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In ordering arbitration of a nursing home dispute, a federal court in Mississippi found that in light of the nursing home resident’s incapacity, her daughter had statutory authority to agree to arbitration on her behalf.
In Gulledge v. Trinity Mission Health & Rehab of Holly Springs, LLC, No. 3:07CV008-M-A, 2007 WL 3102141 (N.D. Miss. Oct. 22, 2007), Bowens admitted her mother, Campbell, to a Trinity Mission nursing home. During the admission process, Bowens signed an arbitration agreement on her mother’s behalf.
When Campbell died, her estate sued Trinity Mission. In response, Trinity Mission moved to compel arbitration. Campbell’s estate raised several arguments in opposition to the motion.
First and foremost, the estate argued that Bowens had no authority to bind Campbell to the arbitration agreement. In rejecting this argument, the Court explained that Mississippi’s statute on surrogate health care decisions gave Bowens authority to sign the arbitration agreement on Campbell’s behalf. See Covenant Health Rehab of Picayune, L.P. v. Brown, 949 So.2d 732 (Miss. 2007). Specifically, in reaching this conclusion, the Court found that an express admission of incapacity is not required to trigger the statute.
The estate also argued that the arbitration agreement was procedurally unconscionable and therefore unenforceable. The Court rejected this argument because the arbitration agreement was a separate document written in plain terms and because the agreement contained an “escape clause” whereby Campbell could rescind the agreement and move to a different facility.
Lastly, the estate argued that the arbitration agreement constituted illegal consideration under a federal statute that precludes a nursing home from accepting “any gift, money donation, or other consideration” as a precondition to the residency of a person receiving assistance through Medicare or Medicaid. See 42 U.S.C. § 1396r(c)(5)(A)(iii). In rejecting this argument, the Court explained that the meaning of the phrase “other consideration” is restricted by the preceding language and thus does not encompass arbitration agreements.
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