
• Parties: James MOFFETT and Rozan O'Brien, Plaintiffs-Appellees, v. LIFE CARE CENTERS OF AMERICA, a Tennessee corporation, d/b/a Briarwood Health Care Center, Defendant-Appellant.
• Court: Colorado Court of Appeals

187 P.3d 1140

James MOFFETT and Rozan O'Brien, Plaintiffs-Appellees, v. LIFE CARE CENTERS OF AMERICA, a Tennessee corporation, d/b/a Briarwood Health Care Center, Defendant-Appellant.

No. 07CA0376.

Colorado Court of Appeals, Div. V.

May 15, 2008.

Law Offices of John Robert Holland, P.C., John Robert Holland, Anna E. Cayton-Holland, Erica T. Grossman, Denver, Colorado, for Plaintiffs-Appellees.

Kennedy Childs & Fogg, P.C., Ronald H. Nemirow, Barbara Glogiewicz, Miles Buckingham, Denver, Colorado, for Defendant-Appellant.

Opinion by Judge GRAHAM.

In this wrongful death case, defendant, Life Care Centers of America, doing business as Briarwood Health Care Center (Briarwood), appeals the trial court's partial summary judgment in favor of plaintiffs, James Moffett and Rozan O'Brien, determining that an arbitration agreement was invalid. It also appeals the order denying its motion to compel arbitration. We reverse and remand for further proceedings.

On February 15, 2004, Dorothy Moffett, who was suffering from Alzheimer's disease, was admitted to Briarwood. As part of the admission process, Dorothy's son, James Moffett, signed various documents provided by Briarwood, including a separate arbitration agreement. The parties agree that Ms. Moffett had executed two powers of attorney appointing her son and daughter (Ms. O'Brien) attorneys-in-fact: a medical durable power of attorney and a general power of attorney. We note that these powers of attorney are not part of the official record before us.

The arbitration agreement provides for the use of arbitration in lieu of a lawsuit to resolve "any dispute that may arise between Dorothy Moffett (the `Resident') and Briarwood (the `Facility')." Specifically, the agreement states that the parties agree to arbitrate any claim, including, but not limited to, any claim that medical services were unnecessary or unauthorized or were improperly, negligently, or incompetently rendered or omitted ... [and] all disputes ... arising out of and in any way connected to the Resident's stay and care provided at the Facility, including but not limited to any disputes concerning alleged personal injury to the Resident caused by improper or inadequate care, including allegations of medical malpractice; any disputes concerning whether any statutory provisions relating to the Resident's rights under Colorado law were violated; and any other dispute under Colorado or federal law based on contact, tort, or statute.

The agreement further states:

It is the intention of the Facility and the Resident that this Arbitration agreement shall inure to the benefit of and bind the Facility, its agents, partners, officers, directors, shareholders, owners, employees, representatives, members, fiduciaries, governing bodies, subsidiaries, parent companies, affiliates, insurers, attorneys, predecessors, successors and assigns, or any of them, and all persons, entities or corporations with whom any of the former have been, are now or may be affiliated; and the Resident, his/her successors, assigns, agents, insurers, heirs, trustees, and representatives, including the personal representative or executor of his or her estate; and his/her successors, assigns, agents, insurers, heirs, trustees, and representatives.

The last section of the agreement, "ACKNOWLEDGMENTS," contains the following bold-faced, capitalized text:

THE UNDERSIGNED ACKNOWLEDGE THAT EACH OF THEM HAS READ THIS ARBITRATION AGREEMENT AND UNDERSTANDS THAT BY SIGNING THIS ARBITRATION AGREEMENT EACH HAS WAIVED HIS/HER RIGHT TO A TRIAL, BEFORE A JUDGE OR JURY, AND THAT EACH OF THEM VOLUNTARILY CONSENTS TO ALL OF THE TERMS OF THE ARBITRATION AGREEMENT.

NOTE: BY SIGNING THIS AGREEMENT YOU ARE AGREEING TO HAVE ANY ISSUE OF MEDICAL MALPRACTICE DECIDED BY NEUTRAL BINDING ARBITRATION RATHER THAN BY A JURY OR COURT TRIAL.

YOU HAVE THE RIGHT TO SEEK LEGAL COUNSEL AND YOU HAVE THE RIGHT TO RESCIND THIS AGREEMENT WITHIN NINETY DAYS FROM THE DATE OF SIGNATURE BY BOTH PARTIES....

NO HEALTH CARE PROVIDER SHALL WITHHOLD THE PROVISION OF EMERGENCY MEDICAL SERVICES TO ANY PERSON BECAUSE OF THAT PERSON'S FAILURE OR REFUSAL TO SIGN AN AGREEMENT CONTAINING A PROVISION FOR BINDING ARBITRATION OF ANY DISPUTE ARISING AS TO PROFESSIONAL NEGLIGENCE OF THE PROVIDER.

NO HEALTH CARE PROVIDER SHALL REFUSE TO PROVIDE MEDICAL SERVICES TO ANY PATIENT SOLELY BECAUSE SUCH PATIENT REFUSED TO SIGN SUCH AGREEMENT OR EXERCISED THE NINETY-DAY RIGHT OF RESCISSION.

