Taylor v. Extendicare Health Facilities, Inc.

• Decision Date: 28 September 2016
• Docket Number: No. 19 WAP 2015,19 WAP 2015
• Citation: 147 A.3d 490
• Parties: Daniel E. Taylor and William Taylor, as Co-executors of the Estate of Anna Marie Taylor, Deceased v. Extendicare Health Facilities, Inc. d/b/a Havencrest Nursing Center ; Extendicare Holdings, Inc.; Extendicare Health Facility Holdings, Inc. ; Extendicare Health Services, Inc.; Extendicare Reit ; Extendicare, L.P.; Extendicare, Inc.; Mon Vale Non Acute Care Service, Inc. d/b/a the residence at Hilltop; Mon-vale Health Resources, Inc.; Jefferson Health Services, d/b/a Jefferson Regional Medical Center Appeal of: Extendicare Health Facilities, Inc., d/b/a Havencrest Nursing Center, Extendicare Holdings, Inc., Extendicare Health Facility Holdings, Inc., Extendicare Health Services, Inc., Extendicare Reit, Extendicare, L.P. and Extendicare, Inc.
• Court: Pennsylvania Supreme Court

147 A.3d 490

Daniel E. Taylor and William Taylor, as Co-executors of the Estate of Anna Marie Taylor, Deceased

v.Extendicare Health Facilities, Inc. d/b/a Havencrest Nursing Center ; Extendicare Holdings, Inc.; Extendicare Health Facility Holdings, Inc. ; Extendicare Health Services, Inc.; Extendicare Reit ; Extendicare, L.P.; Extendicare, Inc.; Mon Vale Non Acute Care Service, Inc. d/b/a the residence at Hilltop; Mon-vale Health Resources, Inc.; Jefferson Health Services, d/b/a Jefferson Regional Medical Center

Appeal of: Extendicare Health Facilities, Inc., d/b/a Havencrest Nursing Center, Extendicare Holdings, Inc., Extendicare Health Facility Holdings, Inc., Extendicare Health Services, Inc., Extendicare Reit, Extendicare, L.P. and Extendicare, Inc.

No. 19 WAP 2015

Supreme Court of Pennsylvania.

ARGUED: April 5, 2016

DECIDED: SEPTEMBER 28, 2016

John A. Bass, Esq., Grogan Graffam, P.C., Jennifer L. McPeak, Esq., Patrick Louis Mechas, Esq., Burns White, LLC, for Mon–Vale Health Resources, Inc., Participants.

Andrew George Kimball, Esq., for Jefferson Health Services d/b/a Jefferson Regional Medical Center, Participants.

Joel I. Fishbein, Esq., for Extendicare, Inc, et al., Appellant.

Amie Marie Mihalko, Esq., for Extendicare Health Services, Inc., Extendicare Holdings, Inc., Extendicare Health Facility Holdings, Inc., Extendicare REIT, Extendicare, L.P., Extendicare, Inc., Extendicare Health Facilities, Inc. d/b/a Havencrest Nursing Center, Extendicare, Inc, et al., Appellants.

William James Mundy, Esq., Ira L. Podheiser, Esq., Burns White LLC, for Pa. Healthcare Assoc. et al., Appellant Amicus Curiae.

Ryan John Duty, Esq., Stephen Trzcinski, Esq., Wilkes & McHugh, P.A., for Daniel E. Taylor and William Taylor, Appellees.

Andrew C. Spears, Esq., Handler, Henning & Rosenberg, L.L.P., for Pennsylvania Association for Justice, Appellee Amicus Curiae.

Sol H. Weiss, Esq., Anapol Weiss, for American Association for Justice, Appellee Amicus Curiae.

Iris Y. Gonzalez, Esq., pro se.

William Rivera, pro se.

Larry A. Tawwater, pro se.

Jeffery R. White, pro se.

SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, JJ.

OPINION

JUSTICE WECHT

The Federal Arbitration Act (“FAA”) provides that arbitration agreements “shall be 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. § 2

. Pennsylvania Rule of Civil Procedure 213(e) requires the consolidation of survival and wrongful death actions for trial. A representative of Extendicare Health Facilities, Inc., d/b/a Havencrest Nursing Center (“Extendicare”), executed an arbitration agreement with Anna Marie Taylor (“Decedent”) requiring the arbitration of claims arising from Decedent's stay at the Extendicare facility. Following Decedent's death, Daniel and William Taylor (“the Taylors”) brought wrongful death claims on behalf of themselves as wrongful death beneficiaries and survival claims on behalf of Decedent's estate against Extendicare and two other defendants. Extendicare moved to bifurcate the wrongful death and survival actions, and to compel arbitration of Decedent's survival claim pursuant to the arbitration agreement and the FAA.

The trial court relied upon Rule 213(e)

to deny Extendicare's motion to bifurcate, and the Superior Court affirmed. We granted review to determine whether the FAA preempts the lower courts' application of Rule 213(e) under the facts presented. Upon review, we conclude that the FAA preempts the application of Rule 213(e), and requires arbitration of the survival claim against Extendicare. We therefore reverse the Superior Court, and we remand to the trial court for further proceedings.

