Flores v. Evergreen at San Diego, LLC, 2007 Cal. App. LEXIS 348 (Cal. Ct. App. 2007)

Resident suffering from dementia was admitted to nursing facility. Husband signed admissions documents including two arbitration agreements. California law prohibits including the arbitration agreement in the admissions agreement so it was a separate document. Husband signed the arbitration agreement on a line labled “Legal Rep/Responsible Party/Agent.” Husband did not hold a power of attorney and had not been appointed guardian or conservator. In February, 2005, nine months after the documents were signed, husband became resident’s attorney-in-fact. In August 2005, husband brought a negligence action on behalf of resident. In December 2005, the nursing home filed a motion to compel arbitration. The trial court denied the motion, finding “no evidence that the purported principal (Josephina Flores) did anything which caused [Evergreen] to believe that her husband was her agent.” On appeal, the nursing facility argued that husband’s status as spouse gave him authority to bind the resident. The court of appeals found that the spousal relationship alone is insufficient to confer authority to to agree to an arbitration provision in a nursing home admission contract. The court distinguished prior case law allowing a health care agent to bind the resident since the husband did not hold a health care power of attorney. Thus, there was no express or implied agency. Further, there was no apparent agency since the conduct of the principal must evidence some consent or ratification for that theory to apply. Execution of a power of attorney after the arbitration agreement was signed does not prove agency at the time it was signed and does not prove that the resident intended to ratify the arbitration agreement. The nursing facility’s evidence that husband “acted as if he were Josephine’s agent” was insufficient to confer agency status since it also requires conduct on the resident’s part to confer that status. The nursing facility’s argument that husband had statutory authority, a s a health care surrogate, to bind resident was rejected. Although the statute confers authority to make medical decisions, it does not convey authority over arbitration decisions. The court reviewed various statutes relating to health care decision making and nursing home admissions and found that the legislative scheme recognizes that it may be necessary to admit a relative to a nursing home even when there is no person with a recognized legal authority to act on behalf of the patient; however, the court found it could not conclude from those statutes that the legislature intended to confer on relatives the authority to make a decision concerning arbitration. Unlike admission decisions, the decision to agree to an arbitration provision in a nursing home contract is not a necessary decision that must be made to preserve a person’s well-being. “Given the Legislature’s extensive regulation of arbitration agreements, combined with the facts that an arbitration agreement waives legal rights and is not necessary to preserve health, we cannot conclude that the Legislature intended by implication to extend authority over the arbitration decision to next of kin.”

This is one of the few cases expressly recognizing that the decision to agree to arbitration is distinct from necessary health care decisions.