In its decision reached on November 25, 2014, the Supreme Court of the State of Oklahoma (“Oklahoma Supreme Court”) ruled that the nursing home resident’s granddaughter did not have authority to sign the nursing home arbitration agreement on behalf of her grandmother, and that the granddaughter was not authorized to make health care decisions under the circumstances of the case.
The Underlying Facts
The grandmother became a resident of the defendant nursing home on March 13, 2009 and remained a resident until her death on July 3, 2011. The nursing home admission documents contained a Dispute Resolution Provision, which was signed by the granddaughter in her own name, as “POA”. The resident’s daughter filed a wrongful death claim in court against the defendant nursing home regarding her mother’s death, to which the defendant nursing home responded by filing a motion to compel arbitration based on the Dispute Resolution Provision.
The Power Of Attorney, The Health Care Power Of Attorney, And The Nursing Home Admission Documents
The grandmother had signed a General Durable Power of Attorney, naming her granddaughter as her attorney in fact, on December 23, 2008 (a Health Care Power of Attorney was also signed by the grandmother, six days later). In response to the defendant nursing home’s motion to compel arbitration with regard to the wrongful death claim filed in court, the trial court ruled that the granddaughter was not acting under any power of attorney on behalf of her grandmother when the nursing home admission documents containing the Dispute Resolution Provision were signed. The trial court further ruled that the plaintiff in the wrongful death case (the resident’s daughter) had not signed the arbitration agreement and that the derivative nature of wrongful death claims is not broad enough to mandate procedural defenses such as arbitration against one who did not sign an arbitration agreement.
The Oklahoma Supreme Court Decision
The Oklahoma Supreme Court stated that it must first determine whether the parties agreed to arbitrate the dispute – the existence of an agreement to arbitrate is governed by state law. The Oklahoma Supreme Court stated that in order for there to be an enforceable arbitration agreement, consent to arbitrate must be found. Consent to arbitrate is determined by analyzing whether there is a valid enforceable arbitration agreement, whether the parties are bound by it, and whether the parties agreed to submit a particular dispute to arbitration.
In determining the ultimate issue, i.e., whether the parties in the present case had entered into an enforceable agreement to arbitrate the wrongful death claim, the Oklahoma Supreme Court looked at the language of the General Power of Attorney, which specifically stated that the granddaughter “cannot contravene any medical power of attorney I have executed whether prior to or subsequent to the execution of this Power of Attorney.” The Oklahoma Supreme Court noted that the grandmother had executed a Health Care Power of Attorney on December 29, 2008, which authorized her granddaughter to make certain health care decisions on her behalf but the Health Care Power of Attorney became effective only if the grandmother “becomes unable to make her own health care decisions and that fact is certified in writing by her physician.”
The plaintiff argued that the Dispute Resolution Provision in the nursing home admission documents was not a “health care decision.” The Oklahoma Supreme Court ruled that because the arbitration agreement was a requirement for admission to the defendant nursing home, arbitration was a condition of admission and therefore was a health care decision. However, the Oklahoma Supreme Court found that there was no written certification in the resident’s records from her physician certifying that she lacked the capacity to make her own health care decisions and therefore the Health Care Power of Attorney had not become effective at the time of the resident’s admission into the nursing home.
The Oklahoma Supreme Court affirmed the trial court’s refusal to compel arbitration in this case, ruling that the granddaughter lacked authority to bind her grandmother to arbitration and that no valid arbitration agreement existed.
Johnson v. Convalescent Center of Grady County LLC, Case No. 111922, 2014 OK 102.
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