The Court of Appeal of the State of California Fourth Appellate District Division Three (“California Appellate Court”) stated in its published opinion dated August 10, 2020 in a case where the defendant nursing home attempted to compel arbitration of the plaintiffs’ nursing home negligence claims: “When the Holleys signed the arbitration agreement, they were temporary conservators of Elizabeth’s person, and therefore, they lacked the power to bind Elizabeth to an agreement giving up substantial rights without her consent or a prior adjudication of her lack of capacity. Further, as merely temporary conservators, the Holleys were constrained, as a general matter, from making long-term decisions without prior court approval.”
The plaintiffs’ California nursing home lawsuit alleged elder abuse, negligence, breach of contract, and wrongful death. The defendant nursing home moved to compel arbitration, which the trial court denied. The defendant appealed.
California Appellate Court Opinion
The California Appellate Court stated that California has a strong public policy in favor of arbitration as an expeditious and cost-effective way of resolving disputes. Even so, parties can only be compelled to arbitrate when they have agreed to do so. Arbitration is a matter of consent, not coercion. Whether an agreement to arbitrate exists is a threshold issue of contract formation and state contract law. The party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement.
In the case it was deciding, the California Appellate Court stated that the plaintiffs were, at the time the arbitration agreement was signed, conservators of Elizabeth’s person but not her estate. Sections 2350 through 2361 set out the powers and duties of a conservator of the person: a “conservator [of the person] has the care, custody, and control of . . . [the] conservatee.” (§ 2351, subd. (a).) As interpreted by the Judicial Council pursuant to section 1834, a conservator of the person is “responsible for the conservatee’s care and protection. You must decide, within certain limits, where the conservatee will live; and you must arrange for the conservatee’s health care, meals, clothing, personal care, housekeeping, transportation, and recreation.” (Judicial Council Forms, form GC-348.)
However, “A temporary conservator should avoid making long-term decisions or changes that could safely wait until a general conservator is appointed. As temporary conservator, you may not move a conservatee from his or her home, unless there is an emergency, or sell or give away the conservatee’s home or any other assets without prior court approval.” (Judicial Council Forms, form GC-348.)
The California Appellate Court held: “By purporting to sign the arbitration agreement on Elizabeth’s behalf, the Holleys were giving up an important right – the right to use the courts for redress of grievances. As temporary conservators of her person, this was simply beyond their powers without the court’s approval.”
Furthermore, “the power of a conservator of the person to make medical decisions without court approval or the conservatee’s consent is limited. Section 2354 states: “If the conservatee has not been adjudicated to lack the capacity to give informed consent for medical treatment, the conservatee may consent to his or her medical treatment. The conservator may also give consent to the medical treatment, but the consent of the conservator is not required if the conservatee has the capacity to give informed consent to the medical treatment, and the consent of the conservator alone is not sufficient under this subdivision if the conservatee objects to the medical treatment.””
The California Appellate Court held: “To the extent admission to a residential facility and a concordant arbitration agreement is a “health care decision” as Silverado asserts, they cannot escape the import of this provision. Without Elizabeth’s signature, there is no substantial evidence that she consented. Without her consent, the Holleys required a court adjudication that Elizabeth lacked capacity to make such decisions. (§ 2355.) The court’s order on this point was not entered until October 30, six days after the arbitration agreement was signed. Accordingly, the Holleys did not have the power to make such decisions for Elizabeth at the time.”
Source Holley v. Silverado Senior Living Management, Inc., G058576.
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