Lead Opinion
INTRODUCTION
Mаrlene Baker LaBerge, a 73-year-old woman, was a resident and patient of a 24-hour skilled nursing facility owned by Italian Maple Holdings, LLC dba La Paloma Healthcare Center (La Paloma). Approximately a week after LaBerge arrived at the facility, La Paloma's staff presented LaBerge with two arbitration agreements that included language required by Code of Civil Procedure
On appeal, Defendants contend that the trial court erred in concluding that the agreements were not effective until after the 30-day rescission period. They argue that this court should decline to follow Rodriguez , supra ,
We conclude that the trial court erred in interpreting section 1295, subdivision (c), and that the arbitration agreements are valid and enforceable. In reaching this conclusion, we disagree with the court's analysis in Rodriguez , supra ,
We therefore reverse the trial court's order denying Defendants' motion to compel arbitration.
FACTUAL AND PROCEDURAL BACKGROUND
LaBerge was admitted to La Paloma's 24-hour care nursing facility on September 18, 2014. At that time, she was diagnosed with high blood pressure and osteomyelitis (a bone infection).
A week after LaBerge's admission to the nursing facility, staff from the facility presented LaBerge with two arbitration agreements. The first one was entitled "Attachment F [¶] Arbitration of Medical Malpractice Disputes [¶] (Optional for Residents and Facility)" (Attachment F, some capitalization omitted). The second one was entitled "Attachment G [¶] Arbitration of Dispute Other Than Medical Malpractice [¶] (Optional for Residents and Facility)" (Attachment G, some capitalization omitted).
Attachments F and G both contained the following language:
"By signing this arbitration agreement below, the Resident agrees to be bound by the foregoing arbitration provision. The Resident acknowledges that he or she has the option of not signing this arbitration agreement and not being bound by the arbitration provisions contained herein. The execution of this arbitratiоn agreement is not a precondition to receiving medical treatment or for admission to the Facility. This arbitration agreement may be rescinded by written notice from either party, including the Resident's Legal Representative and/or Agent, if any, and as appropriate, to the other party within thirty (30) days of signature."
Both arbitration agreements bear a date stamp of September 25, 2014, which was seven days after LaBerge was admitted to the nursing facility. There is no other evidence in the record regarding when LaBerge signed these agreements or the circumstances surrounding her signing.
When the paramedics аrrived, the nursing facility staff informed them that they had seen LaBerge suffer a heart attack.
LaBerge passed away after she was taken to the hospital. An autopsy revealed that she died as a result of blunt force injuries to her head and torso.
Plaintiffs opposed the petition to compel arbitration, arguing that under the holding in Rodriguez , supra ,
The trial court relied on Rodriguez to conclude that because LaBerge died before the expiration of the 30-day rescission period under section 1295, subdivision (c), Defendants could not establish that an enforceable arbitration agreement exists. The trial court did not address Defendants' contention that the FAA preempts the requirements imposed by section 1295, subdivision (c).
Defendants filed a timely appeal.
III.
DISCUSSION
A. Standards relating to motions to compel arbitration
The party seeking to compel arbitration has the burden of proving the existence of an enforceable arbitration agreement by a preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance any fact necessary to its defense. (
In considering a petition to compel arbitration, "the court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court's discretion to reach a final determination." ( Engalla , supra ,
" 'Ordinarily, we review a denial of a petition to compel arbitration for abuse of discretion. [Citation.] However, where the trial court's denial of a petition to arbitrate presents a pure question of law, we review the order de novo.' " ( Mendez v. Mid-Wilshire Health Care Center (2013)
B. Analysis
1. The statutory framework
Section 1295 addresses arbitration agreements in medical services contracts. The Supreme Court has stated that "[t]he purpose of section 1295 is to encourage and facilitate arbitration of medical malpractice disputes. [Citations.] Accordingly, the provisions of section 1295 are tо be construed liberally [to support that legislative purpose]." ( Reigelsperger v. Siller (2007)
The principal dispute in this case involves section 1295, subdivision (c), which provides: "Once signed, such a contract governs all subsequent open-book account transactions for medical services for which the contract was signed until or unless rescinded by written notice within 30 days of signature. Written notice of such rescission may be given by a guardian or conservator of the patient if the patient is incapacitated or a minor."
