Westerfield v. Three Rivers Nursing & Rehab. Ctr., L.L.C.

2013 Ohio 512

• Court: Ohio Court of Appeals
• Decided: February 15, 2013
• Docket: 25347
• Status: Published

Opinion

[Cite as Westerfield v. Three Rivers Nursing & Rehab. Ctr., L.L.C., 2013-Ohio-512.]

IN THE COURT OF APPEALS FOR MONTGOMERY COUNTY, OHIO

MICHELLE WESTERFIELD, EXECUTOR :

Plaintiff-Appellee : C.A. CASE NO. 25347

v. : T.C. NO. 11CV6557

THREE RIVERS NURSING : (Civil appeal from & REHABILITATION CENTER, LLC Common Pleas Court) et al. :

Defendants-Appellants :

:

..........

OPINION

Rendered on the 15th day of February , 2013.

NANCY C. ILER, Atty. Reg. No. 0039855, 101 West Prospect Avenue, Suite 1650, Cleveland, Ohio 44115 Attorney for Plaintiff-Appellee

WAYNE E. WAITE, Atty. Reg. No. 0008352 and KELLY M. SCHROEDER, Atty. Reg. No. 0080637, Fifth Third Center, 1 South Main Street, Suite 1800, Dayton, Ohio 45402 Attorneys for Defendants-Appellants

FROELICH, J. [Cite as Westerfield v. Three Rivers Nursing & Rehab. Ctr., L.L.C., 2013-Ohio-512.] {¶ 1} Three Rivers Nursing and Rehabilitation Center and others appeal

from a judgment of the Montgomery County Court of Common Pleas, which denied their

motion to dismiss, to compel arbitration as to all defendants and, in the alternative, to stay

proceedings against all defendants pending arbitration. Although for a different reason than

that expressed by the trial court, the judgment will be affirmed.

I.

{¶ 2} The evidence at the hearing on Three Rivers’ motion revealed the

following facts:

{¶ 3} On March 18, 2010, John J. Desmond, Jr., was admitted to Three Rivers

Nursing and Rehabilitation Center, following a four-day hospitalization at Christ Hospital in

Cincinnati. Desmond decided to go to Three Rivers for rehabilitation so that he could be

near his wife, who was a resident in Three Rivers’ Alzheimer’s unit.

{¶ 4} The following day, March 19, one of Three Rivers’ employees, Ms.

Wolford, asked Michelle Westerfield, Desmond’s daughter, to come to the admission office

and sign paperwork to formally admit Desmond. Westerfield was asked to sign 18 different

documents, which addressed such things as Desmond’s admission, the various optional

amenities at the facility, treatment options, and legal notices. Westerfield testified that the

documents were presented as “one package.”1

{¶ 5} Westerfield was first presented with a five-page Licensed Nursing

Admission Agreement (“Admission Agreement”). On page 4 in the “Resolution of 1 At oral argument, Westerfield suggested that all of the admission documents, collectively, created a single agreement with Three Rivers. The trial court did not make a factual finding about whether the admission packet was one agreement or a series of agreements. Three Rivers treats the Licensed Nursing Admission Agreement and the Agreement to Resolve Disputes by Binding Arbitration as separate agreements, and for purposes of this appeal, we will do likewise. 3

Disputes” section, the agreement provided:

A. Nonpayment of Charges: Any controversy, dispute, disagreement or

claim of any kind arising between the parties after the execution of this

Agreement regarding nonpayment by Resident or Responsible Party for

payments due to Facility shall be adjudicated in a court of law, or arbitrated if

mutually agreed to by the parties.

B. Resident’s Rights: Any controversy, dispute, disagreement or claim of

any kind arising between the parties after the execution of this Agreement in

which Resident or person on his/her behalf alleges a violation of any right

granted Resident in a State or Federal statute shall be settled exclusively by

binding arbitration.

The last paragraph of the agreement stated, in bold and capital letters, that the

“UNDERSIGNED, HAVING READ THE FOREGOING TERMS OF THIS AGREEMENT, *** AGREE TO

THE TERMS HEREIN IN CONSIDERATION OF THE FACILITY’S ACCEPTANCE OF AND RENDERING OF

SERVICES TO THE RESIDENT.”

{¶ 6} Westerfield testified that Wolford “gave me a brief summary quickly on

pretty much all of [the document],” but did not direct Westerfield’s attention to the dispute

resolution provision or any other provision in the Admission Agreement. Westerfield

signed the Admission Agreement as the “Responsible Party” without reading it.

