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Avila v. Southern California Specialty Care, Inc.

California Court of Appeals, Fourth District, Third Division

February 26, 2018

ALEX AVILA et al., Plaintiffs and Respondents,
v.
SOUTHERN CALIFORNIA SPECIALTY CARE, INC., et al., Defendants and Appellants.

         Appeal from an order of the Superior Court of Orange County No. 30-2016-00843634 Nathan R. Scott, Judge. Affirmed.

          Giovanniello Law Group, Alexander F. Giovanniello, Karen A. Bocker, Danielle M. VandenBos and Thomas C. Swann for Defendants and Appellants.

          Valentine Law Group, Kimberly A. Valentine, Jennifer L. Turner and Joseph F. Fighera for Plaintiffs and Respondents.

          OPINION

          MOORE, ACTING P. J.

         Southern California Specialty Care, dba Kindred Hospital - Santa Ana and Kindred Healthcare Operating, Inc. (Kindred or defendants) appeal from the trial court's order denying its petition to compel arbitration as to the negligence and elder abuse claims of now-deceased Antonio Avila (Antonio), and the wrongful death claim brought by his son and survivor, Alexis Anthony Avila (Alex)[1] (collectively plaintiffs). The trial court ruled that Alex's wrongful death claim was not subject to arbitration. The court further exercised its discretion under Code of Civil Procedure section 1281.2, subdivision (c), [2] to refuse to enforce the arbitration agreement as to the remaining claims due to the risk of inconsistent judgments. We find no error and affirm the order.

         I

         FACTS

         In 2007, Antonio executed California's statutory power of attorney form, naming his son, Alex, as his agent. In March 2015, Antonio, age 87 at the time, was transferred from another facility to Kindred, a long-term acute care hospital, suffering from various conditions, including sepsis and chronic renal failure.

         The next day, after Antonio had begun receiving care, Alex was presented with a stack of documents, including a document entitled “Voluntary Alternative Dispute Resolution (ADR) Agreement” (the agreement). Alex signed the agreement on Antonio's behalf.

         The agreement provided for arbitration after mediation, with “submission to arbitration as provided by California law.” It also refers to section 1281.6 (court appointment of an arbitrator if the parties cannot agree) and Evidence Code section 1157 with regard to confidentiality of peer review proceedings.

         The agreement stated “any dispute as to medical malpractice, ” in addition to “any legal claim or civil action arising out of or relating to your hospitalization” was subject to arbitration. “This ADR agreement also covers any claim or action brought by a party other than you (e.g., an action by your spouse, legal representative, agent, heir) arising out of or relating to your hospitalization....” The agreement also included a 30-day period in which to rescind.

         On the signature page, immediately prior to the signature area, there is a statement pursuant to section 1295, subdivision (b) stating that by signing, the signator is “agreeing to have any issue of medical malpractice decided by neutral arbitration and you are giving up your right to a jury or court trial.” The signature line under “name of patient” was stamped “unable to sign, ” and the signature was Alex's, followed by the word “son.” (Original capitalization omitted.) It was also signed by Alex under a statement regarding his certification that he was authorized to act as Antonio's agent.

         According to the complaint, Antonio died within five days of admission as a result of Kindred's neglect. A dislodged feeding tube began infusing into the throat and/or esophagus instead of the stomach, and Antonio's impaired gag reflex was unable to clear his lungs. He aspirated, resulting in cardiopulmonary arrest and rapid decline until his death.

         In March 2016, the initial complaint was filed on behalf of Antonio, “by and through his successor-in-interest” Alex, and individually on Alex's behalf. The first cause of action for “negligence/willful misconduct” and the second cause of action for elder abuse and neglect was on behalf of both plaintiffs. A third and final cause of action for wrongful death was filed on Alex's behalf only. In May, defendants filed an answer, demand for jury trial, and notice of posting of juror fees. They also sent a letter to plaintiffs' counsel demanding dismissal of the lawsuit and proceeding to arbitration. Plaintiffs declined.

         In July, Kindred filed the instant petition to compel arbitration and motion to stay. They argued there was a written agreement between plaintiffs and defendants providing for arbitration of all disputes, and plaintiffs had refused their demand. Kindred argued, among other things, that the Federal Arbitration Act (9 U.S.C. § 1, et seq. (FAA)) applied to the agreement, that no traditional defenses to contract law applied, and the agreement was enforceable as to Alex as well as to Antonio. Defendants also contended the agreement was enforceable under California law as well as the FAA.

         In response, plaintiffs argued the agreement was unconscionable, and the defendants had waived their right to arbitrate by their unreasonable delay. They further argued that Alex was not a signatory to the agreement, which was unenforceable against him, and the presence of his nonarbitrable wrongful death claim created the risk of inconsistent rulings. Accordingly, they requested the trial court, in an exercise of discretion, to retain jurisdiction. Defendants filed a reply in due course.

         The trial court initially issued a tentative decision granting defendants' motion, but after hearing argument, took the matter under submission. The court's final order denied the motion, concluding defendants had failed to show a valid arbitration agreement with respect to Alex. The court exercised its discretion under section 1281.2, subdivision ...


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