In a recent decision, the Appeals Court of Massachusetts, in Walker v. Collyer, 85 Mass. App. Ct. 311 (2014), holds that physician Charles Walker cannot be compelled to arbitrate a medical malpractice claim despite an arbitration agreement signed by the senior health care facility at which he treated patients. He had not signed the agreement.
Karl Collyer, now deceased, was admitted to The Oaks for rehabilitation after hip replacement surgery. Upon admission, Collyer and the facility entered into a voluntary arbitration agreement (no doubt signed by Collyer as part of a pile of admission papers). The agreement includes language covering “all disputes” that arise out of or are “in any way related or connected to the Resident’s stay and care provided at the Facility.” The agreement goes on to define all parties subject to its terms including agents and employees of the facility.
Walker is the attending physician and subacute rehab program medical director at The Oaks, but he is an independent contractor, not an employee. Walker treated Collyer during his four-day stay at The Oaks, conducting his physical examination, signing his admissions order and later signing his discharge order. Less than three days after his discharge, Collyer died from bilateral pulmonary thrombosis.
Jennifer Collyer, the administratrix of Collyer’s estate, brought an arbitration proceeding for medical malpractice against Walker pursuant to the agreement signed by the facility and Collyer. Walker argued he was not bound by the agreement nor could he be compelled to arbitrate. After a hearing ordering Walker to participate in an arbitration proceeding, Walker challenged the order in superior court which ruled against him. Walker appealed. In this case, the court considers whether and under what circumstances a signatory (Collyer) can compel a nonsignatory (Walker) to arbitrate a dispute he did not personally agree to arbitrate.
Under traditional contract law, a party may not be bound by an agreement to which he did not agree to or sign. However, there are exceptions to the rule. Collyer argues that under the theories of “estoppel” and “agency,” Walker was required to arbitrate. The doctrine of estoppel provides that a party may not deny (they are estopped from denying) the existence of a state of facts or agreement if they are to benefit from such an agreement and injustice can be avoided only by enforcement of that agreement. An agency relationship results from the principal and agent’s consent, that the agent will act on the principal's behalf and subject to his control.
The court disagrees with both theories proposed by Collyer, finding that any benefits Walker received as a result of the agreement were too minimal and indirect to bind him as a nonsignatory under the theory of estoppel and the situation was not one that fit within the agency exception allowing agents to bind principals by their actions. Although a principal may be bound by the actions of his agent, the reverse is not true. The Oaks, as principal, cannot bind Walker, as agent. Walker, as an independent contractor is not an employee of The Oaks, and thus he is not an agent of the facility.
One wonders if the court might have reached a different result if Jennifer Collyer had argued that The Oaks was Walker’s agent, rather than the other way around. It seems reasonable that Walker agreed to the terms of his treatment of Collyer through his agent, The Oaks.
Alexandra Lowe, a law clerk with Margolis & Bloom, will be entering her third year at Suffolk University Law School in September.
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