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Northern Health Facilities v. Batz

United States District Court, Third Circuit

January 23, 2014

NORTHERN HEALTH FACILITIES, d/b/a TREMONT HEALTH AND REHABILITATION CENTER, Plaintiff,
v.
FAITH BATZ, Individually and as Administratrix of the Estate of John Batz, Deceased, Defendant.

MEMORANDUM OPINION

ROBERT D. MARIANI, District Judge.

I. Procedural History

Presently before the Court is a Motion to Compel Arbitration in an underlying state action arising from the death of federal Defendant's husband. ( See generally Pl.'s Mot. to Compel Arb., Doc. 2; see also Am. Compl., Doc. 11, Ex. J (underlying state complaint).)

According to Plaintiffs uncontradicted representations, on January 26, 2012, John Batz "became a resident of Tremont Health and Rehabilitation Center." (Brief in Supp. of Mot. to Compel Arb., Doc. 3, at 1.) Upon his admission to the Center, John's wife, Faith Batz, signed certain documents related to his admission, one of which was an Alternative Dispute Resolution ("ADR") Agreement. ( Id. at 2.) The Agreement provided in relevant part that "[t]he Parties voluntarily agree that any disputes covered by this Agreement (herein after referred to as "Covered Disputes") that may arise between the Parties shall be resolved exclusively by an ADR process that shall include mediation and, where mediation does not successfully resolve the dispute, binding arbitration." (Def.'s Resp. to Mot. to Compel Arb., Doc. 7, Ex. A., at 1 (Alternative Dispute Resolution Agreement).) Covered Disputes are defined as "any and all disputes arising out of or in any way related to this Agreement or to the Resident's stay at the Center that would constitute a legally cognizable cause of action in a court of law sitting in the Commonwealth of Pennsylvania, " including but not limited to "tort;... negligence; gross negligence; malpractice; death or wrongful death and any alleged departure from any applicable federal, state, or local medical, health care, consumer or safety standards." ( Id., Ex. A, at 2.) The Agreement further emphasized, in a paragraph requiring separate acknowledgment:

THE PARTIES UNDERSTAND, ACKNOWLEDGE, AND AGREE THAT BY ENTERING INTO THIS AGREEMENT THEY ARE GIVING UP THEIR CONSTITUTIONAL RIGHT TO HAVE THEIR DISPUTE DECIDED BY A COURT OF LAW OR TO APPEAL ANY DECISION OR AWARD OF DAMAGES RESULTING FROM THE ADR PROCESS EXCEPT AS PROVIDED HEREIN. THIS AGREEMENT GOVERNS IMPORTANT LEGAL RIGHTS. YOUR SIGNATURE BELOW INDICATES YOUR UNDERSTANDING OF AND AGREEMENT TO THE TERMS SET OUT ABOVE. PLEASE READ IT COMPLETELY, THOROUGHLY AND CAREFULLY BEFORE SIGNING.

( Id., Ex. A, at 4.) This paragraph was individually initialed by Faith Batz and by a representative of the Tremont Center, ( see id., Ex. A), and the full agreement was signed by the same, ( see id., Ex. A, at 5.)

In mid-February, while at the Tremont Center, John Batz allegedly suffered a deep tissue injury which deteriorated into "necrotizing fasciitis with Fourniers gangrene, " requiring transfer to a hospital and multiple operations. (Doc. 11, Ex. J, at ¶¶ 21-26.) "By March 5, 2012, [Batz] had developed a large open wound that extended from his sacrum to his perineum." ( Id., Ex. J, at ¶ 28.) At this point, Mr. Batz "was discharged from [the hospital] to home hospice where he died 8 days later on or about March 24, 2012." ( Id., Ex. J, at ¶ 29.) His wife then filed a state court action individually and as administratrix of his Estate.

The Tremont Center in turn filed this federal action to stay the state court proceedings and to compel Mrs. Batz to arbitrate. ( Id. at 8.) Tremont argued that by bringing an action in state court, Mrs. Batz "ignored the valid and enforceable ADR Agreement she executed on behalf of her husband, which obligated her, as the Adrninistratrix of her husband's estate, to resolve any disputes she had with the Center by using the ADR process in accordance with that ADR Agreement." (Doc. 3 at 3.)

