In a published opinion filed on July 31, 2017, the Fourth District Court of Appeal, Division One, held in a 2-1 ruling an arbitration agreement between a 24-hour skilled nursing facility and deceased resident was enforceable in a lawsuit filed on behalf of the heirs. Baker v. Italian Maple Holdings, (2017) 13 Cal.App.5th 1152. The appeal was filed after the trial judge denied the defendant’s petition to compel arbitration in reliance on a 2009 ruling of the Second District Court of Appeal, Division Seven, in Rodriguez v. Superior Court (2009) 176 Cal.App.4th 1461. The conflict arose from the interpretation of Code of Civil Procedure Section 1295(c) which requires inclusion of a clause which allows a patient to rescind a binding arbitration agreement contained in a contract for medical services within 30 days of signature by the patient.
In both cases, the patient passed away before the expiration of the 30-day “cooling off” period. The Rodriguez court concluded an enforceable arbitration agreement did not exist because the patient’s death “…rendered it impossible to make any evidentiary finding regarding whether Newton’s alleged waiver of her rights, not to mention the child’s rights, to a jury trial was knowing and voluntary.” Rodriguez v. Superior Court (2009) 176 Cal.App.4th 1461, 1469. The majority in Baker disagreed, finding, “The statute’s granting of an opportunity to reconsider a decision does not suggest that a party cannot be determined to have knowingly and voluntarily considered the decision in the first place.” Baker v. Italian Maple Holdings (2017) 13 Cal.App.5th 1152.
BINDING ARBITRATION OF MEDICAL MALPRACTICE CLAIMS
Binding arbitration is a common process to resolve disputes outside the court system. It has a long history as an alternative to the civil trial. In 1929 Congress enacted the Federal Arbitration Act (FAA) to “…overcome judicial resistance to arbitration.” Buckeye Check Cashing, Inc. v. Cardegna (2006) 546 U.S. 440, 443. Code of Civil Procedure Section 1295, the interpretation of which gave rise to the split in authority, was enacted as part of the Medical Injury Compensation Reform Act of 1975 (MICRA). In 1976 the California Supreme Court recognized arbitration was an accepted method of settlement of disputes in Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 702, 131 Cal.Rptr. 882, 884.
Binding arbitration has its proponents and detractors. Proponents contend resolution of a dispute through arbitration is faster, less expensive, easier for the parties and attorneys to schedule, and can be conducted in private. Detractors contend the arbitration clause is frequently part of an adhesion, “take it or leave it,” contract which is forced on the weaker party to the contract; the arbitrator can be dependent upon the proponent of the clause for repeat business and is thus biased in favor of the proponent; bad decisions cannot be appealed with very limited exceptions, and; privacy may benefit one party to the disadvantage of the other.
While the debate continues, the California Legislature and courts recognize there is a strong public policy favoring arbitration as a method for resolving claims including medical malpractice claims. Beynon v. Garden Grove Medical Group (1980) 100 Cal.App.3d 698, 704. CCP Section 1295 governs agreements to arbitrate medical malpractice claims in contracts between patients and medical providers in California. “The purpose of that statute is to encourage and facilitate the arbitration of medical malpractice claims by specifying uniform language to be used in binding arbitration agreements, so that the patient knows what he or she is signing and knows its ramifications.” County of Contra Costa v. Kaiser Foundation Health Plan, Inc. (1996) 47 Cal.App.4th 237, 246.
Where there is an arbitration agreement, it will be liberally construed in favor of arbitration. Izzi v. Mesquite Country Club (1986) 186 Cal.App.3d.1309, 1315. “Appellate Courts have stated that arbitration agreements are enforced with regularity against nonsignatories.” County of Contra Costa v. Kaiser Foundation Health Plan, Inc., supra at 242. The Contra Costa decision noted minors are bound by their parents’ signatures as are heirs by the decedent’s signature. The Rodriguez decision arguably strictly construed the arbitration agreement in holding the expiration of the 30-day period was a condition precedent to enforceability of the agreement.
