2018-00244899-CU-PO

Claude Rogers vs. Meadow Oaks of Roseville

Nature of Proceeding: Petition to Compel Arbitration

Filed By: Ginella, Mark A.

Defendants Roseville SH, LLC, et al.’s petition to compel arbitration is denied.

In this action, Plaintiff Claude Rogers (the “Decedent”), by and through his successor in interest Kathryn Rogers, asserts causes of action for elder abuse and fraud. Also, Plaintiffs Kathryn Rogers, Jeffrey Rogers, Phillip Rogers and Richard Rogers assert a wrongful death cause of action. The action arises from the care the Decedent received at Defendants’ facility.

Defendants move to compel the action to arbitration on the basis that Richard Rogers signed a Residency Agreement as the Decedent’s representative which contained an Arbitration Agreement. Mr. Richard Rogers signed the Arbitration Agreement on a space labeled “Resident/Representative Signature.”

The Arbitration Agreement provides that “any and all claims and disputes arising from or related to this Agreement or to your residency, care or services at the Community,… including, without limitation, personal injury or wrongful death claims, shall be resolved by submission to neutral, binding arbitration in accordance with the [FAA]; excepts that any claim or dispute involving unlawful detainer proceedings (eviction) or any claims that are brought in small claims court shall not be subject to arbitration unless all parties agree to arbitrate such proceedings. If someone other than the resident signs this arbitration clause, he/she understands and agrees that he/she is agreeing to arbitrate on behalf of the resident and on behalf of him/herself as an individual.” (Ginella Decl. Exh. A at MOOR74.)

A written agreement to submit a controversy to arbitration is valid, enforceable, and irrevocable consistent with standard contract principles. There is a strong public policy favoring the enforcement of arbitration agreements. (Code Civ. Proc. §1281; Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 706.) On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy, the court shall order the petitioner and the respondent to arbitrate the matter if it determines that an agreement to arbitrate the controversy exists, unless it determines that: (a) the right to compel arbitration was waived by the petitioner; (b) grounds exist for the revocation of the agreement; or, (c) a party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact. (Code Civ. Proc. §1281.2; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.)

Plaintiffs oppose the motion on the basis that there was no binding agreement to arbitrate. On this point, the Court must agree. Plaintiffs first argue that the Arbitration Agreement presented by Defendants contains what purports to be Mr. Richard Rogers’ electronic signature. They point to the fact that Civil Code § 1633.5(b) indicates that the Uniform Electronic Transactions Act, which provides that an electronic signature has the same effect as a handwritten signature only applies between parties who agreed to conduct the transaction by electronic means and Richard Rogers never agreed to contract electronically. (Rogers Decl. ¶ 6.) While the Court could simply stop here and deny the petition for failing to provide any foundation for Richard’s signature, as shown below, even if Richard Rogers’ signature was properly authenticated, there still was no binding agreement as Defendants have failed to demonstrate that Richard Rogers had the authority to sign the Arbitration Agreement on the Decedent’s behalf.

A party seeking to compel arbitration has the burden of proving that the agreement was signed either by the party to be bound or by a person who had the authority to act on behalf of the party. (Goldman v. Sunbridge Healthcare, LLC (2013) 220 Cal.App.4th 1160, 1173.) To make such a showing, Defendants were required to either show that the person to be bound by the Agreement lacked the mental capacity to agree to it, or evidence that the person who signed the Agreement had the authority of an agent. (Id. at 1170-1173.) No such showing was made here. Defendants made no attempt to show that the Decedent lacked the requisite mental capacity or that Richard Rogers had the authority to sign the Arbitration Agreement. Under Probate Code section 4658, “Unless otherwise specified in a written advance health care directive, for the purposes of this division, a determination that a patient lacks or has recovered capacity, or that another condition exists that affects an individual health care instruction or the authority of an agent or surrogate, shall be made by the primary care physician.” For example, pursuant to Probate Code §4732, a physician who makes a determination that an individual lacks capacity must record the determination in the patient’s health care record, and communicate it to the patient and if possible, the patient’s authorized health care agent. Defendants have presented no evidence that such a determination was ever made by decedent’s primary care physician