On the basis of the memoranda that the parties have filed so far, there are two unresolved disputes concerning the Motion to Compel, to wit:

a. Whether ADR Agreement was properly executed when it was signed by Faith Batz, rather than John Batz, and
b. Whether the ADR Agreement is enforceable through a federal action to compel arbitration, either (i) according to its written terms or (ii) under the Pennsylvania Superior Court's recent decision in Pisano v. Extendicare Homes, Inc., 77 A.3d 651 (Pa.Super. Ct. 2013).

II. Analysis

a. Validity of Faith Batz's Signature[1]

As an initial matter, it is indisputable that John Batz did not sign the ADR Agreement, even though he is named as a party to it. ( See Doc. 7, Ex. A, at 1 ("This Alternative Dispute Resolution.. Agreement... is entered into by Extendicare Health Services, Inc. on behalf of its parents, affiliates, and subsidiaries including Tremont Health & Rehab Center..., a nursing facility, and John Batz, a Resident at the Center[.]").) The signature page clearly bears the signature of Faith Batz, above the signature lines "Legal Representative for Healthcare Decisions" and "Legal Representative for Financial Decisions, " respectively. ( Id., Ex. A, at 5.)

Under well-known agency principles, an agency relationship "arises when one person (a principal') manifests assent to another person (an agent') that the agent shall act on the principal's behalf and subject to the principal's control, and the agent manifests assent or otherwise consents so to act." Restatement (Third) of Agency § 1.01. "There are four grounds upon which a [factfinder] can conclude that an agency relationship exists and that the principal is bound by a particular act of the agent and liable to third parties on the basis thereof." Bolus v. United Penn Bank, 525 A.2d 1215, 1221 (Pa.Super. Ct. 1987). That is, an agency relationship can be based on (1) express authority, (2) implied authority, (3) apparent authority, or (4) authority that the principal is estopped from denying. Id. Indeed, the signature page of the ADR Agreement that Faith Batz signed in the spaces providing for execution by a "Legal Representative" expressly states that, if the Agreement is signed by a Legal Representative, "the representative certifies that the Center may reasonably rely upon the validity and authority of the Representative's signature based upon actual, implied or apparent authority to execute this Agreement as granted by the Resident." (Doc. 7, Ex. A, at 5.)

"Whether an agency relationship exists is a question of fact" that will vary from case to case. Bolus, 525 A.2d at 1221. Thus, even though Defendant cites cases where a principal did not grant authority to a purported agent sufficient to create an agency relationship, ( see Def.'s Resp. to Mot. to Compel Arb., Doc 7-1, at 2-4), such factual contingencies are not binding in the instant case.

On the contrary, in the instant case the Court has evidence of the following facts, from the sworn Affidavit of Nurse Jayne Kintzel, which Plaintiff provided in its Reply Brief to the Motion to Compel Arbitration. ( See generally Affidavit of Jayne Kintzel, LPN, Doc. 13, Ex. A.) Nurse Kintzel testifies that, upon meeting John Batz before his admission to the Tremont Center, she "noticed that Mr. Bat was blind." ( Id., Ex. A, at ¶ 6.) Subsequently, when she "attempted to present the [intake] documents, including the ADR Agreement, to Mr. Batz for his signature, he said that, since he cannot see, that his wife should sign for him." ( Id. , Ex. A, at ¶ 8.) Mrs. Batz subsequently reviewed and signed the documents. ( See id. at ¶¶ 9-11.) Moreover, because Mr. Batz was present throughout the entire time required for his wife to review and sign all of the intake documents, Nurse Kintzel believed that "Mr. Batz knew that his wife signed the paperwork related to his admission to Tremont for him and, to [Kintzel's] knowledge, he did nothing after she signed the documents on his behalf to indicate that she did not have his authority to do so." ( Id. , Ex. A, at ¶ 15)[2]

Because Kintzel's testimony was first raised in a reply brief, and because Defendant never sought leave to file a sur-reply, the Court ordered a conference call with counsel on January 22, 2014 to determine to what extent Kintzel's statements were in dispute. Counsel for the Defendant informed the Court that Defendant does not dispute the following facts: that John Batz was blind and had no other mental infirmities, ( see Unofficial Tr., Jan. 22, 2014, at 3:5-6); that John told Kintzel that his wife should sign the Agreement, ( see id. at 3:10-11); that Faith Batz had the opportunity to read and review the documents related to her husband's admission, and signed all such documents, ( see id. at 3:14, ...


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