Morrison Law Journal


The Morrison Law Journal June 2018 Volume XIII, Edition 6 When It Does Not Have To Be In The Agreement: Court Of Appeal Rules That Agreement To Arbitrate Disputes May Be Binding Even Though The Parties Entered Into A Separate Agreement Which Purported To Be The Entire Agreement Between The Parties And The Separate Agreement Is Silent As To Arbitration By: Edward F. Morrison, Jr., Esq. Larry A. Schwartz, Esq.
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. 1 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. The Williams case is important in that it demonstrates that a concurrently signed Arbitration Agreement, which is separate from an agreement which purportedly sets forth all of the parties' agreements, can still be enforced. It is also important in that it holds that claims of loss of consortium by the spouse of an injured plaintiff may not be subject to arbitration if the spouse did not sign the arbitration agreement. About the Authors: Edward F. Morrison, Jr. is the founding partner and Larry A. Schwartz is Of Counsel to The Morrison Law Group, a professional corporation. Their biographies can be viewed at www.morrisonlawgroup.com. Publication Note: The Morrison Law Group wishes to disseminate this publication to all clients and colleagues of the Firm who wish to receive it. Should any recipient desire to be removed from the distribution list, or wishes to have a colleague added, please contact Jim Van Dusen at The Morrison Law Group at 213 356-5504 or vandusen@morrisonlawgroup.com. Disclaimer Note: The legal article presented above is intended to provide general information which may be of interest or use to clients and colleagues of The Morrison Law Group and should not be construed as legal advice on any matter. 2

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.

The Williams case is important in that it demonstrates that a concurrently signed Arbitration Agreement, which is separate from an agreement which purportedly sets forth all of the parties' agreements, can still be enforced. It is also important in that it holds that claims of loss of consortium by the spouse of an injured plaintiff may not be subject to arbitration if the spouse did not sign the arbitration agreement.

About the Authors: Edward F. Morrison, Jr. is the founding partner and Larry A. Schwartz is Of Counsel to The Morrison Law Group, a professional corporation. Their biographies can be viewed at www.morrisonlawgroup.com.

Publication Note: The Morrison Law Group wishes to disseminate this publication to all clients and colleagues of the Firm who wish to receive it. Should any recipient desire to be removed from the distribution list, or wishes to have a colleague added, please contact Jim Van Dusen at The Morrison Law Group at 213 356-5504 or vandusen@morrisonlawgroup.com.

Disclaimer Note: The legal article presented above is intended to provide general information which may be of interest or use to clients and colleagues of The Morrison Law Group and should not be construed as legal advice on any matter.