Defendants provide no evidence that Richard Rogers had the authority to sign the Arbitration Agreement on the Decedent’s behalf. Instead, they simply rely on the fact that Richard signed the Arbitration Agreement and other admissions documents as “Representative.” This is not sufficient as “agency cannot be created by the conduct of the agent alone; rather the conduct by the principal is essential to create agency. ( Goldman, supra, 220 Cal.App.4th at 1173 [emphasis in original].) There is no conduct on the Decedent’s part that created any agency. To that end, “[t]he mere fact that [the husband] signed the admission documents [for his wife’s admission to a skilled nursing facility], including the arbitration agreements, is insufficient.” (Flores v. Evergreen at San Diego, LLC (2007) 148 Cal.App.4th 581, 588. “Although we agree that spouses are fiduciaries and owe a duty of support in the family law context, these duties do not create a power to contractually bind each other in the agency context. It is well established that an agency cannot be implied form the marriage relationship alone….We recognize that it is also true that much less evidence is required to establish a principal and agent relationship between husband and wife than between non-spouses. Here, however, Evergreen presented no evidence of agency apart from the marital relationship. Although the establishment of an agency relationship does not require a high level of proof, the Floreses’ marital relationship cannot alone create an agency.” (Id. at 589.) Here, the case is even stronger for the Decedent as Richard Rogers was the Decedent’s son, not his spouse.

The suggestion that there must have been an agency relationship because Mr. Rogers signed other documents in connection with the admissions process is incorrect. Indeed, this argument has been specifically rejected by case law. “Although the

Legislature has specifically conveyed authority over medical decisionmaking and enforcement of rights to family members, it has not conveyed authority over the arbitration decision to family members. We view this as a significant omission, and accordingly conclude that there is no statutory authorization for a person to agree to arbitration based solely on a familial relationship with the patient.” (Flores, supra, at 590 [emphasis added]) Only “a person who is authorized to act as the patient’s agent can bind the patient to an arbitration agreement.” (Id. at 587.)

Again, there is no evidence that the Decedent ever agreed to have Mr. Rogers act as his agent with respect to the Arbitration Agreement. While Plaintiffs were not required to present any evidence given the lack of any showing whatsoever on Defendants’ part, Mr. Rogers submitted a declaration that he was in the area on the day his father was admitted to the facility and so he coordinated to take him to the facility. (Rogers Decl. ¶ 2.) The Decedent never told him that he wanted Mr. Rogers to sign anything for the Decedent and never told him that he had the authority to sign any medical documents for him, let alone waive his right to a jury trial. (Id. ¶ 4.) Mr. Rogers declares that on the day the Decedent was admitted, the facility administrator Ms. Raymond indicated she had a stack of documents she needed him to sign for the Decedent’s admission but never asked him if he had a power of attorney and he just assumed Ms. Raymond needed a family member to sign and he was the family member there that day. (Id. ¶ 3.) He declares that the Decedent could have signed the documents. (Id.) Mr. Rogers never represented that he had the authority to sign the documents and that he did not have the unilateral authority to do so and that had he been asked and the process explained, he would have told the facility that the Decedent should sign. (Id.) Mr. Rogers only signed because he was informed he had to sign for the Decedent to be admitted. (Id.)

The argument in reply that there was an ostensible agency relationship between the Decedent and Mr. Rogers because the Decedent never objected to his son’s signature on the Arbitration Agreement is rejected. “[F]ormation of an agency relationship is a bilateral matter. Words or conduct by both principal and agent are necessary to create the relationship.” (Van’t Rood v. County of Santa Clara (2003) 113 Cal.App.4th 549, 571.) There is no evidence of any conduct on the part of the Decedent creating any such relationship. The failure to object to something it has not even been shown the Decedent knew his son signed certainly cannot form an agency relationship. Once again, the fact that Richard signed multiple documents on his father’s behalf cannot form an agency relationship. To the extent that Defendants argue that Richard Rogers’ conduct somehow led them to believe he was the Decedent’s agent because he never said he was not one “takes the risk not only of ascertaining whether the person with whom he is dealing is the agent, but also of ascertaining the scope of his powers…Even if there were sufficient evidence that [Mr. Rogers] actually represented that [he] was authorized to bind [the Decedent] to arbitration, [Defendants] took the risk that [he] in fact had no authority.” (Young v. Horizon West, Inc. (2013) 220 Cal.App.4th 1122, 1134-1135.)

