MacPherson, P. v. The Magee Memorial Hosp.

J-E01002-15

2015 PA Super 248

PATRICK J. MACPHERSON, EXECUTOR IN THE SUPERIOR COURT OF

OF THE ESTATE OF RICHARD PENNSYLVANIA

MACPHERSON, DECEASED

Appellee

v.

THE MAGEE MEMORIAL HOSPITAL FOR

CONVALESCENCE D/B/A MAGEE

REHABILITATION HOSPITAL, JEFFERSON

HEALTH SYSTEM, INC., TJUH SYSTEM,

MANOR CARE OF YEADON PA, LLC,

D/B/A MANORCARE HEALTH SERVICES-

YEADON, HCR MANOR CARE, INC.,

MANORCARE, INC., HCR HEALTHCARE,

LLC, HCR II HEALTHCARE, LLC, HCR III

HEALTHCARE, LLC

APPEAL OF: MANOR CARE OF YEADON

PA, LLC, D/B/A MANORCARE HEALTH

SERVICES-YEADON, HCR MANOR CARE,

INC., MANORCARE, INC., HCR

HEALTHCARE, LLC, HCR II HEALTHCARE,

LLC, HCR III HEALTHCARE, LLC

Appellants No. 80 EDA 2013

Appeal from the Order Entered November 20, 2012

In the Court of Common Pleas of Philadelphia County

Civil Division at No(s): No. 191 Oct. Term 2011

BEFORE: BOWES, J., DONOHUE, J., SHOGAN, J., LAZARUS, J., MUNDY, J.,

OLSON, J., WECHT, J., STABILE, J., and JENKINS, J.

DISSENTING OPINION BY MUNDY, J.: FILED NOVEMBER 25, 2015

J-E01002-15

I respectfully dissent from the Court’s decision to reverse the trial

court’s order and to direct that this case be referred to arbitration. 1 I base

my disagreement with the Majority primarily on our Supreme Court’s recent

decision in Wert v. Manorcare of Carlisle PA, LLC, --- A.3d ---, 2015 WL

6499141 (Pa. 2015) (plurality).2

In Wert, our Supreme Court considered an arbitration agreement,

which provided that “any disputes shall be resolved exclusively by binding

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1

At the outset, I note that MacPherson does not challenge the decedent’s

lack of capacity to sign the arbitration agreement. MacPherson’s Brief at 36.

Therefore, it is unnecessary for the Majority, in my respectful view, to

engage in its own factfinding based on the decedent’s medical records in an

effort to decide an issue that MacPherson does not wish to pursue in this

Court. See generally Majority Opinion 15-16. In my view, the Majority

should summarily note that, to the extent the trial court decided a question

of capacity, the parties agree that said issue is not in dispute in this case,

and note that the trial court was wrong to decide it.

2

I disagree with the Majority’s pronouncement that any argument as to the

NAF Code of Procedure is waived for failing to include the Code in the

certified record. See Majority Opinion at 23-24. There is no actual dispute

in this case about the relevant rules in the NAF code. Manor Care

acknowledges the Code and quotes from it in its reply brief. See Manor

Care’s Reply Brief at 15 (stating, “Code Rule 1A states that ‘[t]his Code shall

be administered only by the [NAF] or by any entity or individual providing

administrative services by agreement with the National Arbitration Forum’”).

Furthermore, both this Court’s opinion in Stewart v. GGNSC-

Canonsburg, L.P., 9 A.3d 215 (Pa. Super. 2010) and our Supreme Court’s

opinion in Wert quote the relevant rules from the NAF Code. Wert, supra

at *9 (quoting Rule 1(A) in full); Stewart, supra at 216-217. Because this

Court, and our Supreme Court have already published and interpreted Rule

1(A), there is nothing additional for this Court to review on this issue. As I

explain infra, under Wert, the adoption of the NAF Code of Procedure alone

renders the agreement unenforceable. As a result, I do not agree that

MacPherson has waived this argument.

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arbitration to be conducted … in accordance with the [NAF] Code of

Procedure, which is hereby incorporated into this Agreement[.]” Wert,

supra at *10 (brackets, ellipses, and emphasis in original; internal quotation

marks omitted). Our Supreme Court held that because the NAF Code states

that only the NAF can administer its own code, this was an “integral and

non-severable” provision of the arbitration agreement. Id. at *5, 10. Our

Supreme Court noted, as did this Court in Stewart, that “the NAF must

administer its code unless the parties agree to the contrary.” Wert, supra

at *10. Our Supreme Court further held that Section 5 of the Federal

Arbitration Act, pertaining to appointment of alternate arbitrators, could not

save the agreement. Id.; see also generally 9 U.S.C. § 5.

