J-A22011-17



NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

ELSIE CLEMENTSON                                IN THE SUPERIOR COURT OF
                                                      PENNSYLVANIA


                      v.

EVANGELICAL MANOR D/B/A WESLEY
ENHANCED LIVING PENNYPACK PARK

                            Appellant                No. 299 EDA 2017


               Appeal from the Order Entered December 19, 2016
              In the Court of Common Pleas of Philadelphia County
                       Civil Division at No(s): 160601775


BEFORE: BOWES, LAZARUS AND PLATT,* JJ.

MEMORANDUM BY BOWES, J.:                            FILED MARCH 29, 2018

       Evangelical Manor d/b/a Wesley Enhanced Living Pennypack Park (the

“Facility”) appeals from the December 19, 2016 order denying its petition to

compel arbitration.1 After thorough review, we affirm.

       Elsie Clementson filed this negligence action seeking damages for a

fractured tibia that she sustained in a fall while she was a resident at the

____________________________________________


1 The trial court's order is final and appealable pursuant to Pa.R.A.P.
311(a)(8), which permits an interlocutory appeal from any order made
appealable by statute. See Midomo Co., Inc. v. Presbyterian Housing
Co., 739 A.2d 180, 183-84 (Pa.Super. 1999). The Uniform Arbitration Act,
42 Pa.C.S. §§ 7301 et seq., provides that an appeal may be taken from "[a]
court order denying an application to compel arbitration. . . ." 42 Pa.C.S. §
7320(a)(1).


* Retired Senior Judge specially assigned to the Superior Court.
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Facility. The Facility moved to compel arbitration pursuant to a clause in the

Admission Agreement, which was signed by Ms. Clementson’s daughter,

Joanne Reilly.2 Ms. Reilly did not act pursuant to a power-of-attorney.

       The circumstances preceding and surrounding the execution of the

Admission Agreement are as follows.              On February 16, 2012, Ms. Reilly

signed the Facility’s Responsible Person Agreement (“RPA”) “to facilitate the

provision    of   care   to   the   Resident,”    her   mother,   Elsie   Clementson.

Responsible Person Agreement, at 1.                 The RPA provided that, “the

responsible person affirms that he or she has access to Resident’s income

and resources and the Resident’s income and resources are available to pay

for Resident’s care.” Id. at 1¶3. The Responsible Person agrees to pay for

the costs of the stay from Resident’s income and resources in accordance

with the Admission Agreement until the costs are paid by other sources, and

to apply for and submit the documentation required to obtain benefits. Id.

If Responsible Person fulfills his or her obligations under that Agreement,

“she shall not be held personally liable for the Resident’s charges.” Id. at 2.

If, however, Responsible Person does not fulfill the Agreement, “she shall be

liable” to the Facility for any losses it sustains due to Responsible Person’s

____________________________________________


2 The record indicates that the form agreements were preprinted with the
name “Joanne Riley,” but signed by “Joanne Reilly.” There was no indication
on the signature page that Joanne Reilly signed in her capacity as the
Responsible Person for her mother.



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breach. Id. In short, the RPA obligated the Responsible Person to fulfill the

duties of the Resident under the Admission Agreement, most of which were

financial in nature, and subjected the Responsible Person to liability for

failure to do so.

        On February 21, 2012, Ms. Reilly was asked by the Facility to execute

the Facility’s Admission Agreement. The Agreement details the nature of the

services provided, the charges, billing, Medicare and Medicaid, and the

“Obligations of Responsible Person.” The latter provision states in pertinent

part:

        The Resident has the right to identify a Responsible Person
        (usually the Agent in the Resident’s Power of Attorney or
        Guardian), who shall be entitled to receive notice in the
        event of transfer of discharge or material changes in the
        Resident’s condition, and changes to this Agreement.
        Resident elects to name JOANNE RILEY of PHILADELPHIA, PA
        [address], as the Responsible Person. The Resident’s selected
        Responsible Person shall sign this Agreement and the
        Responsible Person Agreement in recognition of this
        designation with the intent to be legally bound by all
        provisions in this Agreement and the Responsible Person
        Agreement.

Admission Agreement, ¶4.1 (emphasis added).

