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Missouri Supreme Court rules power of attorney covers arbitration agreement

Scott Lauck//November 29, 2019

Missouri Supreme Court rules power of attorney covers arbitration agreement

Scott Lauck//November 29, 2019

The Missouri Supreme Court split 4-3 on whether a quadriplegic man was bound by an arbitration agreement that the person to whom he gave power of attorney had signed when admitting him to a nursing home.

In its Nov. 19 ruling, the court’s majority said the agreement was valid. The durable power of attorney document specifically allowed the man’s agent to move him into a residential care facility, which “necessarily carries with it the authority to sign admission documents on [his] behalf,” Judge Zel M. Fischer wrote.

But Judge Mary R. Russell, who led the dissent, argued that the power of attorney allowed the agent to make only “necessary” arrangements for the man’s care, which didn’t extend to a voluntary arbitration agreement.

“I fear the principal opinion would go far toward allowing agents to bind a vulnerable segment of the population beyond healthcare decisions that the instrument was designed to serve,” she wrote.

The case involves Theron Ingram, who was in a severe motor-vehicle crash in 2015 that left him a quadriplegic. While hospitalized, he signed a durable power of attorney designating Andrea Nicole Hall as his attorney-in-fact. An attorney for Ingram described Hall as a family friend.

The agreement authorized Hall to “make all necessary arrangements for health care services” on Ingram’s behalf, as well as to move him “into, or out of, any health care or assisted living/residential care facility.” After Ingram was discharged from the hospital in 2016, Hall had him admitted to Brook Chateau, a residential care facility in Jackson County.

During the admission process, Hall signed a “Voluntary Arbitration Agreement” requiring Ingram to arbitrate any dispute that arose. The document specified that “the patient will receive services in this center whether or not this agreement is signed.”

In 2018, Ingram sued the home in Jackson County Circuit Court, alleging he’d developed pressure ulcers after the staff failed to turn him in his bed. Brook Chateau, which denies those allegations, sought to compel arbitration. Judge Justine Del Muro declined, a decision that the Court of Appeals Western District affirmed earlier this year in an unpublished opinion.

The Western District’s ruling, and much of the parties’ briefing, hinged on whether agreeing to arbitration was among the “necessary arrangements” the agent was authorized to make. The Supreme Court’s majority, however, focused on the agreement’s language specifically granting the agent the ability to move Ingram into assisted living. Signing documents is a “natural part” of such an admission process, the court said.

“Regardless of what authority the ‘necessary arrangements’ clause grants Hall, Ingram’s argument ignores that Hall had express, actual authority to move him into residential care facility, from which her authority to sign the Agreement — a document incidental to admission — derived,” Fischer wrote. Judges Paul C. Wilson, W. Brent Powell and Patricia Breckenridge concurred.

But Russell, joined by Chief Justice George W. Draper III and Judge Laura Denvir Stith, said the agreement did not include “waiving the right to a jury trial or to have a court settle a dispute.”

“Forfeiting the right to have a dispute settled by a court was unrelated to making necessary arrangements for health care services, and agreeing to arbitration was not a necessary action to accomplish what Ingram authorized,” Russell wrote.

Russell also said the majority had stepped “outside of its role as referee and instead takes the position of advocate” by applying general principal/agency rules that the parties hadn’t briefed.

“There is a reason this Court considers the disposition of cases after briefing and oral argument,” she wrote in a footnote. “The parties frame their own dispute and provide this Court with valuable insight into the issues.”

A note in Fischer’s opinion responded that the case involved a purely legal questions, and the parties “cannot stipulate to questions of law.”

Kevin Young of Peterson & Associates in Kansas City, an attorney for Ingram, said the outcome was “not ideal,” but he put a good face on it.

“We believe a trial by jury is a more effective way to get justice,” he said. “That being said, my client’s not completely lacking in the ability to get a recovery. It will probably just be harder and less good for him.”

Timothy Sansone of Sandberg Phoenix & von Gontard, who argued the case for Brook Chateau, declined to comment on the ruling.

In briefs, he wrote that the Western District’s earlier ruling put long-term care facilities in a “damned if you do, damned if you don’t” position. If the agreement was a requirement of admission, it could be struck down as an unenforceable contract of adhesion. But if it was voluntary, then it wasn’t covered by the power of attorney and once again was unenforceable.

Young responded in his brief that such an argument didn’t give the agent more power than the power of attorney document provided.

The case is Ingram v. Brook Chateau, SC97812.

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