Pursuant to the reasoning of the Stewart court and

the majority of our sister jurisdictions, we find that,

post-consent decree, Section five of the FAA cannot

preserve NAF-incorporated arbitration agreements

unless the parties made the NAF's availability non-

essential by specifically varying the terms of its

procedure. Regardless of whether Section five may

apply where there is a lapse in the administrator, by

its own rules, the NAF must administer its code

unless the parties agree to the contrary.

Wert, supra (some emphasis added).

In the case sub judice, the arbitration agreement defines the

arbitration panel as three arbitrators, whether from the NAF or otherwise.

Majority Opinion at 6. In my view, there is no meaningful difference

between the provision in Wert that states “shall be resolved exclusively by

binding arbitration to be conducted ... in accordance with the [NAF] Code of

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Procedure, which is hereby incorporated into this Agreement[,]” and the

provision here that states “[t]he Panel shall apply NAF’s Code of

Procedure[.]” Wert, supra at *10; Majority Opinion at 7. Consistent with

our Supreme Court’s view, it is academic that another arbitrator could be

chosen and “[c]onceivably, [] apply the designated rules and procedure.”

Majority Opinion at 25. Under Wert, the reliance on the NAF Code (the

choice of law), as opposed to the NAF’s unavailability itself (the choice of

forum), is sufficient legal basis alone to render the agreement

unenforceable.3

Turning to this case, the Majority concludes that Wert does not apply

on several grounds. First, the Court concludes that because Wert is a

plurality opinion, it is not binding. Majority Opinion at 20. However, “[i]n

cases where a concurring opinion enumerates the portions of the plurality’s

opinion in which the author joins or []agrees, those portions of agreement

gain precedential value.” Commonwealth v. Brown, 23 A.3d 544, 556

(Pa. Super. 2011). “[H]owever, [if] the concurrence does not explicitly state

its agreement or disagreement with the plurality, we must look to the

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3

If the Majority were correct that the choice of forum clause was controlling

in Wert, presumably our Supreme Court would have simply applied Section

5 of the FAA, which it acknowledged controlled the agreement. Then

another forum would have been chosen pursuant to Section 5, and our

Supreme Court would have reversed this Court’s judgment and referred the

case to arbitration.

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substance of the concurrence to determine the extent to which it provides

precedential value to points of agreement.” Id.

The Majority is correct that Wert is a plurality opinion, authored by

Justice Stevens and joined in full by Justice Todd. The Chief Justice filed a

concurring opinion, noting that he agreed with some of the plurality’s

reasoning, but relied more on Judge Hamilton’s dissent in Green v. U.S.

Cash Advance Ill., LLC, 724 F.3d 787 (7th Cir. 2013). In Green, Judge

Hamilton opined, as our Supreme Court did in Wert, that the arbitration

agreement at issue in Green was unenforceable in part because “[t]he

terms of the parties’ contract require application of the [NAF] Code … [and

t]he [NAF] Code requires that it be administered only by the [NAF].” Id. at

795 (Hamilton, J., dissenting).4 The Chief Justice explicitly stated that he

agreed with Judge Hamilton’s analysis regarding Rule 1(A) of the NAF Code,

which specifies that only the NAF can administer it. Wert, supra at *10

(Saylor, C.J., concurring). Therefore, three justices out of five in Wert

agreed that the NAF Code issue rendered the arbitration agreement

unenforceable. Thus, the portion of Wert pertaining to the requirement in

Rule 1(A) that NAF administer its own Code, which is central to the

conclusion in Wert that the arbitration agreement therein was

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4

The Chief Justice’s concurrence specifically cited to pages 795-796 of Judge

Hamilton’s dissent in Green. Wert, supra at *10 (Saylor, C.J., concurring),

citing Green, supra at 795-796 (Hamilton, J., dissenting).

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unenforceable, is precedential and binding on this Court. See Brown,

supra.

The Majority next concludes that the arbitration agreement in Wert is

different than the one in the instant case. The Majority asserts that Wert

does not apply because “the plain language of the Agreement does not

evince an intent to arbitrate only before the NAF.” Majority Opinion at 22

(emphasis in original). The Majority then cites to the portion of the

agreement that states that the parties can select another administrator or

none at all if the NAF is unavailable to serve. Id. In the Majority’s view,

Wert does not control this case because “the language in the instant

Agreement is … permissive, not mandatory, and provides for an alternative

to NAF if it is unable or unwilling to serve, or if the parties choose

otherwise.” Id.

