California Court of Appeals, Third District, Sacramento
Pub. Order 10/28/13
APPEAL from a judgment of the Superior Court of Sacramento County No. 34201100104195CUPOGDS, David I. Brown, J.
Cole Pedroza, Curtis A. Cole, Kenneth R. Pedroza, Lisa Schwartz Tudzin; Wilke, Fleury, Hoffelt, Gould & Birney and Scott L. Gassaway for Defendants and Appellants SunBridge Healthcare, LLC (formerly known as SunBridge Healthcare Corporation), Regency Health Services, Inc., Sun Healthcare Group, Inc., and SunBridge Carmichael Rehabilitation Center (doing business as Carmichael Care and Rehabilitation Center); Schuering Zimmerman & Doyle and Lawrence S. Giardina for Defendants and Appellants Carmichael Care, Inc. (doing business as Rosewood Terrace Care and Rehabilitation), North American Health Care, Inc., and John Sorensen.
Hooper, Lundy & Bookman, Mark E. Reagan, Felicia Y Sze for The California Association of Health Facilities; Fred J. Hiestand for The Civil Justice Association of California as amici curiae on behalf of Defendants and Appellants.
The Law Office, Edward P. Dudensing and Christopher S. Buckley for Plaintiff and Respondent.
On behalf of her decedent husband Edward Goldman, Judy Goldman sued for alleged neglect by the operators of two skilled nursing facilities: Carmichael Care and Rehabilitation Center (Carmichael Care) and Rosewood Terrace Care and Rehabilitation (Rosewood Terrace). In the same complaint, Judy also sued all defendants in her individual capacity for negligent infliction of emotional distress and wrongful death.
Carmichael Care and Rosewood Terrace each sought to compel arbitration based on documents Judy signed when Edward was admitted to each of the facilities. Plaintiff opposed the petition and motion, and the trial court refused to compel arbitration. The trial court found Judy did not have authority to sign on Edward’s behalf, and she did not sign in her individual capacity. The trial court also exercised its discretion under Code of Civil Procedure section 1281.2, subdivision (c), to adjudicate the arbitrable and nonarbitrable claims in order to avoid the possibility of inconsistent rulings.
Carmichael Care and Rosewood Terrace appeal from the orders refusing to compel arbitration and present nearly identical arguments. Defendants contend (1) Judy had authority to sign the admissions papers containing the arbitration agreements because Edward was unable to sign for himself, (2) Judy signed not only on Edward’s behalf, but also for herself when she agreed to arbitration, (3) public policy compels enforcement of the arbitration agreements in this case, (4) the arbitration agreements are not void for being oppressive or unconscionable, and (5) the trial court was precluded from exercising jurisdiction over the arbitrable claims pursuant to Code of Civil Procedure section 1281, subdivision (c), because that section is preempted by the Federal Arbitration Act (9 U.S.C. § 1 et seq.).
We conclude Judy did not have authority to sign the arbitration agreements on Edward’s behalf and did not sign the agreements in her individual capacity. We reject the contention that public policy requires plaintiffs to arbitrate their claims in the absence of the existence of a valid arbitration agreement. Accordingly, we affirm the trial court’s orders denying Carmichael Care’s petition and Rosewood Terrace’s motion to compel arbitration.
In May 2011, Edward –- by and through his successor, Judy –- filed a complaint setting forth causes of action for elder abuse, fraud, and violations of the Patients Bill of Rights (Health & Saf. Code, § 1430, subd. (b); Cal. Code Regs., tit. 22, § 72527).
The complaint alleged Edward was 61 years old on February 25, 2010, when he was admitted to Carmichael Care, a skilled nursing facility. Edward was transferred to Carmichael Care after a short stay at the Veterans Administration (VA) Medical Center where he had been treated for gastrointestinal bleeding. Although Edward suffered a stroke in 2008 that left him weak on his left side, he had been living independently at home with Judy. Over the course of four months at Carmichael Care, Edward sustained six falls –- several of which were undocumented by the facility’s staff. On the sixth fall, Edward fractured his left hip. The facility staff did not document the fall or immediately respond to Judy’s requests to have x-rays taken of Edward’s hip. Three days after the fall, an x-ray was taken and Edward was rushed to the emergency room. On June 28, 2010, Edward’s hip was surgically repaired at Mercy San Juan hospital.
