Petersen Ex Rel. Morrison v. Kindred Healthcare, Inc.
155 A.3d 641
| Pa. Super. Ct. | 2017Background
- Mary P. Petersen (through her attorney-in-fact Kathleen Morrison) sued Kindred for negligence arising from care at a Kindred facility; Petersen did not sign the arbitration agreement herself.
- Darlene Uriarte (Petersen’s daughter) signed an alternative dispute resolution (ADR) / arbitration agreement at admission, presenting a copy of Petersen’s durable power of attorney (POA).
- The POA named Kathleen as agent and appointed Darlene as successor agent “[i]n the event [Kathleen] is unwilling or unable to act.”
- Kindred sought to compel arbitration via preliminary objections, asserting Uriarte had authority under the POA and alternatively arguing estoppel and FAA/PUAA policy favoring arbitration.
- The trial court overruled Kindred’s preliminary objections; Kindred appealed the denial of its petition to compel arbitration.
- The Superior Court affirmed, holding Uriarte lacked authority under the POA and that agency-by-estoppel/equitable-estoppel arguments failed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Was Uriarte authorized by the POA to sign the ADR agreement? | POA limited: successor agent only if Kathleen was unwilling/unable; no authorization existed, so ADR not binding. | Uriarte had authority as successor agent and presented POA; Kindred reasonably relied on her representation. | Held: Uriarte lacked authority because POA made her authority contingent and Kindred had actual notice of that limitation and did not verify whether Kathleen was unwilling/unable. |
| 2. Did Uriarte understand ADR and thus have capacity to bind Petersen? | Petersen lacked capacity and did not sign; signer’s understanding irrelevant because no valid agency existed. | Uriarte had a basic understanding and capacity to sign ADR on behalf of her mother. | Held: Court did not credit a valid agency/authorization; capacity/understanding of Uriarte was irrelevant once agency was lacking. |
| 3. Is Petersen estopped from disavowing the ADR agreement because other admission documents signed by Uriarte were accepted? | Petersen accepted benefits of admission, so she should be estopped from rejecting ADR. | Because separate ADR agreement was presented and not a condition of admission, estoppel is inapplicable. | Held: No estoppel—ADR was separate from admission and Washburn controls; acceptance of other benefits did not bar disavowal. |
| 4. Should FAA/PUAA policy favor arbitration and compel enforcement? | Policy favors arbitration, so courts should enforce arbitration clauses where possible. | Arbitration policy arguments cannot overcome lack of a valid agreement/agency. | Held: Court did not reach policy arguments because no valid arbitration agreement existed; enforcement denied. |
Key Cases Cited
- Gaffer Ins. Co., Ltd. v. Discover Reinsurance Co., 936 A.2d 1109 (Pa. Super. 2007) (standards for appellate review of order denying arbitration).
- Walton v. Johnson, 66 A.3d 782 (Pa. Super. 2013) (agency may be proved by express, implied, apparent, or estoppel; burden on proponent).
- Fierst v. Commonwealth Land Title Ins. Co., 451 A.2d 674 (Pa. 1982) (person dealing with agent who acts under a written grant must notice its limitations).
- Washburn v. N. Health Facilities, Inc., 121 A.3d 1008 (Pa. Super. 2015) (separate ADR agreement not part of admission quid pro quo; equitable estoppel to enforce ADR rejected).
- Turnway Corp. v. Soffer, 336 A.2d 871 (Pa. 1975) (elements and reliance required for agency by estoppel).