Monday, August 22, 2022
Court of Appeal:
Agent’s Power to Make ‘Health Care Decisions’ Does Not Include Agreeing to Arbitration
Panel Rejects Contrary Conclusion by Another Division in District
By a MetNews Staff Writer
A man who signed a directive authorizing an agent to make “health care decisions” on his behalf did not thereby authorize that agent to execute an agreement providing that any disputes with a health care provider would be routed to arbitration, Div. Four of the Court of Appeal for this district has held, repudiating a contrary decision in 2005 by this district’s Div. Five.
Div. Four’s opinion, filed Thursday, affirms an order by Los Angeles Superior Court Judge Monica Bachner denying a motion to compel arbitration. The motion was made by defendant Country Oaks Partners, LLC, which operates a skilled nursing facility in Pomona.
Country Oaks was sued by Charles Logan who had been resident there and whose causes of action include elder abuse. The defendant maintains that the plaintiff is bound by an arbitration agreement executed by his nephew, Mark Harrod, whom Logan had designated in an “advance directive,” executed before his admission to the facility, as his health-care agent.
Under Div. Five’s opinion, by Presiding Justice Paul Arthur Turner (since deceased), in Garrison v. Superior Court, authority to make “health care decisions” includes entering into arbitration agreements with heath care providers. But Justice Brian S. Currey, in Thursday’s opinion, declared:
“We respectfully disagree with the reasoning set forth in Garrison and conclude the Advance Directive did not confer such broad authority on Harrod.”
“….Probate Code section 4688 clarifies that if there are any matters not covered by the Health Care Decisions Law, the law of agency is controlling. Civil Code section 2319 states: ‘An agent has authority: [¶] 1. To do everything necessary or proper and usual, in the ordinary course of business, for effecting the purpose of his agency….’ The decision to enter into optional revocable arbitration agreements in connection with placement in a health care facility, as occurred here, is a ‘proper and usual’ exercise of an agent’s powers.”
The presiding justice pointed to the California Supreme Court’s 1976 decision in Madden v. Kaiser Foundation Hospitals which held that a state employee who in 1965 enrolled in a Kaiser health care plan, which did not have an arbitration provision, was bound by an agreement the Board of Administration of the State Employees Retirement System entered into six years later providing for mandatory arbitration of disputes.
The board, as the agent of state employees, had the power, under §2319, to enter into such an agreement, the court held, over a dissent by Justice Stanley Mosk. Justice Matthew Tobriner wrote, for the majority:
“[W]e conclude that arbitration is a ‘proper and usual’ means of resolving malpractice disputes, and thus that an agent empowered to negotiate a group medical contract has the implied authority to agree to the inclusion of an arbitration provision.”
Analysis Found Pertinent
Turner said in Garrison:
“No doubt, Madden involves slightly different facts. But its analysis as to the ‘proper and usual’ nature of selecting arbitration as part of an agent’s selection of health care options is directly pertinent to this case.”
(Ironically, the judge whose ruling was the subject of the writ proceeding in Garrison was named Madden—Los Angeles Superior Court Judge Patrick T. Madden—and joining in Turner’s opinion, which embraces the decision in Madden, was Justice Richard Mosk, now deceased, son of the dissenter in that opinion.)
Currey said in a footnote that the Court of Appeal, in the 2007 decision in Hogan v. Country Villa Health Services (by Justice Eileen Moore of the Fourth District’s Div. Three), hailed Garrison as “well reasoned.” He also noted the 2013 opinion in Young v. Horizon West, Inc. (by then-Justice Franklin D. Elia of the Sixth District) expresses disagreement with the “view that the term ‘health care decisions’ made by an agent encompasses the execution of arbitration agreements on behalf of the patient.”
The author of Thursday’s opinion expressed disagreement with Turner’s reliance on Madden.
“The facts in Madden…are distinguishable from both the facts in Garrison and this case,” he said.
Currey explained that the court in Madden held that where parties “possessing parity of bargaining strength” negotiate contract on behalf of a group, it is “proper and usual” to negotiate terms such as the forum for resolution of disputes.
“The holding in Madden is inapplicable here, however, where the skilled nursing facility’s admission agreement does not contain an arbitration provision negotiated between parties of equal bargaining power,” he declared.
The jurist noted that under statutory law, the arbitration agreement with the health care provider must be separate from the admission form and signing it cannot be a condition of admission. He set forth:
“There is nothing…‘necessary or proper and usual’ about signing an optional arbitration agreement ‘for effecting the purpose of his agency,’ i.e., placing Logan into a skilled nursing facility. Rather, the ‘health care decision’ (whether to consent to admission into the skilled nursing facility) has been expressly decoupled from the decision whether to enter into the optional arbitration agreement.
“Based on the foregoing, we decline to follow Garrison’s broad interpretation of ‘health care decisions.’ ”
The case is Logan v. Country Oaks Partners, 2022 S.O.S. 3948.
Kenneth R. Pedroza and Cassidy C. Davenport of the San Marino firm of Cole Pedroza teamed with Trent Evans and Kevin Khachatryan of Brea in representing Country Oaks. Ayman R. Mourad and Alexander S. Rynerson of the Long Beach firm of Lanzone Morgan LLP acted for Logan.
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