Arbitration & Mediation

Nursing Home Arbitration Fails Due to Power of Attorney Language and Lack of Authority of Signor

By Christopher B. Hopkins, Esq.

As we've mentioned before, it is sometimes surprising that arbitration is "favored" despite the number of pitfalls which exist in compelling it. A nursing home chain, Alterra, is certainly aware of the morass of arbitration enforcement given its string of Florida opinions in the last 12-18 months.

We've previously discussed the case of Estate of Loyette McKibbin v. Alterra Health Care Corporation a/k/a Clare Bridge Cottage of Winter Haven et al. Back in March 2007, we got our hands on the trial court order in this case and the fact that it granted arbitration despite the usual arguments for escaping arbitration. Our crystal ball must have been at full luminescence back then, as we penned this line in our 3/20/07 post:

"The court held the power of attorney was authorized however there is little fact-driven analysis in the order."

Ah ha. Plaintiff's counsel, no stranger to the Florida appellate courts, took up that issue.

Enter the Second DCA with a one page opinion reversing the trial court in Estate of Loyette McKibbin v. Alterra et al. Our prior post set out more factual detail than the Second DCA's opinion but suffice it to say a resident was admitted to a nursing home. She was not incompetent. Her son signed the admission agreement which had an arbitration clause. He had a power of attorney. We have few other facts.

Here's where our crystal ball comes in: the Second DCA wrote, "[n]othing in that power of attorney, however, gave Ms. McKibbin's son the legal authority to enter into an arbitration agreement on behalf of his mother." Hmmm. Take a look again at our March 2007 analysis of the trial court's ruling which discussed this very same weakness in the trial order.

After disposing with the issue of the POA -- albeit silently -- the Second DCA went on to discuss the strict construction of a power of attorney and that there were no other basis for arbitration enforcement. That "discussion" was mainly a series of string cites without specifics about the arguments raised.

Our frustration level runs high in this case since the trial court did not provide the arbitration wording (despite the plaintiff claiming it was unconscionable and against public policy) while the appellate court holds that the power of attorney was insufficient but does not provide us with the wording. Not helpful. Hence, to anyone but the parties, this case provides little to no precedent.

It is unclear if third party beneficiary was raised as an argument -- we assume it was an argument since Alterra had raised it before in Alterra Healthcare v. Estate of Linton in the First DCA. The Second DCA, for whatever reason, choose not to discuss or compare its analysis to that of the First DCA's.

We do note that this opinion has to be seen -- even in its vague and underwhelming form -- as a "win" for parties seeking to avoid arbitration since the Second DCA is typically an arbitration-friendly district. That said, the facts in this case are not revealed to us in the opinion so its precedential value seems... nominal.

We will obtain the briefs as well as this POA and report.

Full post as published by Florida Arbitration Law on January 24, 2008 (boomark / email).