Harrod v. Country Oaks Partners

319 Cal.Rptr.3d 400

544 P.3d 1138

Mark HARROD, Plaintiff and Respondent,

v.COUNTRY OAKS PARTNERS, LLC, et al., Defendants and Appellants.

S276545

Supreme Court of California.

March 28, 2024

Second Appellate District, Division Four, B312967, Los Angeles County Superior Court, 20STCV26536, Monica Bachner, Judge

Cole Pedroza, Kenneth R. Pedroza, Cassidy C. Davenport, San Marino; Buchalter, Harry W.R. Chamberlain II, Los Angeles, Robert M. Dato, Irvine; Sun Mar Management Services, Trent Evans, Kevin Khachatryan, Los Angeles, Julieta Y. Echeverria and Brittany A. Ortiz for Defendants and Appellants.

Tucker Ellis and Traci L. Shafroth, San Francisco, for California Medical Association, California Dental Association and California Hospital Association as Amici Curiae on behalf of Defendants and Appellants.

Hooper, Lundy & Bookman, Mark E. Reagan, San Francisco, and Jeffrey Lin for California Association of Health Facilities as Amicus Curiae on behalf of Defendants and Appellants.

Carroll, Kelly, Trotter & Franzen, David P. Pruett, Long Beach; and Fred J. Hiestand, Sacramento, for the Association of Southern California Defense Counsel and the Civil Justice Association of California as Amici Curiae on behalf of Defendants and Appellants.

Lanzone Morgan, Ayman R. Mourad, Huntington Beach, Alexander S. Rynerson, Los Angeles, Suzanne M. Voas; BraunHagey & Borden, Matthew Borden, San Francisco, and Kory J. DeClark for Plaintiff and Respondent.

Stiller Law Firm and Ari J. Stiller for Consumer Attorneys of California, Compassion & Choices, American Association for Justice and Public Justice as Amici Curiae on behalf of Plaintiff and Respondent.

William Alvarado Rivera; and Eric M. Carlson, Los Angeles, for AARP, AARP Foundation, Justice in Aging, California Advocates for Nursing Home Reform, California Long-Term Care Ombudsman Association and The National Consumer Voice for Quality Long-Term Care as Amici Curiae on behalf of Plaintiff and Respondent.

Opinion of the Court by Jenkins, J.

Under California’s Health Care Decisions Law (Prob. Code, § 4600 et seq.),¹ a principal may appoint a health care agent to make health care decisions should the principal later lack capacity to make them. In this case, a health care agent signed two contracts with a skilled nursing facility. One, with state-dictated terms, secured the principal’s admission to the facility. The other made arbitration the exclusive pathway for resolving disputes with the facility. This second contract was optional and had no bearing on whether the principal could access the facility or receive care. The issue before us is whether execution of the second, separate, and optional contract for arbitration was a health care decision within the health care agent’s authority. It was not, and the facility’s owners and operators may not, therefore, rely on the agent’s execution of that second agreement to compel arbitration of claims arising from the principal’s alleged maltreatment that have been filed in court. We affirm the judgment of the Court of Appeal and remand for further court proceedings.

I. BACKGROUND

The Health Care Decisions Law authorizes competent adults to draft powers of attorney for health care, a type of advance health care directive, and thereby "authorize [an] agent to make health care decisions." (§ 4671, subd. (a); see §§ 4605, 4629.) The law defines "health care" as "any care, treatment, service, or procedure to maintain, diagnose, or otherwise affect a patient’s physical or mental health condition." (§ 4615.) It further defines a "health care decision" as one "regarding the patient’s health care, including … [¶] (1) Selection and discharge of health care providers and institutions[;] [¶] (2) Approval or disapproval of diagnostic tests, surgical procedures, and programs of medication, including mental health conditions[;] [¶] (3) Directions to provide, withhold, or withdraw artificial nutrition and hydration and all other forms of health care, including cardiopulmonary resuscitation." (§ 4617, subd. (a).) "Subject to any limitations in the power of attorney for health care," an agent "may make health care decisions" and "may also make decisions that may be effective after the principal’s death," such as approving organ donation, autopsies, disposition of remains, and records releases. (§ 4683.)

A competent adult desiring a power of attorney for health care may, but need not, use the form found in section 4701. (§ 4700.) Regardless of whether the adult executes this "form or any other writing" to establish a power of attorney, the provisions of the Health Care Decisions Law "govern the effect" of the writing. (Ibid.)

