PruittHealth-Augusta, LLC v. Lyell

362 Ga.App. 799

870 S.E.2d 215

PRUITTHEALTH-AUGUSTA, LLC et al.

v.LYELL et al.

A21A1681

Court of Appeals of Georgia.

February 28, 2022

Jeffrey Daniel Braintwain, Atlanta, Randolph Page Powell Jr., James W. Purcell, Augusta, Mark J. Simmons Jr., David James Hymel, for Appellant.

Christopher Caleb Connor, Augusta, Kenneth Luke Connor, Anne Katharine Moore, for Appellee.

Doyle, Presiding Judge.

PruittHealth-Augusta, LLC, PruittHealth, Inc., a/k/a UHS Pruitt Corporation, PruittHealth Consulting Services, Inc., and Neil L. Pruitt, Jr., (collectively "PruittHealth") appeal from the trial court's denial of their motions to dismiss or, in the alternative, to stay proceedings and compel arbitration in the underlying wrongful death action filed by Connie Lyell, individually, as daughter of Dorothy Mae Watts, deceased, and as Administrator of the Estate of Dorothy Mae Watts. This Court granted PruittHealth's application for interlocutory appeal,¹ and PruittHealth now argues that the trial court erred by finding that the arbitration agreement was procedurally unconscionable. For the reasons that follow, we vacate the trial court's order and remand the case with direction.

"On appeal, this Court reviews the record de novo to determine whether the trial court's denial of the motion to compel arbitration is correct as a matter of law. However, we defer to the trial court's findings of fact upon which its denial was based unless those findings are clearly erroneous."²

Viewed in this light, the record shows that in April 2013, 76-year-old Watts moved from a nursing facility in another part of the state to PruittHealth's skilled nursing facility in Augusta. Prior to Watts's admission, her daughter and financial power of attorney, Connie Lyell, faxed to PruittHealth a copy of the financial power of attorney showing that Lyell had the ability to decide whether to pursue litigation, arbitration, or other matters on Watts's behalf.³

Despite this knowledge, PruittHealth, through its employee, Rose Merchant, presented to Watts 89 pages of admissions documents upon her arrival to the facility without Lyell being present. Included in the documents was an arbitration agreement. The documents were prepopulated with spaces for Watts's signature and also for Lyell's signature despite the fact that the documents were only presented to Watts to be signed. Merchant deposed that she never represented to any patient that signing the arbitration agreement was a prerequisite for admission to the facility.⁴ Moreover, despite the fact that she indicated on the documents that she gave a copy of the documents to Watts and Lyell, Merchant failed to do so.

Eventually, on October 5, 2018, Watts passed away after a fall from her bed two months earlier that resulted in numerous injuries, and Lyell filed the instant wrongful death action alleging negligence and other claims against PruittHealth.⁵ PruittHealth filed a motion to dismiss or, in the alternative, to stay proceedings and compel arbitration based on the arbitration clause signed by Watts at entry to PruittHealth's skilled nursing facility. Lyell responded, arguing that the arbitration agreement should not be enforced because it was unconscionable.

Following a hearing, the trial court denied PruittHealth's motion, concluding that the arbitration agreement was procedurally unconscionable and thus unenforceable. The court listed several factors it considered in making its ruling. Specifically, the court noted the lack of inquiry made by Merchant into Watts's medical condition or ability to read before presenting her with the arbitration clause to sign given the vulnerability of a patient entering a long-term nursing facility; the failure of the facility to have Lyell sign the agreement given its prior knowledge that Lyell was Watts's financial power of attorney and its inclusion of a specific place for signing Lyell's name to the agreement; and the failure of PruittHealth to provide a copy of the agreement to either Watts or Lyell given that it was company policy to do so and would have allowed Watts and Lyell 30 days in which to revoke the agreement to arbitrate. The court reasoned that "[n]o single failure of the Defendants le[d] this court to the conclusion that the Agreement, as executed, was procedurally unconscionable. Instead, it is the combined effect of all of those procedural deficiencies which leads this Court to conclude that the Agreement is procedurally unconscionable and, therefore, unenforceable."

Thereafter, the trial court issued a certificate of immediate review, this Court granted PruittHealth's discretionary appeal application, and this appeal followed.

In a single enumeration of error, PruittHealth challenges the court's order finding that the arbitration agreement was unenforceable because it was procedurally unconscionable. We agree.

"An unconscionable contract is abhorrent to good morals and conscience and is an agreement in which one of the parties takes a fraudulent advantage of another."⁶ A claim of substantive unconscionability " ‘looks to the contractual terms themselves’ "; a claim of procedural unconscionability " ‘considers the process of making the contract.’ "⁷

Here, the trial court erred by finding that the arbitration agreement was procedurally unconscionable. Despite the fact that one of the findings made by the trial court to support its finding of unconscionability was Merchant's failure to inquire into Watts's health and mental capacity at the time the agreement was signed, the trial court also acknowledged that Watts's mental capacity to enter into the arbitration agreement was undisputed by Lyell, and there was no other record evidence that Watts was incompetent. The trial court also found that the financial power of attorney did not divest Watts of the authority to enter into the arbitration agreement without Lyell's agreement; it then found that the fact that the prepopulated form was not signed by Lyell was evidence of unconscionability. But if Watts was competent to sign, as was undisputed, then it was unnecessary for Lyell to sign the agreement in order for it to bind Watts and require arbitration of any claims arising from PruittHealth's negligence regarding treatment of Watts.⁸

Evidence that PruittHealth failed to give copies of the signed agreement to Watts or to Lyell ...