Ramirez-Leon v. GGNSC, LLC

• Decision Date: 27 March 2018
• Docket Number: WD 80990
• Citation: 553 S.W.3d 318
• Parties: Belinda RAMIREZ-LEON, Respondent, v. GGNSC, LLC, et al., Appellants.
• Court: Missouri Court of Appeals

553 S.W.3d 318

Belinda RAMIREZ-LEON, Respondent,

v.GGNSC, LLC, et al., Appellants.

WD 80990

Missouri Court of Appeals, Western District.

OPINION FILED: March 27, 2018

Motion for Rehearing and/or Transfer to Supreme Court Denied May 1, 2018

Application for Transfer to Supreme Court Denied August 21, 2018

Duane M. Dreesen II, Chesterfield, MO, Bradford Kendall, Kansas City, MO and Ron S. Ribaudo, Ballwin, MO, for respondent.

Stephen M. Strum and Timothy C. Sansone, St. Louis, MO, for appellants.

Before Division Three: Gary D. Witt, Presiding Judge, Lisa White Hardwick, Judge and Edward R. Ardini, Jr., Judge

Gary D. Witt, Judge

Golden Gate National Senior Care, LLC, GGNSC Equity Holding, LLC, and GGNSC Independence II, LLC d/b/a Golden Living Center—Independence (collectively "Appellants") bring this interlocutory appeal from the Circuit Court of Jackson County's denial of Appellants' Motion to Dismiss and Enforce Alternative Dispute Resolution Agreement. Appellants argue that the trial court erred in denying their motion because the Alternative Dispute Resolution Agreement ("Arbitration Agreement") is valid and enforceable under Missouri's Uniform Arbitration Act and the Federal Arbitration Act. We reverse and remand.

Background¹

As a result of events which are unrelated to this action, Kevin Bratton ("Bratton") suffered anoxic brain damage

, which rendered him totally incapacitated and disabled, mentally and physically. On October 17, 2008, Belinda Ramirez-Leon ("Ramirez-Leon"), Bratton's mother, was appointed by the Jackson County Probate Court as Bratton's guardian and conservator, and Bratton was placed in a nursing home in Smithville, Missouri.

In October 2015, Ramirez-Leon decided to move Bratton to Golden Living Center ("GLC") in Independence, Missouri. During the admission process, Ramirez-Leon was provided with admission forms by Carla Hopper ("Hopper"), the Director of Admission at GLC. Ramirez-Leon was instructed to sign the forms in order for Bratton to be admitted. Among the forms presented to her was a separate document containing the Arbitration Agreement.

The Arbitration Agreement is titled Alternative Dispute Resolution Agreement. Directly below the title, in all capital letters, the Arbitration Agreement states: "THIS AGREEMENT IS NOT A CONDITION OF ADMISSION TO OR CONTINUED RESIDENCE IN THE FACILITY." The Arbitration Agreement further provides that it is between the facility, GLC, and the resident of the facility, Bratton. According to the Arbitration Agreement, the facility includes "the living center, its employees, agents, officers, directors, affiliates and any parent or subsidiary of the facility and its medical director acting in his or her capacity as medical director," and resident includes "the Resident, all persons whose claim is or may be derived through or on behalf of the Resident, including any next of kin, guardian, executor, administrator, legal representative, or heir of the Resident, and any person who has executed this Agreement on the Resident's behalf."

The next part of the Arbitration Agreement is titled "Voluntary Agreement to Participate in ADR." In the middle of that section, in bold typeface and capital letters, the Arbitration Agreement states:

THE PARTIES UNDERSTAND, ACKNOWLEDGE, AND AGREE THAT THEY ARE SELECTING A METHOD OF RESOLVING DISPUTES WITHOUT RESORTING TO LAWSUITS OR THE COURTS, AND THAT BY ENTERING INTO THIS AGREEMENT, THEY ARE GIVING UP THEIR CONSTITUTIONAL RIGHT TO HAVE THEIR DISPUTES DECIDED IN A COURT OF LAW BY A JUDGE OR JURY, THE OPPORTUNITY TO PRESENT THEIR CLAIMS AS A CLASS ACTION AND/OR TO APPEAL ANY DECISION OR AWARD OF DAMAGES RESULTING FROM THE ADR PROCESS EXCEPT AS PROVIDED HEREIN.

The Arbitration Agreement also has a choice of law provision, which states the Arbitration Agreement should be governed by and interpreted under the Federal Arbitration Act ("FAA"). The Arbitration Agreement states that it "applies to any and all disputes arising out of or in any way relating to this Agreement or to the Resident's stay at the Facility or the Admissions Agreement between the Parties that would constitute a legally cognizable cause of action in a court of law sitting in the state where Facility is located." Above the signature block, the Arbitration Agreement includes another statement in bold typeface and capital letters which states: "THIS AGREEMENT GOVERNS IMPORTANT LEGAL RIGHTS. PLEASE READ IT CAREFULLY AND IN ITS ENTIRETY BEFORE SIGNING." Ramirez-Leon signed the Arbitration Agreement on the line labeled "Signature of Resident" and did not sign on the line labeled "Signature of Resident's Legal Representative".² The bottom of the Arbitration Agreement also includes a line to sign if one wishes to decline the Arbitration Agreement. This line was left blank.

