Arbitration & Mediation

Colorado Supreme Court Upholds Nursing Home Arbitration

By Christopher B. Hopkins, Esq.

We travel to Colorado for this state supreme court case in yet another nursing home arbitration / agreement-signed-by-adult-children case.

In Moffett v. Life Care Centers of America, the adult son of a nursing home resident signed the admission agreement and a separate arbitration agreement two days after the resident was admitted to the facility. He had both a power of attorney and a medical durable power of attorney. A dispute arose about the quality of care.

In disputing arbitration, the family argued that Colorado's Health Care Availability Act would only validate arbitration agreements between the provider and "the patient" -- not the patient's POA. Moreover, the family claimed that the Act was violated because the son stated in an affidavit that he was told he had to sign the arbitration agreement to gain his mother's admission.

In short, the family's argument would essential prevent an attorney in fact from signing health care documents for an incapacitated patient (recognizing that so many health care providers use arbitration in their agreements).

The Colorado Supreme Court held that a person possessing a POA is permitted to agree to arbitrate on behalf of an incapacitated patient under the Act, as long as there is no restriction or limitation on authority in the POA documents.

In its analysis, the court held that the family's argument was "illogical" and employed an interpretation which "frustrates the purpose of the HCAA, Colorado's public policy favoring arbitration, and the right of an individual to authorize [a power of attorney]."

Quick notes:

Arbitration clause at issue: "..any claims, including but not limited to, any claim that medical services... were improperly, negligently, or incompletely rendered or omitted... [and] all disputes... arising out of or in any way related or connected to the resident's stay and care provided at the Facility..."

The paperwork contained a "comprehensive explanation of arbitration" and "makes explicit that 'the execution of [the Agreement] is voluntary and not a precondition to receiving medical treatment at or for admission to [facility]."

The last section of the agreement provided a 90-day rescission period: "You have the right to seek legal counsel and you have the right to rescind this agreement within ninety days from the date of signature of both parties."

The matter was remanded to the trial court for an evidentiary hearing over the family's claim that the son was told he had to sign the agreement. Likely as not-so-subtle guidance to the trial judge on remand, the court gratuitously pointed out (1) the son signed the documents AFTER admission, (2) the paperwork is contrary to the affidavit, and (3) the paperwork references getting legal counsel and rescinding in 90 days.

We note that Life Care recently made pro-arbitration law in two Florida appellate courts: the Second and Fifth Districts both agreed that the AAA's refusal to hear matters based upon pre-dispute health care arbitration agreements does not prevent arbitration when the agreement referred disputes to the AAA (the cases are Perez v. Life Care and Life Care v. Stern). On the flip side, see this Georgia case with a slightly different set of facts and an inopposite outcome.

Full post as published by Florida Arbitration Law on February 19, 2010 (boomark / email).