Monday, February 27, 2017

Dallas COA Orders Arbitration Based on Electronic Signature and Click Through User Agreement

Originally published by Beth Graham.

Texas’ Fifth District Court of Appeals in Dallas has ordered a health care liability lawsuit to arbitration based on an online click through agreement and a financial responsibility contract that contained an agreement to arbitrate.  In Athas Health LLC d/b/a North American Spine v. Melody Trevithick et al., No. 05-16-00219-CV (Tex. App – Dallas, February 17, 2017), a man, Paul Trevithick, underwent spinal surgery at a Dallas healthcare facility that was owned by Athas Health.  Prior to securing treatment, Trevithick completed detailed paperwork and requested an MRI via Athas Health’s website.

During the surgical procedure, Trevithick’s surgeon unintentionally punctured the dural membrane surrounding his spine.  About two weeks after the surgery, Trevithick unfortunately passed away as a result of Group B Strep Meningitis.  Following the man’s death, Trevithick’s surviving spouse filed a health care liability lawsuit against Athas Health.

In response to the wife’s lawsuit, Athas Health filed two separate motions to compel the case to arbitration.  The first motion claimed Trevithick agreed to arbitrate all claims against Athas Health when he checked a box stating “I accept the Privacy Policy and User Agreement” on the company’s website. In its second motion, the company argued Trevithick agreed to arbitration based on the user agreement and an electronically signed financial responsibility contract regarding payment for medical services received from Athas Health.  After both motions were denied, Athas Health filed two interlocutory appeals with Texas’ Fifth District Court of Appeals in Dallas.

The Dallas court first consolidated the two appeals before examining the facts of the case.  The court then addressed “whether arbitration was required by the arbitration clause in the financial agreement.”  According to the court, neither party asserted that the arbitration clause was ambiguous, nor did the parties dispute that Trevithick’s electronic signature appeared on the financial agreement.  In addition, the Court of Appeals stated neither party claimed “fraud, deceit, or misrepresentation was involved in his signing of the agreement.”

After that, the appellate court turned to the plaintiff’s claim “that Athas is not a party to the agreement and there is no evidence Trevithick entered into the agreement for Athas’s benefit.”  The court determined:

At the top of the financial agreement, the document identifies in bold print Red River Spine as the medical practice and Dr. Will as the physician for Trevithick’s surgery. Based on this, appellees contend the agreement was only between Trevithick, Red River Spine, and Dr. Will. The financial agreement does not define or otherwise limit the parties to the agreement as being only Trevithick, Red River Spine, and Dr. Will, however. Trevithick is the only party whose signature was required by the document. The financial agreement was sent to Trevithick by Athas along with other documents for him to sign. After signing the agreement, Trevithick returned it to Athas electronically. The arbitration provision, which takes up a large section of the financial agreement’s first page and is entirely in bold print, specifically states that it is solely between Trevithick and Athas. The content of the contract, and the circumstances surrounding its execution, indicate that Athas was as much a party to the contract as Red River Spine and Dr. Will and the agreement to arbitrate was solely between Trevithick and Athas.

Even if Athas is not a party to the financial agreement, it can enforce the arbitration provision as a third party beneficiary. See id. at 677. We ascertain the intentions of the parties to a contract by examining the contract’s express language. See Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011). Where it is clear from terms of the contract that the agreement to arbitrate was entered into for the benefit of non-signatories, those non-signatory parties may compel arbitration. See id.; Rubiola, 334 S.W.3d at 225–26; Sherer v. Green Tree Servicing LLC, 548 F.3d 379, 382 (5th Cir. 2008). In this case, the language of the contract clearly indicates that the arbitration agreement was intended to benefit Athas as it was the only entity identified in the clause with whom Trevithick agreed to arbitrate. Because the terms of the agreement clearly indicate Trevithick could be required to arbitrate with Athas, Athas may compel arbitration. See Sherer, 548 F.3d at 382.

The Dallas court next examined whether the plaintiff’s health care liability claims fell within the scope of the parties’ agreement to arbitrate.  The court stated that Texas law favors arbitration, particularly in situations where the arbitration clause is broad.  The Fifth District then examined the factual allegations asserted in the complaint before stating:

The financial agreement, along with the other documents submitted simultaneously by Trevithick, all concern or relate to the medical treatment Trevithick sought to obtain through Athas. The arbitration provision specifically states the parties agreed to arbitrate all claims between the parties arising out of services Athas provided to Trevithick relating to his medical treatment. The language relied on by appellees in the billing and payment section of the financial agreement falls far short of forceful evidence of a purpose to exclude health care liability claims from the broad arbitration provision specifically covering claims relating to medical treatment. See Abazi, 348 S.W.3d at 459. We conclude Athas established a valid arbitration clause and the claims in dispute fall within that agreement’s scope.

Since the plaintiff failed to successfully “raise an affirmative defense to the agreement’s enforcement,” Texas’ Fifth District Court of Appeals in Dallas concluded “the trial court abused its discretion in denying Athas’s second motion to compel arbitration.”  The appellate court ultimately reversed and remanded that case.

Photo credit: jurvetson via / CC BY

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

from Texas Bar Today
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