MacPherson, P. v. The Magee Memorial Hosp. ( 2015 )

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2015 PA Super 248PATRICK J. MACPHERSON, EXECUTOR IN THE SUPERIOR COURT OF
OF THE ESTATE OF RICHARD PENNSYLVANIA
MACPHERSON, DECEASED
Appellee
v.
THE MAGEE MEMORIAL HOSPITAL FOR
CONVALESCENCE D/B/A MAGEE
REHABILITATION HOSPITAL, JEFFERSON
HEALTH SYSTEM, INC., TJUH SYSTEM,
MANOR CARE OF YEADON PA, LLC,
D/B/A MANORCARE HEALTH SERVICES-
YEADON, HCR MANOR CARE, INC.,
MANORCARE, INC., HCR HEALTHCARE,
LLC, HCR II HEALTHCARE, LLC, HCR III
HEALTHCARE, LLC
APPEAL OF: MANOR CARE OF YEADON
PA, LLC, D/B/A MANORCARE HEALTH
SERVICES-YEADON, HCR MANOR CARE,
INC., MANORCARE, INC., HCR
HEALTHCARE, LLC, HCR II HEALTHCARE,
LLC, HCR III HEALTHCARE, LLC
Appellants No. 80 EDA 2013
Appeal from the Order Entered November 20, 2012
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): No. 191 Oct. Term 2011
BEFORE: BOWES, J., DONOHUE, J., SHOGAN, J., LAZARUS, J., MUNDY, J.,
OLSON, J., WECHT, J., STABILE, J., and JENKINS, J.
DISSENTING OPINION BY MUNDY, J.: FILED NOVEMBER 25, 2015
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I respectfully dissent from the Court’s decision to reverse the trial
court’s order and to direct that this case be referred to arbitration. 1 I base
my disagreement with the Majority primarily on our Supreme Court’s recent
decision in Wert v. Manorcare of Carlisle PA, LLC, --- A.3d ---, 2015 WL
6499141 (Pa. 2015) (plurality).2
In Wert, our Supreme Court considered an arbitration agreement,
which provided that “any disputes shall be resolved exclusively by binding
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1
At the outset, I note that MacPherson does not challenge the decedent’s
lack of capacity to sign the arbitration agreement. MacPherson’s Brief at 36.
Therefore, it is unnecessary for the Majority, in my respectful view, to
engage in its own factfinding based on the decedent’s medical records in an
effort to decide an issue that MacPherson does not wish to pursue in this
Court. See generally Majority Opinion 15-16. In my view, the Majority
should summarily note that, to the extent the trial court decided a question
of capacity, the parties agree that said issue is not in dispute in this case,
and note that the trial court was wrong to decide it.
2
I disagree with the Majority’s pronouncement that any argument as to the
NAF Code of Procedure is waived for failing to include the Code in the
certified record. See Majority Opinion at 23-24. There is no actual dispute
in this case about the relevant rules in the NAF code. Manor Care
acknowledges the Code and quotes from it in its reply brief. See Manor
Care’s Reply Brief at 15 (stating, “Code Rule 1A states that ‘[t]his Code shall
be administered only by the [NAF] or by any entity or individual providing
administrative services by agreement with the National Arbitration Forum’”).
Furthermore, both this Court’s opinion in Stewart v. GGNSC-
Canonsburg, L.P., 9 A.3d 215 (Pa. Super. 2010) and our Supreme Court’s
opinion in Wert quote the relevant rules from the NAF Code. Wert, supra
at *9 (quoting Rule 1(A) in full); Stewart, supra at 216-217. Because this
Court, and our Supreme Court have already published and interpreted Rule
1(A), there is nothing additional for this Court to review on this issue. As I
explain infra, under Wert, the adoption of the NAF Code of Procedure alone
renders the agreement unenforceable. As a result, I do not agree that
MacPherson has waived this argument.
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arbitration to be conducted … in accordance with the [NAF] Code of
Procedure, which is hereby incorporated into this Agreement[.]” Wert,
supra at *10 (brackets, ellipses, and emphasis in original; internal quotation
marks omitted). Our Supreme Court held that because the NAF Code states
that only the NAF can administer its own code, this was an “integral and
non-severable” provision of the arbitration agreement. Id. at *5, 10. Our
Supreme Court noted, as did this Court in Stewart, that “the NAF must
administer its code unless the parties agree to the contrary.” Wert, supra
at *10. Our Supreme Court further held that Section 5 of the Federal
Arbitration Act, pertaining to appointment of alternate arbitrators, could not
save the agreement. Id.; see also generally 9 U.S.C. § 5.
Pursuant to the reasoning of the Stewart court and
the majority of our sister jurisdictions, we find that,
post-consent decree, Section five of the FAA cannot
preserve NAF-incorporated arbitration agreements
unless the parties made the NAF's availability non-
essential by specifically varying the terms of its
procedure. Regardless of whether Section five may
apply where there is a lapse in the administrator, by
its own rules, the NAF must administer its code
unless the parties agree to the contrary.