{¶ 7} Westerfield was next presented with the Liberty Nursing Center of Three

Rivers, Inc. Agreement to Resolve Disputes by Binding Arbitration (“Arbitration

Agreement”). The “Disputes to Be Arbitrated” provision reiterated the terms on the page 4 4

of the admission document, and the agreement set forth the terms of binding arbitration

between the parties. Wolford briefly explained the document and asked Westerfield to sign

it; Wolford did not mention anything about the previously-signed Admission Agreement

which, at page four, contained a binding arbitration privision. Westerfield refused to sign

the Arbitration Agreement and she took the document home with her.

{¶ 8} Westerfield then reviewed the rest of the documents. She declined some

services for her father, such as telephone service, and accepted others. The entire

admissions process lasted 20 minutes.

{¶ 9} Westerfield testified that her father lived independently and had never been

declared incompetent or mentally incapable by any physician or court of law prior to his

hospitalization and rehabilitation. Desmond, however, had not been asked to sign the

admission paperwork. Westerfield acknowledged that her father had previously executed a

Durable Power of Attorney document, which appointed Westerfield his attorney in fact.

{¶ 10} According to Westerfield’s complaint, Desmond began experiencing severe

diarrhea within a few days of his admission. On March 29, 2010, he was transferred to

Christ Hospital, where he was diagnosed with hypovolemic shock and sepsis. Desmond

died at the hospital on April 1, 2010.

{¶ 11} Westerfield, individually and as executor of Desmond’s estate, subsequently

brought suit against Three Rivers, numerous Three Rivers employees, and others

(collectively, “Three Rivers”) raising claims arising from Desmond’s death. In February

2012, Three Rivers moved to dismiss, to compel arbitration and, alternatively, to stay

pending arbitration, arguing that Westerfield had agreed to binding arbitration when she 5

signed the Admission Agreement. On March 8, 2012, Westerfield’s attorney wrote to Three

Rivers’ attorney, indicating that she was disputing the application of the arbitration clause in

the Admission Agreement and that she was terminating the Admission Agreement pursuant

to the termination provision in that document.

{¶ 12} After a hearing on Three Rivers’ motion, the trial court denied the motion.

The court found that (1) Desmond’s competency at the time of his admission was irrelevant

because Westerfield was his attorney in fact, (2) Westerfield did not validly cancel the

Admission Agreement through her March 2012 letter, (3) the arbitration provision in the

Admission Agreement was unenforceable because there was no meeting of the minds on

arbitration, and (4) the arbitration clause in the Admission Agreement was procedurally and

substantively unconscionable.

{¶ 13} Three Rivers appeals from the trial court’s ruling, claiming the trial court

erred by refusing to enforce the parties’ agreement to resolve any dispute through binding

arbitration.

II.

{¶ 14} Three Rivers raises several issues to support its contention that Westerfield

validly consented to resolve her claims by binding arbitration. First, it emphasizes that the

Federal Arbitration Act preempts state laws that bar arbitration of particular disputes and

that arbitration is favored in Ohio as a matter of public policy. Second, it argues that

Westerfield agreed to arbitration when she signed the Admission Agreement and that her

failure to read the terms of that document (or the failure of Three Rivers employee to explain

the arbitration provision) does not relieve her from her acceptance of the provision. Three 6

Rivers states that the trial court should not have looked beyond the Admission Agreement to

determine the intent of the parties. Third, Three Rivers argues that the arbitration provision

was neither procedurally nor substantively unconscionable.

{¶ 15} In her responsive brief, Westerfield raises two “cross-assignments of error”

challenging the trial court’s findings that Westerfield had the authority to sign the Admission

Agreement as Desmond’s attorney in fact and that her attempted March 2012 termination of

the Admission Agreement was not valid. Westerfield claims that the trial court erred in

rejecting those bases for finding the arbitration agreement unenforceable. Because

Westerfield is simply raising alternative reasons for affirming the trial court’s judgment, she

was not required to file a notice of cross-appeal and raise cross-assignments of error.

Regardless, because we conclude, for different reasons, that the Arbitration Agreement is not

enforceable, we need not address Westerfield’s “cross-assignments of error.”

{¶ 16} “Ohio has long had a strong public policy favoring arbitration.” Haight v.

Cheap Escape Co., 2d Dist. Montgomery No. 25345, 2013-Ohio-182, ¶ 10, citing Schaeffer

v. All State Ins. Co., 63 Ohio St.3d 708, 711, 590 N.E.2d 1242, 1245 (1992). Arbitration is

favored because it allows parties to bypass expensive and time-consuming litigation and

“provides the parties thereto with a relatively expeditious and economical means of

resolving a dispute.” Id., quoting Schaeffer at 712.

{¶ 17} Ohio’s public policy favoring arbitration is codified at R.C. Chapter 2711.

