Turner v. Concord Nursing & Rehab. Ctr., LLC

2023 IL App (1st) 221721

218 N.E.3d 456

467 Ill.Dec. 121

Barbara TURNER, as Attorney-in-Fact for Marvin Turner, Plaintiff-Appellee,

v.CONCORD NURSING AND REHABILITATION CENTER, LLC, d/b/a Aperion Care Oak Lawn, Defendant-Appellant.

No. 1-22-1721

Appellate Court of Illinois, First District, First Division.

Filed March 20, 2023

Ronald E. Neroda and Rain Montero, of Cassiday Schade LLP, of Chicago, for appellant.

Jonathan W. Young, of Ferrell Young, LLC, of Chicago, for appellee.

JUSTICE HYMAN delivered the judgment of the court, with opinion.

¶ 1 Barbara Turner, as independent administrator of the estate of her uncle, Marvin Turner, sued Concord Nursing and Rehabilitation Center, LLC (Concord), doing business as Aperion Care Oak Lawn (Aperion) under the Nursing Home Care Act, the Wrongful Death Act, and the Survival Act, alleging Marvin suffered and died due to Aperion's negligent care and treatment. Aperion answered the Wrongful Death and Survival Act claims and moved to dismiss and compel arbitration of the Nursing Home Care Act claim under an arbitration agreement that Marvin signed two months before his death. The trial court denied Aperion's motion, finding the arbitration agreement unenforceable as a matter of law on (i) procedural unconscionability because Marvin had little choice but to accept the terms of the 120-page admissions packet, which included the arbitration agreement, and (ii) substantive unconscionability because the arbitration agreement limited damages to $250,000 and disallowed statutory attorney fees and punitive damages.

¶ 2 Aperion argues the trial court erred in finding the arbitration agreement unenforceable, arguing (i) adequate consideration, (ii) Marvin's competence, (iii) that the agreement was neither substantively nor procedurally unconscionable, and (iv) enforceability under the federal Arbitration Act ( 9 U.S.C. § 1 et seq. (2018) ). Alternatively, Aperion asks that we sever from the remainder of the agreement provisions deemed unenforceable.

¶ 3 We affirm the trial court's finding that the agreement was procedurally unconscionable because Marvin had little choice in accepting the terms despite contrary language buried in the packet and substantively unconscionable because it deprived Marvin of his statutory attorney fees and limited his damages to $250,000. Further, severance of the unenforceable provisions, which Aperion did not raise in the trial court, was not an available remedy.

¶ 4 Background

¶ 5 Marvin Turner, now deceased, resided at Aperion, a long-term care facility, between January 2016 and April 2020. Marvin had been diagnosed with multiple sclerosis and end-stage renal disease. He had numerous stays in the hospital between 2018 and 2020 for his underlying conditions and treatment of other ailments, including septic shock resulting from pressure sores and ulcers. In December 2019, doctors amputated Marvin's right leg above the knee due to an infected pressure wound on his ankle.

¶ 6 On February 24, 2020, Marvin was "readmitted" to Aperion on returning from the hospital. Aperion's admissions director, Diamond Walton, presented Marvin with its 120-page admissions packet and asked that he sign in 20 locations throughout the packet, including the rider, a three-page arbitration agreement. Relevant here, the arbitration agreement contained provisions as to costs, attorney fees, and damages:

"5. In consideration for the execution of this agreement, Facility agrees to pay up to $3,000.00 of the Resident's Arbitration or Mediation costs, and out-of-pocket expenses for any claim brought against the Facility regardless of the outcome; the Resident shall have the right to demand non-binding mediation prior to arbitration; and the Resident shall have the right to choose when to initiate said proceedings. If nonbinding mediation is elected but is unsuccessful at resolving all claims or controversy's [sic ], then those unresolved matters shall be settled by binding arbitration.

6. The parties acknowledge and agree that with regard to any claim brought by a party to this Rider against the other party, shall be limited to actual out-of-pocket costs actually incurred PLUS an amount not to exceed $250,000.00 for any and all other damages. Such claims include but are not limited to the Facility for unpaid fees, or charges for damage to the facility, or a claim by, or on behalf of, a Resident, Resident Party, or by a Resident's Estate, Agent or Legal Representative, arising out of care or treatment received by the Resident while at said Facility.

7. Resident shall not be entitled to Statutory Attorney Fees, including those delineated in the Illinois Nursing Home Care Act and Missouri's ‘Omnibus Nursing Home Act’, and no Punitive Damages will be awarded to either Resident or Facility. The attorneys for both Resident and Facility will be paid fees and costs per their own respective client agreements."

