[Cite as Miller v. Cardinal Care Mgt., Inc.,

.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

MARK MILLER, ET AL., :

Plaintiffs-Appellants, : No. 107730 v. :

CARDINAL CARE MANAGEMENT, : INC., ET AL. Defendants-Appellees. :

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED RELEASED AND JOURNALIZED: July 11, 2019

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-18-898372

Appearances:

Djordjevic and Marmarous, L.L.C., Peter W. Marmaros and Michael M. Djordjevic; Bashein and Bashein Co., L.P.A., and W. Craig Bashein; Paul W. Flowers Co., L.P.A., Paul W. Flowers, and Louis E. Grube, for appellees.

Tucker Ellis, L.L.P., Kelli R. Novak, Ernest W. Auciello, and Susan Audey, for appellants.

KATHLEEN ANN KEOUGH, J.:

Defendants-appellants, Cardinal Care Management, Inc.; Cardinal

Care Management; Foundations Health Solutions, Inc.; Saybrook Landing Health

and Rehabilitation; Saybrook Meadows Retirement Center, Inc.; Saybrook Meadows, Ltd.; Jefferson Healthcare Center, L.L.C.; Jefferson Healthcare Center;

Bonnie Foderetti, STNA; Brian McNaughton, Catherine Higgins, STNA; Christy

Vincenzo, LPN; Dawn King, LPN; Eric Woodin, Erin Harper, George Dubic, Jamie

Burckhartte, LPN; Jessica Rich, RN; Joyce Bovee, STNA; Krystal Ramirez, LPN;

Megan Green, RN; Molly McCluskey, LPN-MDS; Nancy Huston, RN; Peter Vilasi;

Rochelle Perkio, RN; Sarah E. Smith, LPN; Shelley Styzej, LPN; and Susan Madsen

(collectively the “Saybrook defendants”), appeal from the trial court’s judgment

denying their motion to stay proceedings and compel arbitration. For the reasons

that follow, we affirm.

I. Background

On December 22, 2016, Lori Miller (“Miller” or “Lori Miller”) became

a resident of Saybrook Landing nursing home (“Saybrook Landing”). Eight days

later, she was dead. On May 24, 2018, Miller’s children — Mark Miller, individually

and as administrator of Miller’s estate, Kimberly Gonzalez, and Katrina Miller

(collectively “plaintiffs-appellees”) — brought suit against Saybrook Landing and the

Saybrook defendants, as well as various University Hospitals entities and doctors

associated with those entities, alleging that Miller died as a result of the defendants’

substandard care. The complaint asserted claims for negligence, survivorship,

statutory violations of the Nursing Home Residents’ Bill of Rights, loss of

consortium, reckless and conscious disregard of Miller’s rights and safety, and

wrongful death. Saybrook Landing and the Saybrook defendants answered the

complaint. Among their affirmative defenses was an assertion that plaintiffs-

appellees’ claims were subject to an arbitration agreement, which they attached as

an exhibit to their answer.

Saybrook Landing and the Saybrook defendants subsequently filed a

motion to stay proceedings and compel arbitration. In their motion, Saybrook

Landing and the Saybrook defendants argued that upon her admission to Saybrook

Landing on December 22, 2016, Lori Miller executed all admission paperwork. They

asserted that among the paperwork was a three-page arbitration agreement

providing that arbitration was to be used to resolve disputes. The agreement stated:

INTRODUCTION

This agreement sets forth a resolution procedure by which the Resident and Facility intend to resolve all disputes which may arise between them concerning any disagreement arising out of the Nursing Facility Admission Agreement.

The procedure is intended to be a speedy and economic alternative to court litigation which is often slow, time-consuming and expensive. By using private arbitration without the right to appeal, the parties are able to avoid crowded court dockets and lengthy appeals processes.

