Opinion
I. INTRODUCTION
Plaintiff Norma Daniels sued Sunrise Senior Living, Inc., and other defendants,
Defendants petitioned the trial court to compel arbitration of all of the claims pursuant to the arbitration clause in a “residency agreement” Daniels entered into with Sunrise Senior Living, Inc., as Barcenas’s attorney in fact, but not in her personal capacity. Under the arbitration clause, all claims related to the care Barcenas received at Sunrise are subject to binding arbitration, and the clause is expressly binding on B arcenas’s heirs and representatives. The court denied the petition and refused to order any of the claims to arbitration on the grounds Daniels was a third party to the agreement and could not be compelled to arbitrate her wrongful death claim, and there was a possibility of conflicting rulings on common issues of fact and law if the survivor claims were arbitrated but the wrongful death claim was not. (§ 1281.2, subd. (c) (herein § 1281.2(c)).) Defendants appeal. (§ 1294, subd. (a).)
II. FACTUAL AND PROCEDURAL BACKGROUND
A. The Allegations of the Complaint
At the age of 92 in December 2009, Barcenas became a resident of Sunrise with a diagnosis of “dementia with psychosis.” She was assigned to a “non-ambulatory” suite and enrolled in a program designed for residents with dementia. Her individualized service plan required Sunrise to assess her for skin breakdown and notify a health care consultant if skin tears or redness were noted. Sunrise staff was also responsible for washing Barcenas’s lower legs, feet, and bottom.
While living at Sunrise during early 2010, Barcenas developed pressure sores on both of her heels and ankles, and her health deteriorated. The pressure sores went unnoticed and untreated until April 2010, when Daniels brought them to the attention of Sunrise staff. In May 2010, Barcenas was taken to a hospital emergency room where tests revealed she had septic shock, pneumonia, dehydration, and a staph infection. She was hospitalized for two months, and was transferred to a skilled nursing facility in July 2010. She never fully recovered from her injuries and died at the skilled nursing facility in February 2011 at the age of 93.
Daniels filed suit against defendants in her representative capacity as Barcenas’s successor in interest (Code Civ. Proc., §§ 377.11, 377.20), alleging claims for elder abuse in violation of the Elder Abuse and Dependent Adult Civil Protection Act (Welf. & Inst. Code, § 15600 et seq.), negligence,
B. The Arbitration Clause in the Residency Agreement
Upon Barcenas’s admission to Sunrise, Daniels signed a residency agreement with defendant Sunrise Senior Living Services, Inc., as Barcenas’s attorney in fact, pursuant to a durable general power of attorney and a durable power of attorney for health care. The residency agreement includes an arbitration clause (the arbitration clause), which states that: “By entering into this Agreement, you agree that any and all claims and disputes arising from or related to this Agreement or to your residency, care or services at [Sunrise] shall be resolved by . . . binding arbitration .... The arbitration clause binds all parties to this Agreement and their spouse, heirs, representatives, executors, administrators, successors, and assigns, as applicable. . . ,”
C. The Petition to Compel Arbitration and the Trial Court’s Ruling
Daniels refused defendants’ request to submit the survivor and wrongful death claims to arbitration. (§ 1281.2(c).) Defendants then petitioned the trial court to compel Daniels to arbitrate all of the claims pursuant to the arbitration clause in the residency agreement. Defendants argued that by signing the agreement, Daniels effectively agreed to arbitrate all claims arising out of Barcenas’s residency at Sunrise, including her personal wrongful death claim.
As indicated, the trial court refused to order any of the claims to arbitration. The court concluded that Daniels’s wrongful death claim was not arbitrable because she did not sign, the residency agreement in her personal capacity and was therefore a third party to the agreement. (§ 1281.2(c).) The
III. DISCUSSION
Defendants claim the trial court erroneously determined thát Daniels could not be compelled to arbitrate her wrongful death claim because she is a third party to the residency agreement and its arbitration clause. (§ 1281.2(c).) They also claim the court abused its discretion in concluding there was a possibility of conflicting rulings on common questions of law and fact if the survivor claims but not the wrongful death claim were ordered to arbitration. {Ibid.) We find no merit in these claims.