        Paragraph 20 of the Admission Agreement is entitled “Community’s

Grievance Procedure,” and provides that if the Resident, Resident’s

Attorney-in-Fact, or Responsible Person believes that Resident is being

mistreated or her rights violated, they are to make the complaint known to

the Director of Nursing or Administrator.    Such notice is a prerequisite to



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arbitration.     It states further that any claim for personal injuries for

inadequate care or medical malpractice while in the Facility are to be

resolved “exclusively by arbitration.”         Paragraph 20.3(b).   The Agreement

explains that this means that the Resident is relinquishing her right to a jury

trial and will not be able to file a lawsuit. Rather, arbitration administered

by ADR Options, Inc. pursuant to its rules, at a site chosen by the Facility, is

the only option. The parties are to split costs and each bear their own legal

fees. The Agreement provides further that “Resident, or Resident’s spouse

or personal representative in the event of Resident’s incapacity, have the

right to rescind this arbitration clause” by notifying the Facility in writing, by

certified mail, within thirty days of signing. Id. at ¶20.3(h).

        The Admission Agreement contains an integration clause providing

that the Admission Agreement, the Application Agreement,3 and the RPA are

the entire agreement and understanding between the parties. Id. at ¶23.4.

The Facility reserved, however, the right to modify unilaterally the terms of

the Agreement to conform to subsequent changes in the law, regulation, or

operations. Id. at ¶23.5.

        At the time the aforementioned documents were executed, Ms. Reilly

was not Ms. Clementson’s attorney-in-fact. The parties to the RPA and the

Admission Agreement were Ms. Reilly and the Facility. Later, in 2014, Ms.
____________________________________________


3   The Application Agreement is not contained in the certified record.



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Clementson executed a durable power-of-attorney conferring attorney-in-

fact status upon her daughter.        Based on the foregoing, the trial court

denied the petition to compel arbitration finding there was no express or

implied agency based on the RPA. The court also found that the power-of-

attorney executed in 2014, more than two years after the execution of the

Admission Agreement containing the arbitration clause, was not retroactive

as   the      powers   designated   therein   were   not   explicitly   retroactive.

Furthermore, Ms. Reilly did not have apparent authority to act as there was

no manifestation by the principal, Ms. Clementson, establishing such

authority. Finally, the trial court found no agency by estoppel, as there was

no evidence that Ms. Clementson was present when the paperwork was

signed, that the agreements were presented to her, or that she knew what

they contained. Absent proof that Ms. Clementson knew that her daughter

purportedly agreed to arbitrate, her failure to disavow her daughter’s

authority to agree to same did not create agency by estoppel.

      The Facility timely appealed, raising one question for our review: “Did

the trial court err by failing to compel binding arbitration of the claims

brought by [Ms. Clementson] against the Defendant Facility pursuant to the

Facility’s valid and binding Admission/Arbitration Agreement?”          Appellant’s

brief at 4.

      Our review of the denial of the petition to compel arbitration “is limited

to determining whether the trial court's findings are supported by substantial

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evidence and whether the trial court abused its discretion in denying the

petition."    Pisano v. Extendicare Homes, Inc., 77 A.3d 651, 654

(Pa.Super. 2013). We apply a two-part test. “First, we examine whether a

valid agreement to arbitrate exists.           Second, we must determine whether

the dispute is within the scope of the agreement.”          Id. at 654-55.   Since

arbitration is a matter of contract, a party cannot be compelled to arbitrate

unless he or his agent have agreed to do so.              Bair v. Manor Care of

Elizabethtown, PA, LLC, 108 A.3d 94 (Pa.Super. 2015).               “Whether an

agreement to arbitrate disputes exists is a question of law.”        Neuhard v.

Travelers Ins. Co., 831 A.2d 602, 604 (Pa.Super. 2003).                Thus, our

standard of review is limited to determining whether the trial court

committed an error of law and our scope of review is plenary. McNulty v.

H&R Block, Inc., 843 A.2d 1267, 1271 (Pa.Super. 2004).