The arbitration agreement stated that any disagreement regarding

nonpayment or overpayment of any fee “by the Resident, Resident’s Representative,

or the Facility may be adjudicated in a court of law, unless arbitration is mutually

agreed upon by the parties.” Regarding other disputes, the agreement stated:

ALL OTHER DISPUTES

Any controversy, dispute, disagreement or claim of any kind arising out of, or related to the Nursing Facility Agreement (other than the payment of charges as described above) shall be settled by binding arbitration. These disputes include, but are not limited to, all claims based upon breach of contract (other than claims arising out of nonpayment of charges), negligence, medical malpractice, tort, breach of statutory duty, resident’s rights, and any departures from accepted standards of care.

The agreement further stated that Miller or her “personal

representative” had the option of cancelling the agreement within 30 days of

signing.

Saybrook Landing and the Saybrook defendants attached a copy of

the arbitration agreement to their motion.1 The agreement was signed by Lori Miller

as “resident” and Carissa Allen as “representative of facility.” The agreement did not

define “facility,” other than to list “Saybrook Landing” as “name of facility.” In

addition, the agreement did not state that it applied to any corporate entities other

than “the facility,” nor that it applied to “the facility’s” agents or employees. The

agreement also did not state that the agreement to arbitrate disputes arising from

the Nursing Facility Agreement applied to Lori Miller’s heirs, beneficiaries,

successors, and assigns.2 Furthermore, the line for the signature of “representative

of resident” was blank.

1 The agreement was not verified by affidavit, and the bottom lines of the first and second pages were cut off and unreadable. 2 As willbe discussed later in this opinion, the agreement provided that if a dispute went to arbitration, the arbitrator’s decision was binding on all parties to the arbitration, and their successors and assigns. The arbitration agreement did not, however, state that the agreement itself was binding on Miller’s heirs, beneficiaries, successors, and assigns. In their motion, Saybrook Landing and the Saybrook defendants

contended that both Ohio and federal public policy favor arbitration as a means of

resolving disputes, and that arbitration agreements between nursing homes and

their residents are valid and enforceable where the agreement is not a precondition

to receiving care, such as the agreement signed by Lori Miller. They argued that the

arbitration agreement signed by Miller included claims arising out of “negligence,

medical malpractice, tort, breach of statutory duty, resident’s rights, and any

departures from accepted standards of care,” and that plaintiffs-appellees’ claims

fell “squarely” within the scope of the arbitration agreement, requiring the trial court

to enforce the agreement.

Saybrook Landing and the Saybrook defendants argued further that

in addition to arbitrating their other claims, the plaintiffs should be required to

arbitrate their wrongful death claim. They contended that the decision of the Ohio

Supreme Court in Peters v. Columbus Steel Castings Co.,

, 2007-

Ohio-4787,

, wherein the court held that a decedent cannot bind his

or her beneficiaries to arbitrate their wrongful death claims, was a “categorical rule”

against arbitrating wrongful death claims, in contravention of the Federal

Arbitration Act (the “FAA”), and thus was preempted by the FAA.

Notably, although the arbitration agreement specified that it was

between the “resident” and “the facility,” which was named in the agreement as

“Saybrook Landing,” and plaintiffs-appellees’ complaint asserted claims against

Saybrook defendants in addition to Saybrook Landing, Saybrook Landing and the Saybrook defendants offered no argument in their motion regarding why the

agreement would also apply to employees or agents of Saybrook Landing, or to

corporate entities other than Saybrook Landing. Additionally, although the

agreement stated that it applied to disputes “arising out of, or related to the Nursing

Facility Agreement,” and Saybrook Landing and the Saybrook defendants asserted

in a footnote to their motion that Lori Miller signed the Nursing Facility Agreement

when she was admitted, they did not provide a signed copy of the Nursing Facility

Agreement with their motion. Nor did they argue that plaintiffs-appellees’ claims

arose out of the Nursing Facility Agreement. Finally, Saybrook Landing and the

Saybrook defendants made no argument regarding why the arbitration agreement

would apply to the plaintiffs-appellees individually even though (1) they had not

signed the agreement, and (2) there was no provision in the agreement stating that

it applied to Lori Miller’s heirs, beneficiaries, successors, and assigns.

