Pa appellate court holds nursing home’s arbitration clause doesn’t cover tort claims

by Paul Bland

On Twitter @PblandBland

In Setlock v. Pinebrook, a Pennsylvania appellate court read a nursing home's arbitration clause to cover only the types of disputes named, refusing the home's invitation to re-write the clause more broadly.

This is a tragic wrongful death and survivorship case, where nursing home personnel allegedly accidentally moved an elderly woman in a wheelchair in a negligent way that resulted in tossing her onto her head and face, which killed her.  The arbitration clause focused on disputes arising out of the Resident Agreement, and many of the surrounding paragraphs of the agreement deal with billing disputes, late fees, price increases, financial services, etc.

After discussing the details of the contract language at some length, the intermediate Pennsylvania state appellate Court concluded that the dispute predominantly dealt with financial obligations and contract terms, and was not intended to cover tort claims.

One issue lurking behind the opinion is how arbitration clauses are to be interpreted.  Corporations often turn to language from a 1983 U.S. Supreme Court decision, Moses H. Cone, which indicates that arbitration clauses should be interpreted generously to find that claims arising under them are arbitrable.  But in a subsequent decision, the Supreme Court applied the normal rule that a contract is to be construed against its drafter, in the case of Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 63, (1995), and the relationship between these two cases has often come up in lower court decisions. 

The family's lawyer, John R. Kantner, did a terrific job presenting the case to the court.