Barrow v. Dartmouth House Nursing Home, Inc. ( 2014 )

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13-P-1375 Appeals Court
SCOTT R. BARROW, executor,1 vs. DARTMOUTH HOUSE NURSING HOME,
INC.,2 & others.3
No. 13-P-1375.
Essex. April 8, 2014. - August 18, 2014.
Present: Kafker, Brown, & Sikora, JJ.
Nursing Home. Arbitration, Parties, Stay of judicial
proceedings, Confirmation of award. Contract, Arbitration,
Parties, Validity, Third party beneficiary. Agency, Scope
of authority or employment. Health Care Proxy. Estoppel.
Practice, Civil, Stay of proceedings.
Civil action commenced in the Superior Court Department on
May 26, 2010.
The case was heard by Robert A. Cornetta, J.
John Vail, of the District of Columbia (David J. Hoey with
him) for the plaintiff.
1
Of the estate of Elizabeth Barrow. Scott R. Barrow is
Elizabeth Barrow's son, and her sole heir and beneficiary.
2
Doing business as Brandon Woods Long Term Care Facility.
3
Scott Picone; Barbara Silva; Samantha Duggan; Susan
Plante; Lucy Silveira; Laura Lundquist; and Essex Group
Management Corp.
2
Tory A. Weigand (Noel B. Dumas with him) for the
defendants.
KAFKER, J. The enforceability of arbitration agreements
signed on behalf of family members being assisted in the nursing
home admission process has been the subject of a recent
constellation of cases. See, e.g., Miller v. Cotter, 448 Mass.
671, 679-684 (2007); Johnson v. Kindred Healthcare, Inc., 466
Mass. 779, 781-789 (2014), and Licata v. GGNSC Malden Dexter
LLC, 466 Mass. 793, 796-799 (2014). Here, the plaintiff, Scott
R. Barrow, signed such an arbitration agreement on behalf of his
ninety-six year old mother, Elizabeth Barrow, as he helped her
enter the Brandon Woods Long Term Care Facility (nursing home).
After she was allegedly beaten and strangled to death by her
ninety-seven year old roommate, Scott4 brought, in his capacity
as executor of his mother's estate, a multicount suit in
Superior Court.5 The Superior Court judge ordered all claims to
arbitration. The arbitrator decided all claims in favor of the
defendants, and Scott appealed on the grounds that the
arbitration agreement was unenforceable.
4
We use first names to avoid confusion.
5
He alleged negligence, lack of informed consent, and
breach of contractual or implied or express warranties, and
sought damages under the wrongful death statute, G. L. c. 229, §
2, as a result of the defendants' care of his mother.
3
We agree that the arbitration agreement was not enforceable
and reverse the decision of the judge compelling arbitration.
Scott did not have a durable power of attorney. Nor was he
acting as his mother's guardian or conservator. A health care
proxy, as the Supreme Judicial Court has previously held, is
insufficient to authorize the health care agent to sign an
arbitration agreement. There was no evidence or suggestion that
Scott's mother specifically authorized him to sign the
arbitration agreement. The agreement, by its express terms, was
not a requirement of admission to the nursing home. We also
conclude that Scott did not sign the arbitration agreement in
his individual capacity and that principles of equitable
estoppel do not preclude Scott from bringing suit.
Background. On February 16, 2006, Scott completed the
admission authorization process for his mother at the nursing
home. Elizabeth had requested that Scott complete this process
prior to her arrival at the home, and she had informed the
nursing home that Scott would be doing so. The admission
process included executing numerous agreements, such as a
consent for admission, a consent for treatment, a physician
consent, and various others enumerated on a two-page "admission
authorization" form.
