Harrod v. Country Oaks Partners, LLC (Mar. 28, 2024, S276545) ___ Cal.5th ___ [2024 WL 1319134]
Charles Logan executed a power of attorney for health care decisions using a form patterned on the Health Care Decisions Law (Prob. Code, § 4600 et seq.), which authorized his nephew, Mark Harrod, to make “health care” decisions on Logan’s behalf. Logan was later admitted to Country Oaks Care Center to rehabilitate a broken leg. Harrod signed Logan’s admission agreement with Country Oaks, and also signed a separate, nonmandatory agreement requiring arbitration of all legal disputes between Logan and Country Oaks. After staying at Country Oaks for less than two months, Logan, through Harrod as his guardian ad litem, sued Country Oaks alleging that its negligence resulted in Logan suffering a second fracture, pressure ulcers, and improper treatment. The trial court denied Country Oaks’s motion to compel arbitration, ruling that Harrod had no authority to execute an arbitration agreement on Logan’s behalf because that was not a health care decision. After the Court of Appeal affirmed, Country Oaks successfully petitioned for review by the Supreme Court.
The Supreme Court affirmed, resolving a split of authority among the Courts of Appeal. First, the Supreme Court concluded that the Health Care Decisions Law, which authorizes a principal to appoint an agent to make health care decisions, does not authorize the health care agent to execute a separate, optional dispute resolution agreement on behalf of the principal. Rather, such authority is conveyed (if at all) under the Power of Attorney Law. The Supreme Court explained that the statutory definition of a “health care decision” is limited to decisions involving the people and places that provide care and the treatments and procedures provided. Because Harrod’s choice to sign Country Oaks’s arbitration agreement was not a decision about who would provide medical services or which treatments Logan would receive, Harrod was not authorized to enter that agreement on Logan’s behalf. Next, the Court rejected Country Oaks’s argument that, under Civil Code section 2319, Harrod had implied power to execute the arbitration agreement on Logan’s behalf as a proper and usual step taken in furtherance of obtaining medical care. The Court explained that such power is implied only when necessary to facilitate a power of attorney, and here that purpose was limited to making health care decisions—not dispute resolution decisions. The Court also rejected Country Oaks’s argument that its decision improperly disfavored arbitration in violation of the Federal Arbitration Act (9 U.S.C. § 1 et seq.), explaining that arbitration can still be compelled under an appropriate agreement executed by a properly authorized agent. Finally, the Court noted that open questions remained regarding (1) whether an agent with power over claims and litigation, but without power over health care decisions, may agree to arbitration with a health care facility when the agent has no right to contract for healthcare services in the first instance; and (2) whether any particular familial relationship would itself convey authority to agree to arbitration with a skilled nursing facility.