After Saybrook Landing and the Sayrook defendants filed their

motion to stay proceedings and compel arbitration, plaintiffs-appellees dismissed

Saybrook Landing from the suit without prejudice. They then filed a brief in

opposition to the Saybrook defendants’ motion.

In their brief in opposition, plaintiffs-appellees asserted that the trial

court should deny the Saybrook defendants’ motion because only signatories to an

arbitration agreement can be forced to arbitrate their claims, and the arbitration

agreement at issue was entered into between Lori Miller and an entity known as

“Saybrook Landing.” Plaintiffs-appellees noted that there was no language in the agreement joining any corporate entities other than Saybrook Landing to its terms,

and no language indicating that the agreement applied to employees, agents, or

other individuals associated with the facility. Accordingly, plaintiffs-appellees

argued that only Saybrook Landing had standing to enforce the agreement, and

because they had dismissed Saybrook Landing from the suit, none of the other

Saybrook defendants could enforce the agreement.

Plaintiffs-appellees argued further that the trial court should deny the

motion because the arbitration agreement was clearly limited to disputes arising out

of or related to the Nursing Facilities Agreement. They contended that the

complaint did not raise any such claims, and the trial court could not ignore the plain

language of the agreement to enforce the agreement.

Plaintiffs-appellees also argued that Lori Miller never got an

opportunity to cancel the arbitration agreement because she died before the 30-day

cancellation period set forth in the agreement had passed. Plaintiffs-appellees

argued that the failure of this condition precedent rendered the remainder of the

agreement invalid.

Further, plaintiff-appellees’ argued that they could not be forced to

arbitrate their wrongful death and loss of consortium claims because the Ohio

Supreme Court has held that individuals cannot release claims that are not yet in

existence and that accrue in favor of other persons, because these claims accrue

independently to beneficiaries for the injuries they suffered as a result of the decedent’s death. Thus, plaintiffs-appellees argued, an individual cannot bind his

or her beneficiaries to arbitrate their wrongful death and loss of consortium claims.

Finally, plaintiff-appellees argued that the arbitration agreement was

unconscionable because it provided that arbitration was to occur before the

American Health Lawyers Association, and plaintiffs-appellees would not receive an

impartial hearing before a tribunal composed solely of “attorneys who earn their

living defending hospitals, medical practitioners, and nursing homes.”

The trial court subsequently denied the Saybrook defendants’ motion,

ruling that “[t]he defendants’ motion to stay proceedings and compel arbitration,

filed 7/30/2018, is denied for the reasons argued by the plaintiffs other than

unconscionability. The evidentiary record is too scant to decide whether the

arbitration agreement is unconscionable.”3

This appeal followed.

II. Law and Analysis

The Saybrook defendants’ sole assignment of error on appeal is that

the trial court erred by denying their motion to stay proceedings and compel

3 The Saybrook defendants’ assertion on appeal that the trial court ruled on their motion “without giving [them] an opportunity to reply” seems disingenuous. In a journal entry dated July 19, 2018, the trial court noted that it held a case management conference at which “all counsel participated and agreed” that the defendants would file their motion to compel arbitration by August 1, 2018, and plaintiffs had until August 31, 2018, to file an opposition. The court also set a subsequent status conference for September 10, 2018. It is apparent from the trial court’s journal entry that a reply brief was not contemplated by the parties or the trial court. Furthermore, the Saybrook defendants could have filed a motion for reconsideration with a request for additional briefing in light of plaintiffs- appellees’ dismissal of Saybrook Landing after they filed their motion to stay proceedings and compel arbitration. They did not do so, however. arbitration. They argue that the trial court erred because the arbitration agreement

applies not only to Saybrook Landing as signatory, but also to its nonsignatory

agents and employees, who can enforce the agreement. They argue further that the

arbitration agreement applies to plaintiffs-appellees’ wrongful death claim because

that claim is preempted by the FAA.