       The following principles govern arbitration agreements.         The party

alleging the existence of a valid arbitration agreement has the burden of

proof on that issue.4 Washburn v. Northern Health Facilities, Inc., 121

A.3d 1008 (Pa.Super. 2015); Wisler v. Manor Care of Lancaster PA, LLC,
____________________________________________


4 In some instances, courts have permitted discovery on the issue of the
enforceability of an arbitration agreement. See Bair v. Manor Care of
Elizabethtown, PA, LLC, 108 A.3d 94 (Pa.Super. 2015). In other cases,
an evidentiary hearing has been conducted by the court. The petition to
compel arbitration did not allege facts that, if proven, would establish that
the clause was binding on the Plaintiff herein, and the Nursing Home did not
request discovery or an evidentiary hearing.



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124 A.3d 317 (Pa.Super. 2015). In addition, “arbitration agreements are to

be strictly construed and not extended by implication.” Fellerman v. PECO

Energy Co., 159 A.3d 22, 26-27 (Pa.Super. 2017).           “When parties have

agreed to arbitrate in a clear and unmistakable manner, every reasonable

effort should be made to favor the agreement unless it may be said with

positive assurance that the arbitration clause involved is not susceptible to

an interpretation that covers the asserted dispute.” Id.

      First, we must determine whether the trial court correctly concluded

that Ms. Clementson did not agree to arbitrate, since she did not sign either

the RPA or the Admission Agreement containing the mandatory arbitration

clause. Ms. Reilly signed the RPA in her personal capacity; she executed the

Admission Agreement in her capacity as the Responsible Person. The Facility

contends that Ms. Reilly had express, implied, and apparent authority, as

well as authority by estoppel, to act as her mother’s agent and bind her to

the arbitration clause in the Admission Agreement.

      The basic elements of agency are the manifestation by the principal

that the agent shall act for him, the agent's acceptance of the undertaking,

and the understanding of the parties that the principal is to be in control of

the undertaking.   Washburn, supra at 1010.        As we held in Walton v.

Johnson, 66 A.3d 782, 786 (Pa.Super. 2013), “[a]n agent cannot simply by

[her] own words, invest [herself] with apparent authority.     Such authority

emanates from the action of the principal and not the agent.” Id. at 787.

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Furthermore, “[t]he relationship of agency cannot be inferred from mere

relationship or family ties unattended by conditions, acts or conduct clearly

implying an agency.” Id. We explained in Walton:

            An agency relationship may be created by any of the
      following: (1) express authority, (2) implied authority, (3)
      apparent authority, and/or (4) authority by estoppel. Express
      authority exists where the principal deliberately and specifically
      grants authority to the agent as to certain matters. See Bolus
      v. United Penn Bank, 363 Pa.Super. 247, 525 A.2d 1215
      (1987). Implied authority exists in situations where the agent's
      actions are 'proper, usual and necessary' to carry out express
      agency. See Passarelli v. Shields, 191 Pa.Super. 194, 156
      A.2d 343 (1959). Apparent agency exists where the principal,
      by word or conduct, causes people with whom the alleged agent
      deals to believe that the principal has granted the agent
      authority to act. See Turner Hydraulics v. Susquehanna
      Construction Co., 414 Pa.Super. 130, 606 A.2d 532 (1992).
      Authority by estoppel occurs when the principal fails to take
      reasonable steps to disavow the third party of their belief that
      the purported agent was authorized to act on behalf of the
      principal. See Turnway Corp. v. Soffer, 461 Pa. 447, 336
      A.2d 871 (1975).

Id.   Agency is not assumed merely because one person does an act for

another. Walton, supra at 787 (mother, who was not acting pursuant to a

power-of-attorney and had no express authorization when she signed an

arbitration agreement on behalf of her comatose daughter, was not acting as

daughter’s agent, and agreement was unenforceable).

      The Facility cites Commonwealth v. Maker, 716 A.2d 619 (Pa.Super.

1998), for the proposition that the principal/agent relationship can be

inferred from facts indicating the intention to create that relationship, such

as acquiescence or failure to disavow.    Inferences that Ms. Reilly was her

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mother’s agent for purposes of the Admission Agreement containing the

arbitration clause can be drawn, according to the Facility, from the signed

Admission Agreement itself, the RPA, the 2014 durable power-of-attorney,

the close familial relationship, and Ms. Clementson’s payment for and

acceptance of its services.