In 2010, Decedent was admitted to Mon-Vale Non-Acute Care Service, Inc., d/b/a The Residence at Hilltop (“The Residence”), a nursing home facility where, on February 1, 2012, she fell and fractured her right hip. Decedent underwent surgery at Jefferson Health Services, d/b/a Jefferson Regional Medical Center (“Jefferson Medical Center”). Following surgery, Decedent was admitted to one of Extendicare's skilled nursing facilities. On February 9, 2012, as part of the admissions paperwork and pursuant to a power of attorney authorizing him to act on Decedent's behalf, William Taylor executed the Alternative Dispute Resolution Agreement (“ADR Agreement”) that is central to this appeal. The ADR Agreement, to which only Decedent (by William Taylor) and Extendicare are parties, provides that any covered disputes arising between the parties are to be submitted to binding arbitration:

Voluntary Agreement to Participate in ADR. The Parties agree that the speed, efficiency and cost-effectiveness of the ADR process, together with their mutual undertaking to engage in that process, constitutes good and sufficient consideration for the acceptance and enforcement of this Agreement. The Parties voluntarily agree that any disputes covered by this Agreement ( [hereinafter] referred to as “Covered Disputes”) that may arise between the Parties shall be resolved exclusively by an ADR process that shall include mediation and, where mediation does not successfully resolve the dispute, binding arbitration. ... The Parties' recourse to a court of law shall be limited to an action to enforce a binding arbitration decision or mediation settlement agreement entered in accordance with this Agreement or to vacate such a decision based on the limited grounds set forth in [the Uniform Arbitration Act, 42 Pa.C.S. §§ 7301, et seq.

]

Reproduced Record (“R.R.”) at 83a-84a. The ADR Agreement purported to require the resolution of all disputes in a single arbitral forum as follows:

Covered Disputes. This Agreement applies to any and all disputes arising out of or in any way relating to this Agreement or to [Decedent's] stay at [Extendicare's facility] that would constitute a legally cognizable cause of action in a court of law sitting in the Commonwealth of Pennsylvania and shall include, but not be limited to, all claims in law or equity arising from one Party's failure to satisfy a financial obligation to the other Party; a violation of a right claimed to exist under federal, state, or local law or contractual agreement between the Parties; tort; breach of contract; fraud; misrepresentation; negligence; gross negligence; malpractice; death or wrongful death and any alleged departure from any applicable federal, state, or local medical, health care, consumer or safety standards. ... All claims based in whole or in part on the same incident, transaction or related course of care or services provided by [Extendicare] to [Decedent] shall be addressed in a single ADR process.

R.R. at 84a.

Following her admission into the Extendicare facility, Decedent quickly developed numerous medical complications. She died on April 3, 2012. On October 15, 2012, the Taylors, as co-executors of Decedent's estate, commenced this litigation, ultimately filing a complaint asserting wrongful death and survival claims against Extendicare, The Residence, and Jefferson Medical Center.¹ The Taylors alleged that the combined negligence of the three defendants caused or contributed to Decedent's injuries and death.

In response, Extendicare filed preliminary objections in the nature of a motion to compel arbitration of the Taylors' wrongful death and survival claims, arguing that both claims should be submitted to binding arbitration pursuant to the ADR Agreement. In support of its motion, Extendicare asserted that the Taylors' wrongful death claim was derivative of the survival claim and, because the survival claim was within the scope of the ADR Agreement, both claims must be submitted to arbitration.

On November 20, 2013, the trial court heard oral argument on Extendicare's motion. Although Extendicare maintained that the ADR Agreement required the court to compel arbitration of both of the Taylors' claims against it, Extendicare conceded that the Superior Court recently had held that an arbitration agreement signed only by a decedent did not bind the decedent's wrongful death beneficiaries. See Pisano v. Extendicare Homes, Inc., 77 A.3d 651, 660–61 (Pa. Super. 2013)

. Shifting its litigation strategy to account for Pisano, Extendicare requested for the first time the bifurcation of the Taylors' two causes of action against it, and an order compelling arbitration just of the survival claim, while the wrongful death claim remained pending for judicial resolution.

Following argument, the trial court overruled Extendicare's preliminary objections. It agreed with Extendicare and the Taylors that, in accord with Pisano,

the Taylors could not be compelled to arbitrate their wrongful death claim against Extendicare because they, as wrongful death beneficiaries, were not parties to the ADR Agreement. Trial Ct. Op., 1/29/2014, at 3; see Pisano, 77 A.3d at 660–61 (holding that because wrongful death actions are not derivative of the decedent's rights, the wrongful death beneficiaries were not bound by an arbitration agreement executed by the decedent); see also E.E.O.C. v. Waffle House, 534 U.S. 279, 293, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002) (holding that, notwithstanding the federal policy favoring arbitration agreements, the FAA does not require parties to arbitrate when they have not agreed to do so).

The trial court also refused Extendicare's request to sever the survival action from the wrongful death action in order to send the former to arbitration. The trial court explained that it found no authority within the FAA to support severance. To the contrary, the trial court opined that severance would not advance the purpose of the FAA, which, it explained, was “to ease the burden of litigation on the parties and this Court's docket.” Trial Ct. Op., 1/29/2014, at 3-4 (citing Joseph Muller Corp. Zurich v. Commonwealth Petrochem., Inc., 334 F.Supp. 1013, 1019 (S.D.N.Y. 1971)

). Examining Rule 213(e) of the Pennsylvania Rules of Civil Procedure, the trial court held that it was...