v Rowan Inc , 2021 COA 7 ( 2021 )

The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.
SUMMARY
January 28, 2021
2021COA7
No. 19CA1211, Johnson v Rowan Inc — Health and Welfare —
Health Care Availability Act — Agreement for Medical Services;
ADR — Arbitration
A division of the court of appeals considers for the first time
whether a health care provider substantially complies with
section 13-64-403, C.R.S. 2020, of the Health Care Availability Act
if it (1) fails to provide a patient with a written copy of an arbitration
agreement that the patient has signed or (2) itself fails to sign the
arbitration agreement. Applying the supreme court’s analysis in
Colorow Health Care LLC v. Fischer, 2018 CO 52M, 420 P.3d 259,
the division concludes that a health care provider that either does
not provide the written copy of the arbitration agreement to the
patient or does not sign it fails to substantially comply with the Act
and, as a consequence, its arbitration agreement is unenforceable
against the patient.
COLORADO COURT OF APPEALS 2021COA7
Court of Appeals No. 19CA1211
City and County of Denver District Court No. 18CV33463
Honorable Ross B. Buchanan, Judge
Patricia Johnson, individually and as heir at law of Christal Johnson,
deceased; and Randall Johnson, individually and as heir at law of Christal
Johnson, deceased,
Plaintiffs-Appellees,
v.
Rowan Incorporated, a Colorado corporation; Jay Moskowitz; and QP Health
Care Services LLC,
Defendants-Appellants.
ORDER AFFIRMED
Division VI
Opinion by JUDGE LIPINSKY
Pawar and Martinez*, JJ., concur
Announced January 28, 2021
Law Offices of J.M. Reinan, P.C., Jerome M. Reinan, Jordana Griff Gingrass,
Denver, Colorado, for Plaintiffs-Appellees
Messner Reeves LLP, Kendra N. Beckwith, Doug C. Wolanske, Mary Byrne
Fletcher, Elizabeth K. Slinas-Van Orman, Denver, Colorado, for Defendants-
Appellants
Levin Sitcoff, PC, Nelson Waneka, Dener, Colorado, for Amicus Curiae Colorado
Trial Lawyers Association
*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2020.
¶1 Randall and Patricia Johnson were handed a stack of forms
when they admitted their seriously ill adult daughter, Christal, to
Rowan Community, a long-term care facility. The Johnsons signed
a number of those documents that day at the request of Rowan
Community’s social services director. One of those documents was
an arbitration agreement (the agreement).
¶2 Following Christal’s death less than two months later, the
Johnsons, individually and as Christal’s heirs, sued Rowan
Community’s owner — Rowan Incorporated — and two other
defendants — Jay Moskowitz and QP Health Care Services LLC
(collectively, Rowan) for wrongful death, among other causes of
action. Rowan moved to compel arbitration based on the language
of the agreement. The Johnsons argued that the agreement was
unenforceable for two reasons — because a Rowan Community
representative had not countersigned it and because Rowan
Community had allegedly not provided them with a written copy of
the agreement, in violation of provisions of the Health Care
Availability Act (the Act), §§ 13-64-101 to -503, C.R.S. 2020. In a
written order, the district court agreed with the Johnsons and held
1
that the agreement was unenforceable. Rowan filed this
interlocutory appeal.
¶3 We decide that, under the Act, Rowan Community cannot
enforce the agreement because it did not substantially comply with
the Act’s requirements that a health care provider (1) give the
patient a written copy of any arbitration agreement he or she signs
and (2) itself sign the arbitration agreement. For these reasons, we
affirm the district court’s order.
I. Background
¶4 Christal Johnson had a brain tumor and other serious health
conditions. The Johnsons decided to place Christal in a long-term
care facility when they were no longer able to care for her on their
own. The Johnsons selected Rowan Community, a skilled nursing
facility, to provide their daughter with round-the-clock care.
