Charles Walker, a physician, seeks to avoid being compelled to arbitrate a medical malpractice claim brought by the representative of a deceased patient, Karl Collyer. Walker treated Karl
While our courts have determined that under some circumstances a party who did not sign an arbitration agreement can take advantage of an agreement signed by an allied party to compel a signatory to arbitrate, we have not decided the question in the converse that is posed by this case: Can a signatory
Background. 1. Undisputed facts. Karl entered The Oaks for rehabilitation following a hip replacement at another health facility. At the time of his admission, Karl and the facility entered into a “Voluntary Agreement for Arbitration” (arbitration agreement). Karl signed the agreement, as did a representative of the facility (not Walker) on behalf of The Oaks. Walker asserts (and Collyer does not dispute) that he was not aware of the existence of the provision until the filing of this medical malpractice claim against him. The agreement includes the following broad arbitration provision:
“The parties agree that they shall submit to binding arbitration all disputes against each other and their agents, affiliates, governing bodies and employees arising out of or in any way related or connected to the Resident’s stay and care provided at the Facility, including but not limited to any disputes concerning alleged personal injury to the Resident caused by improper or inadequate care, including allegations of medical malpractice; any disputes concerning whether any statutory provisions relating to the Resident’s rights under Massachusetts law were violated; and any other dispute under Massachusetts or federal law based on contract, tort, or statute.”
The agreement also broadly defines the scope of the parties that it covers:
“It is the intention of the Facility and the Resident that this Arbitration Agreement shall inure to the benefit of andbind the Facility, its parents, affiliates, and subsidiary companies, owners, officers, directors, employees, successors, assigns, agents and insurers; and the Resident, his/her successors, assigns, agents, insurers, heirs, trustees, and representatives, including the personal representative or executor of his or her estate; and his/her successors, assigns, agents, insurers, heirs, trustees, and representatives.”
Walker works at The Oaks both as an attending physician and as subacute rehab program medical director. Walker served as Karl’s attending physician during his short stay at The Oaks. Walker conducted a physical examination of Karl the day after he was admitted to the facility and signed his admissions order. Walker also signed Karl’s discharge order three days later. The record does not show additional examinations or treatment between the initial examination and Karl’s discharge.
Walker’s role as the subacute rehab program medical director was governed by an agreement (contract) signed on December 18, 2006.
After receiving care in the facility for four days, Karl was discharged. He died less than three days later from bilateral pulmonary thromboemboli that had resulted from deep vein thrombosis (that is, blood clots that traveled to the lungs from elsewhere in the body).
2. Procedural history. On behalf of Karl’s estate and on her own behalf, Collyer brought an arbitration proceeding against Walker, as well as The Oaks and its parent company. This appeal pertains only to Collyer’s ability to compel Walker to resolve the dispute through arbitration.
Analysis. 1. Governing law. Because of the dearth of Massachusetts cases on point, we address first the governing law that we apply. Regardless whether the Massachusetts Arbitration Act, G. L. c. 251, §§ 1 et seq., or the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (2006), governs the underlying dispute (see, e.g., Feeney v. Dell Inc.,
Until the Supreme Judicial Court’s recent decisions in Johnson v. Kindred Healthcare, Inc.,
Other courts, particularly the Federal courts, have considered such situations, enumerating the circumstances in which a signatory can compel a nonsignatory to arbitrate. See, e.g., Thomson-CSF, S.A. v. American Arbitration Assn.,
2. Who determines arbitrability and how. The question whether Walker is bound by the arbitration agreement between Collyer
Here, we do not have the requisite evidence of intent. The Oaks and Collyer clearly and unmistakably agreed to arbitrate disputes between them. The arbitration agreement states:
“By signing this agreement, the resident agrees with the Facility that any dispute regarding (1) any services . . . ; (2) any dispute arising out of the diagnosis, treatment, or care of the resident, including the scope of this arbitration clause; or (3) the arbitrability of any claim or dispute, against whomever made (including, to the full extent permitted by applicable law, third parties who are not signatories to this agreement) shall be resolved by binding arbitration by the National Arbitration Forum . . .” (emphasis added).
