Court Opinion

ID: 7801842
Source: CourtListenerOpinion
Date Created: 2022-08-18 22:01:36.468874+00
Date Added: 2024-06-11T16:29:21.465645
License: Public Domain

Filed 8/18/22
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                SECOND APPELLATE DISTRICT

                        DIVISION FOUR

 CHARLES LOGAN,                         B312967
     Plaintiff and Respondent,          (Los Angeles County
       v.                               Super. Ct. No.
                                        20STCV26536)
 COUNTRY OAKS PARTNERS,
 LLC, et al.,

       Defendants and Appellants.

     APPEAL from an order of the Superior Court of Los
Angeles County, Monica Bachner, Judge. Affirmed.
     Cole Pedroza, Kenneth R. Pedroza and Cassidy C.
Davenport; Sun Mar Management Services, Trent Evans and
Kevin Khachatryan for Defendants and Appellants.
     Lanzone Morgan, Ayman R. Mourad and Alexander S.
Rynerson for Plaintiffs and Respondents.
                       INTRODUCTION

       Plaintiff Charles Logan designated his nephew, Mark
Harrod, as his health care agent and attorney-in-fact using an
advance health care directive and power of attorney for health
care decisions form developed by the California Medical
Association (the Advance Directive). After the execution of the
Advance Directive, Logan was admitted to a skilled nursing
facility. Nineteen days later, Harrod executed an admission
agreement and a separate arbitration agreement purportedly on
Logan’s behalf as his “Legal Representative/Agent.”
       The sole issue on appeal is whether Harrod was authorized
to sign the arbitration agreement on Logan’s behalf. The answer
turns on whether an agent’s authority to make “health care
decisions” on a principal’s behalf includes the authority to
execute optional arbitration agreements. We conclude it does not.
We therefore affirm the trial court’s order denying the motion to
compel arbitration.

      FACTUAL AND PROCEDURAL BACKGROUND

       In 2017, Logan executed the Advance Directive under
California Probate Code1 sections 4600-4805 (Health Care
Decisions Law), appointing Harrod as his health care agent.
Under the Advance Directive, if Logan’s primary physician found
he could not make his own health care decisions, Harrod had the
“full power and authority to make those decisions for [Logan],”
subject to any health care instructions set forth in the Advance
Directive. In the Advance Directive, Logan specified that Harrod

1    All further undesignated statutory references are to the
Probate Code.

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“will have the right to: [¶] A. Consent, refuse consent, or
withdraw consent to any medical care or services, such as tests,
drugs, surgery, or consultations for any physical or mental
condition. This includes the provision, withholding or withdrawal
of artificial nutrition and hydration (feeding by tube or vein) and
all other forms of health care, including cardiopulmonary
resuscitation (CPR). [¶] B. Choose or reject my physician, other
health care professionals or health care facilities. [¶] C. Receive
and consent to the release of medical information. [¶] D. Donate
organs or tissues, authorize an autopsy and dispose of my body,
unless I have said something different in a contract with a
funeral home, in my will, or by some other written method.” The
Advance Directive does not specifically address Harrod’s
authority to execute an arbitration agreement on Logan’s behalf.
       On November 10, 2019, Logan was transferred from a
hospital to Country Oaks Partners, LLC dba Country Oaks Care
Center (Country Oaks), a skilled nursing facility. Nineteen days
later, on November 29, 2019, Harrod executed an admission
agreement, and a separate arbitration agreement purportedly on
Logan’s behalf as his “Legal Representative/Agent.” The
arbitration agreement stated (in boldface): “Residents shall not
be required to sign this Arbitration Agreement as a condition of
admission to this facility or to continue to receive care at the
facility.”
       On December 13, 2019, Logan was transferred from
Country Oaks to another skilled nursing facility. Following his
discharge from Country Oaks, Logan filed a complaint against
Country Oaks and its owner and operator, Sun Mar Management
Services, Inc., alleging causes of action for declaratory relief,

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elder abuse and neglect, negligence, and violation of Residents’
Bill of Rights (Health and Saf. Code, § 1430, subd. (b).)2
       Country Oaks filed a petition to compel arbitration.
Following an initial hearing on the petition, the trial court
continued the hearing to allow both parties to submit
supplemental briefing on the issue of whether a health care agent
may bind his principal to arbitration. After reviewing the
supplemental briefs and hearing oral argument, the trial court
denied the petition. The court concluded Country Oaks failed to
meet its burden of proving the existence of a valid, enforceable
arbitration agreement because Harrod lacked authority to enter
into the agreement on Logan’s behalf. It explained that although
the Advance Directive was effective at the time Logan entered
the facility,3 the Advance Directive “only entitle[d] Harrod to
make health care decisions for [Logan], not enter a binding
arbitration agreement on his behalf.”
       Country Oaks timely appealed the order denying its
petition.