A. Section 1281.2(c) and the Standard of Review
Under section 1281.2(c), a court may stay or refuse to compel arbitration of all or part of an arbitrable controversy when: (1) “[a] party to the arbitration agreement is also a party to a pending court action . . . with a third party, arising out of the same transaction or series of related transactions,” and (2) “there is a possibility of conflicting rulings on a common issue of law or fact.” (§ 1281.2(c).)
Whether an arbitration agreement is binding on a third party (e.g., a nonsignatory) is a question of law subject to de novo review. (Suh v. Superior Court (2010)
B. Daniels Is a Third Party to the Arbitration Agreement and May Not Be Compelled to Arbitrate Her Wrongful Death Claim
Daniels’s wrongful death claim is personal to her and lies independent of the survivor claims. “Unlike some jurisdictions wherein wrongful death actions are derivative, Code of Civil Procedure section 377.60 ‘creates a new cause of action in favor of the heirs as beneficiaries, based upon their own independent pecuniary injury suffered by loss of a relative, and distinct from any the deceased might have maintained had he survived. [Citations.]’ ” (Horwich v. Superior Court (1999)
As a general rule, a party cannot be compelled to arbitrate a dispute that he or she has not agreed to resolve by arbitration. (Buckner v. Tamarin (2002)
In concluding that Daniels was a third party to the residency agreement and not bound by its arbitration clause, the trial court principally relied on Fitzhugh v. Granada Healthcare & Rehabilitation Center, LLC (2007)
Even though the arbitration agreements were expressly binding on the decedent’s heirs, the court concluded that the decedent’s surviving spouse and adult children were not obligated to arbitrate their wrongful death claims because there was no evidence that the spouse signed the agreements in his personal capacity, and the adult children did not sign either agreement. (Fitzhugh, supra,
There are exceptions to the general rule that third party nonsignatories to an arbitration agreement cannot be bound by it. (See, e.g., Buckner, supra,
At issue in Ruiz was whether the wife and four adult children were bound by the decedent’s arbitration agreement with the physician. Following an extensive analysis of the extant case law including Herbert, the Ruiz court concluded that wrongful death claimants are bound by agreements to arbitrate medical malpractice claims entered into between the decedent and a health care provider pursuant to section 1295, “at least when ... the language of the agreement manifests an intent to bind [the third party wrongful death] claimants.” (Ruiz, supra, 50 Cal.4th at pp. 841, 849.)
Ruiz is based squarely on section 1295, which governs agreements to arbitrate professional negligence or medical malpractice claims in medical services contracts with health care providers. As explained in Ruiz: “ ‘Section 1295 was enacted as part of the Medical Injury Compensation Reform Act of 1975 (MICRA). . . . The purpose of section 1295 is to encourage and facilitate arbitration of medical malpractice disputes,’ ” because the arbitration of these disputes “furthers MICRA’s goal of reducing costs in the resolution of malpractice claims and therefore malpractice insurance premiums.” (Ruiz, supra, 50 Cal.4th at pp. 843-844, quoting Reigelsperger v. Siller (2007)
The Ruiz court reasoned that, though wrongful death claims are personal to the heir and compensate the heir for his or her own pecuniary loss resulting from the loss of the decedent (Ruiz, supra,
Defendants maintain that the rationale of Ruiz applies with equal force to wrongful death claims against RCFE’s particularly when, as here, the decedent agreed to arbitrate her claims against the RCFE, the agreement is intended to bind heirs, and the heirs assert wrongful death claims based on the decedent’s claims against the RCFE. We disagree. For one thing, the arbitration clause in Barcenas’s residency agreement with Sunrise Senior Living, Inc., is not manifestly intended to bind third party wrongful death claimants. Rather, the clause is directed solely to “your” claims, that is, Barcenas’s claims, and does not mention or allude to wrongful death or other third party claims. And in context, the statement that the arbitration clause “binds all parties to the Agreement and their spouse, heirs, representatives, executors, administrators, successors, and assigns as applicable” means only that the clause is binding on persons who would assert survivor claims on behalf of Barcenas.
