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Keywords

contractbreach of contractarbitrationnegligenceappealmotiontrustarbitration clause
arbitrationappeal

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Siopes v. Kaiser Foundation Health Plan, Inc., 130 Hawai‘i 437, 312 P.3d 869

Facts

Michael Siopes enrolled in a health plan offered through the Hawai‘i Employer—Union Health Benefits Trust Fund (EUTF) and later faced issues regarding treatment for a cancerous tumor. He and his wife, Lacey, filed claims against Kaiser Foundation Health Plan, Inc. for breach of contract and medical negligence, among other claims. The Circuit Court granted Kaiser's motion to compel arbitration, which the Siopeses appealed, arguing that the arbitration provision was unenforceable due to lack of assent.

In October 2009, Michael contacted his Kaiser primary care physician on Maui regarding a persistent upper abdominal pain. He was prescribed medication, and blood tests were ordered for him.

Issue

Did Michael Siopes assent to the arbitration provision in the service agreement, and is Lacey bound by that provision despite not being a member of the plan?

The Siopeses raise three points of error on this appeal: A. The Circuit Court erred by failing to find the arbitration provision unenforceable as to Michael Siopes and by failing to examine the specific issues raised by Michael Siopes as to mutual assent and bilateral consideration.

Rule

An arbitration agreement must be in writing, unambiguous as to the intent to submit disputes to arbitration, and there must be bilateral consideration. Mutual assent is required to form a binding contract.

We have held that 'in order to be valid and enforceable, an arbitration agreement must have the following three elements: (1) it must be in writing; (2) it must be unambiguous as to the intent to submit disputes or controversies to arbitration; and (3) there must be bilateral consideration.'

Analysis

The court found that Michael Siopes did not assent to the arbitration provision because the enrollment form he signed did not reference it, nor was he provided with the Group Agreement containing the arbitration clause. The court emphasized that without mutual assent, there can be no enforceable arbitration agreement. Additionally, the court noted that Lacey, who never signed the enrollment form or agreed to the plan, could not be compelled to arbitrate her claims.

The Siopeses' primary contention is that the second requirement of mutual intent to submit to arbitration is not present in this case because Michael did not assent to the arbitration agreement when he enrolled in the Kaiser plan.

Conclusion

The Supreme Court vacated the Circuit Court's orders compelling arbitration and remanded the case for further proceedings, holding that the arbitration provision was unenforceable.

Accordingly, the court concluded that the decision in Leong, 71 Haw. 240, 788 P.2d 164 was 'directly on point and controlling.'

Who won?

The Siopeses prevailed in the case as the Supreme Court found the arbitration provision unenforceable due to lack of assent.

The Supreme Court, Pollack, J., held that: 1 enrollee did not assent to arbitration provision contained in service agreement between plan and EUTF, and, thus, arbitration provision was unenforceable with respect to employee's claims.

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