Opinion
No. 1 CA-CV 19-0854
11-24-2020
PAULA COOPER, Plaintiff/Appellee, v. YOUNGTOWN HEALTH INC., et al., Defendants/Appellants.
COUNSEL Jeffrey L. Victor, PC, Scottsdale By Jeffrey L. Victor Counsel for Plaintiff/Appellee Ensign Services Inc, Higley By Michael J. Ryan, Michael S. Redhair Counsel for Defendants/Appellants
NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
Appeal from the Superior Court in Maricopa County
No. CV2019-053020
The Honorable Theodore Campagnolo, Judge
REVERSED AND REMANDED
COUNSEL
Jeffrey L. Victor, PC, Scottsdale
By Jeffrey L. Victor
Counsel for Plaintiff/Appellee
Ensign Services Inc, Higley
By Michael J. Ryan, Michael S. Redhair
Counsel for Defendants/Appellants
MEMORANDUM DECISION
Presiding Judge Jennifer M. Perkins delivered the decision of the Court, in which Judge David B. Gass and Judge Michael J. Brown joined.
PERKINS, Judge:
¶1 Youngtown Health Inc. ("Youngtown") appeals from a superior court ruling denying its motion to compel arbitration. The court declined to enforce the arbitration agreement because Youngtown did not sign it. For the following reasons, we reverse and remand.
FACTUAL AND PROCEDURAL HISTORY
¶2 Michael Buschell suffered from numerous physical ailments including chronic respiratory failure and paraplegia. Buschell was admitted to Sunview Health and Rehabilitation Center ("Sunview"), a nursing care facility managed by Youngtown, for skilled nursing and rehabilitation.
¶3 Four days after Buschell's admission, a Sunview employee presented Paula Cooper, Buschell's wife, with an admission packet containing numerous documents. The admission packet included a document entitled "Agreement to Arbitrate" ("Agreement"). The Agreement described with specificity the disputes the parties agreed to arbitrate, stated rules and regulations for arbitration, and explained that these conditions were voluntary and not a precondition to receiving medical treatment.
¶4 The Agreement provided several spaces at the end of the document for the resident, or a legal representative of the resident, and an administrator or designee to print their names, sign, and date. The Agreement directed a signing legal representative to also sign an acknowledgement provision affirming her legal authority to bind the resident ("Acknowledgement Provision").
¶5 Because Buschell's paraplegia rendered him unable to sign the Agreement himself, a Sunview employee printed Buschell's name in the resident portion of the Agreement. Cooper listed herself as Buschell's legal representative by signing her name and the date in the spaces allotted for a resident's legal representative before returning the Agreement to Sunview.
In the signature line next to her signature as legal representative, however, Cooper wrote only her first name. Cooper did not sign the Acknowledgement Provision affirming her legal authority to bind Buschell. The signature line designated for an administrator or designee remained blank.
¶6 After Buschell died, Cooper filed a lawsuit as personal representative of Buschell's estate alleging various claims against Youngtown. Youngtown moved to compel arbitration based on the Agreement. Cooper countered that the Agreement was procedurally and substantively unconscionable. Specifically, Cooper argued that the Agreement was unenforceable because (1) Sunview never signed the agreement despite a signature line for a Sunview administrator; (2) Cooper did not sign her full name on the Agreement; (3) Cooper did not sign the Acknowledgement Provision; and (4) the Agreement was substantively unconscionable.
¶7 The superior court denied Youngtown's motion to compel arbitration based on the Sunview Administrator's failure to sign the Agreement and declined to reach Cooper's additional arguments. Youngtown timely appealed. This court has jurisdiction under A.R.S. § 12-2101(A)(1).
DISCUSSION
¶8 We review the denial of a motion to compel arbitration de novo. Sec. Alarm Fin. Enters., L.P. v. Fuller, 242 Ariz. 512, 515, ¶ 9 (App. 2017). "We must defer, absent clear error, to the factual findings upon which the trial court's conclusions are based." Harrington v. Pulte Home Corp., 211 Ariz. 241, 246-47, ¶ 16 (App. 2005).
¶9 Contract law governs the validity of the agreement. The fundamental prerequisite to arbitration is the existence of an actual agreement or contract to arbitrate. Escareno v. Kindered Nursing Centers West, L.L.C., 239 Ariz. 126, 129, ¶ 7 (App. 2016) The enforceability of an agreement to arbitrate is determined by principles of general contract law. Broemmer v. Abortion Servs. of Phoenix, Ltd., 173 Ariz. 148, 150 (1992). An enforceable arbitration agreement must therefore contain all the elements of a contract, to wit: offer, acceptance, and consideration. See Tabler v. Indus. Comm'n, 202 Ariz. 518, 520, ¶ 8 (App. 2002).
¶10 The superior court found the Agreement unenforceable because it did not satisfy the elements of a binding contract. Specifically, the court found that Sunview never accepted the Arbitration Agreement
because Sunview did not sign the document. The court reasoned that "[s]uch a weighty waiver requires the signatures of both parties for it to be enforceable." We disagree.
¶11 The superior court's finding appears to rely on the conclusions that the Agreement did not amount to an offer and Sunview was not an offeror. Otherwise, Cooper's acceptance of the offer would form an enforceable contract even absent Sunview's signature. See Nationwide Res. Corp. v. Massabni, 134 Ariz. 557, 563 (App. 1982) (manifestation of acceptance to the offeror forms a contract). The analysis thus pivots on whether the Agreement presented by Sunview to Cooper amounted to an offer.