On December 20, 2016, Bratton, through Ramirez-Leon, filed a negligence claim in the Circuit Court of Jackson County against Richard T. Chung, M.D. and Appellants, alleging that he sustained certain physical injuries due to his treatment by Appellants. Appellants filed the Motion to Dismiss and Enforce Alternative Dispute Resolution Agreement on April 6, 2017. On May 8, 2017, Ramirez-Leon filed Suggestions in Opposition to Appellants' Motion, which argued that the Arbitration Agreement was unconscionable and violated public policy. Ramirez-Leon further argued that GGNSC Independence II, LLC, Golden Gate National Senior Care, LLC, and GGNSC Equity Holdings, LLC were not parties to the Arbitration Agreement and therefore could not claim any rights pursuant to that agreement.

On July 31, 2017, the trial court denied Appellants' Motion to Dismiss and Enforce Alternative Dispute Resolution Agreement. This timely interlocutory appeal followed.

Standard of Review

"The Judgment of the trial court is affirmed on appeal unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law." Stubblefield v. Best Cars KC, Inc. , 506 S.W.3d 377, 379 (Mo. App. W.D. 2016). "Appellate review of the denial of a motion to compel arbitration is de novo. " Id. "When faced with a motion to compel arbitration, the motion court must determine whether a valid arbitration agreement exists and, if so, whether the specific dispute falls within the scope of the arbitration agreement." Arrowhead Contracting, Inc. v. M.H. Washington, LLC , 243 S.W.3d 532, 535 (Mo. App. W.D. 2008) (quoting Nitro Distrib., Inc. v. Dunn , 194 S.W.3d 339, 345 (Mo. banc 2006) ). "In determining whether or not a valid arbitration agreement exists, we apply the usual rules of state contract law and cannons of contract interpretation." Id. (internal quotations omitted).

Analysis

Appellants raise two points on appeal, which we address in reverse order for ease of analysis. In Appellants' second point on appeal, they argue that the trial court erred in denying their motion to enforce the Arbitration Agreement because the Arbitration Agreement is valid and enforceable under the Federal Arbitration Act ("FAA"). In Appellants' first point on appeal, they argue that the trial court erred in denying their motion to enforce the Arbitration Agreement because the Arbitration Agreement is valid and enforceable under the Missouri Uniform Arbitration Act.

Point Two

In Point Two, Appellants argue that the trial court erred in denying their Motion to Dismiss and Enforce Alternative Dispute Resolution Agreement because the Arbitration Agreement is valid and enforceable under the FAA. Appellants argue that the Arbitration Agreement complied with the requirements of the FAA and any failure by Ramirez-Leon to read the Arbitration Agreement before signing it does not relieve Bratton from being bound.

"The Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq. (2006), governs the applicability and enforceability of arbitration agreements in all contracts involving interstate commerce." State ex rel. Hewitt v. Kerr , 461 S.W.3d 798, 805 (Mo. banc 2015). "Section 2 extends the scope of the FAA to any contract evidencing a transaction involving commerce." Id. (internal quotations omitted). The Arbitration Agreement states that it is governed by the FAA and Ramirez-Leon has never challenged this.

"The Supreme Court stated in Concepcion that the FAA reflects a ‘liberal policy favoring arbitration and the fundamental principle that arbitration is a matter of contract.... [C]ourts must place arbitration agreements on an equal footing with other contracts and enforce them according to their terms." Id. (quoting AT & T Mobility LLC v. Concepcion , 563 U.S. 333, 131 S.Ct. 1740, 1745, 179 L.Ed.2d 742 (2011) ). Written agreements to arbitrate are "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. section 2. "The FAA expresses the United States Congress's policy favoring resolution of disputes by enforcement of arbitration agreements, instead of resorting to the judicial system." Kan. City Urology, P.A. v. United Healthcare Servs. , 261 S.W.3d 7, 11 (Mo. App. W.D. 2008) (citation omitted).

But "[t]his policy is not enough, standing alone, to extend an arbitration agreement beyond its intended scope because arbitration is a matter of contract." Id. Further, "[a] party cannot be compelled to arbitration unless the party has agreed to do so." Id. "As such, enforceability under the FAA never comes into play if a contract itself was never formed." Bellemere v. Cable-Dahmer Chevrolet, Inc. , 423 S.W.3d 267, 273 (Mo. App. W.D. 2013). "[T]he essential elements of a contract are: ‘(1) competency of the parties to contract; (2) subject matter; (3) legal consideration; (4) mutuality of agreement; and (5) mutuality of obligation.’ " Id. (quoting Bldg. Erection Servs. Co. v. Plastic Sales & Mfg. Co., Inc. , 163 S.W.3d 472, 477 (Mo. App. W.D. 2005) ). See also Johnson v. Vatterott Educ. Ctrs., Inc. , 410 S.W.3d 735, 738 (Mo. App. W.D. 2013) ("Under ... the ...