3. Circumstances compelling arbitration. “[T]he superior court may stay an arbitration proceeding commenced or threatened if it finds that there is no agreement to arbitrate.” G. L. c. 251, § 2(b). When there is a dispute as to a material fact, “the judge conducts an expedited evidentiary hearing on the matter and then decides the issue.” McInnes v. LPL Financial, LLC,
“Absent advance consent to [a contractual] agreement, a party cannot be compelled to arbitrate a dispute.” Constantino v. Frechette,
Of the six bases for mandating arbitration listed above, Collyer argues that under theories of estoppel and agency, Walker is required to arbitrate.
a. Estoppel. Collyer argues that Walker is bound by estoppel to arbitrate this dispute. “[B]y knowingly exploiting [an] agreement, [a party is] estopped from avoiding arbitration despite having never signed the agreement.” Thomson-CSF,
In arguing that Walker benefited from the arbitration agreement, Collyer contends only that “Dr. Walker, should he have elected to enforce the arbitration provision, could avoid the uncertainty and expense of litigation and a jury trial. . . .” We assume without deciding that Walker could opt into the arbitration. See note 13, supra.-However, even assuming that Walker could avail himself of the arbitration agreement, that does not mean that he must. It appears Walker has determined, for whatever reason, that the arbitral forum does not benefit him in this case. The possibility of enforcing the arbitration agreement would provide Walker with some benefit, but this minimal benefit is not enough to compel him to arbitrate against his wishes.
In Deloitte Noraudit, the United States Court of Appeals for the Second Circuit held that the plaintiff was estopped from claiming that it was not bound by an arbitration clause because it had knowingly accepted the benefit of an agreement containing the arbitration clause by continuing to use the name “Deloitte” pursuant to that agreement and because it had failed to object to the arbitration provision when it became aware of it. 9
Walker’s situation is closer to several cases where the Federal courts have refused to bind a party through estoppel than it is to Deloitte Noraudit, supra. See, e.g., MAG Portfolio,
ii. Alternative form of estoppel. Nor does the alternative form of estoppel apply in this case. Courts applying the alternative form of estoppel have only allowed a nonsignatory to compel a signatory to participate in arbitration. See Thomson-CSF,
“Agency” is one of the well-established exceptions to the general rule that parties cannot be bound by an arbitration agreement they did not sign. See, e.g., Merrill Lynch,
The seminal cases that establish the agency exception pertain to the binding of a principal to arbitrate by virtue of the actions of an agent — not the reverse situation, which we find in this case. See, e.g., A/S Custodia v. Lessin Intl., Inc.,
A close reading of the contemporary cases confirms that the
Given this legal analysis, the factual dispute among the parties is immaterial. The parties dispute whether Collyer’s claims involve Walker only in his role as attending physician or also in his role as the subacute rehab medical director. They also dispute whether Walker was an agent of The Oaks in his medical director capacity — and thus covered by the arbitration agreement, according to Collyer’s reading. Because the applicable law only allows the binding of a principal by an agent’s actions rather than vice versa, it is immaterial whether Walker was actually an agent of The Oaks. Whether he was an agent or was solely a nonagent independent contractor, he cannot be compelled to arbitrate this dispute by virtue of any “ordinary principle” of agency law.
Alternatively, Collyer argues that Walker is bound by the
Conclusion. As in Thomson-CSF, the trial court and the arbitrator here “improperly extended the limited theories upon which [we are] willing to enforce an arbitration agreement against a nonsignatory.”
The judgment is reversed, and the case is remanded to the Superior Court for entry of a new judgment declaring that Walker is not bound by the “Voluntary Agreement for Arbitration” and may not be compelled to participate in the arbitration proceeding.
So ordered.
Notes
For the sake of clarity, we refer to Jennifer Collyer, in her capacity as administratrix of her deceased husband’s estate, as “Collyer,” and to the patient as “Karl.”
We acknowledge the amicus brief of the Professional Liability Foundation, Ltd.
