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Fischer v. Colorow Health Care, LLC

Court of Appeals of Colorado, Second Division

September 8, 2016

Amy Fischer and Roger Fischer, Plaintiffs-Appellees,
v.
Colorow Health Care, LLC; QP Health Care Services, LLC, d/b/a Vivage; Beverly Cole; Michael Reinhardt; and Travis Young, Defendants-Appellants.

         Montrose County District Court No. 14CV30176 Honorable Mary E. Deganhart, Judge

          Laszlo & Associates, LLC, Theodore E. Laszlo, Jr., Michael J. Laszlo, Boulder, Colorado, The Meyer Law Firm, P.C., William R. Meyer, Boulder, Colorado, for Plaintiff-Appellee

          Fennemore Craig, David Gelman, Troy R. Rackham, Denver, Colorado, for Defendant-Appellants Colorow Health Care, LLC, QP Health Care Services, LLC, Beverly Cole, and Michael Reinhardt

          Senter Goldfarb & Rice, L.L.C., Tiffaney A. Norton, Denver, Colorado, for Defendant-Appellant Travis Young

          OPINION

          WEBB JUDGE

         ¶ 1 In deciding the enforceability of an agreement to arbitrate under the Health Care Availability Act (HCAA), should the test be strict compliance or substantial compliance with the textual and typographical requirements of section 13-64-403, C.R.S. 2015? And if the test is strict compliance, does the absence of bold-faced type, required under section 13-64-403(4), doom the agreement? Neither of these questions has been answered in Colorado.

         ¶ 2 Plaintiffs, Amy Fischer and Roger Fischer, pleaded tort claims arising from the death of Charlotte Fischer (the decedent). Defendants, Colorow Health Care, LLC, QP Health Care Services, LLC, d/b/a Vivage, Travis Young, Beverly Cole, and Michael Reinhardt, appeal the trial court's order denying their motions to compel arbitration. Applying the strict compliance test, we conclude that because the arbitration agreement did not satisfy the bold-faced type requirement, it is unenforceable. Therefore, we affirm.

         I. Facts and Procedural History

         ¶ 3 Colorow Health Care, LLC, and its management company, QP Health Care Services, LLC, d/b/a Vivage, operate a long-term health care facility. When the decedent was admitted to the facility, her daughter, acting under a power of attorney, signed an arbitration agreement. The decedent passed away while a resident of the facility. The circumstances of her death are disputed.

         ¶ 4 After plaintiffs brought this action, defendants moved to compel arbitration. Plaintiffs opposed the motions based on discrepancies between the wording and typography of the arbitration agreement and the requirements of section 13-64-403(3) and (4). Initially, the trial court granted the motion, but set a hearing on plaintiffs' attempt to rescind the agreement.

         ¶ 5 Following that hearing and additional briefing, the court reversed itself. It noted that while the arbitration agreement included most of the language required by section 13-64-403(3), "there are some typos and words omitted." It also pointed out that the agreement "contains the required language from section 13-64-403(4), " but this language is only in capital letters and is not in bold-faced type, as the statute requires. Explaining that "the entity seeking to enforce the arbitration agreement must be held to strict compliance with [the statutory] requirements, " the court held that the agreement "is not valid and the Motions to Compel Arbitration are denied." However, the court did not make any findings whether the decedent's attorney-in-fact had misunderstood the agreement when she signed it.

         ¶ 6 Defendants then filed this interlocutory appeal as of right under section 13-22-228(1)(a), C.R.S. 2015.

         II. Preservation and Standard of Review

         ¶ 7 The parties' motions, briefs, and arguments below preserved the issue of the validity of the arbitration agreement.

         ¶ 8 Statutory interpretation is subject to de novo review. Lewis v. Taylor, 2016 CO 48, ¶ 14.

         III. The Statute

         ¶ 9 Section 13-64-403 is a gatekeeper. It sets out specific language that an arbitration agreement must include to comply with the HCAA. Subsection 403(4) provides language that must appear "[i]mmediately preceding the signature lines for such an agreement, . . . [and] shall be printed in at least ten-point, bold-faced type . . . ." § 13-64-403(4). And "an agreement may . . . be declared invalid by a court if it is shown by clear and convincing evidence that . . . [t]he agreement failed to meet the standards for such agreements." § 13-64-403(10)(a).

         IV. The Arbitration Agreement

         ¶ 10 The arbitration agreement between defendants and the decedent's daughter, as her representative, covers two-and-a-half pages. The first page and two-thirds of the second page define the claims and the parties subject to the agreement. Next, the agreement parrots the required language from subsection 403(3), in regular typeface, but with a few typographical errors and minor departures from the statutory text.

         ¶ 11 After the subsection 403(3) text, the agreement quotes the required language from subsection 403(4). This text was capitalized, and in twelve-point font, but in regular - as opposed to bold - typeface:

NOTE: BY SIGNING THIS AGREEMENT YOU ARE AGREEING TO HAVE ANY ISSUE OF MEDICAL MALPRACTICE DECIDED NY [sic] NEUTRAL BINDING ARBITRATION RATHER THAN [sic] JURY OR COURT TRAIL [sic].
YOU HAVE THE RIGHT TO SEEK LEGAL COUNSEL AND YOU AND [sic] RIGHT TO RESCIND THIS AGREEMENT WITHIN NINETY DAYS FROM THE DATE OF SIGNATURE BY BOTH PARTIES UNLESS THE AGREEMENT WAS SIGNED IN CONTEMPLATION OF HOSPITALIZATION IN WHICH CASE YOU HAVE NINETY DAYS AFTER ...

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