      Ms. Clementson counters that the court in Maker, supra, found an

agency relationship based upon the conduct of the principal, rather than the

actions of the alleged agent.     She argues that the RPA signed by her

daughter did not supply the requisite authority for Ms. Reilly to agree to

arbitration on her behalf, as apparent authority must emanate from the

principal, rather than the agent. The principal must manifest “assent that

another person (the agent) will act on the principal’s behalf subject to the

principal’s control, and the agent agrees to do so.” Wisler, supra at 323-

24. Ms. Clementson maintains that the Facility offered no evidence of any

words or conduct on her part at the time that could be construed as

conferring authority upon her daughter to bind her to the agreement to

arbitrate.

      Moreover, Ms. Clementson contends that the 2014 durable power-of-

attorney does not cure that deficiency. Since the later-executed power-of-

attorney did not contain any provision that it was to be retroactively applied,

she maintains it was not retroactive. Twp. of N. Fayette v. Guyaux, 992

A.2d 904, 905 (Pa.Super. 2010).       Finally, according to Ms. Clementson,

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agency by estoppel would require a showing that she knew or should have

known that her daughter waived her jury-trial rights.               There was no

allegation or showing of such knowledge. Thus, absent a power-of-attorney

or a guardianship, evidence of Ms. Clementson’s conduct at the time, or that

she knew about the arbitration agreement, Walton, supra, negates any

agency relationship.    Ms. Reilly signed the RPA, which bound her, not her

mother.      It did not create an agency relationship with her mother.          She

signed the Admission Agreement in her capacity as the Responsible Person,

a power that did not emanate from her mother.

      As the trial court correctly concluded, neither the RPA nor the 2014

durable power-of-attorney created either an express or an implied agency.

Ms. Clementson did not sign the RPA or any other document conferring

authority upon her daughter, and “[a]n agent cannot, simply by [her] own

words, invest [herself] with apparent authority.” Turnway Corp. v. Soffer,

336 A.2d 871, 876 (Pa. 1975). The trial court also correctly noted that the

later-executed    power-of-attorney   was      not   retroactive   as   the   powers

designated therein were not explicitly retroactive.         Thus, the trial court

properly concluded that Ms. Reilly lacked apparent authority to act as there

was no manifestation by the principal, Ms. Clementson, establishing such

authority.

      We note further that the Facility did not allege facts or circumstances,

or adduce evidence from which one could reasonably infer that Ms.

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Clementson consented to her daughter signing the Admission Agreement.

There is no evidence of Ms. Clementson’s mental and physical condition at

the time.   Thus, we cannot discern whether Ms. Clementson was mentally

and/or physically incapable of signing the Admission Agreement herself, or

mentally competent to authorize her daughter to act as her agent.          In

addition, there is no indication that she was present when the Admission

Agreement was signed, that she knew what it contained, or that she was

provided with a copy.

     Finally, we find no agency by estoppel simply because Ms. Clementson

did not disavow the arbitration agreement or because she benefitted from

the services provided. In Petersen v. Kindred Healthcare, Inc., 155 A.3d

641 (Pa.Super. 2017), we considered whether agency by estoppel applied to

compel arbitration where the patient’s daughter signed the relevant

paperwork. The daughter was named as a successor agent on the patient’s

power-of-attorney.   On appeal, Kindred, similar to the arguments lodged

herein, claimed   that   Petersen’s acceptance   of   medical benefits,   the

documents signed by her daughter, and the admission agreement itself,

created an agency relationship binding her to arbitration. We observed,

     Here, Kindred’s argument on this issue is misplaced. While
     agency by estoppel is essentially a determination of agency by
     after-the-fact actions by the principal, Kindred focuses its
     argument on the actions of [Petersen’s daughter]. As such, its
     claim is fatally flawed.




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      In any event, Kindred offered no evidence to demonstrate that
      Petersen acted negligently or had any reason to believe that
      Kindred was acting upon a mistaken belief as to [the daughter’s]
      authority – or lack thereof – under the [power-of-attorney].
      Peterson had no knowledge of the circumstances surrounding
      the execution of the ADR agreement. She was not present at its
      execution, and [her daughter] did not show the ADR agreement
      to her after the fact . . . . Kindred never presented the ADR
      agreement to Petersen for ratification and there is no basis to
      believe that she knew or should have known about the
      agreement.

