The Court of Appeal of the State of California reverses and remands an order denying arbitration in a nursing home negligence, abuse, and wrongful death case concerning a poisoned resident. While the wrongful death claims brought by the victim’s children are not subject to arbitration, the trial court will need to resolve whether the negligence and elder abuse claims are. In Maxwell v. Atria Management (Cal. Ct. App. No. A168043, September 19, 2024).
Trudy Maxwell, an elderly woman with dementia, resided at a memory care facility known as Atria Park of San Mateo. Her health care power of attorney appointed her daughter as agent, while her durable power of attorney appointed her son. She passed away after imbibing an industrial strength cleaner that an employee served to her and other residents. Her children sued the facility for elder abuse, negligence, and wrongful death.
Atria Park moved to compel arbitration, relying on an arbitration agreement signed by Mrs. Maxwell’s son, James Maxwell III.
The trial court found that the arbitration agreement did not preempt the litigation. The court concluded that the son lacked authority to execute the agreement because he did not have the authority to make health care decisions under a power of attorney, it did not pertain to the children’s wrongful death claims, and no federal preemption applied because the contract did not involve interstate commerce. The facility appealed.
While the appeal was pending, the California high court issued a decision in Harrod v. County Oaks Partners. A footnote addressed but did not resolve the question of the validity of arbitration agreements when there are two powers of attorney with two separate agents.
The case appears to present the issue of whether executing an arbitration agreement is a health care decision. Yet other questions must be addressed first, such as whether the arbitration agreement was validly and voluntarily executed and whether the health care agent had the authority to make decisions. The appellate court remands this case to the trial court to consider the validity of the arbitration agreement.
Even if the arbitration agreement is valid, it does not affect the children’s wrongful death claims. The agreement states that it only pertains to disputes between the parties. The wrongful death claims are not derivative, and the children did not agree to arbitration. Since the son who signed the agreement is not acting in a representative capacity with respect to the wrongful death claim, the arbitration agreement does not apply to it.
Section 1281.2(c) of the California Code of Civil Procedure gave the trial court discretion to deny the motion to compel arbitration to avoid conflicting rulings. The children are third parties to the arbitration agreement. If the arbitration agreement is valid, the negligence and elder abuse disputes are arbitrable. They arose out of the same facts as the wrongful death action.
The Federal Arbitration Act (FAA) does not preempt state law. The language of the arbitration agreement indicates that California law applies. Section 1281.2(c) is an additional procedural rule that does not conflict with the FAA.
The appellate court remands the case to the trial court to resolve the motion to compel arbitration. It must determine whether there was a health care POA and a DPOA held by different persons and, if so, what the effect is under the recent legal precedent.
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