¶5 On the day of Christal’s arrival at Rowan Community, the
Johnsons met with Rowan Community’s social services director,
Tammy Gleisner, to complete the admission process. Gleisner
presented the Johnsons with what Mr. Johnson described as an
“inch-and-a-half worth of papers” for them to sign as Christal’s legal
representatives. Either or both of the Johnsons signed the
2
documents, including the agreement, during their meeting with
Gleisner. Neither Gleisner nor any other representative of Rowan
Community signed the agreement, however. In addition, the
district court found that Gleisner did not provide the Johnsons with
a written copy of the agreement.
¶6 Christal was hospitalized three times shortly after her
admission to Rowan Community. She died during the third
hospitalization.
¶7 The Johnsons filed suit against Rowan Community’s corporate
owner, its management company, and those companies’ individual
owner, manager, and operator for negligence resulting in wrongful
death, violation of the Colorado Consumer Protection Act, fraud and
fraudulent nondisclosure, and civil conspiracy.
¶8 Rowan’s attorneys informed counsel for the Johnsons that the
Johnsons had signed the agreement at the time Christal was
admitted to Rowan Community and provided a written copy of the
agreement to the Johnsons’ counsel. The copy of the agreement
provided to the Johnsons contained Mr. Johnson’s signature, but
was missing the signature of a representative of Rowan Community.
The Johnsons asserted that they had not seen the agreement
3
before. Through their counsel, the Johnsons attempted to exercise
their right to rescind the agreement pursuant to the agreement’s
rescission clause. Rowan responded that the Johnsons had waited
too long to rescind the agreement and were therefore bound by its
terms.
¶9 Rowan moved to stay the Johnsons’ case and compel
arbitration based on the terms of the agreement.
¶ 10 The district court conducted an evidentiary hearing at which
Mr. Johnson and Gleisner testified. Mr. Johnson testified that he
did not recall discussing the agreement with Gleisner, signing it, or
receiving a written copy of it, and that he had not intended to waive
his and his wife’s right to a jury trial. Gleisner testified that she
discussed the agreement with the Johnsons and that her failure to
sign the agreement was “an oversight.”
¶ 11 Following the hearing, the district court entered an order
denying Rowan’s motion. After finding that Mr. Johnson was more
credible than Gleisner, the court further found that Rowan
Community had not provided the Johnsons with a written copy of
the agreement. After considering the supreme court’s analysis of
the Act in Colorow Health Care, LLC v. Fischer, 2018 CO 52M, 420
4
P.3d 259, the court concluded that, because Rowan Community
failed to sign the agreement and provide a written copy of the
agreement to the Johnsons, “the Agreement does not substantially
comply with [the] statutory requirements of C.R.S. § 13-64-403,
[C.R.S. 2020] and thus, . . . is invalid.”
¶ 12 The district court distinguished the requirements of the Act
that the health care provider sign and provide a written copy of the
arbitration agreement to the patient from the requirement of the Act
at issue in Colorow — that health care arbitration agreements
contain, in bold-faced text, a statement disclosing to the patient
that, by signing the agreement, she is waiving the right to have any
issue of medical malpractice decided by a jury or court trial. (The
parties do not dispute that the Act’s references to “patient” include
authorized patient representatives, such as Mr. Johnson, who sign
a health care arbitration agreement on behalf of the patient. For
this reason, in this opinion we do not distinguish between patients
and the authorized patient representatives who sign arbitration
agreements on behalf of the patients.)
¶ 13 The district court held that, in contrast to the health care
provider’s minimal noncompliance with the Act’s typeface
5
requirement at issue in Colorow, Rowan Community had failed to
substantially comply with the Act by neither signing the agreement
nor providing a written copy of the agreement to the Johnsons.
Applying the substantial compliance standard, the district court
held that Rowan Community’s failure to comply with the Act
adversely affected the Johnsons’ ability to exercise their statutory
right to rescind the agreement and thus rendered the agreement
unenforceable.