Petersen, supra at 647 (internal citations omitted, emphasis in original).

Since Kindred failed to establish that Petersen was negligent in failing to

correct Kindred’s mistaken belief about her daughter’s authority, we found

that agency by estoppel did not apply. See also Washburn, supra (absent

evidence that decedent knew his wife signed arbitration agreement, no basis

to infer that she was authorized to do so).

      Herein, there was no assertion that Ms. Clementson was unable to sign

the Admission Agreement, that she was aware that Ms. Reilly was signing

documents on her behalf, or that she knew or should have known that the

Admission Agreement contained an arbitration clause.     The Facility did not

allege or proffer evidence that it later presented it to Ms. Clementson for

ratification.   Thus, the record does not support a finding of agency by

estoppel.

      In sum, we find no error in the trial court’s finding that there was no

agency, and hence, no binding agreement to arbitrate.      The RPA was an

agreement between the Facility and Ms. Reilly personally; she did not


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execute it pursuant to any authority conferred upon her by her mother. By

executing that document, Ms. Reilly agreed to submit the necessary

paperwork to facilitate reimbursement from applicable insurance, to pay any

amounts owing, and to be personally liable for non-payment.

       Similarly, the Admission Agreement was an agreement between the

Facility and Ms. Reilly as the Responsible Person.           As the Responsible

Person, Ms. Reilly had no authority from her mother to act on her behalf or

bind her to the terms of the Admission Agreement. While "a party can be

compelled to arbitrate under an agreement, even if he or she did not sign

that agreement, if common-law principles of agency and contract support

such an obligation on his or her part[,]” Wisler, supra at 323, there was no

proof of agency herein.            There is no evidence that Ms. Clementson

authorized Ms. Reilly to agree to arbitrate on her behalf, and thus, no

agreement to arbitrate that is binding upon Ms. Clementson.

       Accordingly, we need not reach the alternative basis for affirmance

advanced by Ms. Clementson, i.e., that the arbitration agreement was an

unenforceable contract of adhesion.5           We observe only that many of the

characteristics of the arbitration agreement held to be conscionable in


____________________________________________


5 The burden of proving unconscionability is upon the party challenging an
agreement, with the ultimate determination to be made by the courts.
Salley v. Option One Mortg. Corp., 925 A.2d 115, 119-20 (Pa. 2007).



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MacPherson v. Magee Mem. Hosp. for Convalescence, 128 A.3d 1209,

1213 (Pa.Super. 2015) (en banc), are not present herein.6

       Order affirmed. Jurisdiction relinquished.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 3/29/18
____________________________________________


6 For instance, the agreement to arbitrate in MacPherson v. Magee Mem.
Hosp. for Convalescence, 128 A.3d 1209, 1213 (Pa.Super. 2015) (en
banc), was a separate document from the Admission Agreement and clearly
identified as an arbitration agreement.       Moreover, arbitration was not
mandatory, and the reader was informed that admission to the facility was
not conditioned upon agreeing to arbitrate (“VOLUNTARY AGREEMENT: If
you do not accept this Agreement, the Patient will still be allowed to live in,
and receive services in, this Center.”). Here, by signing the Admission
Agreement, the Resident or her agent agreed to arbitrate, and it is unclear
whether a refusal to arbitrate would result in the denial of admission.

In MacPherson, the jury trial waiver language was in bold type, much
larger than the surrounding type, and thus, conspicuous.          Here, the
agreement to arbitrate is located on page 10, in paragraph 20, of a fourteen
page Admission Agreement. It appears under the general designation
“Community’s Grievance Procedure.” The jury trial waiver is not in bold type
or large font.

Unlike the agreement in MacPherson, the Facility retained the right to
choose the arbitration site and unilaterally modify the Admission Agreement
containing the arbitration agreement, arguably making the latter more
favorable to the drafting party. The cost of arbitration is split under the
Agreement herein, unlike the MacPherson agreement where the nursing
home bore all of the costs.



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