Brown ex rel. Brown v. Genesis Healthcare Corp.

729 S.E.2d 217, 229 W. Va. 382, 2012 WL 2196090, 2012 W. Va. LEXIS 311
CourtWest Virginia Supreme Court
DecidedJune 13, 2012
DocketNos. 35494, 35546, 35635
StatusPublished
Cited by56 cases

This text of 729 S.E.2d 217 (Brown ex rel. Brown v. Genesis Healthcare Corp.) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown ex rel. Brown v. Genesis Healthcare Corp., 729 S.E.2d 217, 229 W. Va. 382, 2012 WL 2196090, 2012 W. Va. LEXIS 311 (W. Va. 2012).

Opinion

KETCHUM, Chief Justice:

The instant case is a consolidation of three separate wrongful death lawsuits. The case was previously before this Court, and in June 2011, we issued an opinion: “Brown I.”1 Each lawsuit arose from a nursing home’s attempt to compel a plaintiff to participate in arbitration, pursuant to a clause in a nursing home admission contract. Our opinion discussed the common law doctrine of uneonscionability, and found one section of the West Virginia Nursing Home Act — which, in part, prohibited arbitration clauses in nursing home contracts — was preempted by the Federal Arbitration Act (“the FAA”). In two of the three cases, we ruled that the arbitration clauses were unconscionable and unenforceable. In the third case, we answered a certified question and held that the Nursing Home Act could not be relied upon to bar enforcement of an arbitration clause in a nursing home contract.

The defendant nursing homes in all three cases sought review of our opinion in the United States Supreme Court. The defendants specifically challenged Syllabus Point 21 of our opinion, in which we questioned whether the FAA applies to personal injury or wrongful death actions. In a per curiam opinion, the Supreme Court found Syllabus Point 21 to be “both incorrect and inconsistent with clear instruction in the precedents of this Court,”2 and reversed our opinion. The Supreme Court’s opinion did not discuss any other portion of Brown I, aside from Syllabus Point 21 and its accompanying text. The cases were remanded to this Court to consider whether the arbitration clauses at issue “are unenforceable under state common law principles that are not specific to arbitration and pre-empted by the FAA.”3

We have carefully examined the record developed in the courts below, and the briefs and arguments of the parties. In accordance [388]*388with the Supreme Court’s mandate, we overrule Syllabus Point 21 of Brown I. We otherwise find that the Supreme Court’s decision does not counsel us to alter our original analysis of West Virginia’s common law of contracts. The doctrine of uneonscionability that we explicated in Brown 7 is a general, state, common-law, contract-law principle that is not specific to arbitration, and does not implicate the FAA. In two of the cases on appeal, we reverse the trial courts’ prior orders compelling arbitration, and permit the parties to raise and develop their arguments regarding uneonscionability anew before the trial court. In the third ease, the issue of uneonscionability was not considered by the trial court, but may be raised by the parties on remand.

I. Factual Background

We do not need to give a comprehensive recitation of the facts of the three eases before the Court, as this was done in Brown 7.4 Generally, in each of the three cases, a family member of a patient who had died sued a nursing home in circuit court, alleging that the nursing home’s negligence had caused injuries to the patient resulting in death. Plaintiff Clayton Brown and plaintiff Jeffrey Taylor each brought suits against defendant Marmet Health Care Center; plaintiff Sharon Marchio brought suit against defendant Clarksburg Nursing Home & Rehabilitation Center.

The defendant nursing homes asserted before the circuit courts that a family member of each patient had signed an admission agreement with the nursing home on behalf of the patient. Each admission agreement included a clause requiring the plaintiffs to arbitrate any disputes that may arise with the defendant nursing homes. The defendants insisted that the circuit courts were obligated to dismiss the plaintiffs’ suits and refer their claims to binding arbitration.

In an order dated August 25, 2009, the Circuit Court of Kanawha County dismissed plaintiff Clayton Brown’s suit against Mar-met Health Care Center (and its manager, defendant Robin Sutphin). The plaintiff had argued that the arbitration clause5 was unenforceable because it violated Section 15(e) of the Nursing Home Act,6 and because it was an unconscionable contract of adhesion. The circuit court disagreed and ruled that under the admission agreement signed with the nursing home, plaintiff Brown was required to arbitrate all of his claims.7 The plaintiff appealed.

In an order dated September 29, 2009, the Circuit Court of Kanawha County dismissed [389]*389plaintiff Jeffrey Taylor’s suit against various owners, operators and employees of Marmet Health Care Center. Plaintiff Taylor had asserted that the arbitration clause8 violated Section 15(c) and was an unconscionable contract of adhesion. The circuit court concluded that under the admission agreement, plaintiff Taylor was required to arbitrate all of the claims asserted against the nursing home. The plaintiff appealed.

Finally, in an order dated June 2,2010, the Circuit Court of Harrison County refused to dismiss or compel arbitration of plaintiff Sharon Marchio’s suit against various owners and employees of Clarksburg Nursing Home & Rehabilitation Center. Instead, the circuit court certified a question to this Court because plaintiff Marehio argued that the arbitration clause9 was unenforceable under Section 15(c). The circuit court asked this Court to determine whether Section 15(e) was preempted by the FAA.

II. Brown I and the U.S. Supreme Court

On June 29, 2011, we issued Brown I, an extensive opinion with three holdings.

First, in Brown I we considered whether Section 15(c) of the Nursing Home Act was preempted by federal law. Section 15(e) of the Act explicitly prohibits “any waiver by a [nursing home] resident or his or her legal representative of the right to commence an action,” declaring that such waivers are “null and void as contrary to public policy.”10 However, “[u]nder the Federal Arbitration Act, 9 U.S.C. § 2, a written provision to settle by arbitration a controversy arising out of a contract that evidences a transaction affecting interstate commerce is valid, irrevocable, and enforceable, unless the provision is found to be invalid, revocable or unenforceable upon a ground that exists at law or in equity for the revocation of any contract.”11

We noted in Brown I that “[a] state statute, rule, or common-law doctrine, which targets arbitration provisions for disfavored treatment and which is not usually applied to other types of contract provisions, stands as an obstacle to the accomplishment and execution of the pui’poses and objectives of the Federal Arbitration Act, 9 U.S.C. § 2, and is preempted.”12 Accordingly, we found in Syllabus Point 11 that to the extent that Section 15(c) “attempts to nullify and void any arbitration clause in a written contract, which evidences a transaction affecting interstate commerce, between a nursing home and a nursing home resident or the resident’s legal representative, the statute is preempted by the Federal Arbitration Act, 9 U.S.C. § 2

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729 S.E.2d 217, 229 W. Va. 382, 2012 WL 2196090, 2012 W. Va. LEXIS 311, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-ex-rel-brown-v-genesis-healthcare-corp-wva-2012.