Section 1295, subdivision (e) provides that a medical services arbitration agreement "is not a contract of adhesion, nor unconscionable nor otherwise improper, where it comрlies with subdivisions (a), (b) and (c) of this section."
2. Section 1295, subdivision (c) does not create a condition precedent to the enforceability of a medical services arbitration agreement; as a result, a party's death during the 30-day rescission window does not invalidate an otherwise enforceable agreement
Defendants claim that the trial court erred in concluding that they failed to meet their burden of proving the existence of an enforceable arbitration agreement by a preponderance of the evidence. Relying on Rodriguez , supra ,
In support of their motion to compel arbitration, Defendants offered copies of Attachments F and G. Plaintiffs do not disрute that these arbitration agreements were executed by LaBerge and Defendants. Rather, in the trial court and on appeal, Plaintiffs maintained that because section 1295, subdivision (c) provides that parties may rescind a medical services arbitration agreement within 30 days of signing the agreement, such an agreement is not enforceable until after that 30-day period has elapsed. Plaintiffs rely on Rodriguez to argue that where, as here, one of the parties to an arbitration agreement dies before the end of the 30-day rescission period, "it is impossible to establish an enforceable arbitration agreement exists."
In Rosenthal , supra ,
With respect to the moving party's burden to provide evidence of the existence of an agreement to arbitrate, it is generally sufficient for that party to present a copy of the contract to the court. (See Condee v. Longwood Management Corp. (2001)
There is no real dispute that the parties entered into and executed arbitration agreements regarding the services that provide the basis for Plaintiffs'
"The parties understand that any dispute as to medical malpractice (that is, whether any medical services rendered under this admission agreement were necessary or unauthorized or were improperly, negligently or incompetently rendered), will be determined by submission to neutral arbitration as provided by California law, аnd not by a lawsuit or court process, except as California law provides for judicial review of arbitration proceedings.
By entering into this arbitration agreement, both parties give up their constitutional right to have any such dispute decided in a court of law before a jury, and instead accept the use of arbitration. [¶] By signing this arbitration agreement below, the Resident agrees to be bound by the foregoing arbitration provision ....
"[¶] ... [¶]
"NOTICE: BY SIGNING THIS AGREEMENT THE RESIDENT AGREES TO HAVE ANY ISSUE OF MEDICAL MALPRACTICE DECIDED BY NEUTRAL ARBITRATION, AND GIVES UP THE RIGHT TO A JURY OR COURT TRIAL." (Italics added.)
Attachment G includes the following relevant language:
"The parties understand that, except as provided below, any claim other than a claim for medical malpractice, arising out of the provision of services by the Facility, the admission agreement, the validity, interpretation, construction, performance and enforcement thereof, or which allege violations of the Elder Abuse and Dependent Adult Civil Protection Act, or the Unfair Competition Act, or which seek an award of punitive damages or attorneys' fees, will be determined by submission to neutral arbitration as provided by California law, and nоt by a lawsuit or court process, except as California law provides for judicial review of arbitration proceedings. By entering into this arbitration agreement, both parties give up their constitutional right to have any such dispute decided in a court of law before a jury, and instead accept the use of arbitration. [¶] By signing this arbitration agreement below, the Resident agrees to be bound by the foregoing arbitration provision ....
"[¶] ... [¶]
"NOTICE: BY SIGNING THIS AGREEMENT THE RESIDENT AGREES TO HAVE ANY CLAIM MADE ON BEHALF OF THE RESIDENT ARISING OUT OF THE PROVISION OF SERVICES BY THE FACILITY, THE ADMISSION AGREEMENT OR THE VALIDITY, INTERPRETATION, CONSTRUCTION, PERFORMANCE AND ENFORCEMENT THEREOF, OR WHICH ALLEGE VIOLATIONS OF THE ELDER ABUSE
AND DEPENDENT ADULT CIVIL PROTECTION ACT, OR THE UNFAIR COMPETITION ACT, OR WHICH SEEK AN [A]WARD OF PUNITIVE DAMAGES OR ATTORNEYS' FEES, DECIDED BY NEUTRAL ARBITRATION, AND GIVES UP THE RIGHT TO A JURY OR COURT TRIAL." (Italics added.)
