Kallas v. Manor Care of Barberton, OH, L.L.C. , 2017 Ohio 76 ( 2017 )

[Cite as Kallas v. Manor Care of Barberton, OH, L.L.C., 2017-Ohio-76.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
KIMBERLY KALLAS C.A. No. 28068
Appellee
v. APPEAL FROM JUDGMENT
ENTERED IN THE
MANOR CARE OF BARBERTON, OH, COURT OF COMMON PLEAS
LLC DBA MANORCARE HEALTH COUNTY OF SUMMIT, OHIO
SERVICES - BARBERTON, et al. CASE No. CV 2015 08 3959
Appellants
DECISION AND JOURNAL ENTRY
Dated: January 11, 2017
WHITMORE, Judge.
{¶1} Appellants, Manor Care of Barberton OH, LLC d/b/a ManorCare Health Services-
Barberton (“ManorCare Barberton”) and HCR ManorCare, Inc. (“HCR ManorCare”) (jointly
“ManorCare”), appeal the decision of the Summit County Court of Common Pleas denying their
motion to stay proceedings pending arbitration. This Court affirms.
I.
{¶2} On June 21, 2013, Kimberly Kallas was admitted to ManorCare Barberton for
physical and occupational therapy following treatment at Akron City Hospital. Ms. Kallas, who
was born with spina bifida, was 41 years old at the time of her admission to ManorCare
Barberton. During her admission, she signed a number of documents including a “Voluntary
Arbitration Agreement.”
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{¶3} Ms. Kallas, subsequently, filed suit against ManorCare Barberton and HCR
ManorCare. Based on the Arbitration Agreement, ManorCare moved to stay the proceedings
pending arbitration. Ms. Kallas opposed the motion.
{¶4} While not denying that she had signed the Agreement, Ms. Kallas argued that the
Agreement failed to identify ManorCare Barberton or HCR ManorCare as parties to it. The
Agreement states it was “[m]ade on 6/21/13 (date) by and between the Patient Kim Kallas or
Patient’s Legal Representative self (collectively referred to as ‘Patient’) and the Center
___________________________.” The date, Ms. Kallas’ name, and the word “self” were
handwritten on blank lines. The line following “Center” was left blank. The agreement was
signed by Kim Kallas and a “Center Representative.” The signature block also contained Ms.
Kallas’ printed name and the date. It did not contain the printed name of the “Center
Representative” or further identify the “Center.” Ms. Kallas argued that, because the Agreement
did not contain “any actual designation of who are the actual parties to the Agreement other than
[Ms.] Kallas[,]” it was unenforceable. She also argued that the Agreement was unconscionable
and unenforceable on that basis as well.
{¶5} The trial court denied the motion to stay proceedings pending arbitration. The
court found that the Arbitration Agreement identified Ms. Kallas as a party, but lacked a
counterparty. The court concluded that, without the identity of the parties to be bound, the
Agreement was unenforceable. The trial court did not reach the issue of unconscionability.
{¶6} ManorCare Barberton and HCR ManorCare appeal raising one assignment of
error.
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II.
Assignment of Error
THE TRIAL COURT ERRED BY NOT GRANTING DEFENDANT-
APPELLANTS’ MOTION TO STAY PROCEEDINGS PENDING
ARBITRATION WHERE THERE EXISTS A VALID AND ENFORCEABLE
ARBITRATION AGREEMENT.
{¶7} In their sole assignment of error, ManorCare Barberton and HCR ManorCare
argue that the Arbitration Agreement was valid and enforceable because ManorCare Barberton
was a party to it. In the alternative, they argue that ManorCare Barberton and HCR ManorCare
were third-party beneficiaries of the Agreement. We disagree.
{¶8} “Generally, we review a trial court’s disposition of a motion to stay trial pending
arbitration under an abuse of discretion standard.” Broughsville v. OHECC, LLC, 9th Dist.
Lorain No. 05CA008672, 2005-Ohio-6733, ¶ 16. However, “[b]efore a party may be bound by
the terms of an arbitration agreement, there must in fact be a contract which requires the
arbitration of the parties’ disputes and claims.” Koch v. Keystone Pointe Health & Rehab., 9th
Dist. Lorain No. 11CA010081, 2012-Ohio-5817, ¶ 9. Whether a contract exists is a matter of
law. Zelina v. Hillyer, 165 Ohio App.3d 255, 2005-Ohio-5803, ¶ 12 (9th Dist.); see also
Westerfield v. Three Rivers Nursing & Rehab. Ctr., 2d Dist. Montgomery No. 25347, 2013-
Ohio-512, ¶ 20 (“Whether the parties have executed a valid written arbitration agreement is a
matter of state contract law.”). We review matters of law and contract interpretation de novo.
St. Marys v. Auglaize Cty. Bd. of Commrs., 115 Ohio St.3d 387, 2007-Ohio-5026, ¶ 38. The
identity of the parties to be bound is an essential term for an enforceable contract to exist.
Summit Tree & Landscaping v. Stow Contracting, L.L.C., 9th Dist. Summit No. 24515, 2009-
Ohio-5794, ¶ 8.
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{¶9} In the present matter, the Arbitration Agreement states that it was made “by and
between the Patient Kim Kallas * * * and the Center ___________________________.” The
line following the word “Center” was left blank. The signature of Kim Kallas and a “Center
Representative” appear at the end of the document, but the name of the “Center” is not specified.