“The core issue in any dispute regarding the arbitrability of a matter

is whether the parties agreed to arbitration.” N. Park Retirement Community Ctr.,

Inc. v. Sovran Cos., 8th Dist. Cuyahoga No. 96376,

. Arbitration

is contractual by nature, “so we are guided by ‘the principle that a party can be forced

to arbitrate only those issues it specifically has agreed to submit to arbitration.’”

quoting First Options of Chicago, Inc. v. Kaplan,

,

,

(1995). Thus, while there are strong federal and state policies

favoring arbitration agreements, ABM Farms, Inc. v. Woods,

,

(1998), such agreements must not be so broadly construed as

to encompass claims and parties that were not intended by the contract. I Sports v.

IMG Worldwide, Inc., 8th Dist. Cuyahoga No. 83349,

, citing

Thomson-CSF, S.A. v. Am. Arbitration Assn.,

(2d Cir. 1995). “While

arbitration is encouraged as a form of dispute resolution, the policy favoring

arbitration does not trump the constitutional right to seek redress in court.” Peters

v. Columbus Steel Castings Co.,

,

,

. Where a party has not signed an arbitration agreement, there is a

presumption against arbitration. Fifth Third Bank v. Senvisky, 8th Dist. Cuyahoga

Nos. 100030 and 100571,

, citing Fifth Third Bank v. Rowlette,

10th Dist. Franklin No. 13AP-337,

, citing Taylor v. Ernst &

Young, L.L.P.,

,

,

, ¶ 21.

Nevertheless, in some circumstances, nonsignatories to arbitration contracts may

be contractually bound by ordinary contract and agency principles. N. Park

Retirement Community Ctr. at ¶ 17, citing Short v. Resource Title Agency, Inc., 8th

Dist. Cuyahoga No. 95839,

, ¶ 14. We apply a de novo standard of

review to determine whether a party has agreed to submit an issue to arbitration.

Rivera v. Rent A Ctr., Inc., 8th Dist. Cuyahoga No. 101959,

.

A. Mark Miller, Individually, Kimberly Gonzalez, and Katrina Miller did not sign the arbitration agreement and are not bound by its terms

On appeal, the Saybrook defendants concede that none of the

defendants other than Saybrook Landing signed the arbitration agreement. They

further concede that plaintiffs-appellees dismissed Saybrook Landing from the suit,

and accordingly, that the remaining Saybrook defendants are all nonsignatories to

the arbitration agreement. They contend that they can enforce the arbitration

agreement against plaintiffs-appellees, however, because they are all agents and

employees of Saybrook Landing.

The Saybrook defendants did not raise this argument in the trial

court, however. It is well settled that a party cannot raise new arguments and legal issues for the first time on appeal, and that failure to raise an issue before the trial

court waives that issue for appellate purposes. Cleveland Town Ctr., L.L.C. v. Fin.

Exchange Co. of Ohio, Inc., 2017 Ohio-384,

, ¶ 28 (8th Dist.); Kalish

v. Trans World Airlines, Inc.,

,

(1977) (appellate

courts “will not consider a question not presented, considered, or decided by a lower

court”). Thus, we will not consider this argument for the first time on appeal. See,

e.g., Senvisky, 8th Dist. Cuyahoga Nos. 100030 and 100571,

(court could not address new argument on appeal that arbitration

agreement was enforceable because plaintiff was a third-party beneficiary of the

arbitration agreement).

Even if we were to consider the argument, we would find it has no

merit. This court has recognized several theories under which nonsignatories may

be bound to the arbitration agreements of others. These theories, which arise from

common law principles of contract and agency law, are: (1) incorporation by

reference; (2) assumption; (3) agency; (4) veil piercing/alter ego; and (5) estoppel.

I Sports, 8th Dist. Cuyahoga No. 83349,

, citing Thomson-

CSF,

; Cleveland-Akron-Canton Adver. Coop. v. Physician’s Weight

Loss Ctrs. of Am.,

,

,

(8th Dist.).