In submitting these arbitration agreements to the trial court, Defendants made a sufficient prima facie showing of the existence of agreements to arbitrate between LaBerge
Because Plaintiffs did not dispute that LaBerge signed the agreements, the burden shifted to the Plaintiffs to raise any defenses that they might have to enforcement of the agreements. (See Rosenthal , supra ,
In Rodriguez , supra ,
In concluding that the trial court erred in granting the motion to compel arbitration of the decedent's heir's claim, the Rodriguez court determined that the medical services arbitration agreement was unenforceable because the decedent's death "shortly after the [initial] surgery rendered it impossible to make any evidentiary finding regarding whether [the decedent's] alleged waiver of her rights, not to mention the child's rights, to a jury trial was knowing and voluntary." ( Rodriguez , supra ,
"[Decedent] was presented with the Arbitrаtion Agreement only four days before her scheduled surgery under circumstances in which she could have believed she must sign the agreement in order to have [defendant surgeon] perform the surgery. There is no evidence that she would or would not have reread and reconsidered the Arbitration Agreement after her surgery or that she would or would not have exercised her right to 'revoke' the agreement within the statutory 30-day revocation period. [Citation.] [Decedent] signed the Arbitration Agreement herself, not through someone authorized to do so on her behalf, and, hence, the determinative factor is [decedent's] intent, not the intent of some representative appointed after her death. [Citation.] [Decedent's] death shortly after the [initial] surgery rendered it impossible to make any evidentiary finding regarding whether [decedent's] alleged waiver of her rights, not to mention the child's rights, to a jury trial was knowing and voluntary. [Decedent's] death prior to the expiration of the 30-day 'cooling off' period also made it imрossible for full compliance with section 1295 requirements. A statutory prerequisite to an enforceable arbitration agreement under section 1295 is that the person signing the agreement must have 30 days to review the agreement and reconsider whether he or she knowingly and voluntarily intends to waive the right to a jury trial or, alternatively, desires to rescind the agreement. ( § 1295, subd. (c).) Thus, [decedent's] death prior to the expiration of the 30-day period rendered it impossible to establish that an arbitration agreement exists that is enforceable under section 1295 . Given the foregoing facts, we conclude that [defendant surgeon] would be unable to carry his burden of proving that an agreement exists." ( Id. at pp. 1469-1470, , italics added.) 98 Cal.Rptr.3d 728
By this reasoning, the Rodriguez court suggests that section 1295, subdivision (c) creates a condition precedent to the enforcement of the terms of a medical services arbitration agreement contract-the condition precedent being the lapsing of the 30-day rescission period without either party rescinding. In our view, this interpretation of section 1295, subdivision (c) fails to adequately take into account the statutory language. Section 1295, subdivision (c) provides in relevant part: "Once signed , such a contract governs all subsequent open-book account transactions for medical services for which the contract was signed until or unless rescinded by written notice within 30 days of signature." ( § 1295, subd. (c), italics added.) The plain meaning of this provision is that a medical services agreement is effective upon execution by the parties and remains in effect until or unless a party rescinds within the 30-day period. Both of the agreements in this case clearly indicate the parties' intent that the agreements were to become valid and enforceable upon their execution, since, in addition to setting forth the language of section 1295, subdivision (c), both agreements state, "By signing this arbitration agreement below, the Resident agrees to be bound by the foregoing arbitration provision," and "BY SIGNING THIS AGREEMENT THE RESIDENT AGREES TO" the arbitration of the identified claims and/or issues. This language indicates a clear intention to obligate the parties, pursuant to the agreеments, immediately upon the execution of the documents.
If the Legislature had intended to delay the enforceability of a medical services arbitration agreement for 30 days after the signing of such an agreement, even where the parties indicated an intention to make their obligations under the agreement enforceable upon signing, it could easily have done so by stating that such an agreement does not become enforceable until a 30-day "grace period" elapses after execution of the document. (See Civ. Code, § 1695.6 [in context of home equity sales contracts, providing that "[u]ntil the time within which the equity seller may cancel the transaction has fully elapsed, the equity purchaser shall not" perform under
The medical services arbitration agreements in this case exhibit the parties' intention that the agreements become enforceable immediately upon execution; that one of the parties died during the 30-day rescission period does not negate this express intention. Until the time of LaBerge's death, neither party had rescinded the agreements; the agreements therefore remained in effect and enforceable at the time of her death.
