HEALTH CARE ARBITRATION AGREEMENTS
Dougherty v. US Behavorial Health Plan, 101 Cal. App. 5th 682
Enmark v. KF Community Care LLC, 105 Cal. App.5th 463
Harrod v. Country Oaks Partners LLC, 15 Cal. 5th 939
Hearden v. Windsor Redding Care Center , 103 Cal. App.5th 1010
Lombardo v. Gramercy Court, 107 Cal.App. 5th 1028
Maxwell v. Atria Management Co., LLC, 105 Cal. App. 5th 230
Dougherty v. US Behavorial Health Plan, 101 Cal. App. 5th 682
Plaintiff Dougherty enrolled herself and her son, Ryan, in a UnitedHealthcare HMO health plan. Dougherty was offered the plan through her employer via the California Schools Voluntary Employee Benefit Association (CSVEBA). That association and UnitedHealthcare entered into a group subscriber agreement (GSA). The agreement contained an arbitration clause that complied with Health and Safety Code Section 1363.1. The agreement also listed several affiliates of UnitedHealthcare that would provide services. Each affiliate provided a document (EOC) that described the services. One of the affiliates was US Behavorial Health Plan (USB). The EOC that it provided to Dougherty contained an arbitration provision that did not comply with Section 1363.1. Dougherty sued USB for medical malpractice based on Ryan’s fatal overdose of drugs three days after USB declined to admit him to its facility. USB’s motion to compel arbitration was denied because of the non-compliance with Section 1363.1. USB appealed and the Court of Appeal reversed.
Section 1363.1 provides that “any health care service plan” that requires arbitration must comply with the disclosure requirements outlined therein. Thus, by its plain terms, the statute's disclosure requirements apply only to a “health care service plan.” Health and Safety Code section 1345 (f)(1) in turn defines “health care service plan” in relevant part as “[a]ny person who undertakes to arrange for the provision of health care services to subscribers or enrollees, or to pay for or to reimburse any part of the cost for those services, in return for a prepaid or periodic charge paid by or on behalf of the subscribers or enrollees.” (italics added.) The record showed that Dougherty was an “enrollee” in UnitedHealthcare's plan, which “arrange[d] for the provision of health care services” to her “in return for a prepaid or periodic charge paid by or on behalf of” Dougherty. On the other hand, there was no evidence that Dougherty was an “enrollee or subscriber” of USB, or that USB “arrange[d] for the provision of health care services” for Dougherty “in return for a prepaid or periodic charge paid by or on [her] behalf.” Thus, under section 1363.1, the only “health care service plan” at issue that “includes terms that require binding arbitration” was Dougherty's plan with UnitedHealthcare.
Enmark v. KF Community Care LLC, 105 Cal. App.5th 463
The plaintiff was appointed conservator for his daughter, who was gravely disabled by a mental disorder. The order empowered him to place his daughter in “the least restrictive setting” for her “care and needs,” including a medical or psychiatric nursing facility. He placed her into a skilled nursing facility operated by the defendants. Upon admission, he signed two optional arbitration agreements as his daughter's representative. After she died, he sued the defendants, asserting as successor to his daughter. The defendants petitioned to compel arbitration. The trial court denied the petition, finding no evidence of the plaintiff's authority to bind his daughter to arbitration. The defendants appealed, contending the successor claim was subject to arbitration because the conservatorship order authorized the plaintiff to sign the agreement on his daughter's behalf.
The Court of Appeal affirmed. For a power of attorney to be viewed as binding on the principal, it must appear that the act done by the agent was in the exercise of the power delegated, and within its limits. The power of attorney did not include the delegated authority to enter into separate optional arbitration agreements with health care providers. The plaintiff's execution of the arbitration agreements was not a health care decision binding his daughter to arbitration. The defendants argued that the conservatorship order empowered the plaintiff to contract for his daughter's placement, which necessarily encompassed his authority to make agreements connected to her placement. Additionally, the order prohibited the plaintiff’s daughter from entering into contracts and left the plaintiff's power to contract unrestricted. The defendants posited this meant the plaintiff alone was authorized to sign the arbitration agreements.
The order made a reference to the conservator’s “determining the placement of residence of the conservatee.” The defendants maintained the word “placement” implied the plaintiff's authority to execute the arbitration agreements as part of the admission paperwork for acceptance as a resident. However, the arbitration agreements were optional, separate from the admission contract, and had no bearing on admission or treatment. As such, the separate decision to agree to arbitration was unrelated and unnecessary to the health care decision to place the daughter in the facility for medical treatment. The authority to make health care decisions—here, the authority to obtain skilled nursing care—could be fully performed without reference to that side agreement. Thus, the word “placement” in the conservatorship order could not be interpreted as implying the plaintiff's authority to sign the arbitration agreements on his daughter's behalf.
