This is going to be the first in probably a couple of posts on arbitration agreements in the long term care (LTC) context. This decision from the Oklahoma Supreme Court was handed down last week. It involves the death of an LTC resident at a Chickasha, Oklahoma facility. The deceased resident’s daughter brought a wrongful death claim.
The facility moved to dismiss the litigation and compel arbitration, citing an arbitration provision in the admission agreement, which was signed by the daughter (and not the resident herself) under a General Power of Attorney. The plaintiff responded by arguing that the Power of Attorney did not authorize the daughter/plaintiff to bind the resident to the arbitration agreement because it was superseded by a later-in-time Health Care Power of Attorney, which specified that the daughter could only make “health care decisions” on behalf of the resident if she was certified by a physician to be unable to make her own health care decisions (which was not the case upon admission. The plaintiff further argued that because the arbitration agreement was a condition precedent to admission, it made signing it a “health care decision” – i.e., a decision that the plaintiff/daughter was unable to make.
The trial court agreed with the plaintiff. The facility appealed, and on November 25, 2014, the Oklahoma Supreme Court handed down its decision. The crux of the opinion concerned the issue of whether signing the arbitration agreement was, in fact, a “health care decision.” The high court agreed, endorsing the plaintiff’s argument that when signing it is a requirement for admission to a LTC facility, it becomes such a decision. It primarily cited and relied upon a 2010 Maryland high court decision reaching the same result. The court also noted that the facts and circumstances surrounding the signing of the general and health care POAs indicated an intent to carefully delineate between the two duties. (As an aside, this appears to be part of a recent trend in Oklahoma to disfavor LTC arbitration agreements.)
So what is the takeaway from this? Well, in Oklahoma at least, it’s simple. LTC facilities admitting new residents need to look at POAs before they accept the new resident’s representative’s signature on an arbitration agreement. If there’s any question at all, try to have both the representative and the resident (if possible) sign.
Outside of Oklahoma, and even outside of the POA context, cases like these really emphasize the importance of making sure you have an ironclad arbitration agreement – and a similarly ironclad process for making sure that they are properly signed. Oklahoma court are not the only state courts that really do not like arbitration agreements. If there is any way for a state court to reject an arbitration provision, in many states, the court will bend over backward to do so. There’s no foolproof method to eliminate that risk, but LTC facilities should do what they can to mitigate it.
This all raises an issue that I plan on covering in a future blog post – maybe a major goal should be to keep arbitration disputes out of the state courts in the first place. But how do you do that? Even if there is diversity jurisdiction based on the out-of-state citizenship and domicile of the facility, plaintiff’s counsel often includes the nursing home administrator or executive director as a co-defendant, which usually defeats diversity.