Agreement to Arbitrate Disputes Over Nursing Home Care Enforced

Agreement to Arbitrate Disputes Over Nursing Home Care Enforced

 

It is quite typical, when a person is admitted to a nursing home or similar facility, that as part of the package of documents executed that there be an agreement to arbitrate any disputes.  Often these agreements are executed by a family member or someone else acting pursuant to a power of attorney, the person being admitted not being in a position to review and execute them themselves.  A significant string of Kentucky cases have held that these agreements to arbitrate are not enforceable because the power of attorney did not authorize the agent to bind the principal to arbitration.  A recent case found that the power of attorney was sufficient to bind the person being admitted to arbitration.  Bardstown Medical Investors, Ltd. v. Dukes, No. 2013-CA-001783-MR (Ky. App. Jan. 23, 2015).

 

Doris Dukes was admitted to the Life Care Center of Bardstown in connection with certain admission documents executed by Bobby Dukes, her husband and the holder of her power of attorney.  That power of attorney specifically authorized Bobby too, on Doris’ behalf, “enter into contracts of any kind of [sic - or] description whatsoever, and to exercise any light [sic - right], option or election which I may have or acquire under any contract.” The power of attorney went on to give Bobby Dukes, on Doris behalf, the right “to compromise, settle renew any claim of or against me, or any right which I may be entitled to assert and which may be asserted against me.”

 

On behalf of Doris, Bobby had filed suit against the Life Care Center of Bardstown alleging numerous instances of negligence.  Life Care Center sought an order requiring that the dispute go to arbitration. In reliance upon Ping v. Beverly Enterprises, Inc., 376 S.W.2-D 581 (KY. 2012), the trial court denied the motion to compel arbitration.  In Ping, the Kentucky Supreme Court determined that there was no binding agreement to arbitrate on the basis that the person who executed the arbitration agreement held only a health-care power of attorney from the person admitted.

 

The Court of Appeals would reverse. In this instance, the power of attorney specifically authorized Bobby Dukes, on Doris’ behalf, to enter into commercial agreements.  As such, Doris had implicitly given to Bobby authority to on her enter into an agreement to arbitrate.  In connection there with, the Court of Appeal cited the Restatement (Third) of Agency § 2.02(1), it providing:

 

An agent has actual authority to take action designated or implied in the principal's manifestations to the agent and acts necessary or incidental to achieving the principal's objectives, as the agent reasonably understand the principal's manifestations and objectives when the agent determines how to act.