Harrod v. Country Oaks Partners LLC, 15 Cal. 5th 939
Logan executed a health care decision power of attorney in favor his nephew, Harrod, that complied with the language set forth in the Probate Code. After he suffered a fall, he was admitted to a nursing facility operated by defendant. Harrod utilized the power of attorney to execute the state mandated admission agreement and a side agreement wherein Logan agreed to arbitrate disputes. Harrod, acting on behalf of Logan, subsequently sued the defendant for elder abuse. The defendant’s motion to compel arbitration was denied on the ground that an agreement to arbitrate is not a “health care decision” and therefore Logan was not bound by it. The defendant appealed. It contended that an agreement to arbitrate a dispute with a nursing home can be a health care decision and, if not, the agreement was still enforceable under Civil Code 2319, which covers powers of attorney. The Court of Appeal affirmed, and defendant appealed to the California Supreme Court, which also affirmed.
The Health Care Decisions Law specifies a “health care decision” is one “regarding the patient's health care” (Probate Code § 4617(a)), with “health care” defined as “any care, treatment, service, or procedure to maintain, diagnose, or otherwise affect a patient's physical or mental health condition” (§ 4615).
Choosing a dispute resolution method does not 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 authority to make health care decisions—here, the authority to obtain skilled nursing care—could be “fully performed” without reference to that side agreement. And accepting or rejecting that side agreement could not be said to be in pursuit of or to effectuate a health care decision.
Hearden v. Windsor Redding Care Center , 103 Cal. App.5th 1010
The grandchildren of four individuals who succumbed to COVID-19 while patients at defendants’ nursing facility filed suit alleging causes of action unique to them and as successors to their grandparents. The defendants moved to compel arbitration based on agreements signed in two cases by a patient’s spouse and in two cases by a patient’s son, wherein the signatories alleged they were legal representatives of the patients. In three of the cases, defendants failed to produce any documents appointing the signatories as legal representatives. In the fourth, defendants produced a durable power of attorney authoring the agent to sign documents. The trial court denied the motion and the defendants appealed.
The Court of Appeal affirmed. In the three cases where no power of attorney was produced, there was no evidence decedents authorized the family signatories to sign the arbitration agreements. The defendants thus failed to establish that the family signatories were actual or ostensible agents. Defendants sought to bind the family signatories to arbitration based on the doctrines of unclean hands and/or equitable estoppel. They argued that if the family signatories had no authority to sign the arbitration agreements, they were misled, and it would be unjust to allow the plaintiffs to avoid arbitration.
Equitable estoppel requires: (a) a representation or concealment of material facts; (b) made with knowledge, actual or virtual, of the facts; (c) to a party ignorant, actually and permissibly, of the truth; (d) with the intention, actual or virtual, that the ignorant party act on it; and (e) that party was induced to act on it. The party asserting estoppel must prove all of these elements. There was no evidence decedents made any relevant representation or concealed any facts or intended defendants to act in reliance on any relevant facts.The doctrine of unclean hands bars relief to a party who has engaged in misconduct directly related to the transaction or matter before the court. Defendants did not show how any alleged misrepresentation in a stand-alone arbitration agreement directly related to the care of residents at the facility. Moreover, they did not cite authority applying the doctrine of unclean hands in a situation like the one here, where defendants sought to bind a decedent who did not sign an arbitration agreement and where there was no evidence the decedent authorized someone else to sign on its behalf.
In the fourth case, the trial court found the agency to be valid, but nevertheless denied the motion, exercising its discretion under CCP Section 1281.2(c), because some of the claims by the plaintiffs were in their individual capacities. The defendants argued that there was a claim for professional negligence under CCP Section 1295 and Section 1281.2(c) did not apply to claims based on Section 1295.The Court of Appeal dismissed this argument. Under section 1295, a patient who signs an arbitration agreement with a health care provider may bind heirs to arbitrate a wrongful death claim in a case where the primary basis for the claim sounds in professional negligence. But if the primary basis sounds in elder abuse, section 1295 does not apply. Professional negligence is a negligent act or omission by a health care provider within the scope of licensed service that proximately causes personal injury or wrongful death. Whereas elder neglect refers to the failure to provide medical care. It includes a failure to provide for personal hygiene, food, clothing, shelter, and medical care; a failure to protect from health and safety hazards; and a failure to prevent malnutrition or dehydration. Elder neglect does not refer to substandard performance of medical services but rather the failure of those responsible for attending to the basic needs and comforts of elderly or dependent adults, regardless of their professional standing, to carry out their custodial obligations. The elder abuse cause of action asserted in the first amended complaint alleged the failure to adequately staff the facility, provide basic custodial care to residents, monitor residents, provide sufficient equipment and training to prevent the spread of COVID-19 in the facility, and enact or comply with policies and procedures to prevent the spread of COVID-19 at the facility. The negligence cause of action alleged the failure to provide adequate staffing, basic services to patients, care for patients’ physical and mental health needs, and protection from health and safety hazards. A cause of action for violation of the Patient's Bill of Rights also alleged a failure to provide services and adequate care. The cause of action for wrongful death incorporated the allegations in the foregoing causes of action and was based on death from COVID-19 that resulted from neglect. While there may have been some overlap between professional negligence and elder abuse in general, the primary basis for the wrongful death cause of action was not medical malpractice or professional negligence. Section 1295 exception to section 1281.2(c) did not apply.
