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In construing a Mississippi statute that allows a surrogate to make health care decisions on behalf of an incapacitated patient, the Mississippi Supreme Court held that a daughter admitting her mother to a nursing home had statutory authority to agree to arbitration on her mother's behalf.
In Covenant Health Rehab of Picayune, L.P. v. Brown, 949 So.2d 732 (Miss. 2007), Brown and her two sisters filed a wrongful death action against Covenant Health after their mother died during her residency in a Covenant Health nursing home.
Covenant Health filed a motion to compel arbitration pursuant to an arbitration clause in the admission agreement that was signed by one of the daughters. The trial court denied the motion on the ground that several provisions of the arbitration agreement were substantively unconscionable.
On appeal, the Court first addressed whether the daughter had authority to enter the arbitration agreement on her mother's behalf. Under the Uniform Health-Care Decisions Act (UHCDA), a surrogate may make "a health-care decision" on behalf of an incapacitated patient. See Miss. Code. Ann. § 41-41-211. The Court relied on this provision of the UHCDA in concluding that the daughter had authority to enter into the arbitration agreement on her mother's behalf.
The other issue on appeal was whether the unconscionable terms of the arbitration agreement – including limitations on liability and a reduced statute of limitations – rendered the entire agreement unenforceable. The Court relied on the federal policy favoring arbitration in concluding that the offending provisions should be severed from the agreement instead of invalidating it altogether. Accordingly, the Court remanded the case with instructions to order arbitration.
In a strongly worded dissent, two of the justices objected to the Court's decision to enforce the arbitration agreement despite the inclusion of unconscionable terms. As support for their view, the dissenting justices observed that "[a]pparently, little has been learned" since Vicksburg Partners, L.P. v. Stephens, 911 So.2d 507 (Miss. 2005), in which the Court examined a virtually identical arbitration agreement.
This observation by the dissenting justices is not completely valid because the arbitration agreement at issue in this case was entered into prior to any ruling in Vicksburg Partners. Nevertheless, it serves as a valuable reminder that parties should regularly update their arbitration agreements to ensure their enforceability.
This case is also noteworthy because the Court's interpretation of the UHCDA means that a Mississippi federal court misconstrued the same provision in denying a nursing home's motion to compel arbitration in Mariner Health Care, Inc. v. Ferguson, No. 4:04CV245-D-B, 2006 WL 1851250 (N.D. Miss. June 30, 2006). In Ferguson, the court reasoned that entering into an arbitration agreement is not "a health-care decision."
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