Avila v. S. Cal. Specialty Care, Inc.

On the signature page, immediately prior to the signature area, there is a statement pursuant to section 1295, subdivision (b) stating that by signing, the signator is "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." The signature line under "name of patient" was stamped "unable to sign," and the signature was Alex's, followed by the word "son." (Original capitalization omitted.) It was also signed by Alex under a statement regarding his certification that he was authorized to act as Antonio's agent.

According to the complaint, Antonio died within five days of admission as a result of Kindred's neglect. A dislodged feeding tube began infusing into the throat and/or esophagus instead of the stomach, and Antonio's impaired gag reflex was unable to clear his lungs. He aspirated, resulting in cardiopulmonary arrest and rapid decline until his death.

In March 2016, the initial complaint was filed on behalf of Antonio, "by and through his successor-in-interest" Alex, and individually on Alex's

MICRA or Not MICRA

A key issue in this case is whether Alex is bound by the agreement. Defendants concede that Alex did not sign the agreement in his individual capacity, but as Antonio's agent. But they argue that nonetheless, the wrongful death claim brought in his personal capacity is subject to arbitration pursuant to section 1295.

Section 1295 is part of California's Medical Injury Compensation Reform Act (MICRA). It created certain requirements for arbitration agreements of "any dispute as to professional negligence of a health care provider." (§ 1295, subd. (a).) It defines "professional negligence" as "a negligent act or omission to act by a health care provider in the rendering of professional services, which act or omission is the proximate cause of a personal injury or wrongful death, provided that such services are within the scope of services for which the provider is licensed and which are not within any restriction imposed by the licensing agency or licensed hospital." (§ 1295, subd. (g)(2).)

Carving out an exception to the general rule that arbitration agreements must be the subject of consent rather than compulsion, in Ruiz v. Podolsky (2010) 50 Cal.4th 838 , 849, 114 Cal.Rptr.3d 263 , 237 P.3d 584 ( Ruiz ), the California Supreme Court held that section 1295 permitted patients who consented to arbitration to bind their heirs in actions for wrongful death. (

The Court of Appeal affirmed, rejecting the argument that Ruiz required arbitration of the independent wrongful death claim. " 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." ( Daniels , supra , 212 Cal.App.4th at p. 682, 151 Cal.Rptr.3d 273 ; see also Herbert v. Superior Court (1985) 169 Cal.App.3d 718 , 215 Cal.Rptr. 477 .) Defendants argue vociferously that Daniels is irrelevant because the defendant in that case was not a licensed health care provider. We disagree. What matters is not the license status of the defendant, but the basis of the claims as pleaded in the complaint. If the primary basis for the wrongful death claim sounds in professional negligence as defined by MICRA, then section 1295 applies. If, as plaintiffs claim here, the primary basis is under the Elder Abuse and Dependent Adult Civil Protection Act ( Welf. & Inst. Code, § 15600 et seq. ) (the Act), then section 1295 does not apply and neither does Ruiz ' s exception to the general rule that one who has not consented cannot be compelled to arbitrate.

DISPOSITION

The order denying defendants' motion to compel arbitration is affirmed. Plaintiffs are entitled to their costs on appeal.

WE CONCUR:

ARONSON, J.

THOMPSON, J.

In 2007, Antonio executed California's statutory power of attorney form, naming his son, Alex, as his agent. In March 2015, Antonio, age 87 at the time, was transferred from another facility to Kindred, a long-term acute care hospital, suffering from various conditions, including sepsis and chronic renal failure.

The next day, after Antonio had begun receiving care, Alex was presented with a stack of documents, including a document entitled "Voluntary Alternative Dispute Resolution (ADR) Agreement" (the agreement). Alex signed the agreement on Antonio's behalf.

The agreement provided for arbitration after mediation, with "submission to arbitration as provided by California law." It also refers to section 1281.6 (court appointment of an arbitrator if the parties cannot agree) and Evidence Code section 1157 with regard to confidentiality of peer review proceedings.

