Crossman v. Life Care Centers of America, Inc.

738 S.E.2d 737, 225 N.C. App. 1, 2013 WL 149857, 2013 N.C. App. LEXIS 68
CourtCourt of Appeals of North Carolina
DecidedJanuary 15, 2013
DocketNo. COA12-702
StatusPublished
Cited by5 cases

This text of 738 S.E.2d 737 (Crossman v. Life Care Centers of America, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crossman v. Life Care Centers of America, Inc., 738 S.E.2d 737, 225 N.C. App. 1, 2013 WL 149857, 2013 N.C. App. LEXIS 68 (N.C. Ct. App. 2013).

Opinion

STEPHENS, Judge.

[2]*2 Facts and Procedural History

On 14 January 2011, while serving as administrator of her husband’s estate, Ms. Lucille Crossman (“Ms. Crossman”) filed a wrongful death complaint against Life Care Centers of America, Inc., Developers Investment Company, Inc., Life Care Management, LLC, Hendersonville Medical Investors, LLC, and Michelle Morrow, (collectively, “Defendants”) in Henderson County Superior Court. Defendants own, operate, and manage Life Care Center of Hendersonville (“Life Care” or “the Facility”). The basis of Ms. Crossman’s complaint centered on the medical care given Mr. Lionel Crossman (“Mr. Crossman”) from 5 July 2007 through 5 March 2009, while he resided at Life Care.

In the year 2000, Mr. Crossman suffered a stroke while on vacation in Florida with Ms. Crossman. That event left him partially paralyzed and with limited communication ability. Despite these physical limitations, Mr. Crossman’s mental capacity and decision-making ability remained “cognitively intact,” and he continued to live at home with his wife until May of 2004. At that time, Mr. Crossman could no longer remain at home and entered Life Care as a full-time resident. Upon entry, he signed a document entitled “Voluntary Agreement for Arbitration” (“the Arbitration Agreement” or “the Agreement”), which stipulated that the parties agreed to submit all claims arising out of the care and treatment of Mr. Crossman at Life Care to binding arbitration. The Agreement also specified that such disputes would be handled via an arbitration hearing “before a board of three arbitrators selected from the American Arbitration Association (“AAA”)” and that the arbitrators would apply the applicable rules of the AAA. The Agreement was not signed by Ms. Crossman.

Mr. Crossman remained at Life Care until 5 March 2009 when he was discharged to the hospital. One week and six days later, on 18 March 2009, he died under hospice care. Ms. Crossman alleges ordinary and medical negligence, fraud, willful and wanton conduct, and unfair and deceptive trade practices on the part of Defendants, claiming that their actions and inaction as caretakers occurring between 5 July 2007 and 5 March 2009 were, together, the proximate cause of Mr. Crossman’s injuries1 and eventual death.

[3]*3On 23 February 2011, Defendants filed a motion to dismiss the case and to compel arbitration based on the Agreement, signed by Mr. Crossman when he entered the Facility in May of 2004. On 9 June 2011, the trial court filed an order denying Defendants’ motion and requiring the parties to complete discovery as “to the existence of an enforceable agreement to arbitrate.” The order halted all discovery on the merits of Ms. Crossman’s allegations until the arbitration controversy was resolved. Discovery on the arbitration matter ensued, and the trial court held an evidentiary hearing concerning Defendants’ motion to dismiss and compel arbitration on 7 November 2011.

On 24 January 2012, the trial court filed an order denying Defendants’ motion to dismiss and to compel arbitration. The Honorable Eric L. Levinson (“Judge Levinson”), Superior Court Judge presiding, found no basis on which to enforce arbitration of the claims made by Ms. Crossman. Despite Mr. Crossman’s established capacity to enter into the Arbitration Agreement on his own behalf, the court concluded that the Agreement was unenforceable because (1) it was impossible to perform due to a failure in its material terms, and (2) arbitration agreements signed by decedents do not bind wrongful death beneficiaries. Two weeks later, on 7 February 2012, Judge Levinson filed an order denying Defendant’s motion to reconsider. Defendants filed notice of appeal on 22 February 2012.

Standard of Review

“[A]n appeal from an order denying arbitration, although interlocutory, is immediately appealable because it involves a substantial right which might be lost if appeal is delayed.” HCW Ret. & Fin. Servs., LLC v. HCW Employee Benefit Servs., LLC,_N.C. App. _,_, 731 S.E.2d 181, 185 (2012) (internal quotation marks omitted). “The standard governing our review of this case is that ‘findings of fact made by the trial judge are conclusive on appeal if supported by competent evidence, even if. . . there is evidence to the contrary.’ . . . ‘Conclusions of law drawn by the trial court from its findings of fact are reviewable de novo on appeal.’ ” Tillman v. Commercial Credit Loans, Inc., 362 N.C. 93, 100-01, 655 S.E.2d 362, 369 (2008) (quoting Lumbee River Elec. Membership Corp. v. City of Fayetteville, 309 N.C. 726, 741, 309 S.E.2d 209, 219 (1983) and Carolina Power & Light Co. v. City of Asheville, 358 N.C. 512, 517, 597 S.E.2d 717, 721 (2004)).

[4]*4 Discussion

Defendants argue the trial court committed reversible error in denying their motion to dismiss and to compel arbitration on grounds that (1) Ms. Crossman, as a beneficiary of Mr. Crossman’s estate, is bound by the Agreement, and (2) the Agreement is not rendered unenforceable by the AAA’s policy on healthcare arbitration. We first address whether the Agreement is enforceable at all, given the AAA’s policy on healthcare arbitration.

Effective 1 January 2003, the AAA issued a Healthcare Policy Statement (“the Policy Statement”) which informed all potential parties to an arbitration agreement arising in the field of healthcare that it would “no longer accept the administration of cases involving individual patients without a post-dispute agreement to arbitrate.”2 In this case, Mr. Crossman signed the Agreement before the dispute arose. Because the Agreement stipulated that arbitration must occur under the rules and procedures of the AAA and be presided over by arbitrators selected from persons approved by the AAA, the trial court determined that the Agreement was unenforceable as impossible to perform due to a failure in material terms.

At the outset, we note that “North Carolina has a strong public policy favoring arbitration.” Raper v. Oliver House, LLC, 180 N.C. App. 414, 419, 637 S.E.2d 551, 554 (2006). That policy is subject, however, to “[t]he essential thrust of the Federal Arbitration Act, which is in accord with the law of our. [S]tate, ... to require the application of contract law to determine whether a particular arbitration agreement is enforceable[,] thereby placing arbitration agreements upon the same footing as other contracts.” See id. (internal quotation marks and citation omitted); see also Futrelle v. Duke University, 127 N.C. App. 244, 248, 488 S.E.2d 635, 638 (1997) (“It is essential that parties to an arbitration specify clearly the scope and terms of their agreement to arbitrate as enforcement of arbitration agreements is not subject to less scrutiny than the enforcement of other agreements.”).

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Cite This Page — Counsel Stack

Bluebook (online)
738 S.E.2d 737, 225 N.C. App. 1, 2013 WL 149857, 2013 N.C. App. LEXIS 68, Counsel Stack Legal Research, https://law.counselstack.com/opinion/crossman-v-life-care-centers-of-america-inc-ncctapp-2013.