Court Opinion

ID: 4254849
Source: CourtListenerOpinion
Date Created: 2018-03-15 15:09:32.985274+00
Date Added: 2024-06-11T13:53:54.985512
License: Public Domain

SECOND DIVISION
                             MILLER, P. J.,
                    ELLINGTON, P. J., and ANDREWS, J.

                    NOTICE: Motions for reconsideration must be
                    physically received in our clerk’s office within ten
                    days of the date of decision to be deemed timely filed.
                                http://www.gaappeals.us/rules

                                                                   February 23, 2018

In the Court of Appeals of Georgia
 A18A0358. COLEMAN v. UNITED HEALTH SERVICES OF
     GEORGIA, INC. et al.

      ANDREWS, Judge.

      Marvin Coleman sued numerous defendants for negligence, medical

malpractice, fraud, and other claims relating to his care at a nursing home. The

defendants subsequently moved to dismiss or stay the proceedings and compel

arbitration. The trial court granted the motion, staying the lawsuit pending conclusion

of the arbitration. We granted Coleman’s application for interlocutory review, and for

reasons that follow, we reverse.

      On appeal, we review the record de novo to determine whether the trial court’s

order compelling arbitration is correct as a matter of law. See Ashburn Health Care

Center v. Poole, 286 Ga. App. 24, 24 (648 SE2d 430) (2007). So viewed, the record
shows that Coleman lived with his sister and brother-in-law, Charles Biggerstaff. On

September 7, 2009, Coleman signed an Advance Directive for Health Care appointing

his sister and Biggerstaff as health care agents authorized “to make health care

decisions for [him].” The directive permitted the Biggerstaffs to render any health

care decisions that Coleman could make, including:

      To authorize [Coleman’s] admission to or discharge (including
      transfers) from any hospital, skilled nursing facility, hospice, or other
      health care facility or service;

      To request, consent to, withhold, or withdraw any type of health care;
      and

      To contract for any health care facility or service for [Coleman], and to
      obligate [Coleman] to pay for these services.

      In April 2013, Coleman was admitted to Heritage Healthcare of Forsyth for

long-term nursing care. Coleman signed his admission documents, including a

voluntary arbitration agreement with the Forsyth facility, and indicated on various

forms that Biggerstaff was his “representative” or “responsible party.” At some point,

however, Coleman began exhibiting memory and behavioral issues that the Forsyth

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facility could not address, and he was transferred to the memory unit at Heritage

Healthcare of Macon1 in March 2014.

      Biggerstaff signed Coleman’s admission paperwork at the Macon facility as

“Patient/Resident Representative,” executing, among other things, a voluntary

arbitration agreement. Pursuant to that agreement, the parties – designated as the

Macon facility, Coleman, and Biggerstaff – purportedly agreed to waive their right

to a jury trial and resolve any disputes through binding arbitration. Coleman did not

sign the Macon arbitration agreement and was not present when Biggerstaff executed

it.

      In December 2014, Coleman filed suit against the Macon facility and other

defendants for injuries he allegedly sustained while residing at the home. The

defendants answered and moved to compel arbitration, pointing to the arbitration

agreement signed by Biggerstaff. The trial court granted the motion, but issued a

certificate of immediate review, and we granted Coleman’s application for

interlocutory appeal.

      1. As the parties seeking arbitration, the defendants bear the burden of

establishing that a valid and enforceable arbitration agreement exists. See Triad

      1
          Heritage Healthcare of Macon later became Pruitthealth-Macon, LLC.

                                         3
Health Mgmt. of Ga., III v. Johnson, 298 Ga. App. 204, 206 (2) (679 SE2d 785)

(2009). “Whether there is a valid agreement to arbitrate is generally governed by state

law principles of contract formation, and is appropriate for determination by the

court.” Id. A contract is valid only if the parties assented to the contract terms. See

United Health Svcs. of Ga. v. Alexander, 342 Ga. App. 1, 2 (2) (802 SE2d 314)

(2017). “Thus, a party cannot be required to submit to arbitration any dispute which

he has not agreed so to submit.” Id. (citation and punctuation omitted).