¶ 14 Rowan filed this interlocutory appeal pursuant to section
13-22-228(1)(a), C.R.S. 2020.
II. Discussion
¶ 15 Rowan challenges only the district court’s legal conclusion and
not its factual findings. Thus, we accept the district court’s findings
of fact and limit our review to the legal issue of whether the
agreement complied with the Act and, therefore, is enforceable
against the Johnsons.
A. Jurisdiction and Standard of Review
¶ 16 “An order denying a motion to compel arbitration is
immediately appealable.” Lujan v. Life Care Ctrs. of Am., 222 P.3d
970, 972 (Colo. App. 2009); see § 13-22-228(1)(a). We review issues
6
of statutory construction de novo. Colorow, ¶ 10, 420 P.3d at
261-62. Specifically, “[w]e review de novo the district court’s
decision on a motion to compel arbitration, employing the same
legal standards that the district court employed.” Lujan, 222 P.3d
at 972 (citing Moffett v. Life Care Ctrs. of Am., 187 P.3d 1140, 1143
(Colo. App. 2008)).
B. Colorow and the Substantial Compliance Standard
for Arbitration Agreements Under the Act
¶ 17 “Arbitration is favored in Colorado as a convenient and
efficient alternative to resolving disputes by litigation. A valid and
enforceable arbitration provision divests the court of jurisdiction
over all arbitrable issues.” Vallagio at Inverness Residential Condo.
Ass’n v. Metro. Homes, Inc., 2015 COA 65, ¶ 13, 412 P.3d 709, 713
(citation omitted), aff’d, 2017 CO 69, 395 P.3d 788. A 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.’” Id. at ¶ 14,
412 P.3d at 713 (quoting Eychner v. Van Vleet, 870 P.2d 486, 489
(Colo. App. 1993)).
7
¶ 18 Section 13-64-403 of the Act sets forth the requirements for
arbitration agreements between health care providers and their
patients. The Act addresses two principal policy objectives
concerning such arbitration agreements. First, the Act generally
“assure[s] the continued availability of adequate health care
services . . . by containing the significantly increasing costs of
malpractice insurance for medical care institutions.”
§ 13-64-102(1), C.R.S. 2020. Second, while authorizing agreements
to arbitrate health care disputes to accomplish this general
purpose, section 13-64-403 also requires that such agreements be
voluntary and “contain[] protective provisions [to] curb[] abusive
practices in obtaining agreements to arbitrate.” Moffett v. Life Care
Ctrs. of Am., 219 P.3d 1068, 1073 (Colo. 2009); see § 13-64-403(1).
¶ 19 To ensure that a patient enters into a health care arbitration
agreement voluntarily, section 13-64-403 sets forth several
requirements for arbitration agreements between health care
providers and their patients. Three of these requirements are
germane to the resolution of this appeal.
¶ 20 First, a health care arbitration agreement
8
shall have the following statement set forth as
part of the agreement: “. . . The patient has the
right to seek legal counsel concerning this
agreement, and has the right to rescind this
agreement by written notice to the physician
within ninety days after the agreement has
been signed and executed by both parties
unless said agreement was signed in
contemplation of the patient being
hospitalized, in which case the agreement may
be rescinded by written notice to the physician
within ninety days after release or discharge
from the hospital or other health care
institution. . . .”
§ 13-64-403(3). (The district court found that the agreement was
not signed in contemplation of Christal being hospitalized. As
noted above, Rowan does not challenge the court’s findings of fact.)
¶ 21 Second, the required disclosure statement must be printed in
“at least ten-point bold-faced type” immediately above the
agreement’s signature lines. The statement must read, in relevant
part:
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
9
SIGNATURE BY BOTH PARTIES UNLESS
THE AGREEMENT WAS SIGNED IN
CONTEMPLATION OF HOSPITALIZATION IN
WHICH CASE YOU HAVE NINETY DAYS
AFTER DISCHARGE OR RELEASE FROM
THE HOSPITAL TO RESCIND THE
AGREEMENT.
