A Mississippi appellate court held that a decedent's son had statutory authority as a health care surrogate to agree to arbitration on his mother's behalf and that the American Arbitration Association (AAA) policy requiring a post-dispute agreement was not a bar to enforcement because of an alternate provision for arbitrator selection.

In Covenant Health & Rehabilitation of Picayune, LP v. Estate of Moulds ex rel. Braddock, No. 2007-CA-01250-COA, 2008 WL 3843820 (Miss. Ct. App. Aug. 19, 2008), Minnie Moulds was a resident of Covenant. Upon her death, James Braddock filed suit against Covenant alleging wrongful death. Covenant moved to compel arbitration based on an arbitration agreement in the admission contract signed by Braddock on Moulds' behalf. The trial court denied the motion.

On appeal, the Court reversed the trial court's denial of Covenant's motion to compel arbitration. The Court first determined that the Federal Arbitration Act applied to the dispute, since agreements between patients and healthcare facilities affect interstate commerce when considered in the aggregate.

Next, the Court rejected Braddock's argument that he did not have authority to agree to arbitration on his mother's behalf. As his mother's health care surrogate under the Uniform Health-Care Decisions Act, Braddock had the authority to bind her to arbitration. See Miss. Code Ann. §§ 41-41-201 to -229 (Rev. 2005); Covenant Health Rehab of Picayune, L.P. v. Brown, 949 So.2d 732, 736-37 (Miss. 2007).

The Court also rejected Braddock's argument that the agreement lacked consideration because the arbitration agreement was not made a condition of admission. According to the Court, this factor was irrelevant to the issue of consideration.

However, the Court agreed with Braddock that the some terms of the arbitration agreement were unconscionable – namely, the terms waiving all claims except for willful acts, limiting recovery of actual and punitive damages, and forcing the resident to pay all costs if they challenged the grievance process. The Court followed Brown and severed the offending terms, but kept the agreement to arbitrate intact.

Finally, the Court rejected Braddock's argument that the agreement was unenforceable in light of the AAA policy requiring a post-dispute arbitration agreement for consumer healthcare disputes. That policy was not fatal because the agreement provided an alternate procedure for arbitrator selection.

Based on those reasons, the Court reversed the trial court's denial of Covenant's motion to compel arbitration.