Binding Arbitration and Admissions Agreements – Part 3

In this week’s final post of three I will finish telling you about a recent court case concerning a dispute over the terms of a long term care facility admissions agreement.  Last week I delved into the specifics facts of that case – the relevant terms of the various documents and who signed and didn’t sign them.  I won’t recite them here because they are contained in last week’s post.  What I want to do this week is discuss the balance of the court’s decision which focused on the questions raised by those facts in an effort to determine whether the resident should be held to the terms of the binding arbitration agreement that was at the heart of the case.

An interesting fact in the case was that at the time she signed the agreement, the resident’s daughter was not acting under a power of attorney.  Resident did not sign one until 3 months later.  The facility director, on the other hand, claimed that the daughter said she was appointed as POA.  The Court questioned whether it would be reasonable for the director to rely on such a representation despite the fact that the daughter did not check the box identifying herself as POA on the Residence and Service Agreement.

The director further stated that she did not seek the resident’s signature when the 3 of them met to go over the terms of the documents because the resident said his daughter could sign for him.  Nevertheless he did sign the resident signature page instead of asking his daughter to sign that document on his behalf.  The court noted that the director offered no explanation why the resident would sign one document and ask his daughter to sign the other.

The court also noted that while the facility’s agreement stated its preference that the resident designate a POA to act on his behalf it then failed to determine if there was actually one in place.  It’s only option then was to try to convince the court that the daughter still had the power to commit her father to an agreement to arbitrate that he never signed.

And can it be said that because the resident signed one document, he can be considered to have agreed to everything stated in the other documents he didn’t sign?  The court in a footnote addressed that question, stating that the resident signature page he signed did not necessarily capture and incorporate all that was stated in the other documents.  It wasn’t clear that he was even aware of the separate arbitration agreement.

The appellate court did not issue a ruling on whether the resident could be held to the terms of the arbitration agreement because the answers to the questions it raised need to be determined first.  It instead sent the case back to the trial level so further evidence can be presented and the trial judge can rule on these issues.

Many reading this post or the court’s actual decision may then find this discussion irrelevant to anyone but the parties in that case.   There is, however, an overriding message here for both facilities and residents (and their family members).  It’s that the language in these documents do matter.  Although placement decisions and transfers often happen quickly by necessity, the parties do need to read, understand and adhere to the rights, obligations and terms of the documents.  Signatures do matter as does who signs and in what capacity.