      Although Coleman did not personally sign the arbitration document,

“traditional principles of agency law may bind a nonsignatory to an arbitration

agreement.” Id. at 3 (citation and punctuation omitted). This “relation of principal and

agent arises wherever one person, expressly or by implication, authorizes another to

act for him or subsequently ratifies the acts of another in his behalf.” OCGA § 10-6-1.

In granting the defendants’ motion, the trial court found that Coleman authorized

Biggerstaff to sign the arbitration agreement for him. We disagree.

      (a) Express Authority. According to the defendants, Coleman expressly

permitted Biggerstaff to sign the agreement by executing the Advance Directive for

Healthcare. That document, however, appointed Biggerstaff as Coleman’s agent for

health care decisions. Undoubtedly, he was authorized to sign the admission

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agreement and take other action necessary to admit Coleman to the Macon facility.

By its terms, however, the arbitration agreement was voluntary and “not a

precondition to admission, expedited admission, or the furnishing of services.”

Biggerstaff’s decision to execute the arbitration agreement cannot be viewed as a

health care decision. See Life Care Centers of America v. Smith, 298 Ga. App. 739,

743-744 (1) (681 SE2d 182) (2009) (“[T]he execution of an arbitration agreement is

considered a health care decision within the authority of a health care surrogate, only

when that arbitration provision is required for admission to the nursing home.”)

(emphasis in original). The advance directive, therefore, did not authorize Biggerstaff

to sign the agreement for Coleman. See id.

      The defendants also contend that Coleman expressly authorized his brother-in-

law to enter the Macon arbitration agreement by naming Biggerstaff as his

representative or “responsible party” in the Forsyth admission papers. Biggerstaff,

however, denied that Coleman gave him broad agency authority, noting that he was

only Coleman’s agent with respect to health care issues. And the record contains no

evidence that Coleman expressly permitted Biggerstaff to make anything other than

health care decisions. Accordingly, the defendants have not shown express authority.

See United Health Svcs. of Ga., supra at 4 (2) (a) (although mother may have

                                          5
authorized daughter to sign medical forms for her, there was no evidence that she

gave daughter express authority to enter arbitration agreement on her behalf); Life

Care Centers of America, supra at 742 (1) (“[T]he plain language of the health care

power of attorney did not give [daughter] the power to sign away her mother’s or her

mother’s legal representative’s right to a jury trial.”).

      (b) Apparent Authority. Next, the defendants claim that Biggerstaff had

apparent or implied authority to bind Coleman to the arbitration agreement.2 Again,

we disagree. Apparent authority to perform an act “is created as to a third person by

written or spoken words or any other conduct of the principal which, reasonably

interpreted, causes the third person to believe that the principal consents to have the

act done on his behalf by the person purporting to act for him.” McKean v. GGNSC

Atlanta, 329 Ga. App. 507, 510 (1) (a) (765 SE2d 681) (2014) (citation omitted)

(emphasis in original).

      Coleman permitted Biggerstaff to make health care decisions on his behalf and

had previously designated him as his representative. But the Macon facility’s

admissions director did not speak to Coleman prior to his admission or review the

      2
        Georgia courts use the terms “apparent authority” and “implied authority”
interchangeably. See United Health Svcs. of Ga., supra at 4 (2) (b).

                                            6
arbitration agreement with him. And although she understood from Biggerstaff that

he had “power of attorney,” she did not obtain supporting documentation or confirm

Biggerstaff’s authority with Coleman. See McKean, supra (“Any manifestations of

implied agency or apparent authority arising only through the words or acts of the

purported agent are insufficient to authorize a finding that an agency existed.”)