§ 13-64-403(4).
¶ 22 Third, “[t]he patient shall be provided with a written copy of
any agreement subject to the provisions of this section at the time
that it is signed by the parties.” § 13-64-403(6).
¶ 23 A health care provider may not condition the provision of
medical care services or emergency medical services on a patient’s
failure or refusal to sign such an agreement or exercise of the
statutory ninety-day right of rescission. § 13-64-403(7)-(8).
¶ 24 These provisions grant the patient a period of time to reflect on
the implications of waiving the right to have a judge or jury hear
any malpractice case against the health care provider. Further, the
provisions give the patient the ability to review the arbitration
agreement with legal counsel and, if she chooses, to exercise the
right of rescission. A provider’s failure to comply with these
provisions of the Act “render[s] the [arbitration] agreement
unenforceable.” Allen v. Pacheco, 71 P.3d 375, 381 (Colo. 2003).
10
¶ 25 In Colorow, in the course of discussing section 13-64-403(4)’s
typeface requirement, the Colorado Supreme Court broadly held
that health care providers need only substantially comply with the
Act. Although the arbitration agreement at issue in Colorow
included the required language, the section 13-64-403(4) disclosure
statement was printed in regular “twelve-point type and all capital
letters,” rather than in “bold-faced . . . font.” Colorow, ¶¶ 6, 28, 420
P.3d at 261, 264. The patient’s family contended that the variance
from the typeface requirement rendered the agreement
unenforceable.
¶ 26 The Colorow court first decided whether an arbitration
agreement must strictly comply, or only substantially comply, with
the Act to be enforceable. After determining that the text of the Act
did not shed light on the required level of compliance, the court
considered which standard best “effectuates the General Assembly’s
purpose in enacting the [Act].” Id. at ¶ 27, 420 P.3d at 264.
¶ 27 The court first noted that the purpose of the typeface
requirement is to “emphasize the required language. Emphasizing
this text encourages patients to read it and understand its
importance.” Id. at ¶ 28, 420 P.3d at 264. Significantly for our
11
analysis, the court said that, “[w]hile bold-faced text and minimum
print size are ways to draw attention to the advisement, there are
other — sometimes better — ways to do so,” such as highlighting
the language or placing it in all capital letters. Id. at ¶ 29, 420 P.3d
at 264. And, as the court pointed out, depending on the particular
font used, “strict compliance might nonetheless fail to draw
attention to the voluntariness language.” Id.
¶ 28 Concluding that the General Assembly did not “intend[] to
elevate form over function,” the court held that the purpose of the
typeface requirement — to conspicuously disclose important
information to the patient — “is better served by the flexibility
substantial compliance affords.” Id. at ¶ 30, 420 P.3d at 265.
¶ 29 The court then “examine[d] the general purpose animating the
[Act] as a whole: keeping insurance costs low for medical providers.”
Id. at ¶ 31, 420 P.3d at 265. It held that this purpose was
supported by the application of a substantial, rather than a strict,
compliance standard to the typeface requirement, which would
“send the right issues to court.” Id. at ¶ 34, 420 P.3d at 266.
Under substantial compliance,
12
agreements with only minor technical
deficiencies — those that don’t bear on
voluntariness in any material sense — will
keep parties in arbitration and avoid the costs
of full-blown merits litigation. A party seeking
to litigate the merits will have a colorable
substantial-compliance issue to litigate only
when an arbitration agreement suffers more
serious deficiencies — those that could
actually bear on voluntariness.
Id. Thus, “[p]unishing health care providers for minor
typographical deficiencies that don’t affect voluntariness wouldn’t
serve . . . the Act’s purposes.” Id. at ¶ 35, 420 P.3d at 266. But
where “more significant deficiencies . . . might affect voluntariness,
punishing providers for failure to substantially comply would
further the statute’s purpose of ensuring voluntariness.” Id.