Respectfully, the Majority misconstrues and misapplies Wert, where

our Supreme Court rejected this reasoning. The appellants in Wert argued,

as Manor Care does here, that the parties were free to agree upon another

arbitrator. According to our Supreme Court, the fact that another

administrator or arbitrator could be chosen, is legally irrelevant. There is no

legal difference whether another arbiter would be chosen because it is

expressly stated in the arbitration agreement, as in this case, or pursuant to

Section 5 of the FAA. Compare Majority Opinion at 22 (quoting the

arbitration agreement as stating, “[i]f the Parties mutually agree in writing

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not to select NAF or if the NAF is unwilling or unable to serve as the

Administrator, the Parties shall agree upon another independent entity to

serve as the Administrator, unless the Parties mutually agree to not have an

Administrator[]”), with 9 U.S.C. § 5 (stating, “if for any other reason there

shall be a lapse in the naming of an arbitrator … or in filling a vacancy, then

upon the application of either party to the controversy the court shall

designate and appoint an arbitrator … who shall act under the said

agreement with the same force and effect as if he or they had been

specifically named therein []). As the Majority acknowledges, Wert states

that “[s]ection five of the FAA cannot preserve NAF-incorporated arbitration

agreements unless the parties made the NAF's availability non-essential by

specifically varying the terms of its procedure.” Wert, supra at *10

(emphasis added). Therefore, in this regard, the Majority’s insistence that

Wert cannot apply because the parties did not agree to exclusively arbitrate

through NAF as an entity is misguided. The fatal provision in Wert was not,

as the Majority concludes, “an exclusive forum-selection clause[.]” Majority

Opinion at 25 (emphasis omitted). The issue in Wert was an exclusive

choice of law clause. Regardless of the chosen forum, the arbitration

agreement’s choice-of law provision requires, as did the one in Wert, that

said forum apply the NAF Code. See generally Majority Opinion at 6-7.

The Majority goes on to state that Wert does not apply because the

provisions referring to the NAF Code can be severed under the severance

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clause of the instant agreement. Majority Opinion at 26. However, our

Supreme Court has already concluded in Wert that the provision regarding

the NAF Code is “integral and non-severable.” Wert, supra at *10

(emphasis added). We are not at liberty to disregard the judgment of our

Supreme Court in this respect. Based on these considerations, I conclude

that Manor Care is not entitled to relief on this issue, either by waiver, or on

its merits.

Based on the foregoing, and in light of our Supreme Court’s decision in

Wert, I conclude the trial court did not err.5 Accordingly, I would affirm the

trial court’s November 20, 2012 order. I respectfully dissent.

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5

Because Manor Care is not entitled to relief on the Stewart issue, the trial

court was correct to overrule Manor Care’s preliminary objections on this

basis alone. Therefore, Manor Care’s other issues are moot for the purposes

of this appeal. However, I do note that MacPherson argues that the

arbitration agreement should not be enforced because it would be

“impermissible under Pennsylvania law” to have him pursue “one joint

tortfeasor in court and the others in a separate arbitration proceeding[.]”

MacPherson’s Brief at 45. Earlier this year in Taylor v. Extendicare Health

Facilities, Inc., 113 A.3d 317 (Pa. Super. 2015), appeal granted, --- A.3d -

--, 2015 WL 5569766 (Pa. 2015), this Court announced a rule that it was

legally impermissible for a trial court to require that survival and wrongful

death claims be litigated in two forums where there were other defendants

in the case that did not agree to arbitrate.

Here, the Majority concludes that MacPherson has not alleged that the

hospital defendants and Manor Care were joint tortfeasors, precluding the

application of Taylor to this case. Majority Opinion at 28 n.12. Joint

tortfeasors are defined as “parties who either act together in committing a

wrong or whose acts, if independent of each other, unite to form a

single injury.” L.B. Foster Co. v. Charles Caracciolo Steel & Metal

Yard, Inc., 777 A.2d 1090, 1095 (Pa. Super. 2001) (citation omitted;

(Footnote Continued Next Page)

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Judge Lazarus and Judge Wecht join this dissenting opinion.

_______________________

(Footnote Continued)

emphasis added). Instantly, MacPherson’s complaint alleged that the

hospital defendants caused the decedent “mental and physical pain,

suffering and inconvenience, loss of life’s pleasures and aggravation of

pre-existing medical conditions, and expense of otherwise

unnecessary hospitalizations … up to and including the time of his

death[.]” MacPherson’s Amended Complaint, 3/19/12, at ¶ 212 (emphasis

added). MacPherson alleged that Manor Care caused “(a) severe permanent

injuries resulting in severe pain, suffering, and disfigurement (b) mental

anguish, embarrassment, humiliation, degradation, emotional distress, and

loss of personal dignity (c) loss of capacity for enjoyment of life, (d)

expense of otherwise unnecessary hospitalizations, medical expenses

and residency at the ManorCare Facility (e) aggravation of his pre-

existing medical conditions, and (f) death.” Id. at ¶ 235 (emphases

added). Therefore, MacPherson’s amended complaint on its face alleges that

the hospital defendants and Manor Care’s acts, “independent of each other,

unite[d] to form” more than one of the alleged injuries listed in the same.

L.B. Foster Co., supra. Therefore, in my view, for some claims of injury,

the hospital defendants and Manor Care are alleged to be joint tortfeasors,

and I would apply Taylor to this case in the alternative.

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