The agreement stated "any dispute as to medical malpractice," in addition to "any legal claim or civil action arising out of or relating to your hospitalization" was subject to arbitration. "This ADR agreement

In July, Kindred filed the instant petition to compel arbitration and motion to stay. They argued there was a written agreement between plaintiffs and defendants providing for arbitration of all disputes, and plaintiffs had refused their demand. Kindred argued, among other things, that the Federal Arbitration Act ( 9 U.S.C. § 1 , et seq. (FAA) ) applied to the agreement, that no traditional defenses to contract law applied, and the agreement was enforceable as to Alex as well as to Antonio. Defendants also contended the agreement was enforceable under California law as well as the FAA.

In response, plaintiffs argued the agreement was unconscionable, and the defendants had waived their right to arbitrate by their unreasonable delay. They further argued that Alex was not a signatory to the agreement, which was unenforceable against him, and the presence of his nonarbitrable wrongful death claim created the risk of inconsistent rulings. Accordingly, they requested the trial court, in an exercise of discretion, to retain jurisdiction. Defendants filed a reply in due course.

The trial court initially issued a tentative decision granting defendants' motion, but after hearing argument, took the matter under submission. The court's final order denied the motion, concluding defendants had failed to show a valid arbitration agreement with respect to Alex. The court exercised its discretion under section 1281.2, subdivision (c), to refuse to order arbitration of the remaining claims, citing the risk of inconsistent rulings.

Defendants now appeal.

DISCUSSION

Standard of Review

" ' "There is no uniform standard of review for evaluating an order denying

As noted above, the agreement here does not even mention the FAA, much less expressly adopt its procedural rules. Accordingly,

The question, then, is whether Ruiz is controlling here, and we must therefore determine whether this case is about "professional negligence," as defined by MICRA, or something else. Ruiz 's focus was on section 1295 and the intent behind it. ( Ruiz , supra , 50 Cal.4th at pp. 843-844, 849-854, 114 Cal.Rptr.3d 263 , 237 P.3d 584 .) The court was "persuaded that section 1295, construed in light of its purpose, is designed to permit patients who sign arbitration agreements to bind their heirs in wrongful death actions." ( Id. at p. 849, 114 Cal.Rptr.3d 263 , 237 P.3d 584 .) Not only did "section 1295, subdivision (a) contemplate[ ] arbitration 'of any dispute as to professional negligence of a health care provider[,]' " including wrongful death, but it "was part of MICRA's efforts to control the runaway costs of medical malpractice ... by promoting arbitration of malpractice disputes...." ( Ibid . )

In Daniels , the plaintiff sued a residential care facility (as distinguished from a health care facility, as here) in her personal capacity. She alleged causes of action for wrongful death, elder abuse, and related claims. She alleged the facility had failed to properly care for her 92-year-old mother and caused her mother's death. The

"Neglect includes the failure to assist in personal hygiene, or in the provision of food, clothing, or shelter; the failure to provide medical care for physical and mental health needs; the failure to protect from health and safety hazards; and the failure to prevent malnutrition or dehydration." ( Sababin v. Superior Court (2006) 144 Cal.App.4th 81 , 88, 50 Cal.Rptr.3d 266 .) Under the Act, neglect " 'refers not to the substandard performance of medical services but, rather, to the "failure of those responsible for attending to the basic needs and comforts of elderly or dependent adults, regardless of their professional standing, to carry out their custodial obligations." [Citation.] Thus, the statutory definition of "neglect" speaks not of the undertaking of medical services, but of the failure to provide medical care.' " ( Id. at p. 89, 50 Cal.Rptr.3d 266 .)

Plaintiffs, within the limits of established law, are essentially free to plead their case as they choose. They chose to plead a cause of action under the Act, and they did so successfully. The fact that they could have also pleaded a claim for medical malpractice, had they wished to do so, is irrelevant. Accordingly, we conclude the plaintiffs' claim is not one within the ambit of section 1295, and therefore, Ruiz 's holding does not apply. We next turn to the question of whether Alex actually agreed to arbitrate.

Applicability of Agreement to Alex

Having determined that section 1295 does not apply, we look to the general

In California, a wrongful death claim is an independent claim. "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.' " ( Horwich v. Superior Court (1999) 21 Cal.4th 272 , 283, 87 Cal.Rptr.2d 222 , 980 P.2d 927 .)

