|
The California Court of Appeals held that a daughter admitting her mother to a nursing home had authority to enter an arbitration agreement on her mother's behalf pursuant to a power of attorney authorizing the daughter to make health care decisions for her mother.
In Hogan v. Country Villa Health Services, 55 Cal. Rptr. 3d 450 (Cal. Ct. App. 2007), Sarah Hogan (Sarah) executed a power of attorney authorizing her daughter Barbara to make health care decisions for her. The power of attorney was created using the standard form from section 4701 of the California Probate Code.
Three years later, when Sarah was suffering from Alzheimer's disease, Barbra placed her in a Country Villa nursing home. During the admission process, Barbara signed an arbitration agreement on her mother's behalf.
Sarah died during her residency at the nursing home, and her family subsequently sued Country Villa for wrongful death and elder abuse. Country Villa filed a motion to compel arbitration of the elder abuse claim. The trial court denied the motion on the ground that the health care power of attorney did not authorize Barbara to agree to arbitration on her mother's behalf.
On appeal, the Court held that the Barbara had authority to agree to arbitration on her mother's behalf because "an agent under a Probate Code section 4701 health care power of attorney, in selecting a long-term health care facility, has the power to execute applicable admissions forms, including arbitration agreements, unless that power is restricted by the principal."
In reaching its holding, the Court relied mainly on Garrison v. Superior Court, 33 Cal. Rptr. 3d 350 (Cal. Ct. App. 2005), which held that a health care power of attorney authorizes the attorney-in-fact to agree to arbitration "as part of the health care decisionmaking process." The holding in Garrison was based largely on principles of agency law in accordance with the California Health Care Decisions Law. See Cal. Prob. Code § 4688 (directing courts to apply agency law where there is no explicit rule).
As further support for its holding, the Court relied on section 1599.81 of the California Health and Safety Code, which imposes requirements on arbitration agreements that are part of nursing home admission agreements. Specifically, the Court reasoned that it "necessarily follows" from this statutory framework that the decision to place someone in a nursing home may entail the review and evaluation of an arbitration agreement.
Finally, the Court observed that Goliger v. AMS Properties, Inc., 19 Cal. Rptr. 3d 819 (Cal. Ct. App. 2004) and Pagarigan v. Libby Care Center, Inc., 120 Cal. Rptr. 2d 892 (Cal. Ct. App. 2002) were distinguishable because "those cases analyzed the authority of the child(ren) to enter into arbitration agreements on behalf of the ailing parent in the absence of a health care power of attorney."
This decision comes on the heels of a harmonious decision by the Mississippi Supreme Court. See Covenant Health Rehab of Picayune, L.P. v. Brown, No. 2005-CA-02220-SCT, 2007 WL 529675 (Miss. Feb. 22, 2007). There, the court held that Mississippi law authorizes health care surrogates to agree to arbitration on the patient's behalf.
Subscribe to a free weekly update on ADR case law and
legislation
|