Washburn v. Northern Health Facilities, Inc.
121 A.3d 1008
| Pa. Super. Ct. | 2015Background
- March 4, 2011: Donald Washburn (decedent) transferred to Tremont Health & Rehabilitation; his wife Shirley signed multiple admission documents on his behalf although she had no power of attorney or guardianship.
- Shirley signed a separate "Alternative Dispute Resolution Agreement" (ADR) as "Legal Representative"; Donald did not sign and lacked capacity due to dementia.
- Tremont later sued in a survival action alleging negligent care that contributed to Donald's death; Shirley, as administratrix, filed the complaint.
- Tremont filed preliminary objections seeking to compel arbitration under the ADR signed by Shirley; the trial court ordered discovery and ultimately overruled the petition to compel arbitration.
- Tremont appealed, arguing (inter alia) that Shirley had agency, that equitable estoppel and third‑party‑beneficiary doctrines bound the estate to arbitrate, and that the FAA required enforcement.
- The Superior Court reviewed whether a valid arbitration agreement existed (agency/principal‑agent issues) and affirmed the trial court, holding no enforceable agreement was shown.
Issues
| Issue | Plaintiff's Argument (Washburn) | Defendant's Argument (Tremont) | Held |
|---|---|---|---|
| 1. Was Shirley authorized to bind Donald to the ADR? | Shirley: she lacked authority; no POA/guardian and Donald never authorized her to sign arbitration. | Tremont: marital course of conduct and prior acts (taxes, forms) created implied or apparent authority. | Held: No agency proven—no express authority, no evidence Donald authorized her, and Tremont had no basis to believe she was authorized. |
| 2. Should equitable estoppel bind the estate to arbitrate because the estate accepted benefits of admission? | Washburn: estate did not knowingly accept or exploit the ADR; ADR was separate and not a condition of admission. | Tremont: estate received services under admission agreements and should be estopped from disavowing arbitration. | Held: No estoppel—ADR was a stand‑alone agreement and admission/benefits were not conditioned on signing the ADR. |
| 3. Is Donald a third‑party beneficiary of the ADR Shirley signed? | Washburn: Shirley signed in a representative capacity; Donald cannot be an intended third‑party beneficiary of a contract to which he was a party. | Tremont: ADR intended to cover residents like Donald; thus he benefited and should be bound. | Held: No—no writing shows intent to make Donald an intended third‑party beneficiary. |
| 4. Does the FAA mandate enforcement despite state‑law defects? | Washburn: Federal law does not create an arbitration agreement where none exists. | Tremont: FAA preempts and requires enforcement of arbitration clauses. | Held: FAA does not compel arbitration absent a valid agreement; state contract/agency rules control enforceability. |
Key Cases Cited
- Taylor v. Extendicare Health Facilities, Inc., 113 A.3d 317 (Pa. Super. 2015) (standard of review and arbitration‑motion principles)
- Pisano v. Extendicare Homes, Inc., 77 A.3d 651 (Pa. Super. 2013) (two‑part test: existence and scope of arbitration agreement)
- Walton v. Johnson, 66 A.3d 782 (Pa. Super. 2013) (refusing to enforce arbitration where signer lacked authority to bind patient)
- Sidle v. Kaufman, 29 A.2d 77 (Pa. 1942) (spousal agency cannot be inferred from mere relationship without conduct indicating agency)
- Turnway Corp. v. Soffer, 336 A.2d 871 (Pa. 1975) (apparent authority must spring from the principal, not the purported agent)
- E.I. DuPont de Nemours & Co. v. Rhone Poulenc Fiber & Resin Intermediates, S.A.S., 269 F.3d 187 (3d Cir. 2001) (equitable estoppel doctrine binding nonsignatories when they knowingly exploit a contract containing arbitration)
- Burks v. Fed. Ins. Co., 883 A.2d 1086 (Pa. Super. 2005) (third‑party beneficiary analysis)