{¶10} ManorCare Barberton acknowledges that it “is not explicitly identified in the
Arbitration Agreement as the ‘Center.’” Nonetheless, it argues that extrinsic evidence
demonstrates that the intent was for the “Center” to be ManorCare Barberton. Therefore,
ManorCare Barberton contends that it was entitled to enforce the Arbitration Agreement as a
party.
{¶11} ManorCare cites Babyak v. DSLangale One, Inc., 10th Dist. Franklin No. 08AP-
996, 2009-Ohio-4212, in support of its argument that the court should examine extrinsic
evidence to determine the identity of a party to the contract. In Babyak, an agreement stated that
it was between an individual and one entity, but it was signed by another related entity. Id. at ¶
8. The court found that “if the face of the contract contains an ambiguity as to whether the
person signed as a party, then a court may consider extrinsic evidence to resolve that ambiguity.”
Id. at ¶ 29. It was undisputed that the identity of each entity was contained in the agreement –
one in the body of the agreement and the other on the signatory page. Id. at ¶ 8, 31.
{¶12} When there is a disparity between the party identified in the granting clause and
the party who signed an agreement, a court may “peruse the contract as a whole to ascertain
whether the entirety of the contract resolves the apparent ambiguity.” Alternatives Unlimited-
Special, Inc. v. Ohio Dept. of Edn., 168 Ohio App.3d 592, 2006-Ohio-4779, ¶ 22 (10th Dist.).
But, “when the name of the corporation does not appear upon the face of the agreement, parol
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evidence is not admissible to add a party who does not appear therein.” Wallington v. Red-E-Bilt
Products, Inc., 5th Dist. Richland No. 2423, 1987 WL 4727, *2 (Jan. 13, 1987).
{¶13} In the present matter, ManorCare Barberton is not identified in either the granting
clause or the signature block. In fact, ManorCare Barberton does not appear in the Agreement at
all. Thus, this case is unlike Babyak, where the ambiguity and identity of the entity to be bound
appeared on the face of the agreement. Because ManorCare Barberton does not appear upon the
face of the Arbitration Agreement, the court properly determined that it was not a counterparty.
See Wallington at *2.
{¶14} HCR ManorCare is mentioned one place in the Arbitration Agreement. That
provision states:
All claims arising out of or relating to this Agreement, the Admission Agreement
or any and all past or future admissions of the Patient at this Center, or any sister
Center operated by any subsidiary of HCR ManorCare, Inc. (“Sister Center”),
including claims for malpractice, shall be submitted to arbitration.
The trial court found that HCR ManorCare “is only referenced for purposes of identifying ‘any
sister Center’ that is ‘operated by any subsidiary of HCR ManorCare.’” ManorCare has not
disputed this finding nor has it developed an argument on appeal that HCR ManorCare was a
party1 to the Arbitration Agreement. See App.R. 16(A)(7).
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ManorCare’s first issue statement arguably contends that either ManorCare Barberton or HCR
ManorCare might be a party to the Agreement. It states, “[ManorCare] Barberton [ ] and HCR
ManorCare [ ] are parties or third-party beneficiaries of the Arbitration Agreement thereby
entitled to enforce the provisions therein.” But, its stated sub-issues clarify that its contention is
that ManorCare Barberton was a party and, alternatively, HCR ManorCare and ManorCare
Barberton were third-party beneficiaries. The sub-issues presented are: (1) “[ManorCare]
Barberton [c]onstitutes the ‘Center,’ and is [t]herefore [e]ntitled to [e]nforce the Arbitration
Agreement as a [p]arty” and (2) “HCR [ManorCare] and [ManorCare] Barberton [a]re [a]t [l]east
[t]hird-[p]arty [b]enenficiaries of the Arbitration Agreement.”
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{¶15} Rather, ManorCare argues that HCR ManorCare was entitled to enforce the
Agreement as a third-party beneficiary. It further argued that ManorCare Barberton was also “at
the very least a third-party beneficiary of the Arbitration Agreement.” “Before there can be a
third party beneficiary to a contract, there must be a valid contract between a promisor and a
promisee.” Guyuron v. Bergdorf, 9th Dist. Summit No. 16075, 1994 WL 286272, *4 (June 29,
1994). Because the Arbitration Agreement fails to identify the counterparty, there is not a valid
contract. See Summit Tree, 2009-Ohio-5794, at ¶ 8. Consequently, neither ManorCare
Barberton nor HCR ManorCare could be a third-party beneficiary.
{¶16} Finally, ManorCare argues, “If [ManorCare is] entitled to enforce the provisions
of the Arbitration Agreement, [ ] the Arbitration Agreement is enforceable where (1) the claims
in the Complaint fall within the provision of the Arbitration Agreement, and (2) no evidence
exists to show that the Arbitration Agreement was procedurally or substantively
unconscionable.” (Emphasis added.) ManorCare implicitly acknowledges that it must first be
found entitled to enforce the Agreement before these additional issues can be addressed. In light
of our determination that ManorCare was not entitled to enforce the purported Agreement, we
need not address its remaining arguments.
{¶17} ManorCare’s assignment of error is overruled.
III.
{¶18} ManorCare’s sole assignment of error is overruled. The judgment of the Summit
County Court of Common Pleas is affirmed.
Judgment affirmed.
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There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed to Appellants.
BETH WHITMORE
FOR THE COURT
CARR, P. J.
SCHAFER, J.
CONCUR.
APPEARANCES:
DANNY M. NEWMAN, JR. and MICHAEL M. MAHON, Attorneys at Law, for Appellant.
LAWRENCE R. BACH and TODD A. MAZZOLA, Attorneys at Law, for Appellee.