¶ 30 For these reasons, the court concluded that “a
substantial-compliance standard is consistent with the general
purpose of the [Act], and the specific purpose of the typeface
requirements set forth in section 13-64-403.” Id. at ¶ 37, 420 P.3d
at 266.
¶ 31 After deciding to apply a substantial compliance standard, the
court considered whether the arbitration agreement at issue
substantially complied with the Act’s typeface requirement. To
13
answer this question, the court applied the test for substantial
compliance announced in Bickel v. City of Boulder, 885 P.2d 215(Colo. 1994). Bickel teaches that, when deciding whether a party
has substantially complied with constitutional or statutory
requirements, a court should
consider factors including, but not limited to,
the following: (1) the extent of the [party’s]
noncompliance [with the requirements], (2) the
purpose of the provision violated and whether
that purpose is substantially achieved despite
the [party’s] noncompliance, and (3) whether it
can reasonably be inferred that the [party]
made a good faith effort to comply or whether
the [party’s] noncompliance is more properly
viewed as the product of an intent to mislead.
Id. at 227.
¶ 32 In applying the first Bickel factor, the Colorow court held that
the facility’s noncompliance with the typeface requirement was
“minimal.” Colorow, ¶ 40, 420 P.3d at 267. The required language
was present, separated from the rest of the text, in all capital
letters, and in a larger font than required. Id. As to the second
factor, the court held that “the purpose behind section 13-64-403
— voluntariness — is achieved despite the technical
noncompliance.” Id. at ¶ 41, 420 P.3d at 267. The arbitration
14
agreement at issue included the required disclosure language, and
there was no evidence that the patient’s representative had been
coerced into signing the agreement. Id.
¶ 33 Finally, in considering the third factor, the court held that “it
can reasonably be inferred that the Facility made a good faith effort
to comply with the statute,” as evidenced by the fact that the
required text was set apart from the rest of the language of the
arbitration agreement. Id. at ¶ 42, 420 P.3d at 267. The court
“perceive[d] no effort to mislead, such as by burying the required
text in fine print or by using a type of script that is unusually
difficult to read.” Id.
¶ 34 Thus, the court held that, despite the facility’s technical
noncompliance with the typeface requirement of the Act, it
nonetheless substantially complied with the requirement, rendering
the agreement enforceable. Id. at ¶ 43, 420 P.3d at 267.
C. The District Court Did Not Err by Finding That the Agreement
Was Unenforceable Under the Act
¶ 35 As explained below, the agreement here is unenforceable
under the more lenient substantial compliance standard. For this
reason, and because Colorow broadly held that providers need only
15
substantially comply with the Act, we do not discuss strict
compliance in this case. If Rowan Community did not substantially
comply with the Act by failing to give the Johnsons a fully signed
and executed copy of the agreement, it could not have strictly
complied with the relevant provisions of the Act.
1. Rowan Community’s Failure to Provide the Johnsons with a
Written Copy of the Agreement
¶ 36 The district court found that Rowan Community’s
representative did not provide the Johnsons with a written copy of
the agreement after Mr. Johnson signed it during the process of
admitting Christal to Rowan Community. According to the district
court, the Johnsons did not receive a written copy of the agreement
until they obtained one from Rowan’s attorneys after initiating this
litigation.
¶ 37 The district court applied the Bickel factors to find that Rowan
Community did not substantially comply with the “written copy”
requirement set forth in section 13-64-403(6).
¶ 38 In analyzing the first Bickel factor, the court held that Rowan
Community’s “noncompliance is not minimal; [it] violated a direct
16
provision of the statute by failing to provide [the Johnsons with] a
copy of the Agreement ‘signed by the parties.’” § 13-64-403(6).
