Daughter's Signature Did Not Bind Her Individually Or As Successor In Interest.
Nursing home arbitration agreements continue to generate plenty of cases. In fact, we have posted about arbitration and nursing homes a number of times. See, for example, our posts of 3/27/2012, 5/21/2012, 11/5/2013, 8/5/2016, 11/1/2016, 2/23/2017, and 7/25/2019. Why are nursing homes such a fertile ground for litigating the enforceability of arbitration agreements? Some thoughts: people die in nursing homes, sometimes from natural causes, sometimes as a result of negligence; sometimes the details of care are pretty gross; nursing homes do not want to try cases before a jury; patients and their relatives do not want to try cases to an arbitrator; the old and the sick may not be competent to authorize an agent to sign on their behalf; admission to a nursing home may occur under exigent and stressful circumstances, so i's may not be dotted and t's may not be crossed.
Our next case, Lopez v. Bartlett Care Center, LLC, et al, G056249 (4/3 8/28/19) (Aronson, O'Leary, Goethals) illustrates several of these aspects. The patient, Irene Lopez, suffered from "diabetes, dementia, end-stage renal disease, generalized muscle weakness, and other debilitating conditions." After complaining about pain in the nursing home, the mother was diagnosed with serious bedsores, wet gangrene, and sepsis, requiring a leg amputation. Three weeks later, the mother died.
Amputating the shattered leg of a wounded soldier, operating room the Military Reserve Hospital, Hiroshima, Japan. circa 1905. Library of Congress.
Her daughter, Jasmine, signed an arbitration agreement, and the nursing home argued that the daughter was bound to arbitrate in her individual capacity and as a successor in interest. However, Jasmine and the nursing home offered "a starkly different picture" of the circumstances under which the agreement was signed, with the nursing home claiming the mother was present and assented to the daughter signing, and the daughter denying that the mother was present, or that the the daughter was authorized to sign on behalf of the mother. Also, the agreement purported to bind the daughter in her individual capacity, but the agreement was supposedly a "RESIDENT-FACILITY ARBITRATION AGREEMENT." The daughter denied that the nursing home brought the arbitration agreement to her attention and explained it to her. The trial judge believed the daughter, and the Court of Appeal explained that it was guided in its assessment by the standard of review when the trial court's order is based on a decision of fact. An agent derives her authority from the principal, and substantial evidence supported the trial court's finding that Jasmine lacked authority to waive her mother's trial rights.
The Court of Appeal also held that the trial court properly found the arbitration agreement unenforceable due to unconscionability. Among other things, the agreement was substantively unconscionable, because it required the mother to arbitrate all her claims, while exempting the most likely of the nursing home's claims from arbitration, namely evictions and collections.
COMMENT: The nursing home argued the agreement was not one-sided because, "Both residents and [the Facility] might make claims pertaining to evictions and collections" . . . The Court of Appeal stated, "[t]he argument is absurd." The nursing home did succeed on one point: the Court of Appeal ordered that the word "absurd" be deleted and replaced with the word "frivolous".
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