¶ 7 The arbitration agreement further provided the "health care arbitration agreement shall constitute an integral part of the Resident's underlying admission and/or continued residency; but *** is not a condition to the admission, or to the rendering of health care services."

¶ 8 Three days later, Turner filed a complaint as Marvin's attorney-in-fact alleging Aperion's negligent care of Marvin violated the Nursing Home Care Act ( 210 ILCS 45/1-101 et seq. (West 2020)), causing injury, including multiple stage two, three, and four pressure wounds, one of which resulted in amputation.

¶ 9 About a month after that, Marvin returned to the hospital due to a fever, altered mental status, and hypotension. He also had a high white blood cell count and ulcers on his left foot with necrosis of the bone and gangrene. Marvin went back to Aperion for a day before returning to the hospital for treatment of hypotension, hypoxemia, and acute septic shock. On April 14, 2020, the hospital discharged Marvin for hospice care at Turner's home, where he died within a few days.

¶ 10 Turner filed a first amended complaint as independent administrator of Marvin's estate, which she later amended, realleging negligence and violations of the Nursing Home Care Act (count I) and adding claims under the Wrongful Death Act ( 740 ILCS 180/0.01 et seq. (West 2020)) (count II) and the Survival Act ( 755 ILCS 5/27-6 (West 2020) ) (count III).

¶ 11 Concord filed an answer denying the substantive allegations in counts II and III and moved to dismiss and compel arbitration on count I, the Nursing Home Care Act claim, under section 2-619 of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-619 (West 2020) ). Concord argued the arbitration agreement was enforceable and the allegations of Turner's complaint fell within its scope. Turner responded that the arbitration agreement was invalid due to (i) procedural and substantive unconscionability, (ii) insufficiency of consideration, (iii) lack of requisite mental capacity, and (iv) deprivation of the protections of the Nursing Home Care Act.

¶ 12 Diamond Walton testified by deposition that an audit revealed the nursing home had lost or misplaced Marvin's original admissions documents, so on Marvin's readmission on February 24, 2020, she went to Marvin's room and spent up to an hour explaining the admissions packet to him. Marvin recognized her, and they joked as they usually did. She had no concerns about his ability to understand the agreement; if she had, she would have contacted Turner. Walton told him that he could have an attorney review the packet. Marvin had no questions and signed and dated the documents. (It is unclear from the record, but Marvin's signature, which occurs 20 times, appears to have been inserted via a computer program.)

¶ 13 Turner, also testifying by deposition, said she had Marvin's power of attorney and made all of his medical and financial decisions. (The power of attorney agreement stated that Marvin could continue making decisions for himself as long as he could.) Turner said that in February 2020 Marvin was confused; had difficulty reading, comprehending, and speaking; and could not sign his name. She acknowledged she was not in the room when Walton presented Marvin with the admissions packet nor had personal knowledge of what occurred or his condition that day.

¶ 14 After a hearing, the trial judge denied Aperion's motion to dismiss and compel arbitration for the reasons stated in open court. The parties submitted an agreed statement of facts as to that ruling, indicating the trial court relied on Bain v. Airoom, LLC , 2022 IL App (1st) 211001, 462 Ill.Dec. 712, 207 N.E.3d 1015, to hold the arbitration agreement to be procedurally and substantively unconscionable. Regarding procedural unconscionability, the court found the agreement contained a lengthy admissions packet and Marvin had little choice in accepting the documents if he wanted readmittance. As to substantive unconscionability, the court found the agreement limited damages to $250,000 and prohibited statutory attorney fees and punitive damages. Because the trial court denied Aperion's motion on conscionability, it did not address Turner's argument that Marvin lacked the capacity to enter into the arbitration agreement.

¶ 15 Analysis

¶ 16 Standard of Review

¶ 17 We review the denial of a motion to dismiss and to compel arbitration under section 2-619 of the Code de novo. Peterson v. Residential Alternatives of Illinois, Inc. , 402 Ill. App. 3d 240, 244, 342 Ill.Dec. 110, 932 N.E.2d 1 (2010). We also review de novo an arbitration agreement's construction and invalidity for procedural or substantive unconscionability. Kinkel v. Cingular Wireless, LLC , 223 Ill. 2d 1, 22, 306 Ill.Dec. 157, 857 N.E.2d 250 (2006).

¶ 18 Unconscionability

¶ 19 By adopting the Arbitration Act, our legislature placed arbitration agreements on equal footing with other contractual promises. See 710 ILCS 5/1 (West 2020) (providing arbitration agreement "is valid, enforceable and irrevocable save upon such grounds as exist for the...