2    Logan also named Alessandra Hovey, the administrator of
Country Oaks, as a defendant in the complaint. Logan dismissed
Hovey from the action on December 17, 2020.

3     On appeal, neither party disputes the trial court’s factual
finding that the Advance Directive sprung into effect at the time
Logan was admitted to Country Oaks (i.e., that Logan’s primary
physician found he could not make his own health care decisions).

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                         DISCUSSION

A.    Governing Law and Standard of Review

      The Federal Arbitration Act (FAA) provides arbitration
agreements are “valid, irrevocable, and enforceable, save upon
such grounds as exist at law or in equity for the revocation of any
contract.” (9 U.S.C. § 2.)4 “‘[E]ven when the [FAA] applies,
[however], interpretation of the arbitration agreement is
governed by state law principles . . . . Under California law,
ordinary rules of contract interpretation apply to arbitration
agreements. . . . “‘The fundamental goal of contractual
interpretation is to give effect to the mutual intention of the
parties. . . .’”’” (Valencia v. Smyth (2010) 185 Cal.App.4th 153,
177.)
      Although federal and California law favor enforcement of
valid arbitration agreements, “‘“[t]here is no public policy
favoring arbitration of disputes which the parties have not agreed
to arbitrate.”’ [Citation.]” (Metters v. Ralphs Grocery Co. (2008)
161 Cal.App.4th 696, 701.) “The party seeking to compel
arbitration bears the burden of proving the existence of a valid
arbitration agreement.” (Flores v. Evergreen at San Diego, LLC
(2007) 148 Cal.App.4th 581, 586.)
      The issue on appeal—i.e., did the Advance Directive confer
authority on Harrod to enter into an arbitration agreement on
Logan’s behalf—presents a legal question. We therefore apply the
de novo standard of review. (See Lopez v. Bartlett Care Center,

4     The arbitration agreement states: “The parties to this
Arbitration Agreement acknowledge and agree that the
Admission Agreement and this Arbitration Agreement evidence a
transaction in interstate commerce governed by the [FAA].”

                                5
LLC (2019) 39 Cal.App.5th 311, 317 [legal conclusions underlying
a trial court’s denial of a petition to compel arbitration are
reviewed de novo].)

B.    Harrod Lacked Authority to Bind Logan to
      Arbitration with Country Oaks

       Country Oaks contends the Advance Directive granted
Harrod actual authority to execute the arbitration agreement on
Logan’s behalf. Relying on Garrison v. Superior Court (2005) 132
Cal.App.4th 253 (Garrison), Country Oaks argues that because
the Advance Directive expressly authorized Harrod to make
health care decisions, including “choos[ing] . . . health care
facilities,” Harrod also was authorized to sign an optional
arbitration agreement when admitting Logan to the nursing
facility. We respectfully disagree with the reasoning set forth in
Garrison and conclude the Advance Directive did not confer such
broad authority on Harrod.
       In Garrison, a daughter, who was designated as her
mother’s attorney-in-fact under a health care power of attorney,
admitted her mother into a health care facility. (Garrison, supra,
132 Cal.App.4th at p. 256.) In doing so, the daughter signed two
arbitration agreements (one pertaining to medical malpractice
claims and one pertaining to all other claims against the facility).
(Id. at pp. 256, 259-261.) Following the death of her mother, the
daughter and other family members sued the facility. (Id. at pp.
256-257.) The trial court granted the facility’s motion to compel
arbitration, and the Court of Appeal agreed that the daughter
had authority to enter into the arbitration agreements on her
mother’s behalf. (Id. at pp. 262, 266.)
       The health care power of attorney at issue in Garrison
provided the daughter was authorized to “‘make health care

