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Colorow Health Care, LLC v. Fischer

Supreme Court of Colorado, En Banc

June 11, 2018

Colorow Health Care, LLC; QP Health Care Services, LLC, d/b/a Vivage; Travis Young; Beverly Cole; and Michael Reinhardt, Petitioners
Amy Fischer and Roger Fischer. Respondents Strictly Compliant Text Noncompliant Text

          Certiorari to the Colorado Court of Appeals Court of Appeals Case No. 15CA1252

          Attorneys for Petitioners Colorow Health Care, LLC; QP Health Care Services, LLC, d/b/a Vivage; Beverly Cole, and Michael Reinhardt: Hall & Evans, L.L.C. David Gelman Alan Epstein Denver, Colorado

          Attorneys for Petitioner Travis Young: Senter Goldfarb & Rice, LLC Tiffaney Norton Denver, Colorado

          Attorneys for Respondents: Laszlolaw Theodore E Laszlo, Jr. Michael J. Laszlo Boulder, Colorado The Meyer Law Firm, P.C. William R. Meyer Boulder, Colorado.

          Attorneys for Amicus Curiae Colorado Health Care Association: Kittredge LLC Daniel D. Domenico Denver, Colorado MRDLaw Michael Francisco Colorado Springs, Colorado.

          Attorneys for Amicus Curiae Colorado Trial Lawyers Association: The Viorst Law Offices, P.C. Anthony Viorst Denver, Colorado.


          HOOD JUSTICE.

          ¶1 When Charlotte Fischer moved into a nursing home, she received an admissions packet full of forms. Among them was an agreement that compelled arbitration of certain legal disputes. The Health Care Availability Act ("HCAA" or "Act") requires that such agreements contain a four-paragraph notice in a certain font size and in bold-faced type. Charlotte's agreement included the required language in a statutorily permissible font size, but it was not printed in bold. Charlotte's daughter signed the agreement on Charlotte's behalf.

         ¶2 After Charlotte died, her family initiated a wrongful death action against the health care facility in court. Citing the agreement, the health care facility moved to compel arbitration out of court. The trial court denied the motion, and the court of appeals affirmed, determining the arbitration agreement was void because it did not strictly comply with the HCAA.

         ¶3 In this opinion, we consider whether section 13-64-403, C.R.S. (2017), of the HCAA, the provision governing arbitration agreements, requires strict or substantial compliance. We hold it demands only substantial compliance. We further conclude the agreement here substantially complied with the formatting requirements of section 13-64-403, notwithstanding its lack of bold-faced type.

         ¶4 Accordingly, we reverse the judgment of the court of appeals and remand for further proceedings consistent with this opinion.

         I. Facts and Procedural History

         ¶5 At eighty-nine years of age, Charlotte Fischer was admitted to a long-term health care facility operated by Colorow Health Care, LLC ("Facility") and its management company, QP Health Care Services, LLC. When Charlotte entered the Facility, her daughter Judith, acting as Charlotte's attorney-in-fact, filled out the admissions paperwork. As part of the entry packet, Judith signed an arbitration agreement ("Agreement"), [1] compelling arbitration for any claim arising from or relating to Charlotte's relationship with the Facility. The parties do not dispute that Judith signed it voluntarily on Charlotte's behalf.

         ¶6 Such arbitration agreements are governed by section 13-64-403 of the HCAA. This section instructs health care facilities to include certain language in these agreements, stating that patients need not sign them, and that care will not be withheld from those who refuse to do so. § 13-64-403(4). The HCAA also obliges health care facilities to print the language in at least ten-point, bold-faced type. Id. The Agreement included the HCAA-required language (albeit with some typos), in twelve-point type and all capital letters. But the Facility failed to print the language in bold-faced type.

         ¶7 Two years later, Charlotte died. According to Charlotte's granddaughter and grandson-in-law, Amy and Roger Fischer ("Fischers"), Charlotte died as a result of an assault committed by a Facility employee. The Facility disputes this. Despite the Agreement, the Fischers filed this wrongful death action against the Facility, its management company, and three of the Facility's employees in state court. The Facility filed a motion to compel arbitration. Because the Facility did not print the required language in bold-faced type, the Fischers claimed the Agreement was invalid. Agreeing with the Fischers, the trial court denied the motion. The Facility filed an interlocutory appeal.