¶ 39 The court determined that, under the second Bickel factor,
Rowan Community’s failure to provide the Johnsons with a written
copy of the agreement “directly circumvent[ed]” a material purpose
of the Act — to protect patients from “unknowingly and
involuntarily waiving their rights to sue in court.” Colo. Permanente
Med. Grp., P.C. v. Evans, 926 P.2d 1218, 1232 (Colo. 1996). In
addition, the court said that, “[w]ithout a copy of the written
Agreement, [the Johnsons] were unable to fully exercise their ‘right
to seek legal counsel concerning this agreement’ by not being able
to show legal counsel the Agreement, and were unable [to] fully
understand their right to rescind the Agreement.” The Act’s
disclosure requirements and right to confer with counsel regarding
an arbitration agreement are “important mechanisms” to protect
patients from involuntarily giving up their right to bring their claims
before a court and a jury.
¶ 40 Because Rowan Community did not give the Johnsons a
written copy of the agreement, the court reasoned that they “were
deprived of the opportunity to review the Agreement, a complex
17
document with statutory notices that can be problematic for lay
people to understand in the best of circumstances, at their own
pace and outside the stressful environment of an intake meeting for
their sick daughter.”
¶ 41 Regarding the third factor, while the court found “no evidence
of an intent to mislead,” or that Rowan Community acted in bad
faith, it could not find that Rowan Community made a good faith
effort to comply with the Act’s requirement that the patient be
provided with a written copy of the arbitration agreement “because
it did not ensure that [the Johnsons] received a copy of the
Agreement.” Rather, “the Agreement was buried in a stack of
papers” that Gleisner instructed the Johnsons to read and sign “in
a relatively short period of time.”
¶ 42 The district court correctly determined that Rowan
Community did not substantially comply with the Act’s “written
copy” requirement. Rowan Community’s noncompliance with this
requirement was not minimal because it failed to provide the
Johnsons with a written copy of the agreement until after the
Johnsons filed suit. Provision of a signed arbitration agreement to
the patient is integral to the Act’s purpose of ensuring that the
18
patient enters into a health care arbitration agreement voluntarily.
Unless she receives a written copy of the arbitration agreement she
signed, in many circumstances, the patient would be unable to
review that agreement’s language in a stress-free setting, discuss it
with an attorney, or contemplate the significance of waiving the
right to a jury or court trial. As a result, she may not even be aware
of her right to seek legal advice regarding the consequences of
agreeing to arbitrate and her right to rescind the agreement if she
decides, upon reflection, that she does not wish to consent to
arbitration. Moreover, without a written copy of the arbitration
agreement, the patient may not know how or when she can exercise
the right to rescind.
¶ 43 In this case, the district court specifically found that the
Johnsons “were deprived of the opportunity to review the
Agreement” after admitting their daughter to Rowan Community
and were not aware of its terms. Even if Rowan Community did not
act in bad faith by failing to provide the Johnsons with a written
copy of the agreement, the Johnsons lacked a meaningful
opportunity to consider the significance of waiving their right to a
jury or court trial and, if they decided upon reflection they did not
19
wish to consent to arbitration, to exercise their right to rescind the
agreement. Thus, even if Rowan Community acted in good faith,
that good faith alone would not make up for its noncompliance with
the “written copy” requirement of section 13-64-403(6).
¶ 44 Rowan notes that, in Colorow, the supreme court held that the
health care provider substantially complied with the Act, even
though it had indisputably violated the provision of the Act
mandating that the required disclosure statement appear in
bold-faced type. But there is a material distinction between a
provider’s use of an incorrect typeface in an arbitration agreement
and its failure to provide the patient with a written copy of the
agreement. Unlike the former noncompliance with the Act’s
requirements, the latter noncompliance is more likely to be material
to the issue of voluntariness and may have a direct bearing on the
patient’s ability to understand the significance of waiving the right
to a jury or court trial, to consider whether waiving such right is in
her best interest, and, if she decides upon reflection not to
arbitrate, to exercise her right of rescission. The failure to give a
patient a written copy of an arbitration agreement will often be a
20
“more significant deficienc[y]” than the “minor typographical” error
in Colorow. Colorow, ¶ 35, 420 P.3d at 266.