                                 6
decisions’” for the mother. (Garrison, supra, 132 Cal.App.4th at
p. 265.) In concluding the daughter had authority to sign the
arbitration agreements because they were “executed as part of
the health care decisionmaking process,” the Garrison court
relied on three provisions of the Health Care Decisions Law in
Probate Code section 4600 et seq. (Garrison, supra, 132
Cal.App.4th at pp. 265-266.) As discussed below, we are
unpersuaded these provisions support that conclusion.
      First, the Garrison court relied on section 4683,
subdivisions (a) and (b), which provide, in relevant part: “An
agent designated in the power of attorney may make health care
decisions for the principal to the same extent the principal could
make health care decisions if the principal had the capacity to do
so” and “may also make decisions that may be effective after the
principal’s death.” That an agent is permitted to make health
care decisions to the same extent as the principal says nothing,
however, about the agent’s authority to agree to enter into an
arbitration agreement and thereby waive the principal’s right to
a jury trial. As defined in the Health Care Decisions Law, the
provisions of which are specifically referenced in the Advance
Directive, a “health care decision” is limited to “a decision made
by a patient or the patient’s agent . . . , regarding the patient’s
health care . . . .” (§ 4617.) “Health care,” in turn, is defined as
“any care, treatment, service, or procedure to maintain, diagnose,
or otherwise affect a patient’s physical or mental condition.”
(§ 4615.) Thus, section 4683 merely confers upon the agent the
authority to make decisions affecting the principal’s “physical or
mental health” to the same extent the principal could make those
decisions. The decision to waive a jury trial and instead engage in
binding arbitration does not fit within these definitions. It is not

                                 7
a health care decision. Rather it is a decision about how disputes
over health care decisions will be resolved.
       The Garrison court next relied on section 4684, which
provides: “An agent shall make a health care decision in
accordance with the principal’s individual health care
instructions, if any, and other wishes to the extent known to the
agent. Otherwise, the agent shall make the decision in
accordance with the agent’s determination of the principal’s best
interest. In determining the principal’s best interest, the agent
shall consider the principal’s personal values to the extent known
to the agent.” (Garrison, supra, 132 Cal.App.4th at p. 266.)
Where, as here, neither the plain language of the Advance
Directive nor any evidence in the record demonstrates Logan’s
wishes or personal values regarding arbitration, we fail to see
how section 4684 sheds light on whether the agent’s execution of
an arbitration agreement is a “health care decision.”
       Finally, the Garrison court cites to section 4688, which
“clarifies that if there are any matters not covered by the Health
Care Decisions Law, the law of agency is controlling.” (Garrison,
supra, 132 Cal.App4th at p. 266.) It therefore turned to Civil
Code section 2319: “An agent has authority: [¶] 1. To do
everything necessary or proper and usual, in the ordinary course
of business, for effecting the purpose of his agency . . . .” Relying
on our Supreme Court’s decision in Madden v. Kaiser Foundation
Hospitals (1976) 17 Cal.3d 699 (Madden), the Garrison court held
“[t]he decision to enter into optional revocable arbitration
agreements in connection with placement in a health care
facility, as occurred here, is a ‘proper and usual’ exercise of an
agent’s powers.” (Garrison, supra, 132 Cal.App.4th at p. 266.) The

                                 8
facts in Madden, however, are distinguishable from both the facts
in Garrison and this case.
       In Madden, the defendants appealed from “an order
denying enforcement of an arbitration provision in a medical
services contract entered into between the Board of
Administration of the State Employees Retirement
System . . . and defendant Kaiser Foundation Health Plan.”
(Madden, supra, 17 Cal.3d at p. 702, fn. omitted.) Plaintiff,
a state employee who enrolled under the Kaiser plan, contended
she was not bound by the provision for arbitration. (Ibid.) Our
Supreme Court held that Civil Code section 2319 granted the
Board (as agent for the employee) the authority to do whatever is
“‘proper and usual’” to carry out its agency, and therefore the
Board “enjoyed an implied authority to agree to arbitration of
malpractice claims of enrolled employees.” (Id. a pp. 702-703.)
Thus, based on Madden, when two parties “possessing parity of
bargaining strength” (id. at p. 711) negotiate a group contract, it
is “proper and usual” to negotiate provisions of the contract,
which may include an arbitration provision. The holding in
Madden is inapplicable here, however, where the skilled nursing
facility’s admission agreement does not contain an arbitration
provision negotiated between parties of equal bargaining power.
Rather, as required by California and federal law, Country Oaks
presented Harrod with a separate document from the admission
contract, which contained an optional arbitration agreement. (See
Health & Saf. Code, § 1599.81, subds. a & b [“(a) All contracts of
admission that contain an arbitration clause shall clearly
indicate that agreement to arbitration is not a precondition for
medical treatment or for admission to the facility. [¶] (b) All
arbitration clauses shall be included on a form separate from the

