The Supreme Court of Mississippi finds no valid arbitration agreement existed between a nursing home and a resident, as the resident’s daughter signed it without the authority to act as her mother’s health care surrogate. In Belhaven Senior Care v. Smith (Miss. No. 2022-CA-00050-SCT, April 6, 2023).
When Mary Hayes entered Belhaven Senior Care, her daughter Betty Smith signed a nursing home admissions agreement that contained an arbitration provision. Although Ms. Hayes had dementia, she did not have a primary physician at the facility, and no doctor found she lacked capacity.
After Ms. Hayes passed away, her daughter brought gross negligence, medical malpractice, and statutory survival claims against Belhaven. The facility sought to compel arbitration. The district court denied arbitration, concluding that Ms. Smith lacked the legal authority to bind her mother to the arbitration agreement. The nursing home appealed.
Direct-benefit estoppel does not apply. Belhaven argued that the arbitration agreement benefited Ms. Smith and Ms. Hayes, estopping Ms. Smith from challenging it. Yet Ms. Hayes did not benefit from the agreement, and Ms. Smith is not suing to enforce it.
The arbitration agreement is invalid. Ms. Smith could not legally act on her mother’s behalf when she signed the agreement. The nursing home failed to show that a primary physician found Ms. Hayes incapacitated. Although Ms. Hayes had dementia, no evidence established the severity of her condition. Since a primary doctor had not determined that Ms. Hayes lacked capacity, Ms. Smith could not act on her behalf under the Mississippi health care surrogacy statute.
Ms. Hayes was not a third-party beneficiary of the arbitration agreement. No valid contract existed because Ms. Smith was not her mother’s health care surrogate.
The Mississippi Supreme Court affirms the trial court’s decision not to compel arbitration, as no valid arbitration agreement existed.
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