United States District Court, D. Massachusetts
GGNSC CHESTNUT HILL LLC d/b/a GOLDEN LIVING CENTER -HEATHWOOD; GGNSC ADMINISTRATIVE SERVICES LLC; GOLDEN GATE NATIONAL SENIOR CARE, LLC; GGNSC HOLDINGS LLC, Plaintiffs,
JACKALYN M. SCHRADER, AS THE PERSONAL REPRESENTATIVE OF THE ESTATE OF EMMA J. SCHRADER, Defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
DOUGLAS P. WOODLOCK UNITED STATES DISTRICT JUDGE.
Schrader, is the personal representative of her mother's
estate. She brought a wrongful death action in state court as
a result of the death of her mother at a nursing home. In
response, the nursing home entities (collectively
“GGNSC”) brought this federal court action to
compel Jackalyn Schrader to arbitrate the dispute pursuant to
the Federal Arbitration Act.
THE BROAD AND CONTESTED LEGAL LANDSCAPE
case is an example of the many skirmishes that continue along
the recently intensifying - but wavering - battle line
between those who support resolution of disputes by
arbitration and those who support resolution of disputes by
has historically been a strong public policy preference
toward arbitration both federally and in the state of
Massachusetts. See Mastrobuono v. Shearson Lehman Hutton,
Inc., 514 U.S. 52, 62 (1995) (federal policy favoring
arbitration) [Stevens, J]; Miller v. Cotter, 863
N.E.2d 544, 547 (2007) (Massachusetts policy favoring
arbitration). So long as arbitration agreements are not
invalidated through contract defenses, such as fraud, duress,
or unconscionability, they have generally been viewed as
valid in the nursing home context. See Miller, 863
N.E.2d at 544.
a contrary public policy view has asserted itself in some
state courts and then has been rejected by the Supreme Court
of the United States. See, e.g., Extendicare Homes, Inc.
v. Whisman, 478 S.W.3d 306 (Ky. 2015) rev'd sub
nom. Kindred Nursing Center, Ltd. v. Clark, 137 S.Ct.
1421 (2017); Brown v. Genesis Healthcare Corp., 724
S.E.2d 250 (W.Va. 2011) rev'd sub nom. Marmet Health
Care Center, Inc. v. Brown, 565 U.S. 530, 132 S.Ct. 1201
(2012) (per curiam).
2016, during the last year of the Obama administration, the
most concerned federal administrative agency rejected
arbitration agreements in the nursing home context when the
Department of Health and Human Services Center for Medicare
and Medicaid Services (“CMS”) issued a new rule
(the “2016 Rule”) effective November 28, 2016,
prohibiting Medicare and Medicaid-participating long-term
care facilities from entering “into pre-dispute binding
arbitration agreements with their residents or their
representatives.” 81 Fed. Reg., 68800 (October 4, 2016)
(to be codified at 42 C.F.R. § 483.70(n)). By terms,
that new rule, however, did not apply retroactively, and CMS
made clear that it would “not have any effect on
existing arbitration agreements or render them
unenforceable.” Id. Ultimately, I need not
weigh in on the validity of the CMS rule because I am
examining an agreement that was signed in 2013, well before
this rule was enacted. It is sufficient for purposes of the
matter before me to observe that the CMS rule is not to be
enforcement of the 2016 Rule has been enjoined and the new
Trump administration has proposed a newer rule to replace it.
Shortly before the effective date of the 2016 Rule, Judge
Mills in the Northern District of Mississippi entered a
preliminary injunction barring its enforcement. Am.Health
Care Ass'n v. Burwell, 217 F.Supp.3d 921 (N.D. Miss.
2016). While the government had appealed this decision to the
United States Court of Appeals for the Fifth Circuit in the
waning days of the Obama administration, see Am.Health
Care Ass'n v. Price, appeal docketed sub nom.
Am.Health Care Ass'n v. Burwell, No. 17-60005 (5th
Cir. Jan. 6, 2017), the new administration published a
proposed revised rule reversing the 2016 Rule banning nursing
home arbitration, 82 Fed. Reg. 26649 (June 8, 2017), 2017 WL
2462165, and coincidentally moved to dismiss its appeal of
Judge Mills's injunction. Am. Health Ass'n v.
Price, No. 17-60005 (5th Cir. Jun. 2, 2017).
from discussion of the resolution of the arbitration question
as a categorical matter at the highest judicial and executive
levels, I must also note that even within regimes where the
general applicability of a policy favoring arbitration is
acknowledged, or at least finally acquiesced in, hand to hand
combat over the conditions precedent can be a proxy for the
broader controversy regarding the public policy of dispute
resolution by arbitration. Thus, here, Jackalyn Schrader declined
to concede that a valid agreement to arbitrate was formed as
a matter of general contract law. Given the factual dispute
about contract formation, I have found it necessary to act as
factfinder on the question. The following Findings of Fact
and Conclusions of Law set forth my determination that a
valid agreement was formed and that Jackalyn Schrader must be
compelled to arbitrate her claims against GGNSC.
