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King v. Bryant

Supreme Court of North Carolina

January 27, 2017


         On discretionary review pursuant to N.C. G.S. § 7A-31 of a unanimous decision of the Court of Appeals, 235 N.C.App. 218, 763 S.E.2d 338 (2014), affirming an order entered on 10 May 2013 by Judge Lucy N. Inman in Superior Court, Cumberland County. After hearing oral argument on 18 May 2015 and receiving additional findings of fact following the entry of a remand order on 19 February 2016, the Court ordered the parties to submit supplemental briefs. Additional issues raised in the supplemental briefs heard on 31 August 2016.

          Beaver, Courie, Sternlicht, Hearp & Broadfoot, P.A., by Mark A. Sternlicht, for plaintiff-appellees.

          Walker, Allen, Grice, Ammons & Foy, L.L.P., by Robert D. Walker, Jr., O. Drew Grice, Jr., and Alexandra L. Couch, for defendant-appellants.

          Zaytoun Law Firm, PLLC, by Matthew D. Ballew, and Patterson Harkavy LLP, by Burton Craige, for North Carolina Advocates for Justice, amicus curiae.

          ERVIN, Justice.

         This case arises out of a medical malpractice action that plaintiffs, Robert E. King and his wife, Jo Ann O'Neal, brought against defendants, Michael S. Bryant, M.D., and Village Surgical Associates, P.A. According to the allegations contained in plaintiffs' complaint, Mr. King was scheduled to undergo a bilateral inguinal hernia repair to be performed by Dr. Bryant at the Fayetteville Ambulatory Surgery Center on 14 May 2009. At the time of his initial appointment with Dr. Bryant, Mr. King was presented with an Agreement to Alternative Dispute Resolution (arbitration agreement) that defendants routinely presented to new patients along with other documents prior to the first occasion on which a patient met with a physician. The arbitration agreement provided that:

In accordance with the terms of the Federal Arbitration Act, 9 USC 1-16, I agree that any dispute arising out of or related to the provision of healthcare services by me, by Village Surgical Associates, PA, or its employees, physician members, and agents shall be subject to final and binding resolution through private arbitration.
The parties to this Agreement shall agree upon three Arbitrators and at least one arbitrator of the three shall be a physician licensed to practice medicine and shall be board certified in the same specialty as the physician party. The remaining Arbitrators either shall be licensed to practice law in NC or licensed to practice medicine in NC. The parties shall agree upon all rules that shall govern the arbitration, but may be guided by the Health Care Claim Settlement Procedures of the American Arbitration Association, a copy of which is available to me upon request. I understand that this agreement includes all health care [sic] services which previously have been or will in the future be provided to me, and that this agreement is not restricted to those health care [sic] services rendered in connection with any particular treatment, office or hospital admission. I understand that this agreement is also binding on any individual or entity and not a precondition to receiving health care [sic] services.

         Mr. King, a witness, and Dr. Bryant each signed the arbitration agreement on 29 April 2009.

         According to the unchallenged findings of fact, a front desk employee at Village Surgical Associates provided Mr. King with several intake forms to complete and sign while he waited to meet Dr. Bryant. The initial intake forms asked Mr. King to provide personal and medical history information and to sign the signature lines on all of the forms, including the arbitration agreement. Mr. King stated in his affidavit that he was then provided with a second set of documents, which addressed insurance and payment-related issues, after he had met with Dr. Bryant. Mr. King acknowledged that he did not read any of the documents that he signed after his initial meeting with Dr. Bryant and stated that he had believed them to be "just a formality." Mr. King denied having received a copy of the arbitration agreement on the day that it was signed and asserted that the contents of the agreement were not clear to him even after he had read it. Mr. King contended that, "[i]f the agreement had been brought to my attention and I had been told signing it was optional, I would not have signed it."[1]

         In the course of the performance of the hernia repair procedure, Dr. Bryant injured Mr. King's distal abdominal aorta, resulting in abdominal bleeding. Although Dr. Bryant was able to repair Mr. King's injury, the necessary remedial procedures led to occlusion of an artery, a thromboembolism to Mr. King's right lower leg, and acute ischemia in Mr. King's right foot. After undergoing the performance of an immediate revascularization at Cape Fear Valley Health Systems for the purpose of salvaging his right leg, Mr. King remained hospitalized until 26 May 2009. At the time of his discharge, Mr. King continued to suffer from complications related to his abdominal aortic injury and needed additional treatment. As a result of the injury that he sustained during the hernia repair procedure, Mr. King incurred unexpected medical expenses, abdominal scarring, lost wages, numbness, and a limited ability to use his right leg and foot.

         On 28 September 2011, plaintiffs filed a complaint against defendants in the Superior Court, Cumberland County, seeking damages for medical malpractice. On 7 November 2011, defendants filed a motion seeking to have further litigation in this action stayed and the arbitration agreement that had been entered into between Mr. King and defendants enforced and an answer in which defendants denied the material allegations of plaintiffs' complaint. Plaintiffs responded to defendants' motion to stay and enforce the arbitration agreement by arguing that:

[T]he purported agreement is not enforceable for reasons that include but are not limited to the undue, prohibitive financial burden that enforcement of the agreement would have on plaintiffs by requiring the hiring of three arbitrators, one who must be a board certified physician in the same specialty as the defendant, Michael S. Bryant, M.D., and two who must be attorneys or physicians licensed in North Carolina; the inherent unfairness of requiring one arbitrator be a member of the same profession and medical specialty as the defendant, . . . especially in light of the absence of any comparable requirement for an arbitrator to be similarly affiliated with the plaintiffs . . . .

