Health Care Agent Not Authorized to Sign Arbitration Agreement on Principal's Behalf

The Court of Appeals for the Second Appellate District in California affirms a Los Angeles Superior Court order denying a nursing home’s motion to compel arbitration because a health care agent did not have the authority to execute an arbitration agreement on a principal’s behalf, as this is not a health care decision. In Logan v. Country Oaks Partners, LLC et al. (Cal. Ct. App., 2nd Appellate Dist., 4th Div., Case No. B312967, August 18, 2022).

In 2017, Charles Logan executed an advance directive under the California Health Care Decisions Law. He appointed his nephew Mark Harrod as his health care agent. In 2019, Mr. Logan entered the Country Oaks nursing home. Mr. Harrod contemporaneously executed an admissions agreement and a separate optional arbitration agreement for Mr. Logan.

One month later, Mr. Logan was moved to another nursing home. He filed a complaint against Country Oaks and its owner-operator for elder abuse, neglect, negligence, and violation of the Residents’ Bill of Rights. In response, Country Oaks sought to compel arbitration.

After considering arguments on whether a health care agent may bind a principal to arbitration, the trial court denied Country Oaks’ petition. It found the advance directive did not give Mr. Harrod authority to enter into the arbitration agreement and only allowed him to make health care decisions on Mr. Logan’s behalf.

Country Oaks appealed, arguing that Mr. Logan’s advance directive gave Mr. Harrod the authority to execute the arbitration agreement. Country Oaks relied on a 2005 case (Garrison v. Superior Court). The Court of Appeals disagrees with County Oaks and the reasoning of the Garrison court. It declines to follow the Garrison court’s broad interpretation of what constitutes a health care decision. It also concludes Mr. Logan’s advance directive did not give Mr. Harrod the authority argued by Country Oaks and affirms the trial court’s decision.

The Court of Appeals’ decision is based on several factors. First, it finds that signing an agreement to engage in binding arbitration does not qualify as a “health care” decision when considering the definitions of “health care” in the California Health Care Decisions Law. Second, it finds neither the plain language of the advance directive nor the record evidenced Mr. Logan’s intentions or feelings regarding arbitration or resolution of legal claims. Finally, the court does not agree with Country Oaks’ argument that the law of agency allowed Mr. Harrod to execute the arbitration agreement because the agreement was not negotiated between parties of equal bargaining power.

The court concludes the execution of an arbitration agreement is not a “health care” decision and Mr. Harrod’s authority per the advance directive does not include executing an optional arbitration agreement. The trial court properly denied Country Oaks’ petition.

Read the full text of this decision.