The Ties That Bind Mom To Arbitration
By: Josh Turner
Turner Law Firm, LLC

To no one’s surprise, arbitration agreements are increasing in the business setting. One cannot get a loan, buy a car, buy a house or open up a bank account without having to sign an arbitration agreement. And, yes, in the event you have the unfortunate instance of having to place a loved one in a nursing home, you will undoubtedly be asked to sign one there, too.

The issue that presented itself toward the end of 2006 is: What happens when the patient does not sign the agreement but someone else does who is related to the patient? This dilemma is further complicated by the patient’s death and a lawsuit alleging negligence and other claims against the nursing home.  The cases that have emerged are predominantly ones where a child or conservator has signed the admission/arbitration agreement, but the patient did not.

At first glance the issues of binding a non-signatory seem quite clear when squared with the United States Supreme Court decision of EEOC v. Wafflehouse, 534 U.S. 279, 294 (2002) where it unequivocally held “[i]t goes without saying that a contract cannot bind a nonparty.” (emphasis supplied) and the Mississippi Supreme Court’s rulings holding that “a party cannot be required to submit to arbitration any dispute which he [or she] has not agreed so to submit.” Pre-paid Legal Services Inc. v. Battle, 873 So.2d 79, 82 (Miss. 2004) (emphasis supplied). However, the waters grow murky when delving into circumstances where a patient’s capacity is in question.

Our federal district courts have consistently held that the burden is on defendants to show that there is some type of agency or estoppel to bind a non-signatory in these situations because without the signatures of a patient, they hold that no agreement exists as the patient was not a party to the contract. See Buie v. Mariner Health Care, Inc.  2006 WL 3858330, *2 (S.D. Miss.) (J. Barbour); Mariner Health Care, Inc. v. Ferguson, Civil Action No. 4:04cv245, 2006 WL 1851250 (N.D. Miss. June 30, 2006) (J. Davidson); Mariner Healthcare, Inc. v. Green, Civil Action No. 4:04cv246, 2006 WL 1626581 (N.D. Miss. June 7, 2006) (J. Mills); Mariner Health Care, Inc. v. Rhodes, Civil Action No. 5:04cv217 (S.D.Miss. Sept. 28, 2005) (J. Bramlette). In each of these cases the courts denied compelling arbitration. In sum, Judge William H. Barbour held that the defendants had the burden to show that the signing party had the authority to bind the patient. When no showing occurred at the time for hearing, the nursing home defendant’s motions were denied for failing to meet the preponderance standard.

Mississippi state courts have recently bound a non-signatory who was a patient in a nursing home when she did not sign the arbitration/admission agreement. See, Covenant Health Rehab of Picayune v. Brown, 949 So.2d 732 (Miss. 2007). The authority that the Mississippi Supreme Court has used to bind a non-signatory is Miss. Code Ann. (1972) § 41-41-211, which is sometimes referred to as the “surrogate statute.”

The statute allows a surrogate to make health care decisions for the care of the patient. In Brown, our Supreme Court held that this decision making extended to the power to contract on behalf of the patient. See Brown, paragraph 10. 

Notably evident in this decision was that the plaintiffs referenced the patient’s lack of capacity throughout their pleadings.  While no evidence of the lack of capacity was put forth, it appears that the court accepted this as a judicial admission. The Brown decision bound the patient to arbitration via the surrogate statute.  However, the one thing that has yet to be addressed is the constitutionality of the statutes application.

This issue has yet to arise in discussion.  Currently the application does not address the Seventh Amendment rights to a jury trial or the Fourteenth Amendment rights to notice.  Indeed, the words of § 41-41-211 do not mention “contract” or “arbitration” or “waiver of jury trial” anywhere in the text.

It is quite possible that a person could appoint someone as his or her surrogate to help make certain decisions regarding his or her health care without ever knowing that he or she is also giving the appointee the power to contract.  The statute certainly does not make mention of the power to contract in its text and the Mississippi Supreme Court has condemned statutory interpretation that ventures outside the meaning of its plain text.  See Mauldin v. Branch, 866, So.2d 429, 435 (Miss. 2003) where the Mississippi Supreme Court held that “[t]he duty of this Court is to interpret the statutes as written. It is not the duty of this Court to add language where we see fit.”

Currently a ruling does not exist addressing the constitutional challenges to this application of the statute, but it appears that there is no better time than the present.