We reach this conclusion with the understanding that our result is in conflict with the interpretation of section 1295, subdivision (c) provided by the court in Rodriguez . However, we do not believe that language of section 1295, subdivision (c) can reasonably be interpreted as creating a statutory condition precedent to the enforceabilty of the parties' obligations under a contract. In reaching a different conclusion, the Rodriguez court appears to have conflated the question whether a contract for which the statute grants a 30-day rescission right is immediately enforceable with the question whether such an agreement was entered into knowingly and voluntarily. (See Rodriguez , supra ,
Plaintiffs have not alleged, let alone demonstrated, that LaBerge lacked capacity to assent to the agreements, that she did so only under duress or coercion, or that for some other reason she should not be bound by the provisions of the agreements. (See Ramirez v. Superior Court (1980)
3. The arbitration agreements sufficiently comply with the requirements of section 1295
Plaintiffs contend that the arbitration agreements do not comply with section 1295's requirements because with respect to certain language the agreements "have paraphrased several provisions" and "fail[ ] to include important several [sic ] sections of the mandatory language." Speсifically, Plaintiffs point out that instead of referring to the document as a "contract" it is referred to as an "agreement," and fails to include the phrase "See Article 1 of this Contract." In addition, Plaintiffs assert that "Defendants also changed some of the mandatory language required [by section 1295 ] in the first paragraph of the agreement," but they do not specify what language was changed.
While "there is some doubt whether" statutes regulating arbitration clauses, whose provisions tend to demand certain technical compliance, "permit [ ] mere substantial compliance" ( Zembsch v. Superior Court (2006)
This case presents an appropriate case for application of the substantial compliance doctrine. Our primary concern is the objective of the statute. The purpose of section 1295 is to " 'encourage[ ] and facilitate [ ] the arbitration of medical malpractice disputes by specifying uniform language to be used in binding arbitration contracts to assure that the patient knows what he is signing and what its ramifications are.' " ( Gross v. Recabaren (1988)
IV.
DISPOSITION
The order is reversed. Costs are awarded to Defendants.
I CONCUR:
O'ROURKE, J.
Notes
Statutory references are to the Code of Civil Procedure unless otherwise specified.
Because our interpretation of the effect of section 1295, subdivision (c) requires reversal of the order denying Defendants' motion to compel arbitration, we decline to address Defendants' alternative arguments for reversal.
In making this argument, Appellants chose not to provide evidence to support their contention that La Paloma is engaged in interstate commerce, and instead relied on the United States Supreme Court's opinion in Summit Health, Ltd. v. Pinhas (1991)
Section 1295, subdivision (a) provides: "Any contract for medical services which contains a provision for arbitration of any dispute as to professional negligence of a health care provider shall have such provision as the first article of the contract and shall be expressed in the following language: 'It is understood that any dispute as to medical malpractice, that is as to whethеr any medical services rendered under this contract were unnecessary or unauthorized or were improperly, negligently or incompetently rendered, will be determined by submission to arbitration as provided by California law, and not by a lawsuit or resort to court process except as California law provides for judicial review of arbitration proceedings. Both parties to this contract, by entering into it, are giving up their constitutional right to have any such dispute decided in a court of law before a jury, and instead are accepting the use of arbitration.' "
Section 1295, subdivision (b) provides: "Immediately before the signature line provided for the individual contracting for the medical services must appear the following in at least 10-point bold red type: [¶] 'NOTICE: BY SIGNING THIS CONTRACT YOU ARE AGREEING TO HAVE ANY ISSUE OF MEDICAL MALPRACTICE DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP YOUR RIGHT TO A JURY OR COURT TRIAL. SEE ARTICLE 1 OF THIS CONTRACT.' "
A medical services arbitration agreement entered into in compliance with section 1295 may bind a signatory's heir in seeking a claim based on wrongful death or other cause of action arising from the signatory's medical treatment. (Ruiz v. Podolsky (2010)
Plaintiffs do assert in briefing on appeal that "[t]here is no evidence the agreements were explained to her, or understood by her." In making this assertion, Plaintiffs appear to suggest that Defendants were required to present evidence with respect to their motion to compel to the effect that LaBerge understood the document. However, it is well established that a party who signs a document is presumed to have read it and to understand its contents. (E.g., Stewart v. Preston Pipeline Inc. (2005)
Despite the existence of the presumptions that accompany an executed document, and despite the fact that Plaintiffs hаve never challenged the circumstances surrounding LaBerge's execution of the relevant documents or her capacity to execute them, the dissent raises the concern that we simply do not know enough about the circumstances surrounding LaBerge's execution of the agreements to give them valid legal effect. The dissent would apparently impose an unprecedented requirement that would seem to apply in any case involving an arbitration agreement-i.e., that, even in the absence of a challenge, the defendant must present evidence of the circumstances of the signing of the arbitration agreement and prove that the plaintiff knowingly and voluntarily waived her right to jury trial, notwithstanding the presence of clear language to that effect in the executed arbitration agreement.
