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California Supreme Court:
Health Care Power of Attorney Did Not Authorize Agreement to Arbitrate
Resolving a Split in Authority, Opinion Says Choice as to Dispute Resolution Is Not a Healthcare Decision
By Kimber Cooley, Staff Writer
The California Supreme Court held yesterday that a power of attorney authorizing a man to make health care for his uncle, in his seventies, did not grant authority to sign an optional agreement requiring that any dispute the principal had with a skilled nursing facility to which he was admitted be resolved through arbitration.
Justice Martin J. Jenkins wrote the opinion for a unanimous court.
He noted that “[s]everal courts of appeal have reached the opposite conclusion regarding a health care agent’s health care decisionmaking authority.”
Power of Attorney
Charles Logan executed a healthcare power of attorney appointing his nephew Mark Harrod as his “health care agent” to make “health care decisions” on his behalf. Two years later, Logan fell and broke his femur.
Logan entered the Country Oaks Care Center, a skilled nursing facility, to aid in his rehabilitation. Upon Logan’s admission, Harrod signed two agreements with the facility on behalf of his uncle—an admission agreement and an arbitration agreement.
Pursuant to state law, the arbitration agreement appeared on a separate form from the admission agreement and was presented as optional.
After his one-month stay in the facility, Logan, with Harrod acting as his guardian ad litem, filed a lawsuit against the facility’s owners and operators, Country Oaks Partners, LLC and Sun-Mar Management Services, Inc. The complaint alleged that the defendants negligently withheld appropriate care which resulted in Logan suffering a second fall and fracture and being unnecessarily diapered leading to pressure ulcers.
The case was brought in Los Angeles Superior Court before now-retired Judge Monica Bachner. The defendants moved to compel arbitration, and Bachner denied the motion, reasoning that the health directive authorized Harrod to make only health care decisions.
The Country Oaks defendants appealed and Div. Four of this district’s Court of Appeal agreed with Bachner. The defendants sought review in the state Supreme Court.
Health Care Decisions
Jenkins noted that there is no dispute that the selection of a skilled nursing facility for Logan was within the scope of Harrod’s agency under the power of attorney, but that the parties disagreed as to whether the authority to make “health care decisions” encompassed Harrod’s separate and optional decision to bind Logan to arbitrate disputes with the facility.
The jurist explained that the meaning of a “health care decision” in a power of attorney is linked to the meaning of the term in the Health Care Decisions Law, California Probate Code §4617, noting that the power of attorney signed by Logan indicated that it was created under the authority of that statute. Under the code, a “health care decision” is defined as one “regarding the patient’s health care.”
He noted that Logan’s power of attorney does not define the term, but said that the document does list examples of what counts as a health care decision, including such things as consenting to tests, drugs or surgery and any medical services. Under those circumstances, he wrote:
“Each enumerated example of a health care decision in the Health Care Decisions Law and in Logan’s power of attorney directly pertains to who provides health care and what may be done to a principal’s body in health, sickness, or death. There is no catchall provision, no express delegation of power to make decisions that serve other purposes, and no express grant of power to waive access to the courts, agree to arbitration, or to otherwise negotiate about or accept any dispute resolution method.”
He continued:
“Thus, defining the term ‘health care decision’ to include a standalone arbitration agreement would not be ‘in concert with’…the items listed and, therefore, with the apparent intent evidenced by the definitional provisions of Logan’s power of attorney or the Health Care Decisions Law it invokes.
1976 Decision
The defendants argued that the 1976 California Supreme Court case of Madden v. Kaiser Foundation Hospitals, which found a state retirement board statutorily authorized to negotiate contracts for state employees could agree to an arbitration clause on behalf of the employees, is dispositive. Jenkins disagreed, saying:
“If, under Madden, selecting arbitration as a contract term serves the purpose of statutorily authorized contract negotiation, choosing a dispute resolution method does not similarly serve the purpose of making ‘health care decisions’ when that choice is contained in a side agreement with no impact on health care or who administers it.”
The case is Harrod v. Country Oaks Partners, LLC, 2024 S.O.S 1121.
Mark Harrod was represented by Matthew Borden and Kory James DeClark of the San Francisco firm BraunHagey and Borden LLP; Ayman R. Mourad of the Lakewood office of Lanzone Morgan, LLP; and Suzanne M. Voas, Alexander S. Rynerson and Elizabeth M. Kim of the Long Beach office of Lazone Morgan, LLP.
Country Oak Partners, LLC and Sun Mar Management Services were represented by Sun Mar’s in-house attorneys Karen Khachatryan and Julieta Y. Echeverria as well as Cassidy C. Davenport of the San Marino firm Cole Pedroza LLP; Brittany A. Ortiz of the Brea firm Jackson Tidus; and Robert M. Dato, Lauren S. Jacobs, and Harry W.R. Chamberlain of the Los Angeles office of Buchalter.
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