Under R.C. 2711.02(A), a written arbitration clause “shall be valid, irrevocable, and

enforceable, except upon grounds that exist at law or in equity for the revocation of any

contract.” This language tracks Section 2 of the Federal Arbitration Act, which provides: 7

“[A] contract evidencing a transaction involving commerce to settle by arbitration a

controversy thereafter arising out of such contract * * * shall be valid, irrevocable, and

enforceable, save upon such grounds as exist at law or in equity for the revocation of any

contract.” Taylor v. Ernst & Young, L.L.P, 130 Ohio St.3d 411, 2011-Ohio-5262, 958

N.E.2d 1203, ¶ 18.

{¶ 18} If a party moves to stay proceedings pending arbitration, pursuant to “an

agreement in writing for arbitration,” the court must first satisfy itself “that the issue

involved in the action is referable to arbitration” under the parties’ agreement. R.C.

2711.02(B); Haight at ¶ 12. “R.C. 2711.01, like its federal counterpart, ‘acknowledges

that an arbitration clause is, in effect, a contract within a contract, subject to revocation on its

own merits.’” Taylor Blg. Corp. of Am. v. Benfield, 117 Ohio St.3d 352, 2008-Ohio-938,

884 N.E.2d 12, ¶ 41, quoting ABM Farms, Inc. v. Woods, 81 Ohio St.3d 498, 501-502, 692

N.E.2d 574 (1998). Therefore, the enforceability of an arbitration clause is considered

separately from the contract within which it is contained. Id.; Brownell v. Van Wyk, 2d

Dist. Montgomery No. 24042, 2010-Ohio-6338, ¶ 24.

{¶ 19} The arbitrability of a claim is a question of law, which we review de novo.

Haight at ¶ 12; McManus v. Eicher, 2d Dist. Greene No. 2003-CA-30, 2003-Ohio-6669; see

also St. Mary’s v. Auglaize Cty. Bd. of Commrs., 115 Ohio St.3d 387, 2007-Ohio-5026, 875

N.E.2d 561, ¶ 38 (“Contract interpretation is a matter of law, and questions of law are

subject to de novo review on appeal.”).

{¶ 20} Whether the parties have executed a valid written arbitration agreement is a

matter of state contract law. “A contract is generally defined as a promise, or a set of 8

promises, actionable upon breach. Essential elements of a contract include an offer,

acceptance, contractual capacity, consideration (the bargained for legal benefit and/or

detriment), a manifestation of mutual assent and legality of object and of consideration.”

Minster Farmers Coop. Exchange Co., Inc. v. Meyer, 117 Ohio St.3d 459, 2008-Ohio-1259,

884 N.E.2d 1056, ¶ 28, quoting Perlmuter Printing Co. v. Strome, Inc., 436 F.Supp. 409,

414 (N.D.Ohio 1976); Kostelnik v. Helper, 96 Ohio St.3d 1, 2002-Ohio-2985, 770 N.E.2d

58, ¶ 16. The parties must have a “meeting of the minds” as to the essential terms of the

contract in order to enforce the contract. Episcopal Retirement Homes, Inc. v. Ohio Dept. of

Indus. Relations, 61 Ohio St.3d 366, 369, 575 N.E.2d 134 (1991).

{¶ 21} When reviewing a contract, the court’s primary role is to ascertain and give

effect to the intent of the parties. Hamilton Ins. Serv., Inc. v. Nationwide Ins. Cos., 86 Ohio

St.3d 270, 273, 714 N.E.2d 898 (1999). A contract that is, by its terms, clear and

unambiguous requires no real interpretation or construction and will be given the effect

called for by the plain language of the contract. Aultman Hosp. Assn. v. Community Mut.

Ins. Co., 46 Ohio St.3d 51, 55, 544 N.E.2d 920 (1989).

{¶ 22} A contract is ambiguous if its provisions are susceptible to two or more

reasonable interpretations. Johnson v. Johnson, 2d Dist. Miami No. 2010 CA 2,

2011-Ohio-500, ¶ 11. “If an ambiguity exists in a contract, then it is proper for a court to

consider ‘extrinsic evidence,’ i.e., evidence outside the four corners of the contract, in

determining the parties’ intent. Blosser v. Carter, 67 Ohio App.3d 215, 219, 586 N.E.2d

253 (1990). Such extrinsic evidence may include (1) the circumstances surrounding the

parties at the time the contract was made, (2) the objectives the parties intended to 9

accomplish by entering into the contract, and (3) any acts by the parties that demonstrate the

construction they gave to their agreement. Id.” U.S. Fid. & Guar. Co. v. St. Elizabeth

Med. Ctr., 129 Ohio App.3d 45, 55-56, 716 N.E.2d 1201 (2d Dist.1998); GZK, Inc. v.

Schumaker Ltd. Partnership, 2d Dist. Montgomery No. 19764, 2003-Ohio-5842, ¶ 20.