The complaint further alleged Edward was admitted on July 1, 2010, to Rosewood Terrace, another skilled nursing facility. At Rosewood Terrace, Edward needed the assistance of two staff members for any transfers. On July 6, 2010, he experienced a popping sensation when he was transferred by a nursing assistant. Subsequent x-rays showed Edward’s hip to be dislocated. Edward returned to Mercy San Juan hospital for two weeks for further care of his hip. He was again admitted to Rosewood Terrace on July 20, 2010. The next day, Edward was due to have the staples removed from his hip repair. However, the staples were not removed. Ten days later, Edward complained of pain in his hip. On July 31, 2010, facility notes recorded he was coughing and wheezing. On August 5, 2010, nursing notes indicated his hip dressing was soaked with blood and the staples still had not been removed. The suture line was swollen and draining necrotic debris. The next day, Judy took Edward out of Rosewood Terrace and drove him to the emergency room at the VA Medical Center. Edward died on August 17, 2010.
In addition to appearing as Edward’s successor, Judy also sued on her own behalf to assert causes of action for negligent infliction of emotional distress and wrongful death.
Carmichael Care’s Petition to Compel Arbitration
In July 2011, Carmichael Care petitioned to compel arbitration and introduced copies of the arbitration agreements signed by Judy. Carmichael Care also introduced a copy of Edward’s VA advance directive: Durable Power of Attorney for Health Care and Living Will (VA advance directive), which included a durable power of attorney appointing Judy as his healthcare agent in the event he became unable to make decisions for himself. In pertinent part, Edward’s VA advance directive stated: “I appoint the person named below to make decisions about my health care if there ever comes [a] time when I cannot make those decisions.” Judy was listed as the person to be appointed in such a circumstance. The VA advance directive was signed by Edward and witnessed on February 9, 2010.
Plaintiff opposed the petition and introduced a declaration by Judy that Edward was capable of and actually did make healthcare decisions for himself before and during his stay at Carmichael Care. Judy’s declaration further stated: “As to the signing of the arbitration agreement, a person from the facility merely told me that I needed to sign some more forms for my husband. The person from the facility did not say what the forms were, that they involved arbitration, or that there was a choice in the signing of the documents. The person from the facility never inquired of me whether my husband was capable of signing the documents or discussed with me that the documents needed to be signed by my husband if he was capable. Had this issue been raised, I certainly would have told the facility employee that my husband was capable of making his own health care decisions.”
In reply, Carmichael Care submitted a form titled “Authorizations, Acknowledgments and Consents” signed and initialed multiple times by Judy. The form had a blank line following text stating, “If Resident is unable to sign this form, please state the reason.” On this line, Judy wrote “Stroke.”
Rosewood Terrace’s Motion to Compel Arbitration
In September 2011, Rosewood Terrace filed a motion to compel arbitration and introduced arbitration agreements signed by Judy.
Plaintiff opposed Rosewood Terrace’s motion and submitted a declaration by Judy that stated Edward was capable of and actually did make healthcare decisions for himself before and during his stays at Rosewood Terrace. Mirroring her earlier declaration, Judy’s declaration in opposition to the Rosewood Terrace motion stated: “As to the signing of the arbitration agreement, a person from the facility merely told me that I needed to sign some admission forms for my husband. The person from the facility did not say what the forms were, that they involved arbitration, or that there was a choice in the signing of the documents. The person from the facility never inquired of me whether my husband was capable of signing the documents or discussed with me that the documents needed to be signed by my husband if he was capable. Had this issue been raised, I certainly would have told the facility employee that my husband was capable of making his own health care decisions.”
Orders Denying the Petition and Motion to Compel Arbitration
The trial court refused to order plaintiff to arbitrate her claims. As to Carmichael Care, the trial court found that Judy signed two arbitration agreements on Edward’s behalf when he was admitted to that facility. At the same time she signed the arbitration agreements, Judy also signed a document noting she was signing on Edward’s behalf due to “Stroke.” However, the trial court found Carmichael Care “presented no evidence that such a determination was ever made by Edward Goldman’s primary care physician.” The court noted that a doctor’s report for Edward made the day after Judy signed the Carmichael Care arbitration agreement “showed [Edward] communicated to the doctor in a manner inconsistent with a person who was too ill to make health care decisions.” As a result, the trial court found the Carmichael Care defendants “have failed to meet their burden to establish that the VA Advance Directive was in effect, and thus, that Judith Goldman was authorized to execute the arbitration agreements on Edward’s behalf.” In so concluding, the court stated the Carmichael Care defendants ...