Cornelio v. Premere Rehab, LLC
Cornelio
Citation
342 Or. App. 399
Court
Court of Appeals of Oregon
Decided
August 6, 2025
Jurisdiction
SA
Importance
45%
Practice Areas
Case Summary
No. 706 August 6, 2025 399 IN THE COURT OF APPEALS OF THE STATE OF OREGON Antonio CORNELIO, as Personal Representative of the Estate of Vickie Marie Pobanz, Plaintiff-Respondent, v. PREMERE REHAB, LLC, an Oregon limited liability company, dba Infinity Rehab, Defendant-Appellant. Deschutes County Circuit Court 21CV48494; A180698 Michelle A. McIver, Judge. Argued and submitted January 29, 2025. Michael J. Estok argued the cause and filed the briefs for appellant. Also on the briefs was Lindsay Hart, LLP. Christopher J. Kuhlman argued the cause and filed the brief for respondent. Also on the brief was Kuhlman Law, LLC. Before Shorr, Presiding Judge, Powers, Judge, and Pagán, Judge. SHORR, P. J. Affirmed. 400 Cornelio v. Premere Rehab, LLC Cite as 342 Or App 399 (2025) 401 SHORR, P. J. Defendant Premere Rehab, LLC, dba Infinity Rehab appeals from an interlocutory order denying its motion to compel arbitration. ORS 36.730(1)(a). Plaintiff is the personal representative of the estate of Vickie Pobanz (decedent), who died following complications that arose during her residence at Bend Transitional Care (BTC). Defendant is a separate legal entity that provided therapy services to decedent at BTC. Defendant moved to compel arbitration of plaintiff’s wrongful death action against it based on an arbitration agreement that decedent had executed with BTC. The trial court denied that motion. Defendant appeals, raising two assignments of error, arguing that the trial court erred in deciding the issue of arbitrability and in denying arbitration on the merits. For the reasons that follow, we affirm. The relevant facts are undisputed. In March 2018, decedent was admitted as a resident at BTC to recover from an ankle fracture. Upon her admission, decedent signed an Admission Agreement and an Arbitration Agreement. There is no dispute that decedent had the mental capacity to sign those agreements. A representative of BTC countersigned the agreements for “the Facility.” Both agreements were between the Facility and the Resident and both had Bend Transitional Care’s name and address printed on the first page. Defendant is not named in either document. The Admission Agreement references a Resident Handbook, which states that the Facility provides various therapy services to its residents. The arbitration agreement provides, in relevant part: “The Resident and/or Legal Representative and/or Resident Representative, collectively known as the ‘Resident Group’ and the Facility, on behalf of themselves and all others claiming by, through or under them, agree that they shall submit to binding arbitration all disputes against each other and their respective Legal Representatives, affili- ates, governing bodies and employees, arising out of, or in any way connected with, the care provided at this Facility under the terms of the Admission Agreement. * * * “All such disputes shall be determined by binding arbitra- tion in the county in which the Facility is located, before one arbitrator. The arbitration shall be administered 402 Cornelio v. Premere Rehab, LLC by JAMS (a private arbitration service) pursuant to its Comprehensive Arbitration Rules and Procedures * * *.” As relevant to this appeal, JAMS Rule 11(b) (the delega- tion provision) delegates initial issues of arbitrability to the arbitrator: “Jurisdictional and arbitrability disputes, including dis- putes over the formation, existence, validity, interpreta- tion or scope of the agreement under which Arbitration is sought, and who are proper Parties to the Arbitration, shall be submitted to and ruled on by the Arbitrator. The Arbitrator has the authority to determine jurisdiction and arbitrability issues as a preliminary matter.” The JAMS Rules do not appear to have been attached to the Arbitration Agreement or provided to decedent. While at BTC, decedent developed wounds on her hips, which became infected and led to her death in August 2019. In 2020, plaintiff filed a wrongful death and survival action against BTC and other affiliated entities and individ- uals allegedly involved in the operation, management, and/ or ownership of BTC. The defendants in the first lawsuit filed a motion to compel arbitration. The court granted the motion, and the parties accordingly submitted to arbitration. Plaintiff then filed the complaint commencing this case against defendant, who was not a party in the first lawsuit, alleging that defendant improperly sized decedent for a wheelchair, which led to her hip wounds. Defendant provides therapy and rehab services a
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Status
Decided
Date Decided
August 6, 2025
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SA
Court Type
federal
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Case Summary
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Case Overview
In Cornelio v. Premere Rehab, LLC, 342 Or. App. 399, the Court of Appeals of Oregon addressed an interlocutory appeal concerning the denial of a motion to compel arbitration in a wrongful death case. The plaintiff, representing the decedent's estate, contested the applicability of an arbitration agreement signed by the decedent with Bend Transitional Care (BTC).
Legal Issues
The court examined several critical legal questions:
- Did the trial court err in denying the motion to compel arbitration?
- Should the trial court or an arbitrator decide the issue of arbitrability?
- Did the decedent agree to arbitrate arbitrability with the defendant, a non-signatory?
- Can the defendant enforce the Arbitration Agreement as a third-party beneficiary?
Factual Background
- The decedent signed an Admission Agreement and an Arbitration Agreement with BTC, but these agreements did not name Premere as a party.
- The decedent developed wounds leading to her death while receiving therapy services from Premere, which the plaintiff alleged was due to negligence.
- The trial court found that there was no valid arbitration agreement between the decedent and Premere, leading to the appeal.
Court's Analysis
The court's reasoning focused on several key points:
- Existence of Agreement: The trial court determined that Premere was not a party to the arbitration agreements, as the agreements referred to 'the Facility' without defining it to include Premere. Thus, there was no valid arbitration agreement between the decedent and the defendant.
- Arbitrability: The court emphasized that arbitration is a matter of contract, requiring mutual assent. It ruled that the trial court must first determine whether a valid arbitration agreement exists before compelling arbitration.
- Third-Party Beneficiary Status: The court found that the defendant could not enforce the arbitration agreement as a third-party beneficiary, as it was not named in the agreement and did not demonstrate intent to confer rights.
Holdings and Decision
The court made the following rulings:
- The trial court's denial of the motion to compel arbitration is affirmed. This ruling applies specifically to claims against Premere Rehab, LLC.
- The defendant is not a party to the Arbitration Agreement and cannot compel arbitration.
Legal Precedents
The court cited several important precedents:
- Citigroup Smith Barney v. Henderson, 241 Or App 65 (2011) - Establishes the standard of review for denial of a motion to compel arbitration.
- Coinbase, Inc. v. Suski, 602 US 143 (2024) - Clarifies that the court must first determine what the parties have agreed to before enforcing a delegation provision.
- First Options of Chicago, Inc. v. Kaplan, 514 US 938 (1995) - Establishes that arbitration is a matter of contract and requires agreement.
- Arthur Andersen LLP v. Carlisle, 556 US 624 (2009) - Allows non-parties to enforce arbitration agreements under state contract law, emphasizing the need for intent to confer rights.
Practical Implications
This ruling has significant implications for legal practice, particularly in the areas of arbitration, contract law, and personal injury claims. It underscores the importance of clearly defining parties in arbitration agreements and the necessity for mutual assent in arbitration clauses. Legal practitioners should ensure that agreements explicitly state the parties involved to avoid similar disputes in the future.
By clarifying the standards for enforcing arbitration agreements and the rights of third-party beneficiaries, this case serves as a critical reference for future arbitration-related litigation in Oregon.
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Case Details
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Status
Decided
Date Decided
August 6, 2025
Jurisdiction
SA
Court Type
federal
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Additional information
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