Arbitration & Mediation

Alabama Court Determines Daughter Without DPOA Had Apparent Authority to Sign Nursing Home Admission Documents

By Christopher B. Hopkins, Esq.

The Supreme Court of Alabama recently held that an adult daughter of a competent nursing home resident could bind the mother/resident to an arbitration agreement as part of nursing home admission paperwork based on the theory that the daughter had "apparent authority" since the mother knew or should have known that forms were signed on her behalf.

In Tennessee Health Management, Inc. v. Carol J. Rousseau Johnson as Personal Representative of Dolores J. Rousseau, the resident was competent at the time of admission but was never presented with the paperwork. Instead, the adult daughter received the paperwork and signed in various places (under various titles, such as "representative" and "responsible party"), including a non-binding arbitration provision.

A lawsuit ensued over care issues and the adult daughter-turned-plaintiff denied she had authority to sign such documents. The facility/defendant countered, relying on Carraway v. Beverly, asserting that "apparent agency" only required passive non-objection by the principal to establish agency.

The key factual elements here appear to involve the fact that the resident was competent (see, alternatively, Mariner v. Ferguson which contrasts with the Pagarian case out of California and the In Re Ledet case in Texas). A bit dated, but in 2007 we covered some cases from around the country regarding these scenarios here.

An interesting quote from the opinion:

"Because [Resident] enjoyed the ease of checking into [nursing home] without the requirement that she sign anything, under circumstances in which no reasonable person could consider the admission possible without the intervention of an agent to act on [Resident's] behalf, she thereby passively permitted [daughter] to appear to [facility] to have the authority to act on her behalf and [daughter's] apparent authority is, therefore, implied."

One may contrast this opinion with a prior Nebraska Supreme Court decision, Koric/Baker v. Beverly, which concluded the same however detoured at the last moment by determining that reasonable people might not anticipate an ADR clause and therefore that part of the admission paperwork was not enforceable.

Full post as published by Florida Arbitration Law on April 27, 2010 (boomark / email).