Health Care Arbitration

In a recent wrongful death action claiming negligence by a nursing home, the 8th District Court of Appeals found that the trial court erred in staying the action and assigning the dispute to arbitration, reasoning that the decedent's mother had apparent authority to bind the decedent to a contract with an arbitration provision where, on appeal, the nursing home asserted that the decedent actually signed the agreement, essentially refuting its argument in the trial court. Kolosai v. Azem,  2014-Ohio-4474.  The case hinges on who actually signed the agreement, and if not the resident/party thereto, whether the person executing an agreement has legal authority to bind another to the agreement. 

Given that an agreement to arbitration in lieu of filing a legal action with a court is a matter of contract, the court outlined that it cannot force a party to arbitrate.  AT&T Technologies, Inc. v. Communications Workers of Am. 475 U.S. 643, 648-649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986).  The problem presented in the case was a positioning that the resident either signed the agreement directly, or if not, that the mother signed it with apparent authority.
 
The evidence at trial supported that the resident did not sign the subject arbitration agreement, hence any argument as to who signed it was moot.  The trial court had already found that the mother had signed it, and held that she had apparent authority to bind her son, the resident, in signing the subject arbitration agreement.  Since this issue of her apparent authority was not appealed, rather new evidence was proffered as to who signed the agreement, the appellate court declined to address whether the trial court was correct in this finding.  The appellate court did find, however, that the trial court's decision rested on an erroneous proposition – since a question of fact remained as to who signed the agreement.  With that finding, the appellate court reversed and remanded the matter.
While this decision is, on its face, confusing, the key points to take are actual and apparent authority to bind another to a contract.  In many cases, a resident is able to sign his or her own admission paperwork, which may include an agreement to arbitrate disputes thereto.  However, more often a resident is not able to do so, resulting in a third party signing the paperwork.  Information is often lacking, as to whether the party signing holds a valid durable power of attorney, is a court appointed guardian, or has some other legal authority to bind the resident.  Absent legal authority to sign for another, may result in the agreement being unenforceable entirely.