Specialty Select Care Center of San Antonio, L.L.C. v. Owen

499 S.W.3d 37, 2016 Tex. App. LEXIS 6812, 2016 WL 3557275
CourtCourt of Appeals of Texas
DecidedJune 29, 2016
DocketNo. 04-15-00561-CV
StatusPublished
Cited by13 cases

This text of 499 S.W.3d 37 (Specialty Select Care Center of San Antonio, L.L.C. v. Owen) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Specialty Select Care Center of San Antonio, L.L.C. v. Owen, 499 S.W.3d 37, 2016 Tex. App. LEXIS 6812, 2016 WL 3557275 (Tex. Ct. App. 2016).

Opinion

OPINION

Opinion by: Patricia 0. Alvarez, Justice

In this wrongful deaths and survival actions suit, the plaintiffs’ family members received allegedly negligent nursing home care from Casa Rio Healthcare and Rehabilitation. When Plaintiffs sued Casa Rio, Casa Rio moved to compel arbitration. The trial court denied the motion, and Casa Rio appeals.. It argues the plaintiffs are bound to the arbitration agreements by direct benefits estoppel. We agree; the arbitration agreements are valid and enforceable against the plaintiffs, and the trial court abused its discretion by failing to compel arbitration. We reverse the trial court’s order and remand this cause to the trial court with instructions to grant Casa Rio’s motion to compel arbitration and to stay the related proceeding.

Background

A. Forms Signed, Resident Admitted

Before the underlying suit was filed, each plaintiff admitted a family member to a Specialty Select Care Center of San [41]*41Antonio, LLC d/b/a Casa Rio Healthcare and Rehabilitation facility. The admitted family member is referred to in the forms as a resident; in this opinion we refer to the admitted person as a resident or former resident. When each of the former residents was admitted, their respective plaintiff executed a Resident Admission Agreement comprised of several forms. One of the forms was a Resident and Facility Arbitration Agreement. The arbitration agreement invokes the Federal Arbitration Act and requires the parties to arbitrate “any legal dispute, controversy, demand or claim ... that arises out of or relates to the Resident Admission Agreement or any service or health care provided by the Facility to the Resident.” The arbitration agreement expressly includes any claim for “negligence, gross negligence, malpractice, or any other claim based on any departure from accepted standards of medical or health care or safety whether sounding or in tort or in contract.”

B. Resident Injured, Shit Filed

According to Plaintiffs, each resident was injured by Casa Rio, and each resident is now deceased. When Plaintiffs sued Casa Rio, Casa Rio moved to compel arbitration.

Casa Rio insisted the Plaintiffs’ wrongful death and survival action claims can only be brought by a plaintiff who is standing in the legal shoes of the deceased resident, the arbitration agreement is valid and enforceable against the decedents under the third-party beneficiary theory, and Plaintiffs are bound to arbitrate.

Plaintiffs responded with two arguments. First, they argued that Casa Rio did not prove the existence of a valid arbitration agreement because those who signed the Resident Admission Agreement had no actual or apparent authority to bind the residents, the third-party beneficiary theory—based on the resident receiving benefits under a contract—does not apply, and Plaintiffs cannot be compelled to arbitrate. Second, they argued Casa Rio waived its right to compel arbitration by substantially invoking the judicial process in a manner that prejudiced Plaintiffs.

After the trial court held a hearing and received supplemental briefs, it denied Casa Rio’s motion to compel arbitration and to stay litigation, and Casa Rio appealed.

Standard of Review

‘Whether an arbitration agreement is enforceable is [a question of law] subject to de novo review.” In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex.2009) (orig.proceeding) (citing J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex.2003)). The party seeking to compel arbitration has the burden to prove, inter alia, a valid arbitration agreement exists. In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex.2005) (orig.proceeding); J.M. Davidson, 128 S.W.3d at 227. If the arbitration agreement is valid and the dispute within its scope, the trial court abuses its discretion by failing to compel arbitration and . stay pending litigation. See Tex. Civ. Prac. & Rem. Code Ann. §§. 171.021, .025(3a) (West 2011); In re R, Inc., 324 S.W.3d 564, 566 (Tex.2010) (orig.proceeding) (per curiam); In re Odyssey Healthcare, Inc., 310 S.W.3d 419, 422 (Tex.2010) (orig.proceeding) (per curiam).

Direct Benefits Estoppel Argued to Trial Court

On appeal, Casa Rio repeats its third-party beneficiary argument, but Casa Rio also asserts Plaintiffs are bound by another equitable estoppel theory: direct [42]*42benefits estoppel. In their brief, Plaintiffs complain that Casa Rio is raising the direct benefits estoppel argument for the first time on appeal. They insist Casa Rio did not present the issue to the trial court, and Casa Rio may not now raise the issue on appeal. See Ochoa v. Craig, 262 S.W.3d 29, 32 (Tex.App.-Dallas 2008, pet. denied).

As a threshold matter, we must determine whether Casa Rio presented the issue of direct benefits estoppel to the trial court.

At the hearing on the motion to compel arbitration, Casa Rio argued the third-party beneficiary theory applies. Casa Rio repeatedly argued Plaintiffs were bound by the arbitration agreement because it was part of the contract under which the residents accepted health care services from Casa Rio, and the residents could not accept benefits under the admission agreement but escape the requirement to arbitrate any dispute.' During the parties’ arguments, the parties’ and the court discussed a hypothetical addressing Casa Rio’s argument that Plaintiffs are bound to arbitrate because the residents accepted health care services under the admission agreement: if a wife admits her husband to the hospital, the husband is not incapacitated, and the wife signs—without the husband’s express authority—an admission agreement which includes an arbitration agreement, is the husband bound by the arbitration agreement? The parties presented the following arguments.

A. Casa Rio’s Argument

Casa Rio argued the following:

And under the FAA, if benefits are provided to [the husband] or services are provided to [the husband] under [this] hypothetical....
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The contract that [the] wife signed, and [the husband got] the benefit of the services provided under that agreement, then [the husband] is bound if—and it has an arbitration clause, ... then [the husband] would be bound ... whether [the wife] had real authority to do it or not,- if [the husband] got the benefits of the services.
[[Image here]]
If [the husband] gets the benefits of the agreement that [the] wife signed, then [the husband] and [the wife] are required to arbitrate, if that is in the agreement under which the services were provided.

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Bluebook (online)
499 S.W.3d 37, 2016 Tex. App. LEXIS 6812, 2016 WL 3557275, Counsel Stack Legal Research, https://law.counselstack.com/opinion/specialty-select-care-center-of-san-antonio-llc-v-owen-texapp-2016.