                                9
rest of the admission contract. . . .”; see also 42 C.F.R.
§ 483.70(n)(1) (2019) [“The facility must not require any resident
or his or her representative to sign an agreement for binding
arbitration as a condition of admission to, or as a requirement to
continue to receive care at, the facility and must explicitly inform
the resident or his or her representative of his or her right not to
sign the agreement as a condition of admission to, or as a
requirement to continue to receive care at, the facility.”].) There
is nothing, therefore, “necessary or proper and usual” about
signing an optional arbitration agreement “for effecting the
purpose of his agency,” i.e., placing Logan into a skilled nursing
facility. Rather, the “health care decision” (whether to consent to
admission into the skilled nursing facility) has been expressly
decoupled from the decision whether to enter into the optional
arbitration agreement.
       Based on the foregoing, we decline to follow Garrison’s
broad interpretation of “health care decisions.”5 Rather, we begin
our analysis by reviewing the plain language of the Advance
Directive. (See Tran v. Farmers Group, Inc. (2002) 104
Cal.App.4th 1202, 1214 [“The scope of a power of attorney
depends on the language of the instrument, which is strictly
construed. [Citation.]”].) Logan stated in the Advance Directive:
“If my primary physician finds that I cannot make my own health
care decisions, I grant my agent full power and authority to make

5     We note Hogan v. Country Villa Health Services (2007) 148
Cal.App.4th 259, 262 followed Garrison, opining Garrison was
“well reasoned.” In Young v. Horizon West, Inc. (2013) 220
Cal.App.4th 1122, 1129, however, the court in dicta disagreed
with the Garrison court’s conclusion that the “the term ‘health
care decision’ made by an agent encompasses the execution of
arbitration agreements on behalf of the patient.”

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those decisions for me, subject to any health care instructions set
forth below.” That grant of authority is immediately followed by a
list of four specific powers granted to Harrod, including the power
to “[c]hoose or reject my physician, other health care
professionals or health care facilities.”
        The Advance Directive does not address arbitration
agreements or the resolution of legal claims. Nor can we infer
Harrod had authority to enter into an optional arbitration
agreement from the fact he had express authority to make
“health care decisions” and “[c]hoose . . . health care facilities.” As
discussed above, an agent’s decision to sign an optional
arbitration agreement with a skilled nursing facility is not a
decision regarding the “patient’s physical or mental condition.”
(§ 4615.)
        Our conclusion that the execution of an arbitration
agreement is not a “health care decision” finds further support in
the regulatory history of the recently enacted federal regulatory
scheme prohibiting nursing facilities participating in Medicare or
Medicaid programs from requiring a resident (or his
representative) to sign an arbitration agreement as a condition of
admission. (42 C.F.R. § 483.70(n)(1) (2019).) Specifically, in the
Centers for Medicare & Medicaid Services’ (i.e., the agency’s)
responses to public comments published in the Federal Register,
the agency explained: “[C]ommenters noted that the number of
[nursing] facilities practically available to an individual may be
extremely limited. For example, it is entirely reasonable for a
resident to want to remain close to family and friends. However,
many times there is only one nursing home within a reasonable
geographic distance of the resident’s family or friends. Likewise,
factors such as the type of payment the facility will accept, the

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health care and services it offers, and the availability of beds
limit an individual’s choice of facilities. Therefore, many
residents may only have a few, and perhaps only one or two,
suitable facilities from which to choose. Once a facility is selected,
commenters stated that some residents believe they have no
choice but to sign the [arbitration] agreement in order to obtain
the care they need.” (84 FR 34727-34728 (2019).) The agency
“agree[d] that many residents or their families usually do not
have many [nursing] facilities to choose from and the existence of
one of these agreements as a condition of admission is not likely
to be a deciding factor in choosing a facility. We also agree that
no one should have to choose between receiving care and signing
an arbitration agreement. Therefore, we have finalized §
483.70(n)(1) to state that the facility must not require any
resident or his or her representative to sign an agreement for
binding arbitration as a condition of admission to, or as a
requirement to continue to receive care at, the facility.” (84 FR
34728 (2019).) These comments and responses demonstrate that,
practically speaking, arbitration agreements are not executed as
part of the health care decisionmaking process, but rather are
entered into only after the agent chooses a nursing facility based
on the limited options available and other factors unrelated to
arbitration (such as geographic distance from family members
and type of payment the facility will accept).
       Accordingly, for the reasons discussed above, we conclude
the authority granted to Harrod in the Advance Directive to
make health care decisions of behalf of Logan, including choosing
a skilled nursing facility, does not extend to executing optional
arbitration agreements. Because Harrod lacked authority to sign

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the arbitration agreement, the trial court properly denied
Country Oaks’ petition to compel arbitration.

                           DISPOSITION
     The order is affirmed. Logan is awarded his costs on
appeal.

              CERTIFIED FOR PUBLICATION

                                                CURREY, J.
We concur:

WILLHITE, Acting P.J.

COLLINS, J.

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