The Mississippi Supreme Court has affirmed the denial of a nursing home’s motion to compel arbitration where the parties’ pre-dispute arbitration agreement invoked rules requiring a post-dispute arbitration agreement.

In Magnolia Healthcare, Inc. v. Barnes ex rel. Grigsby, No. 2006-CA-00427-SCT, 2008 WL 3101737 (Miss. Aug. 7, 2008), Barnes was admitted to Magnolia's health care facility by Grigsby. Grigsby completed the admission paperwork on behalf of the incompetent Barnes. The paperwork included an arbitration agreement.

Grigsby later sued Magnolia, alleging that Barnes was sexually assaulted while in Magnolia's care. Magnolia moved to compel arbitration of the claim. The trial court denied the motion, holding that Grigsby did not possess the agency or statutory authority to bind Barnes to the arbitration agreement. Magnolia appealed, claiming that Grigsby had such authority under Mississippi's health care surrogate statute. Miss. Code Ann. § 41-41-201, et seq.

Initially, the Mississippi Supreme Court held that Grigsby possessed the statutory authority to bind Barnes to the arbitration agreement, characterizing it as a "health care decision." Magnolia Healthcare, Inc. v. Barnes ex rel. Grigsby, No. 2006-CA-00427-SCT, 2008 WL 95814 (Miss. Jan. 10, 2008) (withdrawn). However, the Court granted Barnes' motion for reconsideration and ultimately affirmed the trial court's decision on different grounds.

Citing the agreement's section on "applicability of rules," the Court held that no valid agreement to arbitrate existed between the parties and affirmed the order denying Magnolia's motion to compel. The Court found that the American Health Lawyers Association (AHLA) ADR Rules governing the dispute would not allow for administration of an arbitration claim unless "all of the parties have agreed in writing to arbitrate the claim after the injury has occurred and a copy of the agreement is received" by the administrator.

The Court found it was undisputed that there was no agreement between the parties after the injury allegedly occurred; therefore, it held there was no valid agreement to arbitrate.

Two justices filed concurring opinions, affirming the motion's denial on alternative grounds. One opined that Grigsby's failure to comply with the statutory requirements for a health care surrogate defeated Magnolia's motion to compel.

The other posited that, even if Grigsby had complied with the health care surrogate statute's provisions, an arbitration agreement is not a "health care decision" under Mississippi law that Grigsby could enter pursuant to her surrogate authority. Specifically, Justice Graves reasoned that the Mississippi Code defines "health care decision" in a manner that does not specifically enumerate or contemplate arbitration agreements. Miss. Code Ann. § 41-41-203(h) (including decisions regarding providers, institutions, tests, procedures, medications, nutrition, and hydration within the scope of "health care decisions").

Despite Justice Graves' objections to the characterization of an arbitration agreement as a health care decision, other recent Mississippi decisions leave it well-settled that statutory health care surrogates may enter into arbitration agreements as health care decisions under Mississippi law. See, e.g., Covenant Health Rehab of Picayune, L.P. v. Brown, 949 So.2d 732, 737 (Miss. 2007) (health care surrogates can enter arbitration agreement as a health care decision); Covenant Health & Rehab of Picayune, L.P. v. Lumpkin ex rel. Lumpkin, No. 2007-CA-00449-COA, 2008 WL 306008, at *2 (Miss. Ct. App. Feb. 5, 2008) (same); Gulledge v. Trinity Mission Health & Rehab of Holly Springs, LLC, No. 3:07CV008-M-A, 2007 WL 3102141, at *2 (N.D. Miss. Oct. 22, 2007) (same).