         On 13 February 2012, defendants filed a motion seeking the entry of an order compelling arbitration. On 23 March 2012, the trial court entered an order denying defendants' motion to enforce the arbitration agreement on the basis of conclusions that:

4. The Agreement to Alternative Dispute Resolution leaves material portions open to future agreements by providing, inter alia, that the parties shall agree upon three arbitrators and that the parties shall agree upon all rules that shall govern the arbitration.
5. At most, the Agreement to Alternative Dispute Resolution is an "agreement to agree" that is indefinite and depends on one or more future agreements. Seawell v. Continental Cas. Co., 84 N.C.App. 277, 281, 352 S.E.2d 263, 265 (1987).
6. The Agreement to Alternative Dispute Resolution is not a binding contract and is not enforceable.

         Defendants noted an appeal to the Court of Appeals from the trial court's order.

         On 5 February 2013, the Court of Appeals filed an opinion reversing the March 2012 order and remanding this case for further proceedings, King v. Bryant, 225 N.C.App. 340, 737 S.E.2d 802 (2013) (King I), on the grounds "that the trial court erred in concluding the Agreement between the parties was too indefinite to be enforced, " id. at 345, 737 S.E.2d at 807. According to the Court of Appeals, "there was clearly an offer to arbitrate any dispute which arose out of Defendants' provision of medical care, as well as an acceptance of that offer by Mr. King." Id. at 346, 737 S.E.2d at 807. Although plaintiffs had argued before the trial court and the Court of Appeals that the arbitration agreement was unenforceable on unconscionability grounds, the Court of Appeals declined to address that issue given that the trial judge in the March 2012 order had not made the necessary factual findings. Id. at 347, 737 S.E.2d at 808. According to the Court of Appeals, "the trial court is the appropriate body to determine whether the agreement is unconscionable, " id. at 347-48, 737 S.E.2d at 808 (citation omitted), with the needed unconscionability analysis to "be undertaken with an understanding of the unique nature of the physician/patient relationship, " id. at 348, 737 S.E.2d at 808. In addition, the Court of Appeals noted that, "[u]nder North Carolina law, fiduciary relationships create a rebuttable presumption that the plaintiff put his trust and confidence in the defendant as a matter of law." Id. at 349, 737 S.E.2d at 809. As a result, the Court of Appeals required that these issues be addressed on remand. Id. at 350, 737 S.E.2d at 809.

         On 10 May 2013, the trial court entered an order on remand determining that, given the nature of the fiduciary relationship that existed between Mr. King and defendants, defendant Bryant "had a fiduciary duty to disclose to his patient all facts material to their transaction." More specifically, the trial court's May 2013 order found as a fact that:

2. Mr. King, now 68, has no educational degree beyond high school and his job requires little reading. He has minimal experience reading legal documents.
3. Defendant Village Surgical Associates, P.A. ("Village Surgical") has experience in managing patient complaints, responding to claims of medical negligence made by patients, and resolving disputes through arbitration.
4. On April 29, 2009, Plaintiffs visited Defendant's office for the first time to consult with Defendant Bryant about performing laparoscopic surgery on Plaintiff King to repair a hernia. Plaintiff King had been referred to Defendants by his primary care physician.
5. While Plaintiffs were waiting to meet Defendant Bryant and consult with him about performing surgery, Defendant's receptionist provided Plaintiff King with several intake forms to complete and sign. Plaintiff King considered the forms to be a formality.
6. Neither the receptionist, nor Defendant Bryant, nor any agent of Defendants called to Plaintiff King's attention the fact that one of the forms he was asked to sign, the Agreement, differed from all of the other forms because it did not concern medical information, insurance information, or payment for the surgery, all routine for a new patient. Nor did anyone disclose to Plaintiff King that the Agreement sought to foreclose his access to the judicial process in the event that any dispute arose out of or related to the surgery to be performed by Defendant Bryant.
. . . .
8. The Agreement does not provide that by signing it, the patient waives his or her right to a trial. The Agreement does not include the word "jury" or "judge" or "trial." The Agreement does not provide that the patient can consult an attorney before signing it.
9. There is no evidence that the physician or any
agent of Defendants discussed with the patient, Plaintiff King, any provision of the Agreement.
. . . .
11. At the time Plaintiff King signed the Agreement and provided his medical information on intake forms, even though he had not yet met Defendant Bryant, he was already placing his confidence and trust in Defendants, as demonstrated by his willingness to share his confidential medical information.
. . . .
14. The first, bold-faced paragraph of the Agreement is poorly drafted, confusing, and nonsensical. For example, it refers to the "provision of healthcare services by me, " suggesting that "me" refers to the physician rather than the patient.
15. The Agreement repeatedly refers to arbitration without defining the term. The Agreement includes no mention whatsoever of the judicial process, a trial, or a jury. The Agreement does not disclose Defendants' intent for Plaintiff King to waive his rights to the judicial process, including his right to a jury trial, in the event of any claim arising from or related to the surgery. A person of Plaintiff King's education and experience should not reasonably have been expected to know from the language of the Agreement, or from any information provided to him by Defendants, that he had a right to a jury trial to resolve any potential dispute with his surgeon. Nor should he have been expected to understand from the language of the Agreement or other information provided to him by Defendants that by signing the Agreement, he would waive his right to a jury trial.
16. The last sentence of the second paragraph in the Agreement starts with complex but complete clauses . . . and ends with an incomplete clause . . . . A person of Plaintiff King's education and experience should not reasonably be expected to understand the last, tacked on, incomplete clause to mean that he did not need to sign the Agreement in order for Defendant Bryant to perform the surgery.
17. Plaintiff King read the Agreement after a copy was provided to him by his attorney, and he still did not understand its contents or the intended consequence of signing it.
18. Unlike arbitration agreements which have been upheld and enforced in medical negligence cases, the Agreement includes no provision allowing or recommending that the patient consult with an ...

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