More generally, we disagree that Ruiz should be extended to arbitration agreements not governed by section 1295, or that are entered into with a person other than a health care provider for claims other than medical malpractice. Defendants point out that an RCFE “is an extension of a health care facility,” in that “[i]t offers varying levels and intensities of care and supervision ... to enable elderly individuals to live independently. (Health &
Section 1295 includes safeguards designed to ensure that the patient will make an informed decision in agreeing to arbitration. The statute provides that an arbitration provision in a contract for medical services must appear in the first article of the contract, and be stated in the language prescribed in the statute. (§ 1295, subd. (a).) The statute also requires that a notice, set forth in 10-point boldface red type, be set forth immediately above the signature line warning the patient that by signing the agreement he or she is giving up his or her right to a jury trial on any issue of medical malpractice. (Id.., subd. (b).) The arbitration clause in Barcenas’s residency agreement with Sunrise Senior Living, Inc., met neither of these requirements.
Nor is there any statutory analog to section 1295, applicable to RCFE’s, or to claims other than professional negligence, that is designed to facilitate informed decisionmaking on the part of the resident in entering into the arbitration agreement as section 1295 does for persons who agree to arbitrate medical malpractice claims against licensed health care providers. Thus, with RCFE’s there is a heightened danger, not present in the medical malpractice or health care provider context, that a person may enter into an arbitration agreement without knowingly waiving his or her right to a jury trial on their health care-related claims or their heirs’ derivative wrongful death claims.
The court in Bush v. Horizon West (2012)
Like Ruiz, Herbert involved professional negligence and wrongful death claims governed by section 1295. There, “ ‘the decedent husband was married and had eight children, three of whom were adults. The decedent, his wife, and their five minor children belonged to a group health plan, but the
As stated in Ruiz'. “Also critical to the Herbert court’s determination was the enactment of section 1295, providing for arbitration of ‘professional negligence’ claims, including wrongful death.” (Ruiz, supra,
Fitzhugh and Buckner, which were decided before Ruiz, distinguished Herbert as involving multiple heirs (adult and minor children of the decedent) who would have split their wrongful death claims between different forums. (Fitzhugh, supra,
Apparently, one of the two arbitration agreements under consideration in Fitzhugh was an agreement to arbitrate medical malpractice claims against the convalescent care facility pursuant to section 1295. (Fitzhugh, supra,
C. The Trial Court Did Not Abuse Its Discretion in Refusing to Compel Arbitration Based on the Possibility of Conflicting Rulings on Common Questions of Law and Fact in the Event the Survivor Claims, But Not the Wrongful Death Claim, Were Ordered to Arbitration (§ 1281.2(c))
Lastly, defendants claim the trial court abused its discretion in refusing to compel arbitration on the ground there was a danger of inconsistent rulings on common questions of law or fact if the survivor claims but not the wrongful death claim were ordered to arbitration. (§ 1281.2(c).) There was no abuse of discretion.
Indeed, if the survivor claims are ordered to arbitration but Daniels’s wrongful death claim was not, there is a possibility of inconsistent rulings on the claims given that they are based on the allegation that Barcenas received inadequate care at Sunrise. (Birl v. Heritage Care, LLC (2009)
Defendants point out that, as stated in Laswell, “the presence of a nonarbitrable cause of action is not sufficient by itself to invoke the trial court’s discretion to deny arbitration under . . . section 1281.2, subdivision (c) . . . .” (Laswell, supra,
Both Laswell and RN Solution are distinguishable because neither involved a third party to the arbitration agreement for purposes of Code of Civil Procedure section 1281.2(c). (Laswell, supra, 189 Cal.App.4th at pp. 1406-1408; RN Solution, supra, 165 Cal.App.4th at pp. 1519-1521.) Given the absence of a third party in Laswell, the court concluded that the plaintiff’s attempt to avoid arbitration based on her assertion of a nonarbitrable claim for statutory remedies, including attorney fees and costs pursuant to Health and Safety Code section 1430, subdivision (b), was insufficient to avoid arbitration. (Laswell, supra, at p. 1409.) The court also noted out that the nonarbitrable statutory claim was based on the same allegations of improper care as the plaintiff’s arbitrable claims and could be litigated in court following the arbitration. (Ibid.) Thus, the nonarbitrable claim in Laswell did not present a danger of inconsistent rulings but could have been easily tried following the arbitration of the plaintiff’s elder abuse and related claims.
Here, by contrast, Daniels is a third party to the arbitration agreement, and the trial court reasonably determined there was a danger of inconsistent rulings of fact or law if the survivor claims were ordered to arbitration but the wrongful death claim was not.