Wert, supra (some emphasis added).
In the case sub judice, the arbitration agreement defines the
arbitration panel as three arbitrators, whether from the NAF or otherwise.
Majority Opinion at 6. In my view, there is no meaningful difference
between the provision in Wert that states “shall be resolved exclusively by
binding arbitration to be conducted ... in accordance with the [NAF] Code of
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Procedure, which is hereby incorporated into this Agreement[,]” and the
provision here that states “[t]he Panel shall apply NAF’s Code of
Procedure[.]” Wert, supra at *10; Majority Opinion at 7. Consistent with
our Supreme Court’s view, it is academic that another arbitrator could be
chosen and “[c]onceivably, [] apply the designated rules and procedure.”
Majority Opinion at 25. Under Wert, the reliance on the NAF Code (the
choice of law), as opposed to the NAF’s unavailability itself (the choice of
forum), is sufficient legal basis alone to render the agreement
unenforceable.3
Turning to this case, the Majority concludes that Wert does not apply
on several grounds. First, the Court concludes that because Wert is a
plurality opinion, it is not binding. Majority Opinion at 20. However, “[i]n
cases where a concurring opinion enumerates the portions of the plurality’s
opinion in which the author joins or []agrees, those portions of agreement
gain precedential value.” Commonwealth v. Brown, 23 A.3d 544, 556
(Pa. Super. 2011). “[H]owever, [if] the concurrence does not explicitly state
its agreement or disagreement with the plurality, we must look to the
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3
If the Majority were correct that the choice of forum clause was controlling
in Wert, presumably our Supreme Court would have simply applied Section
5 of the FAA, which it acknowledged controlled the agreement. Then
another forum would have been chosen pursuant to Section 5, and our
Supreme Court would have reversed this Court’s judgment and referred the
case to arbitration.
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substance of the concurrence to determine the extent to which it provides
precedential value to points of agreement.” Id.The Majority is correct that Wert is a plurality opinion, authored by
Justice Stevens and joined in full by Justice Todd. The Chief Justice filed a
concurring opinion, noting that he agreed with some of the plurality’s
reasoning, but relied more on Judge Hamilton’s dissent in Green v. U.S.
Cash Advance Ill., LLC, 724 F.3d 787 (7th Cir. 2013). In Green, Judge
Hamilton opined, as our Supreme Court did in Wert, that the arbitration
agreement at issue in Green was unenforceable in part because “[t]he
terms of the parties’ contract require application of the [NAF] Code … [and
t]he [NAF] Code requires that it be administered only by the [NAF].” Id. at
795 (Hamilton, J., dissenting).4 The Chief Justice explicitly stated that he
agreed with Judge Hamilton’s analysis regarding Rule 1(A) of the NAF Code,
which specifies that only the NAF can administer it. Wert, supra at *10
(Saylor, C.J., concurring). Therefore, three justices out of five in Wert
agreed that the NAF Code issue rendered the arbitration agreement
unenforceable. Thus, the portion of Wert pertaining to the requirement in
Rule 1(A) that NAF administer its own Code, which is central to the
conclusion in Wert that the arbitration agreement therein was
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4
The Chief Justice’s concurrence specifically cited to pages 795-796 of Judge
Hamilton’s dissent in Green. Wert, supra at *10 (Saylor, C.J., concurring),
citing Green, supra at 795-796 (Hamilton, J., dissenting).
