South Carolina Supreme Court Refuses To Enforce Assisted Living Facility Arbitration Agreement

The Supreme Court of South Carolina, in its opinion dated March 10, 2021, held: “Under the facts of this case, neither the GDPOA [General Durable Power of Attorney] nor the HCPOA [Health Care Power of Attorney] granted Arredondo authority to execute the arbitration agreement. Therefore, we reverse the court of appeals and hold the arbitration agreement is unenforceable. We need not address Arredondo’s argument that the arbitration agreement is unconscionable.”

The Underlying Facts

On October 12, 2012, Thayer Arredondo (“Arredondo’) decided to place Hubert Whaley (“Whaley”), her father, in Defendant’s Ashley River Plantation assisted-living facility in Charleston. Whaley was eighty-four years old, was diagnosed with dementia, and required assistance with daily functions such as bathing, dressing, toileting, and taking medications. When Whaley was admitted into the facility, Arredondo held two valid powers of attorney, a General Durable Power of Attorney (GDPOA) and a Health Care Power of Attorney (HCPOA).

When Arredondo and Whaley arrived at the facility, Arredondo met with a facility representative and signed various documents in connection with Whaley’s admission. During that meeting, the facility representative did not mention or present an arbitration agreement to Arredondo. Later that day, after Whaley was admitted, Arredondo met with a different facility representative who, according to Arredondo, told her she “needed to sign additional documents related to [her] father’s admission to the facility.” Included among those documents was the arbitration agreement, which Arredondo signed.

The arbitration agreement, which Arredondo executed before any dispute arose between the parties, contains a mutual waiver of the right to a trial by judge or jury and requires arbitration of all claims involving potential damages exceeding $25,000. The agreement bars either party from appealing the arbitrators’ decision, prohibits an award of punitive damages, limits discovery, and provides the defendant the unilateral right to amend the agreement.

On February 21, 2014, while he was still a resident at the facility, Whaley was admitted to Bon Secours St. Francis Hospital, where he died six days later. Arredondo, as Personal Representative of Whaley’s estate, brought an action alleging claims for wrongful death and survival against the defendant. The complaint alleges that during his residency at the facility, Whaley suffered serious physical injuries and died as a result of the defendant’s negligence and recklessness. The defendant moved to compel arbitration.

In opposition to the motion, Arredondo argued (1) the two powers of attorney did not give her the authority to sign the arbitration agreement, and (2) even if she had authority to sign it, the agreement is unconscionable and therefore unenforceable. To buttress her unconscionability argument, Arredondo submitted an affidavit in which she described the events surrounding her execution of the arbitration agreement. Arredondo stated that when she had questions about the arbitration agreement and told the facility representative she was not comfortable signing it, the facility representative responded, “this [is] a document that everyone sign[s] when admitting their loved ones to the facility and that [Arredondo] needed to sign the ‘Arbitration Agreement’ in order to ensure [Whaley’s] admission to the facility.” The defendant insisted the evidence supports only the conclusion that Arredondo’s execution of the arbitration agreement was not a prerequisite for Whaley’s admission into the facility.

South Carolina Supreme Court Opinion

The South Carolina Supreme Court held: “We hold this particular GDPOA did not authorize Arredondo to sign the arbitration agreement because the arbitration agreement did not concern a chose in action or any other property right Whaley possessed at the time Arredondo signed it … We also hold the court of appeals erred in concluding Arredondo’s authority under the GDPOA “extended to ‘any other property, right or thing” … By signing the arbitration agreement, Arredondo (for herself, for Whaley, and for his heirs and executors) waived the right to a jury trial, waived any claim to punitive damages, agreed to limited discovery, and waived the right to appeal the arbitration decision. These acts were not “transfers” of anything to anyone. Thus, the provision of the GDPOA authorizing Arredondo to enter into any agreements concerning transfers of any property, right, or thing did not grant her the authority to sign the arbitration agreement … While the GDPOA gave Arredondo significant authority to make business and property decisions for Whaley, the mere title of the document did not increase Arredondo’s authority beyond the plain meaning of the provisions contained in the document.”

With regard to the HCPOA, the South Carolina Supreme Court stated, “Arredondo clearly had no authority to take any action under the first clause of subparagraph 11(d) unless the action taken was “necessary to making, documenting, and assuring implementation” of a decision concerning Whaley’s health care. (emphasis added). The only health care decision in play when Arredondo signed the arbitration agreement was Arredondo’s decision to seek Whaley’s admission into the facility … As we have already discussed, Arredondo was not required to sign the arbitration agreement for Whaley to be admitted. Since Arredondo was not required to sign the arbitration agreement, it logically follows that any waivers contained in the agreement were not required by the facility. For the reasons set forth above in our discussion of the term “necessary,” we conclude the HCPOA did not give Arredondo the authority to grant the waivers recited in the arbitration agreement.”

With regard to Arredondo’s authority to pursue legal action, the South Carolina Supreme Court held: “We first note the parties overlook the context in which this provision appears in subparagraph 11(d) of the HCPOA. This provision authorized Arredondo to pursue legal action only to “force compliance with [Whaley’s] wishes as determined by [Whaley’s] agent, or to seek actual or punitive damages for the failure to comply.” For that reason alone, we hold this provision of the HCPOA is of no significance in this case. However, even if this provision authorized Arredondo to pursue legal action unrelated to forcing compliance with Whaley’s health care wishes, this provision still did not authorize Arredondo to sign a pre-dispute arbitration agreement.”

Source Arredondo v. SNH SE Ashley River Tenant, LLC, Opinion No. 28011.

If you or a loved one suffered injuries (or worse) while a resident of an assisted living facility in South Carolina or in another U.S. state due to assisted living neglect, assisted living negligence, assisted living abuse, assisted living understaffing, or the assisted living facility failing to properly care for a vulnerable adult, you should promptly find an assisted living claim lawyer in South Carolina or in your state who may investigate your assisted living claim for you and file an assisted living claim on your behalf or on behalf of your loved one, if appropriate.

Visit our website to be connected with assisted living attorneys in your U.S. state who may assist you with your assisted living claim, or call us toll-free in the United States at 800-295-3959.

Turn to us when you don’t know where to turn.

This entry was posted on Sunday, March 28th, 2021 at 5:19 am. Both comments and pings are currently closed.

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