Like Laswell, RN Solution involved no third parties but did involve arbitrable and nonarbitrable claims. (RN Solution, supra, 165 Cal.App.4th at pp. 1517, 1519-1521.) Given that there were no third parties, the RN Solution court concluded that the trial court erroneously refused to compel arbitration of the arbitrable claims pursuant to the “third party provisions of section 1281.2(c).” (Id. at p. 1521.) Instead, the trial court “should have first determined the arbitrable and nonarbitrable claims alleged in the complaint, ordered all of the arbitrable claims to arbitration, and stayed all such claims pending arbitration. The court would then have had discretion to delay its order to arbitrate the arbitrable claims under section 1281.2(c), only if it first determined that the adjudication of the nonarbitrable claims in court might make the arbitration unnecessary. Absent that determination, the arbitrable claims would proceed to arbitration and the nonarbitrable claims would continue to be litigated in court unless a party moved successfully pursuant to section 1281.4, to stay further litigation of such nonarbitrable claims.” (Id. at pp. 1521-1522, fns. omitted, italics added.) It is in this context—the absence of a third party and the trial court’s lack of authority to refuse to order claims to arbitration under “the third party provisions” of section 1281.2(c)—that the court’s comments in RN Solution must be understood.
The order denying defendants’ petition to compel arbitration is affirmed. Daniels shall recover her costs on appeal.
Ramirez, P. J., and Hollenhorst, J., concurred.
A petition for a rehearing was denied January 31, 2013, and appellants’ petition for review by the Supreme Court was denied May 1, 2013, S208616.
Notes
In addition to Sunrise Senior Living, Inc., defendants include Sunrise Senior Living Services, Inc., doing business as Sunrise of Hemet, Sunrise Senior Living Management, Inc., Eight Pack Management Corp., and Kent Goforth. The complaint alleges that defendants collectively owned and operated Sunrise of Hemet, directed the conduct complained of in the complaint, and acted as the agents of each other in committing the acts alleged in the complaint.
An RCFE is a housing arrangement chosen voluntarily by the resident where 75 percent of the residents are 60 years of age or older, and where varying levels of care and supervision are provided. (Cal. Code Regs., tit. 22, § 87101, subd. (r)(5).)
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
The full text of the arbitration clause states: “By entering into this Agreement, you agree that any and all claims and disputes arising from or related to this Agreement or to your residency, care or services at this Community shall be resolved by submission to neutral, binding arbitration; except that any claim involving unlawful detainer actions (eviction) or any claims that are brought in small claims court shall not be subject to arbitration unless both parties agree to arbitrate such proceedings. Both parties give up their constitutional rights to have any such dispute decided in a court of law before a jury, and instead accept the use of arbitration. The arbitration shall be conducted in [Riverside] County, California, by a single neutral arbitrator selected as provided in the California Code of Civil Procedure, unless otherwise mutually agreed. In reaching a decision, the arbitrator shall prepare findings of fact and conclusions of law. Each party shall bear its own costs and fees in connection with the arbitration. This arbitration clause binds all parties to this Agreement and their spouse, heirs, representatives, executors, administrators, successors, and assigns, as applicable. After termination of this Agreement, this arbitration clause shall remain in effect for the resolution of all claims and disputes that are unresolved as of that date.”
Section 1281.2 provides that: “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: [ID ... [ID
“(c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact. For purposes of this section, a pending court action or special proceeding includes an action or proceeding initiated by the party refusing to arbitrate after the petition to compel arbitration has been filed, but on or before the date of the hearing on the petition. This subdivision shall not be applicable to an agreement to arbitrate disputes as to the professional negligence of a health care provider made pursuant to Section 1295. [f] . . . [ID
“If the court determines that a party to the arbitration is also a party to litigation in a pending court action . . . with a third party as set forth under subdivision (c) herein, the court (1) may refuse to enforce the arbitration agreement and may order intervention or joinder of all parties in a single action . . . ; (2) may order intervention or joinder as to all or only certain issues; (3) may order arbitration among the parties who have agreed to arbitration and stay the pending court action . . . pending the outcome of the arbitration proceeding; or (4) may stay arbitration pending the outcome of the court action . . . .”
Subdivision (a) of section 1295 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 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 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.’ ”