FINDINGS OF FACT
February 4, 2013, Jackalyn Schrader's mother, Emma
Schrader (“Ms. Schrader”) was transferred by
ambulance and admitted to Golden Living Center Heathwood
(hereinafter “Heathwood”) in Chestnut Hill. Ms.
Schrader began receiving care that day at Heathwood. Aside
from the Consent to Treat document, which authorized the
nursing staff to commence treatment, no paperwork or
agreements were completed in order for Ms. Schrader to be
admitted and begin receiving care at Heathwood.
LaTouf was the Administration Coordinator at the time of Ms.
Schrader's admittance to Heathwood. She was responsible
for completing admissions paperwork with new patients. As a
matter of custom and practice, Ms. LaTouf would present new
residents with a package or booklet of information and
agreements (apart from the Consent to Treat, which was
executed with the nursing staff). Ms. LaTouf has no specific
memory of meeting Emma or Jackalyn Schrader or providing them
with the paperwork now in dispute. While Ms. LaTouf usually
discussed the paperwork with patients and their
representatives, if a patient had a representative who was
unable to sign paperwork at the time of admittance at
Heathwood, it was Ms. LaTouf's practice either to mail
the paperwork to the representative or to leave it for the
representative to complete at a later time. It was Ms.
LaTouf's general practice to allow the families of newly
admitted patients to take the package of agreements,
including the arbitration agreement, home to consider and
have legal counsel review if they wished. However, on
February 4, 2013, after Ms. Schrader was admitted to
Heathwood, Jackalyn Schrader signed a document describing Ms.
Schrader's “Inventory of Personal
of her duties as a member of the nursing staff, Vanessa
Desesa, RN, made a progress note in Emma Schrader's file
on February 11, 2013 at 15:30, which stated, in part:
“daughter will be in to sign paperwork and be present
for Ativan trial.” Jackalyn Schrader signed three
documents on February 11, 2013, including: a DNR Order, a No
CPR Order, and a Consent to Withhold CPR. Jackalyn Schrader
completed additional documents on February 14, 2013. She
signed the Admissions Agreement on February 19, 2013. In
addition to the Admissions Agreement, Jackalyn Schrader
signed four other documents on February 19, 2013. On February
27, 2013, Jackalyn Schrader signed six documents.
signed documents, including the Arbitration Agreement, were
left undated. Ms. LaTouf testified that she signed the
Arbitration Agreement on February 11, 2013 and does not
recall personally seeing Jackalyn Schrader sign the
Schrader testified that the signature on the Durable Power of
Attorney document appeared to be hers; the signature on the
Admissions Agreement appeared to be hers; the signature on
the Arbitration Agreement appeared to be hers; the signature
on the Acknowledgement of Receipt of the Department of Public
Health Brochure appeared to be hers; the signature on the
Authorization for Assignment of Insurance Benefits appeared
to be hers; the signature on the Acknowledgment Page
Regarding Valuables appeared to be hers; and the signature on
the Mass. Health Application appeared to be hers. Jackalyn
Schrader testified that it was her common practice to sign
paperwork in blue ink. The documents presented to Jackalyn
Schrader as initially offered during her testimony were black
and white copies, and she stated that she could not verify
her signatures unless she saw them in blue ink. In viewing
the original and/or color copied versions submitted
thereafter that Jackalyn Schrader signed, I find that she
signed the following documents in blue ink: the Arbitration
Agreement; Acknowledgement of Receipt of the Department of
Public Health Brochure); Admission Agreement (dated 2/19/13);
Authorization for Assignment of Insurance Benefits (dated
2/19/13); and Document Opening an RFMS Banking Account (dated
LaTouf testified that there was no requirement to sign the
Arbitration Agreement for continued care at Heathwood. The
Arbitration Agreement contained a signature line to accept
the agreement and a separate signature line to decline the
agreement. Nevertheless, although there was an option to
either accept or decline the Arbitration Agreement, Ms.
LaTouf only highlighted below the signature line that
indicated acceptance of the agreement.
the top of the first page of the Arbitration Agreement, in
bold capital letters, the Arbitration Agreement, states:
“This agreement is not a condition of
admission or continued residency in the facility”
(emphasis in original). On the top of the signature page of
the Arbitration Agreement, the Agreement states in bold
capital letters: “His [sic] agreement governs important
legal rights. Please read it carefully and in its entirety