Following this text are lines for "Signature of Resident/Date," which was left blank; "Signature of Legal Representative/Date," which was signed by James Moffett, but not dated; and "Signature of Facility Representative/Date," which was signed by a Briarwood employee and dated February 17, 2004.

On October 13, 2004, Ms. Moffett was admitted to St. Luke's Hospital. She died two days later.

Plaintiffs filed a complaint for wrongful death against Briarwood. In response to the complaint, Briarwood filed a motion to stay the trial court proceeding and compel arbitration pursuant to the arbitration agreement.

The trial court concluded that the arbitration agreement was invalid because it did not comply with the standards prescribed by section 13-64-403, C.R.S.2007, of the Colorado Health Care Availability Act (HCAA). Specifically, the trial court determined that (1) the arbitration agreement was "illegally tendered" because Briarwood knew "Ms. Moffett lacked rational capacity to sign" the agreement, which violated section 13-64-403(11), C.R.S.2007; (2) a copy of the arbitration agreement was not given to Ms. Moffett as required by section 13-64-403(6), C.R.S. 2007; and (3) Mr. Moffett was impermissibly told that, if he did not sign the arbitration agreement, his mother would be refused and denied urgently needed care, in violation of section 13-64-403(7), C.R.S.2007.

The trial court later granted summary judgment for plaintiffs on the basis that the arbitration agreement was invalid. This appeal followed.

I. Standard of Review

Summary judgment is proper when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. C.R.C.P. 56(c). We review a grant or denial of summary judgment de novo. Lutfi v. Brighton Cmty. Hosp. Ass'n, 40 P.3d 51, 54 (Colo.App.2001).

II. Validity of the Arbitration Agreement

Briarwood contends that the trial court erred in denying its motion to compel arbitration on the basis that the arbitration agreement violated several provisions of section 13-64-403 of the HCAA. We agree and remand for further proceedings.

We review the trial court's decision on a motion to compel arbitration de novo, employing the same legal standards the trial court employed. See 1mage Software, Inc. v. Reynolds & Reynolds Co., 459 F.3d 1044, 1055 (10th Cir.2006).

In considering a motion to compel, the trial court must first determine whether a valid agreement to arbitrate exists between the parties to the action. Eagle Ridge Condo. Ass'n v. Metro. Builders, Inc., 98 P.3d 915, 917 (Colo.App.2004).

The court may refuse to compel arbitration "only upon a showing that there is no agreement to arbitrate or if the issue sought to be arbitrated is clearly beyond the scope of the arbitration provision." Shorey v. Jefferson County Sch. Dist. No. R-1, 807 P.2d 1181, 1183 (Colo.App.1990), aff'd, 826 P.2d 830 (Colo. 1992).

Whether an agreement to arbitrate exists is a matter of law that we review de novo. Lane v. Urgitus, 145 P.3d 672, 677 (Colo.2006); Allen v. Pacheco, 71 P.3d 375, 378 (Colo.2003).

A. Mr. Moffett's Authority to Execute the Arbitration Agreement Under Section 13-64-403(11)

We first address whether section 13-64-403(11) prohibits a person who holds a power of attorney from executing an arbitration agreement, as part of a nursing home admissions contract, on behalf of a patient who is unable to make a rational decision whether to execute such an agreement. We conclude the statute allows an attorney-in-fact with sufficient authority to execute such an agreement. However, on the record before us, we cannot determine whether Mr. Moffett had authority to do so.

Section 13-64-403(11) provides, "No such [arbitration] agreement may be submitted to a patient for approval when the patient's condition prevents the patient from making a rational decision whether or not to execute such an agreement."

We review issues of law involving statutory interpretation de novo. Klinger v. Adams County Sch. Dist. No. 50, 130 P.3d 1027, 1031 (Colo.2006).

Our primary goal in statutory interpretation is to find and give effect to legislative intent. Colo. Office of Consumer Counsel v. Pub. Utils. Comm'n, 42 P.3d 23, 27 (Colo. 2002). We first look to the language of the statute, giving words and phrases their plain and ordinary meaning, and we interpret the statute in a way that best effectuates the purpose of the legislative scheme. Harding v. Heritage Health Prods. Co., 98 P.3d 945, 947 (Colo.App.2004). When a court construes a statute, it should read and consider the statute as a whole and interpret it in a manner giving consistent, harmonious, and sensible effect to all its parts. Colo. Ins Guar. Ass'n v. Menor, 166 P.3d 205, 212 (Colo.App.2007). In doing so, a court should not interpret the statute so as to render any part of it either meaningless or absurd. Id.

If the statute is unambiguous, we look no further. Bd. of County Comm'rs v. Costilla County Conservancy Dist., 88 P.3d 1188, 1193 (Colo.2004). However, if a statute is ambiguous, we may consider prior law, legislative history, the consequences of a given construction, and the underlying purpose or policy of the statute. Branch v. Colo. Dep't of Corr., 89 P.3d 496, 498 (Colo.App.2003).

The plain language of section 13-64-403(11) neither expressly includes nor expressly excludes a person who holds a power of attorney from entering into an arbitration agreement on behalf of a patient who is unable to make a...