In addition, there is no evidence that the Decedent lacked the mental capacity to sign and Defendants made no argument or showing in this regard. In any event, and as noted above, pursuant to the Probate Code “[a] patient is presumed to have the capacity to make health care decisions, to give or revoke an advance health care directive, and to designate or disqualify a surrogate. This presumption is a presumption affecting the burden of proof.” (Probate Code § 4657.) The determination of whether the Decedent lacked capacity at the time the arbitration agreement was signed was one that must have been made by the Decedent’s primary care physician. Probate Code § 4658 provides that “[u]nless otherwise specified in a written advance health care directive, for the purposes of this division, a determination that a patient lacks or has recovered capacity, or that another condition exists that affects an individual health care instruction or the authority of an agent or surrogate, shall be made by the primary physician.” (See also Goldman, supra, 220 Cal.App.4th at 1170-1171.) Again, Defendants have presented no evidence regarding the Decedent’s mental capacity. By contrast, Plaintiffs’ provided evidence indicating that the Decedent had the requisite mental capacity. The report from the Decedent’s primary physician on November 28, 2017, just prior to the Decedent’s admission to the facility, noted that the Decedent did not have dementia but rather “mild cognitive impairments.” (Rogers Decl. Exh. 2.) The Decedent’s primary physician noted that he could manage his own treatment/medication/equipment and that he was not confused and not disoriented, was not displaying aggressive or wandering behavior, was not at risk if allowed to access personal grooming and hygiene equipment and could communicate his needs and follow instruction. (Id.) While Defendants argue in reply that Plaintiffs present an incomplete picture regarding the Decedent’s mental health and even contradict allegations in the complaint regarding the Decedent, even if true, Plaintiffs had no burden to demonstrate that the Decedent in fact had the requisite mental capacity at the time because Defendants never made a showing in the first instance that he did not have such capacity. Further, the documents attached in reply indicating that the Decedent was given a mini-mental state exam in connection with his admission and was assessed with severe dementia were not prepared by the Decedent’s primary care physician.

Defendants’ argument in reply that Plaintiffs are barred by the doctrine of unclean hands from avoiding the Arbitration Agreement is rejected. Defendants argue that Mr. Rogers is now indicating that he falsely represented that he had the authority to sign the Arbitration Agreement on the Decedent’s behalf. There is no evidence of any knowingly false representation by Mr. Rogers. Rather the evidence simply showed that he signed the admissions documents and as set forth above, Defendants bore the risk of dealing with Mr. Rogers without clarifying whether he was actually the Decedent’s agent. Indeed, a third person is not compelled to deal with an agent, but if he does so, he must take the risk. He takes the risk not only of ascertaining whether the person with whom he is dealing is the agent, but also of ascertaining the scope of his powers.” (Ernst v. Searle (1933) 218 Cal. 233, 240.) Further, even if there were a knowingly false representation, it could not serve to allow Defendants to force the Decedent’s claims to arbitration as the Decedent had no involvement with the Arbitration Agreement.

As a result, the Court must conclude that Richard Rogers lacked the authority to execute the Agreement on the Decedent’s behalf. Again, all that Defendants have submitted is evidence that Mr. Roger signed as the “Resident/Representative.” This is insufficient.