{¶ 23} Upon review of the evidence, we agree with Three Rivers that Westerfield

originally agreed to arbitration when she signed the Admission Agreement. During her

meeting with Three Rivers regarding the admission papers for her father, Westerfield was

first presented with the Admission Agreement. Section VI of that agreement concerned the

resolution of disputes. The two paragraphs comprising that section provided that issues of

nonpayment would be resolved in court whereas certain claims by Desmond that arose

between the parties after the execution of the Admission Agreement would be resolved by

binding arbitration. Westerfield signed the agreement (albeit without reading it), which

expressed her assent to binding arbitration.

{¶ 24} Westerfield testified that Wolford did not specifically discuss the arbitration

provision of the Admission Agreement with her, a fact that the trial court noted in its

decision. However, this fact has no bearing on the enforceability of the arbitration

provision in the Admission Agreement. As we have stated in the context of a fraudulent

inducement claim:

[Plaintiff Swayze] was not misled because he could have read the contract.

Swayze contends that he was never told about arbitration and that he was not

given a copy of the agreement. The evidence from Huntington’s employee

indicates that Swayze did receive a copy of the arbitration agreement. 10

However, this dispute is not material. The fact is that Swayze signed a form

indicating that he had read the terms and conditions of the agreement. He

also agreed to be bound by the conditions, which included pre-dispute

arbitration. An individual who fails to read what he signs cannot argue that

he has been misled; willing ignorance is the very antithesis of being fooled by

another.

Swayze v. The Huntington Inv. Co., 2d Dist. Montgomery No. 20630, 2005-Ohio-2519, ¶ 24.

{¶ 25} We nevertheless agree with the trial court’s conclusion that the arbitration

provision in the Admission Agreement is not enforceable. Immediately after reviewing the

Admission Agreement, Wolford reviewed the Arbitration Agreement with Westerfield.

Westerfield testified that she refused to sign the document and asked to take it home with

her; Ms. Wolford was “fine with it.” The trial court found that, “within seconds of signing

the Admission Agreement, [Westerfield] made it quite clear to the Facility’s representative,

Ms. Wolford, that [she] had not agreed to arbitrate claims relating to her father’s care,

notwithstanding the Admission Agreement’s clause. * * * [Westerfield] testified quite

credibly that she understood and believed she had unequivocally rejected arbitration as the

vehicle for resolving disputes regarding her father’s care at the Facility.” (Emphasis in

original.)

{¶ 26} Based on the testimony, which the trial court credited, it is clear that,

immediately after Westerfield’s initial assent to arbitration in the Admission Agreement,

Westerfield indicated that she would not agree to binding arbitration; at that time, Three

Rivers agreed to accept Desmond as a resident without an agreement to arbitrate. We need 11

not decide whether this agreement is best construed as the result of estoppel by silence, an

express modification of the original agreement, or as a termination of the original agreement

and a new agreement without arbitration. (The Admission Agreement allowed Westerfield

to terminate the Admission Agreement “at any time.”) Regardless, Westerfield and

Wolford both understood following their discussion of the Arbitration Agreement that

Westerfield did not agree to binding arbitration, and the admission process continued with

that understanding. Three Rivers cannot now enforce Westerfield’s initial agreement to

{¶ 27} In light of our determination, we need not address the scope of federal

preemption of Ohio’s arbitration statute, or whether the arbitration provision in the

Admission Agreement is procedurally or substantively unconscionable.

{¶ 28} Parenthetically, we note that the parties’ arguments before the trial court

revolved around whether there was an enforceable agreement to arbitrate, not the reach of

any such agreement. For example, the parties did not discuss whether the arbitration

provision in the Admission Agreement applied to all of Westerfield’s claims. The

arbitration provision in the Admission Agreement required arbitration of claims “alleg[ing] a

violation of any right granted Resident in a State or Federal statute.” (Emphasis added.)

Perhaps this is a reference to R.C. Chapter 3721 (concerning rest homes and nursing homes),

but Westerfield alleged common law wrongful death and survivorship claims in addition to a

Nursing Bill of Rights claim.

{¶ 29} In addition, the parties did not address below whether the arbitration

agreement applied to all of the defendants in this case. The Admission Agreement states that 12

it is among only Three Rivers, Desmond, and Westerfield, whereas the Arbitration

Agreement, which Westerfield expressly rejected, would have required binding arbitration

for certain claims against “[Three Rivers], its owners, affiliates, employees or agents.”

Westerfield sued various entities and individuals in addition to Three Rivers.

{¶ 30} Regardless, in light of our conclusion that there is no enforceable

arbitration agreement, we need not address these issues or whether these questions would

have resulted in ambiguity.

{¶ 31} Three Rivers’ assignment of error is overruled.

IV.

{¶ 32} The trial court’s judgment will be affirmed.

FAIN, P.J. and HALL, J., concur.

Copies mailed to:

Nancy C. Iler Wayne E. Waite Kelly M. Schroeder Hon. Steven K. Dankof