EMAIL TO A FRIEND COMMENT

 

Care Facility Admission; Arbitration Clause; Health Care Decisions


A woman executed a power of attorney for health care, as authorized under California’s Health Care Decisions Law (HCDL), Prob. Code, § 4671, subd. (a), (health care POA). The woman appointed a niece as the attorney-in-fact to make health care decisions for the woman. The authority to make health care decisions included the power to authorize the woman’s admission to “any hospital, hospice, nursing home, adult home, or other medical care facility,” and the authority to consent to the provision, withholding, or withdrawal of health care. The health care POA became effective immediately.

 

Four years later, the woman executed a power of attorney as set forth in California’s Power of Attorney Law, Prob. Code, § 4401, (personal care POA) using the statutory form. In the woman’s personal care POA, the woman designated a sister and the same niece as the woman’s attorneys-in-fact. The woman granted them the authority to act for the woman on a number of different subjects, including personal and family maintenance, and claims and litigation. The form expressly did not authorize anyone to make “medical and other health-care decisions” for the woman. Each attorney-in-fact had the authority to act alone on all matters within each’s authority under the personal care POA. The personal care POA became effective immediately.

 

The woman lived with the sister. The woman’s sister served as the woman’s care provider or oversaw care provided to the woman by in-home care providers, including their administration of medicine. The sister stated that the sister knew that the woman had assigned the niece to make health care decisions. It was the woman’s desire throughout the woman’s lifetime that the niece make health care decisions for the woman.

 

The sister voluntarily admitted the woman to a residential care facility for the elderly under the California Residential Care Facilities for the Elderly Act (Health & Saf. Code, § 1569 et seq.). The sister signed the admission agreement on the woman’s behalf.

 

The admission agreement contained an arbitration clause. The clause in general required all claims arising from the woman’s care at the residential care facility to be submitted to binding arbitration. The clause bound the parties’ heirs, representatives, and successors, and it remained in effect after the admission agreement terminated for the resolution of all claims.

 

The residential care facility requested to know who the woman had assigned to make health care decisions for the woman. The woman’s sister and niece provided the residential care facility with the woman’s health care POA that named the niece as the attorney-in-fact over the woman’s health care.

 

A medical appraisal performed the day of the woman’s admission determined that the woman was suffering from dementia and seizures. The woman was confused and disoriented. The woman engaged in inappropriate, aggressive, and wandering behaviors. The woman was not able to follow instructions consistently, and was depressed. The woman required “complete” supervision.

 

When the woman was admitted to the residential care facility, the woman suffered from epilepsy and had a prescription for Ativan. The woman was to take 1 mg of the medicine only as needed for seizure-like activity. The residential care facility staff began giving the woman more doses of Ativan than were prescribed. The staff’s intention was to help alleviate the woman’s anxiety and agitation. Concerned about the staff’s increased administration of Ativan for purposes other than seizures, the woman’s sister made an appointment for the woman to see the woman’s doctor.

 

The doctor found the woman was disoriented as to time, place, and person, which was a “drastic change from earlier visits.” The doctor confirmed that the Ativan was prescribed for seizures only, not for anxiety. The doctor concurred in the sister’s decision to move the woman back to the sister’s home.

 

On the day the woman’s sister was to move the woman out of the residential care facility, the woman choked on lunch at the facility and was transferred to a hospital. The woman was diagnosed with aspiration pneumonia and severe dysphagia (difficulty in swallowing). The woman died 20 days later.

 

There was no evidence that the woman’s niece, the woman’s attorney-in-fact for health care under the health care POA, was contacted by the residential care facility or involved in any of the decisions and actions regarding the woman’s admission to, stay at, or discharge from the residential care facility.

 

The niece and sister sued the residential care facility. The complaint alleged the residential care facility committed elder abuse, fraud, and negligent infliction of emotional distress.

 

The Sacramento County Superior Court denied the residential care facility’s motion to compel arbitration. The trial court found that the sister made a health care decision when the sister admitted the woman to a residential care facility for the elderly and, in the process, agreed to an arbitration clause. In doing so, the sister acted outside the scope of the authority granted to the sister in the personal care POA. Consequently, the arbitration clause was void.

 

The California Court of Appeal, Third District, affirmed. The court held that the admission of the woman to the residential care facility, along with the sister’s execution of the admission agreement’s arbitration clause, was a “health care decision” under California’s Health Care Decisions Law (HCDL); and the woman and the sister did not create an ostensible agency by failing to inform the residential care facility that the sister was not authorized to execute the admissions agreement.

 

The admission of the woman to the residential care facility, along with the sister’s execution of the admission agreement’s arbitration clause, was a “health care decision” under California’s Health Care Decisions Law (HCDL). Because the HCDL defined the services a personal care POA cannot authorize, the court relied on the HCDL in determining that the sister executing the admission agreement with its arbitration clause was a health care decision. For purposes of the HCDL and, by extension, the PAL and its statutory form personal care POA, the term “health care” means “any care, treatment, service, or procedure to maintain, diagnose, or otherwise affect a patient’s physical or mental condition.” Prob. Code, § 4615. The residential care facility agreed to provide dementia care as part of its custodial care, which required staff members to be trained on issues that included health care, such as hydration, skin care, therapeutic activities, and behavioral challenges. The type of custodial care the residential care facility agreed to provide to the woman qualified as health care for the purposes of the HCDL and the personal care POA. Consequently, the sister executing the admission agreement with its arbitration clause fell outside the scope of the woman’s personal care POA, which did not authorize the sister to make health care decisions for the woman. Because the attorney-in-fact acting under the PAL did not have authority to make health care decisions for the principal, the attorney-in-fact’s execution of the admission agreement and its arbitration clause were void, meaning the trial court did not err in denying the residential care facility’s motion to compel arbitration.

 

The woman and the sister did not create an ostensible agency by failing to inform the residential care facility that the sister was not authorized to execute the admissions agreement. Agency can be established either by agreement between the agent and the principal, that is, a “true agency,” or it can be founded on “ostensible authority,” that is, some intentional conduct or neglect on the part of the alleged principal creating a belief in the minds of third persons that an agency exists, and a reasonable reliance thereon by such third persons. The woman did not intentionally or negligently cause the residential care facility to believe the sister was the woman’s agent for purposes of executing the health care agreement containing the arbitration clause. The residential care facility was in possession of the woman’s health care POA, which named the woman’s niece as the woman’s health care attorney-in-fact. The residential care facility did not raise the discrepancy with either the sister or the niece. The residential care facility did not seek the niece’s authorization to render health care to the woman and execute the arbitration agreement. The woman’s silence and possible lack of capacity did not constitute negligence. The court concluded that no ostensible agency was created.

 

The California Court of Appeal, Third District, affirmed the trial court’s denial of the residential care facility’s motion to compel arbitration.

 

See: Hutcheson v. Eskaton Fountainwood Lodge, 2017 WL 5712590 (Cal.App. 3 Dist., November 28, 2017) (not designated for publication).

 

See also Medical Law Perspectives Report: Risks in Caring for Patients with Cognitive Impairments: Alzheimer's Disease and Dementia

 

See the Medical Law Perspectives Blog: Alzheimer’s Disease Presents an Array of Legal Issues

 

 

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