Charles Logan executed a power of attorney for health care. He used, not the statutory form, but a California Medical Association form patterned on, and specifically citing to, the Health Care Decisions Law. Logan appointed his nephew, Mark Harrod, as his "health care agent" to make "health care decisions" should Logan’s primary physician find Logan unable to make those decisions himself. Paraphrasing the portions of the Health Care Decisions Law defining health care decisions (§ 4617) and decisions after death (§ 4683), the form Logan signed authorized Harrod to (1) "consent, refuse consent, or withdraw consent to any medical care," including care to artificially sustain life; (2) "choose or reject [the principal’s] physician, other health care professionals or health care facilities;" (3) "receive and consent to the release of medical information;" and (4) authorize organ donation, an autopsy, and disposal of remains.

About two years after executing this power of attorney, Logan, then approaching his 77th birthday, fell, broke a femur, and became unable to walk. He entered the Country Oaks Care Center (Country Oaks), a skilled nursing facility, to obtain living assistance and rehabilitative treatment. Harrod signed two agreements with the facility on Logan’s behalf. The first was an admission agreement that entitled Logan to care at the facility and specified the services to be rendered, payment terms, and facility rules. It was unalterable and its terms were state-mandated. (Health & Saf. Code, § 1559.61 ["all skilled nursing facilities … shall use a standard admission agreement developed and adopted by the" state and "[n]o facility shall alter" it unless directed].) The second agreement Harrod signed was an arbitration agreement. Per the requirements of state law applicable to long-term health care facilities and federal regulations governing such facilities participating in Medicare and Medicaid, the arbitration agreement appeared on a separate form and was presented as optional. (See id., § 1599.81, subds. (a), (b) [an arbitration agreement must not be a precondition to facility admission and must "be included on a form separate from the rest of the admission contract"]; 42 C.F.R. § 483.70(n) (2019) [facilities participating in Medicare and Medicaid "must not require any resident or his or her representative to sign an agreement for binding arbitration as a condition of admission"].)² A boxed warning atop this agreement stated, "READ CAREFULLY — Not Part of Admission Agreement," and continued, "Resident 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."³ The arbitration agreement stated disputes concerning medical care, the provision of services, and the admission agreement or arbitration agreement would be arbitrated, not litigated in court. Under the agreement, both parties abjured "their constitutional right to have any such dispute decided in a court of law before a jury."

Based on the care he received during his approximately one-month stay at Country Oaks, Logan, with Harrod acting as his guardian ad litem,⁴ filed a lawsuit in a California superior court against the facility’s owners and operators, Country Oaks Partners, LLC, and Sun-Mar Management Services, Inc. Logan alleged these defendants negligently withheld appropriate care, resulting in Logan suffering a second fall and fracture, being unnecessarily diapered, and developing pressure ulcers. In addition to pleading a cause of action for common law negligence, Logan asserted causes of action for elder abuse and violations of his right as a resident of a skilled nursing facility (Health & Saf. Code, § 1430, subd. (b)). Logan further asked the superior court for a declaration that he was not bound by the arbitration agreement that his health care agent, Harrod, had signed.

Defendants moved to compel arbitration. The superior court denied the motion. It reasoned Harrod’s power to make health care decisions for Logan as his health care agent did not encompass the power to sign the optional arbitration agreement. The Court of Appeal affirmed, agreeing that a health care decision does not encompass optional, separate arbitration agreements presented alongside mandatory facility admissions paperwork. (Logan v. Country Oaks Partners, LLC (2022) 82 Cal.App.5th 365, 297 Cal.Rptr.3d 903.) Several courts of appeal have reached the opposite conclusion regarding a health care agent’s health care decisionmaking authority. (See, e.g., Garrison v. Superior Court (2005) 132 Cal.App.4th 253, 33 Cal.Rptr.3d 350 ["The revocable arbitration agreements were executed as part of the health care decisionmaking process."]; Hogan v. Country Villa Health Services (2007) 148 Cal.App.4th 259, 268, 55 Cal.Rptr.3d 450 [agreeing with Garrison].) We now, in the context of Logan’s power of attorney for health care, address this conflicting authority.⁵

II. DISCUSSION

[1] The parties assume Harrod’s selection of a skilled nursing facility for Logan, pursuant to the first, mandatory contract for admission, was within the scope of Harrod’s agency. They disagree, however, whether Harrod’s authority to make "health care decisions" — as granted by Logan’s power of attorney for health care — encompassed...