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unenforceable, is precedential and binding on this Court. See Brown,
supra.The Majority next concludes that the arbitration agreement in Wert is
different than the one in the instant case. The Majority asserts that Wert
does not apply because “the plain language of the Agreement does not
evince an intent to arbitrate only before the NAF.” Majority Opinion at 22
(emphasis in original). The Majority then cites to the portion of the
agreement that states that the parties can select another administrator or
none at all if the NAF is unavailable to serve. Id. In the Majority’s view,
Wert does not control this case because “the language in the instant
Agreement is … permissive, not mandatory, and provides for an alternative
to NAF if it is unable or unwilling to serve, or if the parties choose
otherwise.” Id.Respectfully, the Majority misconstrues and misapplies Wert, where
our Supreme Court rejected this reasoning. The appellants in Wert argued,
as Manor Care does here, that the parties were free to agree upon another
arbitrator. According to our Supreme Court, the fact that another
administrator or arbitrator could be chosen, is legally irrelevant. There is no
legal difference whether another arbiter would be chosen because it is
expressly stated in the arbitration agreement, as in this case, or pursuant to
Section 5 of the FAA. Compare Majority Opinion at 22 (quoting the
arbitration agreement as stating, “[i]f the Parties mutually agree in writing
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not to select NAF or if the NAF is unwilling or unable to serve as the
Administrator, the Parties shall agree upon another independent entity to
serve as the Administrator, unless the Parties mutually agree to not have an
Administrator[]”), with 9 U.S.C. § 5 (stating, “if for any other reason there
shall be a lapse in the naming of an arbitrator … or in filling a vacancy, then
upon the application of either party to the controversy the court shall
designate and appoint an arbitrator … who shall act under the said
agreement with the same force and effect as if he or they had been
specifically named therein []). As the Majority acknowledges, Wert states
that “[s]ection five of the FAA cannot preserve NAF-incorporated arbitration
agreements unless the parties made the NAF's availability non-essential by
specifically varying the terms of its procedure.” Wert, supra at *10
(emphasis added). Therefore, in this regard, the Majority’s insistence that
Wert cannot apply because the parties did not agree to exclusively arbitrate
through NAF as an entity is misguided. The fatal provision in Wert was not,
as the Majority concludes, “an exclusive forum-selection clause[.]” Majority
Opinion at 25 (emphasis omitted). The issue in Wert was an exclusive
choice of law clause. Regardless of the chosen forum, the arbitration
agreement’s choice-of law provision requires, as did the one in Wert, that
said forum apply the NAF Code. See generally Majority Opinion at 6-7.
The Majority goes on to state that Wert does not apply because the
provisions referring to the NAF Code can be severed under the severance
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clause of the instant agreement. Majority Opinion at 26. However, our
Supreme Court has already concluded in Wert that the provision regarding
the NAF Code is “integral and non-severable.” Wert, supra at *10
(emphasis added). We are not at liberty to disregard the judgment of our
Supreme Court in this respect. Based on these considerations, I conclude
that Manor Care is not entitled to relief on this issue, either by waiver, or on
its merits.
Based on the foregoing, and in light of our Supreme Court’s decision in
Wert, I conclude the trial court did not err.5 Accordingly, I would affirm the
trial court’s November 20, 2012 order. I respectfully dissent.
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5
Because Manor Care is not entitled to relief on the Stewart issue, the trial
court was correct to overrule Manor Care’s preliminary objections on this
basis alone. Therefore, Manor Care’s other issues are moot for the purposes
of this appeal. However, I do note that MacPherson argues that the
arbitration agreement should not be enforced because it would be
“impermissible under Pennsylvania law” to have him pursue “one joint
tortfeasor in court and the others in a separate arbitration proceeding[.]”
MacPherson’s Brief at 45. Earlier this year in Taylor v. Extendicare Health
Facilities, Inc., 113 A.3d 317 (Pa. Super. 2015), appeal granted, --- A.3d -
--, 2015 WL 5569766 (Pa. 2015), this Court announced a rule that it was
legally impermissible for a trial court to require that survival and wrongful
death claims be litigated in two forums where there were other defendants
in the case that did not agree to arbitrate.
Here, the Majority concludes that MacPherson has not alleged that the
hospital defendants and Manor Care were joint tortfeasors, precluding the
application of Taylor to this case. Majority Opinion at 28 n.12. Joint
tortfeasors are defined as “parties who either act together in committing a
wrong or whose acts, if independent of each other, unite to form a
single injury.” L.B. Foster Co. v. Charles Caracciolo Steel & Metal
Yard, Inc., 777 A.2d 1090, 1095 (Pa. Super. 2001) (citation omitted;
(Footnote Continued Next Page)
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Judge Lazarus and Judge Wecht join this dissenting opinion.
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(Footnote Continued)
emphasis added). Instantly, MacPherson’s complaint alleged that the
hospital defendants caused the decedent “mental and physical pain,
suffering and inconvenience, loss of life’s pleasures and aggravation of
pre-existing medical conditions, and expense of otherwise
unnecessary hospitalizations … up to and including the time of his
death[.]” MacPherson’s Amended Complaint, 3/19/12, at ¶ 212 (emphasis
added). MacPherson alleged that Manor Care caused “(a) severe permanent
injuries resulting in severe pain, suffering, and disfigurement (b) mental
anguish, embarrassment, humiliation, degradation, emotional distress, and
loss of personal dignity (c) loss of capacity for enjoyment of life, (d)
expense of otherwise unnecessary hospitalizations, medical expenses
and residency at the ManorCare Facility (e) aggravation of his pre-
existing medical conditions, and (f) death.” Id. at ¶ 235 (emphases
added). Therefore, MacPherson’s amended complaint on its face alleges that
the hospital defendants and Manor Care’s acts, “independent of each other,
unite[d] to form” more than one of the alleged injuries listed in the same.
L.B. Foster Co., supra. Therefore, in my view, for some claims of injury,
the hospital defendants and Manor Care are alleged to be joint tortfeasors,
and I would apply Taylor to this case in the alternative.
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