¶ 45 As Colorow made clear, while “strict consistency isn’t the
objective[,] [v]oluntariness is.” Id. at ¶ 36, 420 P.3d at 266. Here,
the voluntariness of the Johnsons’ agreement to waive their right to
a jury or court trial was not safeguarded because they lacked a
written copy of the document they needed — in any typeface — to
make a substantive decision about arbitration and exercising their
statutory right to rescind.
¶ 46 Moreover, the absence of a meaningful alternative to the
provision of a written copy of the arbitration agreement to the
patient distinguishes the Johnsons’ case from Colorow. Rowan
does not offer any alternative to providing the patient with a written
copy of an arbitration agreement, as section 13-64-403(6) requires.
Instead, Rowan suggests that, following Christal’s admission, the
Johnsons could have called Rowan Community to request a written
copy of the agreement.
¶ 47 The supreme court’s decision in Colorow rested on its
conclusion that there was a meaningful alternative to the Act’s
typeface requirement that furthered that subsection’s purpose of
21
providing notice. See Colorow, ¶ 29, 420 P.3d 264-65. The court
determined that the purpose of the Act’s bold-faced type
requirement — to “emphasize the required language” and
“encourage[] patients to read it and understand its
importance” — could be accomplished by other means, such as
“[h]ighlighting the text in a particular color, underlining it, [or]
printing it in all capital letters . . . .” Id. at ¶¶ 28-29, 420 P.3d at
264-65.
¶ 48 In contrast, Rowan’s suggestion that the Johnsons could have
called Rowan Community following Christal’s admission to request
a written copy of the agreement assumes that the Johnsons
recognized the significance of the papers they signed during their
meeting with Gleisner. This is contrary to the Act’s presumption
that a patient does not fully appreciate the consequences of signing
an arbitration agreement while in the stressful process of admission
to a health care facility. Moreover, the Act specifies that the health
care provider, and not the patient, bears the burden of complying
with the Act. See § 13-64-403(12)(a)(I).
¶ 49 In the absence of a meaningful alternative to the requirement
that the health care provider give the patient a written copy of the
22
arbitration agreement she signed, Rowan Community could not
have substantially complied with the Act when it failed to provide
the Johnson with a written copy of the agreement until after the
suit was filed.
¶ 50 Therefore, we conclude that the agreement is unenforceable
because Rowan Community did not substantially comply with the
“written copy” requirement set forth in section 13-64-403(6).
2. Rowan Community’s Failure to Sign the Agreement
¶ 51 Rowan does not dispute that no representative of Rowan
Community signed the agreement. Rowan initially contends,
however, that the absence of Rowan Community’s signature does
not preclude the formation of a contract under common law
principles. The formation of a contract between the Johnsons and
Rowan Community under common law principles is not
determinative, however, because the Act imposes more stringent
requirements for contract formation than does the common law of
contracts. Thus, we confine our analysis to the Act’s signature
requirement.
¶ 52 We agree with the district court’s conclusion that, under the
Bickel factors, Rowan Community failed to substantially comply
23
with the Act’s signature requirement, in addition to the Act’s
“written copy” requirement.
¶ 53 Under the first Bickel factor, the court found that Rowan
Community’s noncompliance with the signature requirement was
not minimal because Rowan Community directly violated a
provision of the Act by “fail[ing] to sign and execute the Agreement
as required by two sections of the [Act].”
¶ 54 The court further found that, under the second Bickel factor,
Rowan Community’s failure to sign the agreement did not satisfy
the Act’s purpose. The court explained that the ninety-day
statutory rescission period, “which is an important safeguard to
ensure that the statute’s purpose of voluntariness is effectuated,”
does not begin to run until both parties have signed the arbitration
agreement.
