Giordano v. Atria Assisted Living, Va. Beach, LLC, 429 F. Supp. 2d 732 (D. Va. 2006)

Plaintiff brought wrongful death action against assisted living facility. During the admission process, resident’s daughter signed admission papers without a power of attorney and without discussing it with the resident. After suit was filed, the facility filed a motion to compel arbitration. The matter was referred to the magistrate. The court found no evidence that there was mutual assent to the agreement. Nonetheless, citing Int’l Paper Co. v. Schmabedissan Maschinen & Anlagen GMBH, 206 F.3d 411 (4th. Cir. 2000), there are five instance where a non-signatory to a contract may be bound: incorporation by reference, estoppel, agency, assumption and veil piecing/alter ego. The facility argued that agency and apparent authority applied. Because the daughter had not discussed the matter with the resident, the resident was not present and there was no power of attorney, the court found there was no agency. In determining there was no apparent agency, the court found there must be reasonable reliance and: “Atria is a sophisticated, corporate client. They should be familiar with the usual devices utilized to ensure valid contract formation when a principal does not sign in person – namely powers of attorney. In this case Atria did nothing to ensure that Ms. Giordano was a lawful agent of Ms. Brennan. They did not require that she possess a power of attorney before she signed the contract, and there is no evidence that they ever inquired whether she had authority to sign for Ms. Brennan. Because of these facts, this Court finds that Atria did not reasonably rely upon the signature of Ms. Giordano to their detriment.” The court went on to find that even if there was an agency relationship, it was limited in scope and did not encompass the right to waive trial by jury. The court also noted, in dicta, that estoppel would not apply since the suit was not based on the contract. Decided March 29, 2006.