IMPACT OF THE BAKER DECISION GOING FORWARD
The doctrine of stare decisis requires the superior courts to follow the decisions of the appellate courts. Schmier v. Supreme Court (2000) 78 Cal.App.4th 703, 710. Where there is a split in authority in the appellate courts, the trial courts “must make a choice between the conflicting decisions.” Auto Equity Sales, Inc. v. Superior Court of Santa Clara County (1962) 57 Cal.2d 450, 456. Going forward, a trial court faced with this issue arguably will have to decide between following the Rodriguez decision or the Baker decision. However, there is an alternative argument available.
In Baker, defendant argued in the alternative the trial court was obligated to follow the decision in Scott v. Yoho (2016) 248 Cal.App.4th 392, also decided in the Second District, by Division Five. The defendant there successfully avoided the impact of the decision in the Rodriguez case by arguing the 30–day “cooling off” period in Section 1295(c) was preempted by the Federal Arbitration Act (FAA). The argument was based on decisions of the United States Supreme Court holding state laws which apply to arbitration specifically, as opposed to contracts in general, interfere with the federally mandated policy favoring arbitration and are thus unenforceable. Scott v. Yoho, supra, at p. 405.
In Scott, defendant offered substantial evidence connecting his medical practice with interstate commerce, offsetting the fact the procedure was done in California by a California doctor on a California patient. The Scott decision noted: “The Federal Arbitration Act’s reach is expansive and coincides with that of the commerce clause.” Scott v. Yoho, supra, at p. 400. The transaction need not have a direct connection to interstate commerce. The defendant need only prove the general practice “bear on interstate commerce in a substantial way.” Scott v. Yoho, supra, at p. 401. The appellate court in Scott declined to follow Rodriguez because there was no issue of preemption by the FAA raised in the trial court. Scott, supra, at p. 408.
State and Federal law heavily favor enforcement of arbitration agreements. The split in authority between Baker and Rodriguez likely can only be resolved by the California Supreme Court. However, the split may not result in a significant number of conflicting results given the availability of the alternative argument that Code of Civil Procedure Section 1295 is preempted by Federal Arbitration Act where the medical practice has connections to interstate commerce. Given the mandate of liberality in construing the agreement and the evidence, the number of medical providers with no connection to interstate commerce may be few and far between.
 The Fourth District encompasses six counties, San Diego, Imperial, Orange, San Bernardino, Riverside and Inyo, divided into three divisions: San Diego (Division One), Riverside (Division Two), and Santa Ana (Division Three).
 The Second District is made up of four counties, Los Angeles, Ventura, Santa Barbara and San Luis Obispo. There are eight Divisions, seven of which handle all matters arising from the Los Angeles Superior Court. Division 6 handles all matters from the Ventura, Santa Barbara and San Luis Obispo Superior Courts.
 There must be some connection between the signatory and the nonsignatory for the agreement to bind the nonsignatory. In Contra Costa, supra, Kaiser was sued by its patient for medical malpractice in treating injuries arising from a motor vehicle accident. The court ordered those claims be arbitrated. However, the patient also sued other defendants for negligence for causing the injuries. The indemnity claims of the other defendants against Kaiser were not subject to arbitration.
 While the trial courts in the Second District would be expected to follow Rodriguez, and the courts in the Fourth District to follow Baker, they are not required to do so. McCallum v. McCallum (1987) 190 Cal.App.3d 308, 315.
 Approximately 20 percent of the medical supplies were shipped from out of state and some of the materials used for the procedure originated from outside California. Defendant advertised on the internet and communicated with out-of-state patients by telephone, mail and e-mail. About five percent of defendants’ patients were outside the state. The medical practice had contacts with out-of-state companies including insurance providers. Scott v. Yoho (2016) 248 Cal.App.4th 392, 401–02.