Presumably, however, a contract itself could demonstrate the parties' intent to create a condition precedent to the contract's enforcement.
Again, the first paragraph of Attachment F states:
"The partiеs understand that any dispute as to medical malpractice (that is, whether any medical services rendered under this admission agreement were necessary or unauthorized or were improperly, negligently or incompetently rendered), will be determined by submission to neutral arbitration as provided by California law, and not by a lawsuit or court process, except as California law provides for judicial review of arbitration proceedings. By entering into this arbitration agreement, both parties give up their constitutional right to have any such dispute decided in a court of law before a jury, and instead accept the use of arbitration."
The first paragraph of Attachment G states:
"The parties understand that, except as provided below, any claim other than a claim for medical malpractice, arising out of the provision of services by the Facility, the admission agreement, the validity, interpretation, construction, performance and enforcement thereof, or which allege violations of the Elder Abuse and Dependеnt Adult Civil Protection Act, or the Unfair Competition Act, or which seek an award of punitive damages or attorneys' fees, will be determined by submission to neutral arbitration as provided by California law, and not by a lawsuit or court process, except as California law provides for judicial review of arbitration proceedings. By entering into this arbitration agreement, both parties give up their constitutional right to have any such dispute decided in a court of law before a jury, and instead accept the use of arbitration."
For comparison, section 1295, subdivision (a) sets forth the following language that is to be included in medical services arbitration agreements:
" 'It is understood that any dispute as to medical malpractice, that is as to whether any medical services rendered under this contract were unnecessary or unauthorized or were improperly, negligently or incompetently rendered, will be determined by submission to arbitration as provided by California law, and not by a lawsuit or resort to court proсess except as California law provides for judicial review of arbitration proceedings. Both parties to this contract, by entering into it, are giving up their constitutional right to have any such dispute decided in a court of law before a jury, and instead are accepting the use of arbitration.' "
Dissenting Opinion
Marlene Baker LaBerge, a 73-year-old woman, who needed 24-hour care, signed two arbitration agreements seven days after she was admitted to a nursing facility owned by Italian Maple Holdings, LLC dba La Paloma Healthcare Center (La Paloma). She died 10 days later allegedly because of the misconduct of La Paloma agents. Her heirs, Paul LaBerge, Suzanne Markx, and Talmadge Baker (collectively Plaintiffs), filed suit against La Paloma and Plum Healthcare, LLC (together Defendants). In response, Defendants submitted a petition to compel arbitration. Following
The majority reverses the court's order, determining that Rodriquez was wrongly decided. In doing so, the majority focuses solely on the text of Code of Civil Procedure
The majority correctly notes that a party petitioning to compel arbitration must first offer evidence of a written agreement to arbitrate the subject dispute. (See Rosenthal v. Great Western Fin. Securities Corp. (1996)
Defendants offered no details regarding LaBerge's execution of the two arbitration agreements. Defendants did not explain why LaBerge was not asked to sign the arbitration agreements with the other admission paperwork she executed and/or received before her admission to the nursing facility. The record does not indicate under what circumstances LaBerge signed the agreements or how the agreements were presented to her seven days after she was admitted to La Paloma's nursing facility. Indeed, Defendants' trial attorney authenticated the two arbitration agreements. Because Plaintiffs did not object to this method of authentication, we do not know what personal knowledge Defendants' trial attorney possessed that allowed him to authenticate the agreements. In his declaration, the attorney does not state that he was present when LaBerge executed the agreements оr he is otherwise familiar with her signature. Thus, we are left with a 73-year-old woman in need of 24-hour care, signing two agreements, under unknown circumstances,
The majority glosses over this background, emphasizing that Plaintiffs did not argue LaBerge lacked the capacity to execute the agreements or contend the agreements are the result of fraud, duress, or undue influence.