Although Walker stated in his affidavit that he “had no further involvement in the care and treatment” of Karl after his initial examination, the parties dispute whether Walker also was responsible for Karl’s care in his capacity as subacute rehab program medical director. As will become clear in our discussion, however, this dispute is not as to a material fact.
The December, 2006, contract was amended on July 27, 2009. The amendments do not modify any provisions at issue here.
The arbitrator ordered as follows:
“For the reasons stated above [in the arbitrator’s memorandum and order dated January 9, 2012], the Arbitrator concludes, and it is ORDERED, that Charles G. Walker, M.D., is bound, under the terms of the parties’ ‘Voluntary Agreement for Arbitration,’ as a party respondent in this arbitration proceeding.”
General Laws c. 251, § 2(b), inserted by St. 1960, c. 374, § 1, provides:
“Upon application, the superior court may stay an arbitration proceeding commenced or threatened if it finds that there is no agreement to arbitrate. Such an issue, when in substantial and bona fide dispute, shall be forthwith and summarily determined, and if the court finds for the applicant it shall order a stay of arbitration; otherwise the court shall order the parties to proceed to arbitration.”
The parties do not question the appropriateness of our consideration of this appeal. In any event, we exercise our discretion to entertain it. See Smith v. Arbella Mut. Ins. Co.,
In Askenazy v. KPMG LLP,
Johnson resolved only the narrow question whether a duly authorized health care proxy’s signature on an arbitration agreement could be binding on the patient, her principal. 466 Mass, at 780. Concluding that an arbitration was not a health- care decision, the Supreme Judicial Court answered the question in the negative. Id. at 781. Given the holding of Johnson, Licata also considered other theories whereby the health care proxy’s signature on an arbitration agreement might bind his principal, concluding that, in those circumstances, the principal was not bound. 466 Mass, at 799-804.
The parties make no argument that Collyer, as administratrix of Karl’s estate, is not bound by the arbitration agreement he signed.
As we have noted, our courts have decided the mirror image question, whether a party who did not sign an arbitration agreement can take advantage of an agreement signed by an allied party to force a signatory to arbitrate. Compare Constantino v. Frechette,
The third-party beneficiary doctrine is similar to the estoppel basis except that courts look to different snapshots in time. E.I. DuPont de Nemours & Co. v. Rhone Poulenc Fiber & Resin Intermediates, S.A.S.,
Because we determine that, even if the arbitration agreement afforded Walker the right to compel some patient to arbitrate, that benefit would not be enough to estop him from seeking to escape arbitration here, we need not decide whether Walker would actually be able to compel a patient to arbitrate based on the language of the agreement. The question whether the agreement gave him those rights is immaterial.
As to the related theory that Walker could be compelled to arbitrate as a third-party beneficiary of the arbitration agreement, Collyer did not continue to press the argument in her postargument submission. Nevertheless, even assuming without deciding that Walker is a third-party beneficiary of the arbitration agreement between Collyer and The Oaks, as with the theory of direct benefits estoppel, courts are reluctant to compel a nonsignatory third-party beneficiary to arbitrate. See Bridas,
The question presented here also differs from that faced in Miller v. Cotter, supra, and Constantino v. Frechette, supra, as to whether nonsignatory employees can, if they wish, compel a patient-signatory to arbitrate pursuant to an agreement signed by their employer. See note 13, supra.
We note also that Interbras involves the ability of a nonsignatory to compel arbitration rather than, as here, the possibility that a nonsignatory would be compelled to arbitrate.
Collyer also argues that language in the arbitration agreement purporting to bind “directors” compels Walker to arbitrate by virtue of his role as subacute rehab medical director. Even assuming this refers to Walker in his capacity as a medical director, this language binds Walker — as a nonsignatory — no more than the language in the agreement purporting to encompass agents. The wording does nothing either to broaden these exceptions or to fit Walker into one of them.
Because we conclude that principles of agency and contract law do not allow Collyer to compel Walker to arbitrate this dispute, we need not consider Walker’s constitutional claim that compelling him to arbitrate without his consent would violate his right to a trial by jury.