¶ 55 The language of the Act is unambiguous — the date of the
“signature by both parties” marks the date on which the ninety-day
rescission period begins to run. § 13-64-403(3)-(4) (emphasis
omitted). Without the health care provider’s signature, the
rescission period never commences. Thus, the purpose of the Act
that the patient have a meaningful opportunity to rescind an
24
arbitration agreement is not satisfied if the health care provider
does not comply with the signature requirement.
¶ 56 Finally, although the court found no evidence that Rowan
Community intended to mislead the Johnsons or acted in bad faith
by failing to sign the agreement, it could not find that Rowan
Community made a good faith effort to comply with the signature
requirement.
¶ 57 We adopt the district court’s thoughtful application of the
Bickel factors to the signature requirement.
¶ 58 On appeal, Rowan challenges the district court’s holding that
the Act requires both the provider and the patient to sign health
care arbitration agreements by contending that the “subsections’
reference to ‘both parties’ defines a point in time, rather than a
requirement . . . .”
¶ 59 While we acknowledge that sections 13-64-403(3) and
13-64-403(4) do not include mandatory language such as “shall,”
Rowan’s argument is unpersuasive. If the signatures of “both
parties” were not a requirement for enforcement of a health care
arbitration agreement, the language of the Act requiring that the
25
patient receive a written copy of the agreement and granting the
patient a rescission period would make no sense.
¶ 60 Section 13-64-403(6) provides that “[t]he patient shall be
provided with a written copy of [the] agreement . . . at the time that
it is signed by the parties.” § 13-64-403(6). In addition, section
13-64-403(3) states, in relevant part, that the rescission period
expires “ninety days after the agreement has been signed and
executed by both parties.” § 13-64-403(3) (emphasis added). Thus,
the date on which the rescission period began to run and the date
on which it expired are inextricably linked to the date on which the
arbitration agreement was “signed and executed by both parties,”
which, in this case, never happened. Id. For this reason, like the
written copy requirement, the signature requirement was material
to the issue of voluntariness.
¶ 61 As noted above, under the Act, an arbitration agreement
between a health care provider and a patient can be voluntary only
if the patient has the right to reflect on the implications of signing
such an agreement and the right to rescind it if the patient changes
her mind about arbitration. See § 13-64-403(1). Any uncertainty
as to the date on which the rescission period begins to run
26
increases the likelihood that the patient will miss the rescission
deadline. And in this case, the failure of the facility to sign unfairly
placed the burden of determining when the rescission period began
to run, and when it expired, on the Johnsons.
¶ 62 Finally, Rowan contends that the missing signature is
inconsequential because Rowan Community did not “coerce or
induce Mr. Johnson’s voluntary signature to the Agreement.”
Rowan is correct that the district court did not find that Rowan
Community took actions to coerce Mr. Johnson into signing the
agreement. But the Act does not state that health care arbitration
agreements are enforceable in the absence of evidence of coercion,
even if they do not comply with the Act’s requirements. Rather, it
assumes that some degree of coercion is inherent in the patient’s
execution of these types of agreements — which is why the Act
grants the patient a ninety-day rescission period to think over the
decision to consent to arbitrate and to confer with counsel about
the merits of arbitration.
¶ 63 This rescission period was necessary here to ensure the
voluntariness of the Johnsons’ execution of the agreement, given
the risk of coercion when a patient makes difficult health care
27
decisions and the patient’s “lack of information” at the time of
signing an arbitration agreement. Colo. Permanente, 926 P.2d at
1227 n.17.
¶ 64 Because Rowan Community did not substantially comply with
sections 13-64-403(3) and 13-64-403(4), the agreement is
unenforceable.
III. Conclusion
¶ 65 The order is affirmed.
JUDGE PAWAR and JUSTICE MARTINEZ concur.
28