The theories were explained in I Sports as follows: (1) a nonsignatory

may compel arbitration against a party to an arbitration agreement under a theory

of incorporation by reference where the party has entered into a separate contractual relationship with the nonsignatory that incorporates the existing arbitration clause;

(2) a nonsignatory may be bound by an arbitration agreement if the nonsignatory’s

conduct indicates that it assumed the obligation to arbitrate; (3) traditional

principles of agency law may bind a nonsignatory to an arbitration agreement; (4)

veil piercing and alter ego theories may be used to bind a nonsignatory corporation

to an arbitration agreement signed by another corporation; and (5) a nonsignatory

to an arbitration agreement may be estopped from denying an obligation to arbitrate

where the nonsignatory has knowingly accepted the benefits of an agreement that

contains an arbitration clause. Id. at ¶ 13-14.

With respect to Miller’s children, this case presents a situation in

which nonsignatories to an arbitration agreement are seeking to compel arbitration

against other nonsignatories. A review of the arbitration agreement demonstrates

that neither Mark Miller (individually), Kimberly Gonzalez, nor Katrina Miller

signed the agreement. Even assuming without deciding that the Saybrook

defendants are all agents and employees of Saybrook Landing and thus bound by

the arbitration agreement and able to enforce it, the Saybrook defendants have not

explained how plaintiffs-appellees can be bound by an agreement that none of them

signed. The Saybrook defendants make no argument that plaintiffs-appellees are

bound under any of the five theories discussed above, and we find nothing in the

record demonstrating that they would be bound under any of the theories.

Moreover, the arbitration agreement specifically limits arbitration to

“the Resident and Facility.” (“This agreement sets forth a resolution procedure by which the Resident and Facility intend to resolve all disputes * * *.”) Significantly,

the agreement contains no language whatsoever that the agreement to arbitrate

disputes applies to Lori Miller’s heirs, beneficiaries, successors, and assigns. We

recognize that in the section regarding the “Binding Nature of Arbitration,” the

agreement states that “[t]here shall be no appeal of the arbitrator’s decision by either

party. The decision of the arbitrator shall be binding on all of the parties to the

arbitration, and also on their successors and assigns.” This provision applies only

to the binding nature of the arbitrator’s decision after a dispute has been arbitrated,

however; it does not apply to the agreement itself to arbitrate disputes.

When confronted with an issue of contract interpretation, courts

should give effect to the intent of the parties to the agreement. The court examines

the contract as a whole and presumes that the intent of the parties is reflected in the

language used in the agreement. Martin Marietta Magnesia Specialties, L.L.C. v.

PUC of Ohio,

,

,

, ¶ 22. Although

Saybrook Landing apparently knew how to draft provisions of the agreement to

make them applicable to the resident’s successors and assigns — as evidenced by the

“Binding Nature of Arbitration” clause — it included no such language anywhere in

the agreement making the agreement as a whole, or specifically the resident’s

agreement to arbitrate disputes, binding upon the resident’s heirs, beneficiaries,

successors, and assigns. Accordingly, examining the arbitration agreement as a

whole, we find no intent by the parties to make the agreement binding upon a

resident’s heirs and beneficiaries and thus, conclude that although Miller’s signature on the arbitration agreement bound herself to arbitration, it did not bind her

children.

Furthermore, despite the reference in the arbitration agreement to a

“personal representative” for Miller, there is no argument that any of Miller’s

children were her “personal representative” for purposes of the agreement.

Although the agreement provides that “the personal representative of the resident”

has the right to cancel the agreement within 30 days of signing and further, and that

the representative may bring disputes regarding the nonpayment or overpayment of

fees in court, no personal representative for Lori Miller is named in the arbitration

agreement and no personal representative for Miller signed the agreement.

Accordingly, the arbitration agreement cannot be enforced against plaintiffs-

appellees Mark Miller, individually; Kimberly Gonzalez; and Katrina Miller.

B. Mark Miller, as administrator for the Estate, is not bound by the arbitration agreement

We also conclude that the agreement cannot be enforced against

plaintiff-appellee Mark Miller, as administrator for Lori Miller’s estate.

