It's not uncommon for elderly persons to designate younger relatives to make health care decisions on their behalf. Does this authority include the right to sign an arbitration agreement if the person must be placed in a skilled nursing facility?
It does not, according to a recent decision by the California Court of Appeal(Logan v Country Oaks Partners), contrary to an earlier ruling on the same topic.
In 2017, Charles Logan designated his nephew, Mark Harrod, as his health care agent and attorney-in-fact, signing an advanced health care directive and power of attorney for health care decisions.
The form, developed by the California Medical Association, said that if Logan's primary physician found he could not make his own health care decisions, Harrod had the "full power and authority to make those decisions" for him, subject to any health care instructions set forth in the Advance Directive.
Harrod could decide on the tests, drugs, surgery, or other treatment Logan would receive, select or change his physician and health care facility, and even tell Logan's doctors whether to resuscitate him if he was dying.
It did not state that Harrod had the authority to execute an arbitration agreement on Logan's behalf.
On November 10, 2019, Logan was transferred from a hospital to Country Oaks Care Center, a skilled nursing facility owned by Country Oaks Partners. Nineteen days later, Harrod signed an admission agreement and a separate arbitration agreement, as Logan's "Legal Representative/Agent."
As required by California law, the latter document stated that "Residents shall not be required to sign this Arbitration Agreement as a condition of admission to this facility or to continue to receive care at the facility."
Two weeks later, Logan was transferred from Country Oaks to another skilled nursing facility. Logan then filed a complaint against Country Oaks, alleging neglect, elder abuse, negligence, and other violations of state law.
Country Oaks asked the Los Angeles County Superior Court to compel arbitration of Logan's complaint. The court denied the request, finding that Country Oaks failed to prove the existence of a valid arbitration agreement because Harrod lacked authority to sign the agreement on Logan's behalf.
The Advance Directive Logan had signed only gave Harrod the power "to make health care decisions" for Logan, the trial judge determined, "not to enter a binding arbitration agreement on his behalf."
Country Oaks appealed.
It contended that the Advanced Directive signed by Logan gave Harrod the authority to make health care decisions, including "choosing...health care facilities." This, it argued, also gave Harrod the power to sign the optional arbitration agreement when admitting Logan to their facility.
Country Oaks cited a 2005 case,Garrison v Superior Court, in which justices in the Fourth District of the Court of Appeals concluded that a holder of an Advanced Directive did have the power to sign two arbitration agreements because they were, in the opinion of those justices, "executed as part of the health care decision-making process."
The Second District appellate justices who reviewed the Logan case reached the opposite result. "We respectfully disagree with the reasoning set forth inGarrisonand conclude the Advance Directive did not confer such broad authority on Harrod," they said.
California law, they noted, says an agent given a power of attorney for health care "may make health care decisions for the principal." The statute "says nothing, however, about the agent's authority to agree to enter into an arbitration agreement and thereby waive the principal's right to a jury trial."
The state's Health Care Decisions Law carefully defines the kinds of decisions an agent can make about the principal's "physical or mental health," they pointed out. "The decision to waive a jury trial and instead engage in binding arbitration does not fit within these definitions."
The justices noted that federal law prohibits nursing facilities participating in Medicare or Medicaid programs from requiring residents or their representatives to sign arbitration agreements.
They concluded that the trial court properly denied the petition by Country Oaks to compel arbitration and awarded Logan his costs on appeal.
Given the conflict in the views of the Second and Fourth Districts, this issue seems ripe for the California Supreme Court to weigh in.
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