Power of Attorney Given Specifically for “Health Care Decisions” Does Not Encompass Nursing Home Arbitration Agreement

An appellate court in Kansas held that where a husband gives his wife a durable power of attorney specifically for health care decisions, the wife does not have the authority to sign on behalf of her husband a nursing home arbitration agreement that is not a precondition to admission.

In McNally v. Beverly Enterprises, Inc., No. 98,124, 2008 WL 4140635 (Kan. Ct. App. Sep. 5, 2008), Paul McNally was a patient at the Beverly Rehabilitation Center (Beverly). Paul fell and broke his hip while at Beverly, and then died during his hospitalization for the broken hip.

Paul’s wife, Helen, brought a wrongful death action against Beverly. Beverly moved to compel arbitration based on an arbitration agreement that Helen signed as Paul’s “authorized representative” when Paul was admitted to Beverly. Helen opposed the motion to compel, arguing that Paul had designated his power of attorney to her only for specific “health care decisions,” and the nursing home arbitration agreement was not a health care decision. The district court agreed with Helen and denied the motion to compel, holding that Helen lacked legal authority to bind Paul to the arbitration agreement. Beverly appealed.

On appeal, Beverly argued that Helen had either implied actual authority or apparent authority to sign the arbitration agreement on behalf of Paul, and thus Helen was required to arbitrate her claims. Helen, on the other hand, argued that the power of attorney signed by Paul was not a general power of attorney, but instead was specifically limited to health care decisions, and signing the arbitration agreement was not a “health care decision” because it was not a precondition to admission at Beverly.

The Court agreed with Helen and denied the motion to compel arbitration. The Court noted that Paul’s delegation of the power of attorney for health care mirrored Kan. Stat. Ann. § 58-632, which is the “durable power of attorney for health care decisions” statute, rather than the general power of attorney statute. Thus, the Court held that “Paul’s intent to provide Helen with a durable power of attorney only for health care decisions is clear.”

As stated by the Huntsville law firm, although it did not discuss why the nursing home arbitration agreement was not a health care decision, the Court apparently agreed with Helen that the agreement was not a health care decision because it was not a precondition to admission at Beverly. The Court held that the party relying on the alleged agency relationship bears the burden of proving that the relationship existed by “clear and satisfactory evidence,” and that Beverly did not meet that burden of proof.

The Court also held that Helen did not have apparent authority to sign the agreement because there was no evidence to indicate that Paul induced or permitted Beverly to believe Helen was his agent. Thus, the Court affirmed the denial of the motion to compel arbitration.

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