Nail v. Consolidated Resources Health Care Fund I

155 Wash. App. 227
CourtCourt of Appeals of Washington
DecidedMarch 18, 2010
DocketNo. 28108-6-III
StatusPublished
Cited by8 cases

This text of 155 Wash. App. 227 (Nail v. Consolidated Resources Health Care Fund I) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nail v. Consolidated Resources Health Care Fund I, 155 Wash. App. 227 (Wash. Ct. App. 2010).

Opinion

Brown, J.

¶1 Consolidated Resources Health Care Fund I, d/b/a Alderwood Manor Nursing and Convalescent Home, and Does 1 through 5 (collectively Alderwood Manor) appeal the trial court’s decision not to enforce a predispute arbitration agreement with Joyce Nail, individually and as personal representative of the estate of Ellen Schimpf; Robert Schimpf; Lowell Nail; and Cindy Lane (collectively Ms. Nail). Alderwood Manor contends the trial court erred in deciding the predispute arbitration agreement was unenforceable without a second, postdispute arbitration agreement contemplated in an American Arbitration Association (AAA) “Healthcare Policy Statement.” Based on our review of persuasive case authority and consistent with Washington statutory authority, we agree with Alderwood Manor that the AAA policy statement is not an AAA rule of procedure preventing arbitration, reverse, and remand for the trial court to appoint non-AAA arbitrators.

FACTS

¶2 Alderwood Manor admitted Ms. Schimpf in April 2005. She then signed an arbitration agreement, stating the parties agree “to arbitrate any dispute that might arise between Ellen Schimpf (the ‘Resident’) and Alderwood Manor (the ‘facility’).” Clerk’s Papers (CP) at 78. The agreement stated an arbitration hearing must be before three arbitrators “selected from the American Arbitration Association (AAA),” and “the arbitrators shall apply the applicable rules of procedure of the AAA.” CP at 78. The agreement specified that each party would select one arbitrator and the two selected were to select the third arbitrator. Notably, the AAA issued a “Healthcare Policy Statement” before the parties entered into their arbitration agreement, stating the AAA “will no longer accept the administration of cases involving individual patients without a post-dispute agreement to arbitrate.” CP at 35.

¶3 Ms. Schimpf left Alderwood Manor to have surgery. Upon readmittance, she signed another, identical, arbitra[231]*231tion agreement. That night, Ms. Schimpf fell out of bed, hitting her head. She was taken to the hospital where she later died.

¶4 Ms. Nail sued Alderwood Manor for negligence and wrongful death. Because the parties did not sign a postdispute arbitration agreement, the parties disputed whether arbitration was required. Ms. Nail refused to stipulate to arbitration and instead moved to oppose arbitration. In a memorandum decision, the court ruled arbitration was not required because the parties did not enter into a postdispute agreement.1 After an unsuccessful reconsideration request, Alderwood Manor appealed.

ANALYSIS

¶5 The issue is whether the trial court erred in ruling the parties’ predispute arbitration agreement was wholly unenforceable without the postdispute agreement contemplated in the AAA’s Healthcare Policy Statement. Aider-wood Manor contends the policy statement is not an AAA rule of procedure and the provision is severable.

¶6 We review arbitrability questions de novo. Satomi Owners Ass’n v. Satomi, LLC, 167 Wn.2d 781, 797, 225 P.3d 213 (2009). “ ‘The party opposing arbitration bears the burden of showing that the agreement is not enforceable.’ ” Id. (quoting Zuver v. Airtouch Commc’ns, Inc., 153 Wn.2d 293, 302, 103 P.3d 753 (2004)). Further, we review de novo a trial court’s interpretation of a contract, including an arbitration clause. Sales Creators, Inc. v. Little Loan Shoppe, LLC, 150 Wn. App. 527, 530, 208 P.3d 1133 (2009).

¶7 Initially, Ms. Nail argues Alderwood Manor is precluded from arguing on appeal that the Healthcare Policy Statement is not an AAA procedure because this issue was raised for the first time in Alderwood Manor’s motion [232]*232for reconsideration.2 But new issues may be raised for the first time in a motion for reconsideration, thereby preserving them for review, where, as here, they are not dependent upon new facts and are closely related to and part of the original theory. Reitz v. Knight, 62 Wn. App. 575, 581 n.4, 814 P.2d 1212 (1991) (citing Newcomer v. Masini, 45 Wn. App. 284, 287, 724 P.2d 1122 (1986)).

¶8 “If the parties to a contract clearly and unequivocally incorporate by reference into their contract some other document, that document becomes part of their contract.” Satomi Owners Ass’n, 167 Wn.2d at 801. In Satomi Owners Ass’n, the parties entered into a purchase and sale agreement, later signing an addendum containing an arbitration clause that was incorporated by reference. Our Supreme Court upheld the addendum. Id. Here, the arbitration agreement states, “In conducting the hearing and all other proceedings relative to the arbitration of the claim(s), the arbitrators shall apply the applicable rules of procedure of the AAA.” CP at 78. The AAA’s applicable rules of procedure are incorporated by reference and, therefore, are part of the parties’ agreement. But Alderwood Manor asserts, and we agree, that the AAA Healthcare Policy Statement is not a rule of procedure.

¶9 Washington favors the arbitration of disputes when parties have agreed to such dispute resolution. Scott v. Cingular Wireless, 160 Wn.2d 843, 858, 161 P.3d 1000 (2007). Additionally, the Federal Arbitration Act, 9 U.S.C. § 2, “ ‘requires courts to enforce privately negotiated agreements to arbitrate, like other contracts, in accordance with their terms.’ ” Satomi Owners Ass’n, 167 Wn.2d at 798 (quoting Volt Info. Scis., Inc. v. Bd. of Trs. of Lealand Stanford Junior Univ., 489 U.S. 468, 478, 109 S. Ct. 1248, 103 L. Ed. 2d 488 (1989)).

¶10 The term “Rules of Procedure” is not defined in either the incorporated documents from the AAA or [233]*233Alderwood Manor’s arbitration agreement. Thus, we look to the term’s ordinary meaning. Cambridge Townhomes, LLC v. Pac. Star Roofing, Inc., 166 Wn.2d 475, 487, 209 P.3d 863 (2009). “To determine the ordinary meaning of an undefined term, our courts look to standard English language dictionaries.” Boeing Co. v. Aetna Cas. & Sur. Co., 113 Wn.2d 869, 877, 784 P.2d 507 (1990). Rules of procedure are generally those rules that are set for “a particular way of doing or of going about the accomplishment of something.” Webster’s Third New International Dictionary 1807 (1993). A policy, on the other hand, is “to organize and regulate the internal order.” Webster’s, supra, at 1754.

¶11 In comparing the two terms, a “procedure” is actually how something is accomplished, while a “policy” is the organization of the internal order of a subject according to management wisdom.

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Bluebook (online)
155 Wash. App. 227, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nail-v-consolidated-resources-health-care-fund-i-washctapp-2010.