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Cardinal v. Kindred Healthcare, Inc.

Superior Court of Pennsylvania

January 27, 2017

BRET CARDINAL, AS EXECUTOR FOR THE ESTATE OF CARMEN CARDINAL, DECEASED Appellee
v.
KINDRED HEALTHCARE, INC., AND PERSONACARE OF READING, INC., D/B/A KINDRED TRANSITIONAL CARE AND REHABILITATION-WYOMISSING, AND KINDRED NURSING CENTERS EAST, LLC, AND KINDRED HEALTHCARE OPERATING, INC., AND MONIQUE COLE, NHA Appellants

         Appeal from the Order Entered August 18, 2014 In the Court of Common Pleas of Berks County Civil Division at No(s): 13-23203

          BEFORE: PANELLA, J., LAZARUS, J., and PLATT, J. [*]

          OPINION

          LAZARUS, J.

         Kindred Healthcare, Inc., Personacare of Reading, Inc., d/b/a Kindred Transitional Care and Rehabilitation-Wyomissing, Kindred Nursing Centers East, LLC, Kindred Healthcare Operating, Inc., and Monique Cole, NHA (collectively, "Kindred"), appeal from the order entered in the Court of Common Pleas of Berks County, overruling Kindred's preliminary objections to the complaint filed by Bret Cardinal, Executor of the Will of Carmen Cardinal, Deceased ("Cardinal"). Upon careful review, we reverse.

         This action involves claims of negligence on the part of Kindred in relation to care rendered to Carmen Cardinal ("Decedent") during his stay as a patient at a Kindred facility. Cardinal filed a complaint on October 7, 2013, alleging claims of negligence, corporate negligence, custodial neglect and wrongful death. Kindred filed preliminary objections on November 5, 2013, seeking, inter alia, to enforce an arbitration agreement signed by Decedent upon admission to Kindred. Cardinal filed a response, in which he asserted that the agreement was "unenforceable, void, unconscionable, and/or a contract of adhesion." Plaintiff's Answer to Preliminary Objections, 11/25/13, at ¶ 4. Cardinal also claimed that the agreement "was signed under duress or by someone without proper legal authority." Id. The parties engaged in limited discovery on the issue of arbitration and filed supplemental briefs. Following oral argument, the trial court issued an order on August 18, 2013, overruling Kindred's preliminary objections and directing Kindred to file a response to Cardinal's complaint.

         This timely appeal follows, [1] in which Kindred raises the following issues for our review:[2]

1. Whether the [t]rial [c]ourt erred in overruling Kindred's preliminary objections seeking to enforce an [a]lternative [d]ispute [r]esolution [a]greement signed by [p]laintiff's [d]ecedent, Carmen Cardinal, who had the capacity to execute the ADR [a]greement on his own behalf?
2. Whether the [t]rial [c]ourt erred by failing to conclude that by signing various other medical-legal documents during his stay at Kindred, [p]laintiff is now estopped from disavowing the [a]greement now?
3. Whether the [t]rial [c]ourt erred in failing to apply the policies favoring arbitration contained in the Federal Arbitration Act, 9 U.S.C. §§ 1-16 ("FAA"), the Pennsylvania Uniform Arbitration Act ("PUAA"), and extensive case law interpreting same?
4. Whether the [t]rial [c]ourt erred in failing to conclude that the [a]greement itself sets forth in direct and understandable terms the material terms of [a]lternative [d]ispute [r]esolution?
5. Whether the [t]rial [c]ourt erred in its application of Pisano v. Extendicare Homes, Inc., 77 A.3d 651 (Pa. Super. 2013), appeal denied, 86 A.3d 233 (Pa. 2014), cert. denied, Extendicare Homes, Inc. v. Pisano, __U.S.__, 2014 WL 2207212 (U.S. June 30, 2014), in that there are no beneficiaries designated by the statute who can recover under the Wrongful Death Act, 42 Pa.C.S. § 8301(b), in this case?

Brief of Appellants, at 4-5.

         We begin by noting that our review of a claim that the trial court improperly denied preliminary objections in the nature of a petition to compel arbitration is limited to determining whether the trial court's findings are supported by substantial evidence and whether the trial court abused its discretion in denying the petition. Gaffer, 936 A.2d at 1112. As contract interpretation is a question of law, our review of the trial court's decision is de novo and our scope is plenary. Id., citing Bucks Orthopaedic Surgery Associates, P.C. v. Ruth, 925 A.2d 868, 871 (Pa. Super. 2007).

         Kindred's first two issues challenge the trial court's finding that Decedent lacked capacity to execute the arbitration agreement. Kindred argues that there is insufficient factual support in the record to support the court's conclusion and further asserts that Cardinal should be estopped from denying Decedent's capacity because Cardinal "seeks to impose a duty based on [the admissions agreement], yet claims[] that [Decedent] was incapable of understanding [other] documents [executed simultaneously] that contained legal concepts." Brief of Appellants, at 24.

         Arbitration agreements are matters of contract. Under Pennsylvania law, it is presumed that an adult is competent to enter into an agreement, and a signed document gives rise to the presumption that it accurately expresses the state of mind of the signing party. Estate of McGovern v. Com. State Employees' Ret. Bd., 517 A.2d 523, 526 (Pa. 1986). To rebut this presumption, the challenger must present evidence of mental incompetency which is clear, precise and convincing. Id. This burden of proof requires that

the witnesses must be found to be credible, that the facts to which they testify are distinctly remembered and the details thereof narrated exactly and in due order, and that their testimony is so clear, direct, weighty and convincing as to enable the [finder of fact] to come to a clear ...

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