In Daniels, the court rejected any claim that signing an arbitration agreement as agent gave the agent's consent to arbitrate independent claims, including a claim for wrongful death. "Because Daniels signed the residency agreement solely as agent and not in her personal capacity, there is no basis to infer that Daniels agreed to arbitrate her wrongful death claim. In context, the provision making the arbitration clause binding on heirs means only that the duty to arbitrate the survivor claims is binding on [the mother] and other persons who would assert the survivor claims on [the mother's] behalf.... The agreement does not indicate an intent to bind third parties with claims independent of the survivor claims, such as wrongful death claimants." ( Daniels , supra , 212 Cal.App.4th at p. 681, 151 Cal.Rptr.3d 273 ; see Monschke v. Timber Ridge Assisted Living, LLC (2016) 244 Cal.App.4th 583 , 587, 197 Cal.Rptr.3d 921 .)

Daniels relied on Fitzhugh v. Granada Healthcare & Rehabilitation Center, LLC (2007) 150 Cal.App.4th 469 , 58 Cal.Rptr.3d 585 ( Fitzhugh ). In that case, the court rejected the defense contention that signing an arbitration agreement as an agent also constituted an agreement to arbitrate in a personal capacity. In that case, Ruth Fitzhugh was admitted to a health care facility. Her husband George Fitzhugh signed two arbitration agreements as her " 'Legal Representative/Agent.' " ( Id. at pp. 471-472, 58 Cal.Rptr.3d 585 .) Each of the agreements stated: " 'This arbitration agreement binds the parties hereto, including the heirs, representatives, executors, administrators, successors, and assigns of such parties.' " ( Id . at p. 472, 58 Cal.Rptr.3d 585 .) After Ruth died, George sued the facility for wrongful death (among other causes of action). ( Id. at pp. 471-472, 58 Cal.Rptr.3d 585 .)

The court held that George was not required to arbitrate his wrongful death cause of action. "It is irrelevant to the wrongful death cause of action whether George Fitzhugh may have signed the arbitration agreements as the decedent's 'legal representative/agent.' Because there is

Such is the case here. There is simply no evidence that when Alex signed the agreement as his father's agent, he had any intent to waive his right to a jury trial for any personal claims. Accordingly, we find the trial court did not err by finding that no agreement to arbitrate existed as to Alex.

Exercise of Discretion to Stay

The trial court ruled: "Even if decedent and his heirs are bound by the arbitration agreement for survivor claims, the court exercises its discretion to 'refuse to enforce the arbitration agreement.' [Citation.] Compelling arbitration of the survivor claims would unreasonably risk 'conflicting rulings on a common issue of law or fact.' [Citations.]" As noted above, we review this issue for abuse of discretion. ( Acquire , supra , 213 Cal.App.4th at p. 971, 153 Cal.Rptr.3d 135 ; Daniels , supra , 212 Cal.App.4th at p. 680, 151 Cal.Rptr.3d 273 .)

Defendants first argue, once again, that section 1295 makes section 1281.2, subdivision (c), inapplicable. But as we already discussed, the provisions of MICRA do not apply to this case. We therefore reject this argument.

As to the exercise of the court's discretion, section 1281.2, subdivision (c), permits a stay if: " 'A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party ... aris[ing] 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.' " ( Acquire , supra , 213 Cal.App.4th at pp. 967-968, 153 Cal.Rptr.3d 135 .) All three requirements must be satisfied before section 1281, subdivision (c), may be used to deny a motion to compel arbitration. ( Id . at p. 968, 153 Cal.Rptr.3d 135 .)

Here, all three factors were met. Both parties are litigants in both the survivorship and wrongful death claims. Those claims involve the same set of operative facts. If the survivorship claims were arbitrated while the wrongful death claim was litigated, there is a strong possibility of inconsistent rulings. The courts in Daniels , supra , 212 Cal.App.4th at page 680, 151 Cal.Rptr.3d 273 , and Fitzhugh , supra , 150 Cal.App.4th at page 476, 58 Cal.Rptr.3d 585 , each reached the same conclusion. We find, accordingly, no abuse of the court's discretion.

Public Policy

Finally, defendants argue "public policy" supports sending the case to arbitration. While the law favors arbitration as an expeditious and cost-effective way to resolve disputes, consent of the parties is required. (See