First, as noted above, the Saybrook defendants raised no argument

whatsoever in the trial court regarding how they could enforce the arbitration

agreement despite being nonsignatories to the agreement. Although they now

contend on appeal that they can enforce the agreement as “employees and agents”

of Saybrook Landing, they made no such argument in the trial court. Reviewing

courts do not consider questions not presented to the court whose judgment is

sought to be reversed. State ex rel. Qurto Mining Co. v. Foreman,

,

(1997). Thus, we cannot address this argument for the first time

on appeal.

Furthermore, although the arbitration agreement specifically states

that it applies to claims “arising out of the Nursing Facility Admission Agreement,”

the Saybrook defendants made no argument in the trial court that plaintiffs-

appellees’ claims arise from that agreement. Although they argue on appeal that

plaintiffs-appellees’ claims fall within the Nursing Facility Admission Agreement

because the complaint alleges there was a “binding contract” for defendants-

appellants to provide Lori Miller “adequate and appropriate medical treatment and

nursing care,” they made no such argument in the trial court. Nor did they

demonstrate that Lori Miller was even bound by the Nursing Facility Admission

Agreement; they did not provide a signed copy of the Nursing Facility Admission

Agreement to the trial court to demonstrate that Miller ever signed the agreement.

Despite this failure of proof, the Saybrook defendants’ argued in the

trial court and argue on appeal that the arbitration agreement should be enforced

because plaintiffs-appellees’ claims fall “squarely” within the “all claims” description

in the second sentence of the provision of the agreement regarding “All Other

Disputes.” But this argument ignores the first sentence of that section, which plainly

and unambiguously states, “Any controversy, dispute, disagreement or claim of any

kind arising out of, or related to the Nursing Facility Agreement (other than the

payment of charges as described above) shall be settled by binding arbitration.”

Although the next sentence of that section describes the type of claims that could arise from the Nursing Facility Agreement, such as “breach of contract, negligence,

medical malpractice, tort, breach of statutory duty, resident’s rights, and any

departures from accepted standards of care,” the “All Other Disputes” provision

specifically provides that the claims must arise from or be related to the Nursing

Facility Agreement. The Saybrook defendants would have this court simply ignore

that requirement of the arbitration agreement. However, “‘[i]n interpreting a

provision in a written contract, the words used should be read in context and given

their usual and ordinary meaning.’” Pantages v. Becker, 8th Dist. Cuyahoga No.

106407,

, quoting Carroll Weir Funeral Home v. Miller,

,

(1965). When read in context, the words used in the

“All Other Disputes” section are clear and unambiguous that disputes covered by the

agreement must arise out of or be related to the Nursing Facility Agreement, a

showing that the Saybrook defendants failed to make. And despite the Saybrook

defendants’ argument otherwise, plaintiffs-appellees’ general allegations in their

complaint of a breach of contract cannot be considered a stipulation that their claims

arise from the Nursing Facility Admission Agreement, or that the Nursing Facility

Admission Agreement even existed.

“Arbitration agreements apply to nonsignatories only in rare

circumstances.” I Sports, 8th Dist. Cuyahoga No. 83349,

,

citing Westmoreland v. Sadoux,

(5th Cir. 2002). In addition, the

party moving for arbitration has the burden of establishing the existence of an

enforceable arbitration agreement between it and the party against whom the moving party seeks enforcement. Senvisky, 8th Dist. Cuyahoga Nos. 100030 and

100571,

. The Saybrook defendants failed to demonstrate

that they are entitled to enforce the arbitration agreement as nonsignatories to the

agreement. Furthermore, even if they were entitled to enforce the arbitration

agreement, they have not demonstrated that the agreement applies to plaintiffs-

appellees’ claims. Accordingly, the trial court did not err in denying their motion to

stay proceedings and compel arbitration. In light of our holding, we find no need to

address any other outstanding issues that were raised. Defendants-appellants’

assignment of error is overruled.

Judgment affirmed.

It is ordered that appellees recover from appellants costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate issue of this court directing the common

pleas court to carry this judgment into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27

of the Rules of Appellate Procedure.

KATHLEEN ANN KEOUGH, JUDGE

SEAN C. GALLAGHER, P.J., and EILEEN A. GALLAGHER, J., CONCUR