Arbitration Agreements and Long Term Care

Arbitration agreements are commonly included with the other documents typically signed during the admission process into a nursing home or assisted living facility. While the policy among facilities may vary signing the arbitration agreement is usually not a condition of admission. Even if you do sign one and then reconsider you typically have a 30 day opt out provision. Signing an arbitration agreement means that in the event of a problem that is not resolved by the parties without third party intervention the signing parties agree to arbitration rather than filing a lawsuit. In other words you are waiving the right to a jury trial for any dispute. For the agreement to be enforceable the person who signs the form must be competent to sign or if an agent is signing on behalf of the patient they have to have legal authority to do so. That authority is often found in the Durable General Power of Attorney or the Health Care Power of Attorney.

In this particular case Sarah Wilkins was admitted to Golden Living Center in Springfield Tennessee. Her son and attorney-in-fact signed the admission documents including the “Alternative Dispute Resolution Agreement”. She lived there for a year and half before she passed away. Later when her estate filed a wrongful death suit against Golden Living the nursing home moved to dismiss the case and compel arbitration based on the signed Arbitration Agreement. The court denied the motion citing the AIF lacked authority to bind enforcement of ADR.
The General Power of Attorney did not bind the patient to arbitration because the POA was not effective at the time of execution due to an unfulfilled springing clause requirement.  The issue became whether or not the language of the Health Care Power of Attorney granted authority to her agent to bind her to arbitration.
The specific language of the power of attorney controls the scope of the power conveyed. A power of attorney should be construed using the same rules of construction generally applicable to contracts and other written instruments except to the extent that the fiduciary relationship between the principal and the agent requires otherwise.
Golden Living relied in part on the Owens V. National Health Care holding that "because the principal could have decided to sign the nursing home contract containing the arbitration provision had the principal been capable, TCA 34-6-204(b) leads to the conclusion that the attorney-in-fact was authorized to sign the arbitration provision on the principal's behalf." 
Contrary to Golden Living's argument the Owens holding did not change the general rule that the specific language of the power of attorney controls the scope of the power granted but merely construed the language within the document to determine whether it authorized the act in question.  This leads to the conclusion in Wilkins the powers listed in her power of attorney was limited by the language in the preamble which only authorized "consent to proposed medical treatments" and "to withhold or withdraw consent based on upon any choices of treatment."  The language did not grant authority for Mr. Wilkin's to sign the optional and separate arbitration agreement on his mother's behalf. 
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