Cardinal v. Kindred Healthcare, Inc.
155 A.3d 46
Pa. Super. Ct.2017Background
- Decedent Carmen Cardinal was admitted to a Kindred skilled nursing facility and signed an arbitration/admissions agreement on June 22, 2012; Cardinal (executor/nephew) later sued for negligence, corporate negligence, custodial neglect, and wrongful death.
- Kindred filed preliminary objections seeking enforcement of the arbitration agreement; Cardinal responded that the agreement was void, unconscionable, and that Decedent lacked capacity or signed under duress/without authority.
- The trial court overruled Kindred’s preliminary objections, finding Decedent lacked capacity (citing hospital notes, facility progress notes indicating confusion, and admissions staff testimony about signing difficulty) and concluding the agreement was unconscionable.
- Kindred appealed the interlocutory order to the Superior Court, arguing (1) Decedent had capacity to sign, (2) estoppel from other signed documents, (3) FAA/PUAA preempt and favor arbitration, (4) the ADR agreement’s terms are clear, and (5) Pisano should not bar arbitration of survival claims.
- The Superior Court reviewed capacity de novo (contract interpretation) and the denial of arbitration for abuse of discretion/substantial-evidence review, and remanded with instructions to compel arbitration.
Issues
| Issue | Plaintiff's Argument (Cardinal) | Defendant's Argument (Kindred) | Held |
|---|---|---|---|
| 1. Capacity to execute arbitration agreement | Decedent was confused/lethargic when signing and lacked capacity; POA holder signed other documents; agreement therefore void | Decedent had sufficient capacity; record lacks clear, precise, convincing evidence of incapacity | Court held trial court erred — record does not show clear, convincing incapacity; arbitration valid |
| 2. Estoppel based on other documents signed | Cardinal contended signatures/POA show invalidity or lack authority to bind others | Kindred argued Cardinal is estopped from disavowing the admissions agreement given other executed documents | Court rejected trial court’s reliance on POA and other staff knowledge; no estoppel finding sustained |
| 3. Unconscionability (procedural/substantive) | Agreement is adhesive, procedurally and substantively unconscionable and unenforceable | Agreement mirrors terms previously upheld (e.g., MacPherson): prominent notices, fee allocations, rescission, and equal remedies — FAA/PUAA favor enforcement | Court held agreement not procedurally or substantively unconscionable and FAA/PUAA policy favors arbitration |
| 4. Effect of wrongful death rule (Pisano / Rule 213(e)) | Wrongful death beneficiaries cannot be bound by decedent’s arbitration; consolidation requires court trial of all claims | Kindred argued survival claims can be arbitrated; wrongful death does not bar arbitration of survival claims post-Taylor | Court applied Taylor and MacPherson: wrongful death claim limited here (only estate damages) does not preclude arbitration of survival claims; bifurcation/remand for arbitration ordered |
Key Cases Cited
- MacPherson v. Magee Meml. Hosp. for Convalescence, 128 A.3d 1209 (Pa. Super. 2015) (analyzing enforceability and unconscionability of nursing-home arbitration agreements)
- Pisano v. Extendicare Homes, Inc., 77 A.3d 651 (Pa. Super. 2013) (held wrongful-death beneficiaries cannot be bound by decedent’s arbitration agreement)
- Taylor v. Extendicare Health Facilities, Inc., 147 A.3d 490 (Pa. 2016) (held FAA preempts Pa.R.C.P. 213(e) and permits bifurcation of wrongful-death and survival claims)
- Gaffer Ins. Co. v. Discover Reinsurance Co., 936 A.2d 1109 (Pa. Super. 2007) (standard of review and appealability for orders denying petitions to compel arbitration)
- Evans v. Marks, 218 A.2d 802 (Pa. 1966) (standard for proving lack of mental capacity to execute an instrument — clear, precise, and convincing evidence)
- Estate of McGovern v. Com. State Emp. Ret. Bd., 517 A.2d 523 (Pa. 1986) (presumption of competence for adults signing documents)
- Salley v. Option One Mortg. Corp., 925 A.2d 115 (Pa. 2007) (challenger bears burden to prove unconscionability)