Lombardo v. Gramercy Court, 107 Cal.App. 5th 1028
Lombardo sued Gramercy Court as heir to her mother, Elizabeth Stein, asserting several causes of action which led to Stein’s death. Gramercy moved to compel arbitration based on an arbitration agreement that Lombardo had signed, pursuant to a form durable power of attorney executed by Stein. Stein had checked several boxes on the form, but not the one that permitted the agent to “submit to arbitration”. Gramercy argued that the box checked by Stein that authorized the agent to hire physicians and nurses and to make decisions regarding Medicare and Medicaid benefits gave Lombardo the authority to sign the agreement. The trial court denied the motion and Gramercy appealed.
The Court of Appeal affirmed. The durable power of attorney provided Lombardo the authority to act as Stein's agent only in property and banking transactions, personal and family maintenance, and government benefits. Nowhere in the selected subject matter was the explicit authority to enter into arbitration agreements. To the contrary, Stein left unchecked the “[c]laims and litigation” subject matter permitting the authority to “submit to arbitration … all … claims.” A plain reading from this delegation of authority to Lombardo did not include binding Stein to agreements to arbitrate.
The authority within the family maintenance subject to hire “physicians” and “nurses” and authority for decisions related to “Medicare” and “Medicaid” benefits was insufficient to include the right to bind the principal in arbitration. In Harrod, supra, the California Supreme Court found the authority to make a health care decision excluded an optional, separate agreement that did not accomplish health care objectives, including an arbitration agreement. The arbitration agreement here was separate from and not necessary for Stein's admission into defendant's facility, and it did not require Lombardo to make a health care decision but instead a decision on how Stein can pursue legal action against defendant. The durable power of attorney therefore did not grant Lombardo the authority to sign this agreement on Stein's behalf.
Maxwell v. Atria Management Co., LLC, 105 Cal. App. 5th 230
After Trudy Maxwell died while a patient at defendants’ nursing home, her eight children filed a lawsuit wherein they raised causes of action based on wrongful death, elder abuse, and negligence. The Atria defendants filed a motion to compel arbitration, citing an arbitration agreement signed by James Maxwell III, one of the eight plaintiffs, who held a durable power of attorney from Trudy. The trial court held that the agreement did not cover plaintiffs’ claim and denied the motion.
The Atria defendants appealed. They noted that the agreement stated that it “pertains to any and all claims and disputes related to or arising out of [Trudy's] residence at [Atria]” and since the children's wrongful death claims were premised on Trudy's care at Atria, their claims were covered by the arbitration agreement.
The Court of Appeal disagreed. The arbitration agreement made clear that it applied only to disputes between the parties, here Trudy and Atria. The children's wrongful death claims were not derivative of Trudy's causes of action, which were within the purview of the plain language in the arbitration agreement. In California, a wrongful death claim is personal and lies independent of survivor claims. Code of Civil Procedure section 377.60 creates a new cause of action in favor of the heirs as beneficiaries, based upon their own independent pecuniary injury suffered by loss of a relative, and distinct from any the deceased might have maintained had he or she survived. Thus, the measure of damages in a wrongful death action is the value of the benefits the heirs could reasonably expect to have received from the deceased if he or she had lived and so the wrongful death claim was between the heirs and Atria, not Trudy’s estate and Atria.
Code of Civil Procedure Section 1281.2(c) applied because the wrongful death claim was not covered by the agreement and so there was a possibility that there could be both an arbitration and a trial. The presumably arbitrable elder abuse and negligence causes of action arose out of the same facts as the wrongful death causes of action. All of the claims in the complaint relied on allegations that Atria failed to appropriately train their staff and follow safety regulations, which led to Trudy's death. Under these circumstances, the trial court had discretion under section 1281.2(c) to deny the Atria defendants' motion to compel arbitration or stay that arbitration with respect to Trudy's claims to avoid conflicting rulings.