The Morrison Law Journal
Arbitration has become an increasingly popular vehicle for service providers and professionals to resolve disputes. Service providers in the elder care industry in particular have become dependent on arbitration. A recent practice of residential care facilities for elders or dependent adults is to have the elder or dependent adult or that individual's representative sign a "residency agreement" with a separate agreement to arbitrate disputes. In that regard, some have questioned whether a residency agreement which does not refer to or incorporate the arbitration agreement will serve to preclude arbitration.
This question was answered in part in the California Court of Appeal, Second Appellate District Decision in John Williams vs. Atria Las Posas (2018) Westlaw 3134869 ("Williams case" or "Williams"). In Williams, John Williams, M.D. suffered major injuries, including a traumatic brain injury, in a bicycle accident. Williams later entered the Atria Las Posas Facility, a facility for Elder or Dependent Adults, for residential care. Williams, before entering the Atria Facility, signed a "Residency Agreement" and then signed immediately thereafter an "Agreement to Arbitrate Disputes." Williams' spouse, Vicktoriya Marina-Williams ("Marina-Williams") signed neither of those agreements.
Shortly after entering the Atria facility, Williams walked away from the facility and was later found laying in a ditch about 5 miles away having suffered kidney failure, respiratory arrest, heat stroke and a second traumatic brain injury.
Williams and his spouse sued Atria and Williams' primary care physician, Steven Barr, M.D. Atria petitioned to compel Arbitration. Williams and his spouse argued that the Residency Agreement did not contain an arbitration clause and had an integration clause indicating it was the entire agreement of the parties. Williams' spouse also argued that the Arbitration Agreement was not binding on her for her loss of consortium claim. They also argued that the third party litigation exception under Code of Civil Procedure Section 1281.2(c) applied and the Arbitration Agreement was unconscionable.
The Trial Court denied the petition to compel arbitration.
On Appeal, the Court of Appeal reversed ruling that the integration clause in the Residency Agreement did not preclude the parties from being bound to arbitrate. The Court of Appeal commented that the timing of the two agreements - they were signed almost concurrently, demonstrated that the Residency Agreement was not intended as a final and complete expression of the parties' agreement. The Court of Appeal also ruled that Williams' spouse was not compelled to arbitrate her claims for loss of consortium because she did not sign either the Residency Agreement or the Arbitration Agreement. The Court also remanded the remaining objections to the Trial Court.