(citation and punctuation omitted). Coleman’s prior decision to sign the Forsyth

arbitration agreement raises no inference with respect to Biggerstaff’s authority to

execute the Macon document. Similarly, the fact that Biggerstaff helped Coleman pay

certain bills and sell his car does not establish apparent authority to waive Coleman’s

right to a jury trial, particularly without evidence that the defendants knew about this

conduct. See Ashburn Health Care Center, supra at 26 (no apparent authority where

third party lacked knowledge of circumstances allegedly giving rise to such

authority).

      The defendants have not demonstrated that Coleman authorized Biggerstaff to

sign the Macon arbitration agreement or created the impression that he gave

Biggerstaff such authority. The purported agreement with Coleman, therefore, is

invalid. See United Health Svcs. of Ga., supra at 3-5 (2) (a) & (b); McKean, supra at

509-510 (1) (a); Ashburn Health Care Center, supra at 26-27.

                                           7
       2. Alternatively, the defendants argue that Coleman is bound by the terms of

the arbitration agreement as a “direct third-party beneficiary.” As discussed above,

Biggerstaff lacked authority to sign the agreement on Coleman’s behalf, undermining

the validity of any alleged contract between Coleman and the nursing home. See

McKean, supra at 513-514 (2) (nursing home patient not bound as third party

beneficiary to arbitration agreement signed by son, who lacked authority to execute

agreement on mother’s behalf). According to the defendants, however, Biggerstaff

also signed the agreement individually, creating a binding contract between the

nursing home and Biggerstaff to which Coleman was a third-party beneficiary.

       A person becomes a third-party beneficiary to a contract when “one party to the

contract promised another party to the contract to render some performance to the

nonparty to the contract. . . [and] both parties to the contract intended that the contract

benefit the nonparty.” Vaughn, Coltrane & Assoc. v. Van Horn Constr., 254 Ga. App.

693, 694 (563 SE2d 548) (2002). Pursuant to OCGA § 9-2-20 (b), the third-party

beneficiary “may maintain an action against the promisor on the contract.” The

beneficiary is also “bound by any valid and enforceable provisions of the contract in

seeking to enforce [his] claim[].” Lankford v. Orkin Exterminating Co., 266 Ga. App.

228, 229 (1) (597 SE2d 470) (2004) (citation and punctuation omitted).

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      The defendants claim that, pursuant to the terms of the arbitration agreement,

Coleman “obtained the benefits of dispute resolution outside the courts . . . in

connection with any claim arising from” his residency at the Macon facility.

Coleman, however, has repudiated this alleged benefit and does not seek to enforce

the arbitration agreement. Although he received care at the nursing facility, the

arbitration provision was not part of – or required by – his admission agreement and

has no bearing on “the [facility’s] duties and obligations with respect to the provision

of care and treatment.”

      Given these circumstances, we cannot find Coleman subject to arbitration on

a third-party beneficiary basis. To conclude otherwise would allow contracting parties

to bind an unsuspecting third party to arbitration without providing a benefit desired

or accepted by the third party. Even if Biggerstaff signed the arbitration agreement

in his individual capacity, therefore, it cannot be enforced against Coleman. See

United Health Svcs. of Ga., supra at 2 (2) (party not required to arbitrate dispute

unless he agrees to arbitration); Mendez v. Hampton Court Nursing Center, 203 So3d

146, 149 (Fla. 2016) (patient not subject to arbitration agreement as a third-party

beneficiary because “[t]he third-party beneficiary doctrine does not permit two parties

to bind a third – without the third party’s agreement – merely by conferring a benefit

                                           9
on the third party.”). Compare JP Morgan Chase & Co. v. Conegie, 492 F3d 596, 600

(5th Cir. 2007) (nursing home patient bound as third-party beneficiary by arbitration

clause within admission agreement, through which patient accepted benefit of nursing

care); THI of South Carolina at Columbia v. Wiggins, 2011 U.S. Dist. LEXIS 103638,

at *17-18 (D.S.C. 2011) (same).

      Judgment reversed. Miller, P. J., and Ellington, P. J., concur.

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