As part of the Medical Injury Compensation Reform Act, the Legislature enacted section 1295"to encourage and facilitate arbitration of medical malpractice claims." ( Reigelsperger v. Siller (2007)
"There is, however, no conclusive presumption that a person who signs a document containing text complying with section 1295 requirements has in fact consented to arbitration as required to form an enforceable agreement. [Citation.] ... As for any contract to be valid, an arbitration agreement requires mutual consent of the parties. [Citation.] No enforceable agreement 'exists unless the parties signing the document act voluntarily and are aware of the nature of the document and have turned their attention to its provisions.' [Citation.] In order to allow a patient sufficient time to rescind the agreement or, by his or her silence, confirm that his or her waiver is knowing and voluntary, section 1295, subdivision (c) requires that the patient be given a 30-day 'cooling off' period after signing the agreement. During that time, the patient may rescind the agreement by giving written notice of rescission." ( Rodriguez , supra ,176 Cal.App.4th at p. 1468 ,.) 98 Cal.Rptr.3d 728
As relevant here, the appellate court interpreted subdivision (c) as including a specific, statutory protection for a patient signing an arbitration agreement: "A statutory prerequisite to an enforceable arbitration agreement under section 1295 is that the person signing the agreement must have 30 days to review the agreement and reconsider whether he or she knowingly and voluntarily intends to waive the right to a jury trial or, alternatively, desires to rescind the agreement." ( Rodriguez , supra ,
However, the majority does not read section 1295, subdivision (c) the same way as the appellate court in Rodriguez, supra,
The majority takes issue with the appellate court's interpretation of section 1295, subdivision (c) in Rodriguez , supra ,
Here, a 73-year-old woman in need of 24-hour care was asked to sign two arbitration agreements seven days after she was admitted to La Paloma's nursing facility. She died 10 days later, allegedly because La Paloma's staff abandoned her and purposefully withheld care. In petitioning to compel arbitration, Defendants did not offer any evidence regarding the circumstances of LaBerge's execution оf the subject arbitration agreements. Alternatively stated, but for the signed arbitration agreements that LaBerge could have rescinded at the time of her death, Defendants did not provide any evidence that LaBerge knowingly and voluntarily waived her constitutional right to a jury trial. Accordingly, I cannot say that Defendants carried their burden in their petition to compel arbitration. Such a determination is made even more difficult because LaBerge still had 20 days in which to rescind her consent to the arbitration agreements at the time of her death. And, according
Statutory references are to the Code of Civil Procedure unless otherwise specified.
Defendants also submitted four exhibits consisting of various medical evaluations of LaBerge. Defendants maintained that these documents prоved LaBerge was competent to execute the arbitration agreements. We observe that none of these documents describe the circumstances of LaBerge's execution of the arbitration agreements. Further, Defendants' trial counsel authenticated these documents with no indication that he had sufficient personal knowledge to do so or otherwise explain their contents.
Although we agree these issues were not raised, we question how Plaintiffs could have properly raised these issues when they were not present during the execution of the arbitration agreements and have no knowledge regarding the circumstances of their execution.
Section 1295, subdivision (c) provides: "Once signed, such a contract governs all subsequent open-book account transactions for medical services for which the contract was signed until or unless rescinded by written notice within 30 days of signature. Written notice of such rescission may be given by a guardian or conservator of the patient if the patient is incapacitated or a minor."