         ¶8 The court of appeals affirmed, concluding (1) the HCAA demands strict compliance, and (2) the failure to include the necessary bold-faced type invalidated the arbitration agreement. The Facility appealed both conclusions, and we granted certiorari.[2]

         II. Analysis

         ¶9 We begin by discussing the standard of review and general principles of statutory interpretation. Next, we describe the relevant portions of the HCAA. We then evaluate whether section 13-64-403 of that Act requires strict or substantial compliance with its terms. After considering the statute's text and purpose, we conclude it demands only substantial compliance. Last, we assess whether the Agreement substantially complies with the HCAA's formatting requirements. We conclude that it does.

         A. Standard of Review

         ¶10 Whether a statute requires strict or substantial compliance is a question of statutory construction, see, e.g., Finnie v. Jefferson Cty. Sch. Dist. R-1, 79 P.3d 1253, 1255-58 (Colo. 2003), which we review de novo. Lewis v. Taylor, 2016 CO 48, ¶ 14, 375 P.3d 1205, 1208.

         ¶11 In interpreting statutes, we endeavor to give effect to the intent of the General Assembly. Coloradans for a Better Future v. Campaign Integrity Watchdog, 2018 CO 6, ¶ 16, 409 P.3d 350, 353. To determine that intent, we begin with a statute's plain language. Id. We apply the text as written, reading words in context, § 2-4-101, C.R.S. (2017), and according them their ordinary meanings. Coloradans for a Better Future, ¶ 16, 409 P.3d at 353.

         B. The Health Care Availability Act

         ¶12 The General Assembly enacted the HCAA, §§ 13-64-101 to -503, C.R.S. (2017), to "assure the continued availability of adequate health care services . . . by containing the significantly increasing costs of malpractice insurance for medical care institutions." § 13-64-102(1). In harmony with that stated intent, section 13-64-403 of the HCAA provides patients and health care facilities "an option to settle their claims in a timely fashion through arbitration." Moffett v. Life Care Ctrs. of Am., 219 P.3d 1068, 1074 (Colo. 2009) (quoting Colo. Permanente Med. Grp., P.C. v. Evans, 926 P.2d 1218, 1227 n.17 (Colo. 1996) (citing S. Floor Deb. on S.B. 143, 56th Gen. Assemb., 2d Sess. (Feb. 25, 1988) (statement of Sen. Ted Strickland))). By permitting parties to select arbitration, the HCAA allows them to curb litigation expenses, which in turn limits the price of malpractice insurance. Id. Because arbitration is efficient and cost effective, Colorado has long recognized it as a preferred method to settle disputes. See, e.g., Lane v. Urgitus, 145 P.3d 672, 678 (Colo. 2006) ("In Colorado, arbitration is a favored method of dispute resolution.").

         ¶13 While "allow[ing] arbitration of disputes, [the HCAA] also contains protective provisions curbing abusive practices in obtaining agreements to arbitrate." Moffett, 219 P.3d at 1073. The General Assembly's stated goal for section 13-64-403 is to ensure "that an arbitration agreement be a voluntary agreement between a patient and a health care provider." § 13-64-403(1) (emphasis added). To that end, the HCAA imposes certain requirements on arbitration agreements. Two are relevant to the case before us now. First, the Act requires health care companies to include particular language explaining that these agreements are voluntary. § 13-64-403(4).[3] Second, it requires that language be printed just above the signature line in at least ten-point font and bold-faced type. Id.

         ¶14 Of course, health care companies have to fulfill their obligations under the HCAA. But how perfectly must they conform to these requirements? That is, does this law require strict or substantial compliance? We turn to that question now.

         C. Does the HCAA Require Strict or Substantial Compliance?

         ¶15 "Not all directives and requirements declared in statute law should be understood to have equal force." 3 Norman Singer & Shambie Singer, Sutherland Statutory Construction § 57:1 (7th ed. 2017). To be sure, all statutes demand compliance, but the term "'[c]ompliance' . . . without further modification, connotes an element of degree." Woodsmall v. Reg'l Transp. Dist., 800 P.2d 63, 67 (Colo. 1990) (citations omitted). While some statutes require strict compliance, others demand only substantial compliance. Id. "Strict compliance leaves no margin for error and even technical deficiencies may be unacceptable. Substantial compliance is less than absolute, but still requires a significant level of conformity." The Grp., Inc. v. Spanier, 940 P.2d 1120, 1122 (Colo.App. 1997).

         ¶16 In this case, we find no easy answer from the General Assembly or from our prior decisions. The General Assembly often specifies the level of compliance it envisions, see, e.g., § 8-47-104, C.R.S. (2017) (substantial compliance); § 10-3-302, C.R.S. (2017) (strict compliance), but it did not do so anywhere in the HCAA. And although this court has touched on the HCAA in the past, see generally Moffett, 219 P.3d 1068 (considering whether the HCAA allows a person possessing a power of attorney ...

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