¶12 An offer is "a manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to the bargain is invited and will conclude it." K-Line Builders, Inc. v. First Fed. Sav. & Loan Ass'n, 139 Ariz. 209, 212 (App. 1983) (citing Restatement (Second) of Contracts § 24). Whether an offer exists depends on whether a reasonable person understands he received an offer and that by accepting the offer he will bind the offeror. See Ballesteros v. Am. Standard Ins. Co. of Wisconsin, 226 Ariz. 345, 348, ¶ 13 (2011).
¶13 Here, Youngtown manifested its willingness to forfeit its right to a jury trial in exchange for Cooper doing the same by presenting her with the Agreement. As the party initiating the bargain, the superior court found Youngtown "clearly . . . wanted any disputes taken to arbitration." And consistent with Youngstown's conduct in retaining the Agreement on file despite not signing it, Youngtown believed itself to be bound by the Agreement.
¶14 This belief is consistent with the language of the Agreement. After explaining the right to a jury or bench trial that the signor agreed to forfeit, the final provision preceding the signature lines states:
NOTICE: BY SIGNING THIS ARBITRATION AGREEMENT, YOU ACKNOWLEDGE THAT YOU UNDERSTAND THE TERMS OF THIS ARBITRATION AGREEMENT. FURTHER, BY SIGNING THIS ARBITRATION AGREEMENT, YOU ARE AGREEING TO HAVE ANY CLAIMS ARISING OUT OF ANY DISPUTE BETWEEN YOU AND THE FACILITY, . . . , DECIDED BY ARBITRATION AND YOU ARE
GIVING UP YOUR RIGHT TO A JURY OR COURT TRIAL.
¶15 This language explicitly notifies residents (or legal representatives) they will be bound by its terms upon signing. There is no conditional language requiring Youngtown to sign before the Agreement becomes valid.
¶16 We reject the superior court's conclusion that enforceable arbitration agreements require the signatures of both parties. In 2010, the Arizona legislature adopted the Revised Uniform Arbitration Act ("AZ-RUAA"). See A.R.S. §§ 12-3001 to -3029. The AZ-RUAA echoes Arizona case law that an agreement to arbitrate "is valid, enforceable and irrevocable except on a ground that exists at law or in equity for the revocation of a contract." See A.R.S. § 12-3006(A). The absence of a signature is not, by itself, a ground to find an arbitration agreement unenforceable. See, e.g., Serafin v. Balco Props. Ltd., LLC, 235 Cal. App. 4th 165, 176 (Cal. Ct. App. 2015) ("[I]t is not the presence or absence of a signature [on an agreement] which is dispositive; it is the presence or absence of evidence of an agreement to arbitrate which matters.") (citation omitted); cf. All State Home Mortg., Inc. v. Daniel, 187 Md. App. 166, 181 (Md. Ct. Spec. App. 2009) (both signatures are required when the agreement contains explicit language that "both parties" must sign as a "condition precedent to the formation of the contract").
¶17 Cooper argues the Agreement contains language making it "mutually optional" and thus unenforceable absent Sunview's signature. According to Cooper, Sunview needed to "opt into" the Agreement before it became enforceable. We disagree. It is true that the second line of the Agreement heading reads: "(OPTIONAL FOR RESIDENT AND FACILITY)." And the Agreement contains a provision that states, "[t]he Parties understand that, by signing [the Agreement]," they agree to forfeit their rights to a jury trial. But no express language requires Sunview to sign as a condition precedent to the Agreement's enforceability. See Hickerson v. Pool Corp., No. 19-CV-02229, 2020 WL 5016938, at *4 (D. Colo. Aug. 25, 2020) (no condition precedent exists without explicitly conditional language).
¶18 We determine the meaning of a contract as a whole document, not by taking up different sections separately. Tech. Constr. Inc., v. Kingman, 229 Ariz. 564, 568, ¶ 10 (App. 2012) (courts should interpret a contract so as to reconcile and give effect to all terms if reconciliation can be accomplished by any reasonable interpretation). Sunview exercised its option and manifested its intent to forfeit the right to a jury trial by presenting the
Agreement to Cooper, who in turn had a choice whether to sign. The Agreement was a valid offer and contains no explicit language requiring Sunview to sign the document. Thus, the absence of a signature by a Sunview representative does not render the Agreement unenforceable. This interpretation reasonably harmonizes the heading of the agreement with the unilateral language of the final provision directed at a signing resident or legal representative.
¶19 Because the superior court found the Agreement unenforceable, it did not consider Cooper's other arguments. Cooper argues the Agreement was unenforceable because she never signed the Agreement, she never signed the Acknowledgement Provision of the Agreement, and the Agreement was substantively unconscionable. Whether Cooper's conduct related to the signature page sufficiently manifested her intent to be bound is a question of fact. See Tabler, 202 Ariz. at 521, ¶ 12. The superior court must first address these disputed issues.
¶20 Cooper requests attorneys' fees as sanctions under A.R.S. §§ 12-341.01, -349. We decline to award attorneys' fees because nothing in this appeal merits sanctions.
CONCLUSION
¶21 We reverse the superior court's finding that the Agreement is unenforceable merely because Sunview failed to sign the document. We therefore remand this case to the superior court to resolve the remaining disputes.