In addition, Defendants failed to show that there is any valid arbitration agreement between themselves and Mr. Rogers and the other Plaintiffs (Kathryn Rogers, Jeffrey Rogers, Phillip Rogers) with respect to their individual wrongful death claim. Given the lack of showing that Richard had the authority to sign the Arbitration Agreement in the first instance, the Decedent was not bound to arbitrate his claims and consequently the Decedent’s heirs were not bound to arbitrate their individual claims. Goldman makes clear that in a situation where as here, a plaintiff signs an arbitration agreement in a representative capacity, but is not shown to have the authority to do so, the plaintiff is not bound to arbitrate survivor claims brought on the decedent’s behalf or the plaintiff’s personal claims even though the arbitration agreement purports to bind “heirs, representatives, executors, administrators, successors, and assigns of such parties.” ( Goldman, supra, at 1177.) This is true even though the Arbitration Agreement states that “[i]f someone other than the resident signs this arbitration clause, he/she understands and agrees that he/she is agreeing to arbitrate on behalf of the resident and on behalf of him/herself as an individual.”

While Defendants argue in reply that Goldman does not apply because the language in the arbitration agreement was different and Goldman involved an advanced healthcare directive, the Court does not agree. While Defendants argue here that the subject Arbitration Agreement indicated that Mr. Rogers agreed to arbitrate on his own behalf and on the Decedent’s behalf, Goldman rejected this very claim. Goldman rejected the claim that a wife who signed an arbitration agreement as her husband’s legal representative was bound to arbitrate her individual claims even though the arbitration agreement provided that a legal representative agreed that he or she was executing the agreement both in his or her representative and individual capacity where, as here the wife was not shown to have the authority to act as the husband’s agent. (Goldman, supra, 220 Cal.App.4th at 1176.) “Although Judy signed as Edward’s legal representative, the fact of her signing did not cast her in that status. [citation] There was no such person as Edward’s legal representative at the time Judy signed the Carmichael Care arbitration agreement. Thus, the signature in that capacity was a mistake…Because there was no such person as Edward’s legal representative, there was also no legal representative to sign in his or her individual capacity.” (Id. [citations omitted] [emphasis added].) Here, because Richard. Rogers did not have the authority to sign the Arbitration Agreement on the Decedent’s behalf, there was no legal representative to sign in an individual capacity and neither himself nor any heirs are bound to arbitrate. The Arbitration Agreement only contained a signature line for “Resident/Representative Signature” and did not have a separate line for an individual. “Carmichael Care could have chosen to have Judy sign separately and expressly in her own right. It did not do so. Accordingly, we conclude Judy is not bound in her separate capacity because her signature as legal representative was ineffective.” (Id. at 1177.) The fact that Goldman may have also involved an advanced healthcare directive is of no moment. The basic principle set forth in Goldman is that one cannot bind another to an arbitration agreement absent a showing of agency. As extensively set forth above, no such showing was made.

The Court would note that given its conclusion that Richard lacked the authority to sign the Arbitration Agreement, it need not address Defendants’ arguments that heirs can be required to arbitrate wrongful death claims. In any event, this contention, as framed by defendants, which relies upon Ruiz v. Podolsky (2010) 50 Cal.4th 838, is incorrect. First, Ruiz involves claims by non-signatory heirs predicated on medical malpractice. The issue in Ruiz was whether an arbitration agreement between a physician and a patient (who consented to arbitration) applied to wrongful death claims brought by the deceased patient’s heirs against the physician. As case law has made clear, Ruiz only applies with respect to arbitration agreements governed by CCP § 1295 and only to wrongful death claims brought by heirs premised on medical malpractice. (Bush v. Horizon West (2012) 205 Cal.App.4th 924, 930; Daniels v. Sunrise Senior Living (2013) 212 Cal.App.4th at 684-685.) This case involves elder abuse. Second, and perhaps most importantly, Defendants have failed to demonstrate the existence of any valid arbitration agreement requiring anyone to arbitrate anything in the first instance.

Given the above, the Court need not and does not reach Plaintiffs’ alternate arguments that the Court should decline to enforce the Arbitration Agreement pursuant to CCP § 1281.2(c) due to the danger of inconsistent rulings or that the Arbitration Agreement is unconscionable.

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.