Baker v. Italian Maple Holdings, LLC (July 31, 2017, D069797) __ Cal.App.5th __ [2017 WL 3224877]
Heirs of an elderly woman sued a skilled nursing facility for various causes of action, including elder abuse, after the woman died at the facility. The facility petitioned to compel arbitration pursuant to two agreements that included language required by Code of Civil Procedure section 1295. The woman signed those agreements one week after admission and ten days before her death. The trial court denied the arbitration under Rodriguez v. Superior Court (2009) 176 Cal.App.4th 1461, 1469-1470, which held that arbitration agreements in medical services contracts cannot be enforced if the patient dies before section 1295’s 30-day rescission period expires. The facility appealed.
The Court of Appeal reversed in a split decision and expressly disagreed with Rodriguez. The court held that the plain language of section 1295 requires arbitration agreements to govern the signing parties’ relationship upon execution “until or unless” either party rescinds within the 30-day rescission period. The court reasoned that, if the Legislature intended to delay the enforcement of such agreements for 30 days after signing, it could have chosen language to accomplish that purpose. Instead, the Legislature provided the parties a 30-day opportunity to rescind an otherwise enforceable agreement. Thus, the woman’s death before the expiration of the statutory period did not render the agreements unenforceable. The majority also rejected the heirs’ argument that the arbitration agreements were unenforceable because their language slightly deviated from provisions required by section 1295. The majority held that the agreements substantially complied with all material statutory requirements, thus enforcing them furthered the Legislature’s desire to facilitate arbitration of medical malpractice disputes.
A dissenting justice would have followed Rodriguez, which he believed “correctly balanced the competing interests of an individual’s constitutional right to a jury trial against the preference for arbitration.” The dissent also expressed concern “that the majority’s approach does not sufficiently consider the circumstances of the execution of the subject agreements, the details of which are largely unknown in the present matter.”
Thomas Watson
htwatson@horvitzlevy.com
Horvitz & Levy LLP
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