The Superior Court has stopped the proceedings in a lawsuit filed by the government and a medical malpractice counterclaim brought by a woman who nearly died after she was allegedly diagnosed with food poisoning when in fact she had appendicitis.
Associate Judge Ramona V. Manglona ruled that a written arbitration agreement contained in Section B of the Group Insurance Policy of PacifiCare Health Insurance Company of Micronesia, Inc. between the provider TakeCare and plan member Ana Leah P. Castillon is valid and enforceable.
Manglona said the Federal Arbitration Act applies in the CNMI and to this arbitration agreement.
The judge stayed the claims and proceedings between Castillon and the Guam corporation, TakeCare Insurance, pending the resolution or termination of Castillon's claims pursuant to Section 3 of Title 9 of United States Code and to the agreement between the parties.
“In the interest of economy and the fair resolution of all claims, and for good cause, this stay shall apply to all parties and claims in the entire action,” Manglona said.
Court records show that it was the Department of Public Health who first sued Castillon for allegedly not returning X-ray images belonging to the Commonwealth Health Center.
On Dec. 7, 2005, Castillon answered and filed a counterclaim against DPH, PacifiCare and Doctors Shireen Alam and Robert George, for negligence.
Castillon's husband, Patrick Castillon, also joined in the lawsuit as a counterclaimant.
The Castillon couple, through counsel Eric D. Bozman, asked the Superior Court to order the defendants to pay them damages for past and future medical expenses, mental anguish, and physical suffering.
On Feb. 8, 2006, PacifiCare's successor, TakeCare, filed a timely motion to stay and to compel binding arbitration of all claims pursuant to a written arbitration agreement contained in the group insurance policy between TakeCare and Castillon's employer PCC Corp.
The arbitration agreement provides that members of the health plan agree that “any and all disputes of any kind whatsoever, including, claims for medical malpractice between member and PacifiCare shall be submitted to binding arbitration.”
TakeCare contended that the arbitration provisions of the health care policy are valid and enforceable in the Commonwealth.
TakeCare said the agreement to arbitrate in this case must be enforced pursuant to the Federal Arbitration Act or, alternatively, pursuant to contemporary common law principles.
Castillon argued that the arbitration provisions are unenforceable as contrary to public policy.
In her decision issued on Thursday, Manglona concluded that the Federal Arbitration Act applies to the Commonwealth pursuant to a provision of the Covenant and is not inconsistent with any further provisions of the Covenant or with any other written law of the Commonwealth.
Manglona said given that the U.S. Supreme Court has held that the FAA falls under the “broadest permissible exercise of Congress' Commerce Clause power,” she concludes that the Group Health Plan pursuant to which Castillon received her medical treatment at CHC “evidences a nexus to interstate commerce sufficient to invoke the FAA.”
The judge said she finds no basis for limiting the enforcement of the arbitration agreement in this case solely because the disputes covered by the contract include claims of negligence.
“Excising the venue provisions from the remainder of the agreement, the Court finds the arbitration agreement to be enforceable according to general principles of contract law,” she added.
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