Finding no evidence that the patient lacked capacity at admission or that the signatory possessed any authority as a surrogate or agent at admission, the Mississippi Supreme Court has affirmed a trial court's denial of a nursing home's motion to compel arbitration.

In Compere's Nursing Home, Inc. v. Estate of Farish ex rel. Lewis, No. 2007-CA-00326-SCT, 2008 WL 2139548 (Miss. May 22, 2008), Farish was admitted to Compere's nursing home facility by her nephew. During the admission process, the nephew signed an arbitration agreement.

Farish passed away, and her estate filed suit against Compere's, claiming that its negligence contributed to Farish's death. Compere's moved to compel arbitration. The trial court denied the motion. Compere's appealed, arguing that the nephew had authority to bind Farish to the arbitration agreement as a health-care surrogate or under apparent authority, and that Farish was bound as a third-party beneficiary.

The Court held that the nephew did not meet the statutory requirements of a health-care surrogate under Miss. Code § 41-41-211. The Court found no evidence that Farish was designated as incapacitated by her primary physician at the time of admission. Furthermore, the Court could find no evidence that Farish's adult child was unable or unwilling to act on Farish's behalf, or that her nephew had a sufficiently close relationship to Farish to find authority under the statute.

Also, the Court rejected Compere's arguments that the nephew acted with apparent authority and that Farish should be bound under the doctrine of equitable estoppel, noting that Compere's had failed to produce any evidence that Farish had engaged in conduct that would have misled Compere's into believing that her nephew had such authority.

The trial court had ruled that Farish's nephew had limited authority to bind Farish in "health care and business affairs," but the Court refused to address this specific finding. The Court simply held that the nephew did not have the authority to bind Farish as to the arbitration agreement. A recent decision of the Mississippi Supreme Court rejected the type of distinction drawn by the trial court, holding that an arbitration agreement is a "health-care decision" within the authority of an eligible statutory health-care surrogate. Magnolia Healthcare, Inc. v. Barnes ex rel. Grigsby, No. 2006-CA-00427-SCT, 2008 WL 95814 (Miss. Jan. 10, 2008).