In addition to these documents, Scott also signed a
"Resident and Facility Arbitration Agreement" (agreement). The
4
agreement provided that "any legal dispute, controversy, demand
or claim . . . that arises out of or relates to the Resident
Admission Agreement or any services or health care provided by
the Facility to the Resident, shall be resolved exclusively by
binding arbitration." The agreement was not a condition of
admission, and clearly stated as much on its face, in bold and
capitalized print. It also was not listed on the admission
authorization form. Scott signed and dated the agreement on the
line for the "Resident Representative Signature," below a
paragraph certifying that the signatory was "the Resident, or a
person duly authorized by the Resident, which shall include a
responsible party, Health Care Proxy, Power of Attorney, or
Legal Guardian." Elizabeth did not sign the agreement, and she
did not specifically authorize Scott to sign the agreement.
According to Scott's affidavit, he never informed his mother
that he entered into an arbitration agreement.
Around the same time that Elizabeth was admitted to the
nursing home, she signed a health care proxy designating Scott
as her health care agent, pursuant to G. L. c. 201D, § 5, in the
event of her incapacity to make health care decisions. The
proxy was witnessed on February 17, 2006, but was not activated.
Aside from the health care proxy, Scott did not hold a power of
attorney, and he was not Elizabeth's legal guardian or
conservator.
5
Elizabeth died on September 24, 2009. According to the
complaint, Elizabeth's roommate at the nursing home attacked
Elizabeth in their room, beating, strangling, and asphyxiating
her by putting a plastic bag over her head. Following
Elizabeth's death, Scott filed this wrongful death action
against the nursing home, its corporate owner, and various
employees of the nursing home (sometimes, collectively, Brandon
Woods) in the Superior Court as executor of Elizabeth's estate.
The complaint alleged that his mother's roommate demonstrated a
propensity for violence on numerous occasions while she was a
resident at the nursing home, and that the defendants' failure
to address these violent propensities resulted in Elizabeth's
death.
Relying on the agreement that Scott had signed during the
admission process, Brandon Woods moved to compel arbitration.
Scott opposed arbitration based on his claim that he lacked
actual or apparent authority to sign the agreement. The judge
entered an order compelling arbitration. After various
additional motions, proceedings, and orders -- including an
order by a single justice of this court denying Scott's
interlocutory appeal -- the parties proceeded to arbitration,
where the arbitrator determined that there had been no
wrongdoing by Brandon Woods. The judge confirmed the
arbitration decision and denied Scott's postarbitration motions
6
seeking to alter or amend the judgment and to vacate the
arbitration decision. This appeal followed.
Discussion. "Adjudication of a motion to compel
arbitration, including a challenge to the validity of the
arbitration agreement, is governed by G. L. c. 251, § 2(a)."
Johnson, 466 Mass. at 781. "Such motions are treated akin to
motions . . . for summary judgment." Chambers v. Gold Medal
Bakery, Inc., 83 Mass. App. Ct. 234, 241 (2013). See Miller v.
Cotter, 448 Mass. at 676. Accordingly, the moving party --
here, Brandon Woods -- bears the burden of proving that the
material facts are established and that it is entitled to
arbitration as a matter of law. See Augat, Inc. v. Liberty Mut.
Ins. Co., 410 Mass. 117, 120 (1991). In the instant case, the
key facts have not been disputed, nor has an evidentiary hearing
been requested. We therefore review de novo the judge's legal
conclusion regarding the validity of the arbitration agreement.
See Licata, 466 Mass. at 796; Chambers, supra at 241. Our own
legal analysis is guided by the Supreme Judicial Court's most
recent decisions in Johnson and Licata.6
1. Health care proxy and agency. In Johnson and Licata,
the court defined the standards for authorizing arbitration
6
We note that neither the judge nor the single justice of
this court had the benefit of the Johnson or Licata decisions,
which were issued subsequently.
7
agreements and distinguished them from other forms of agency
authority, including those governing health care proxies and the
signing of ordinary nursing home documents. More specifically,
the court held that a health care proxy alone is insufficient to
provide authorization to sign an arbitration agreement. See
Johnson, 466 Mass. at 781; Licata, 466 Mass. at 797. As the
court explained, "the Legislature intended to distinguish
between a health care proxy, which limits an agent's decision-
making authority on behalf of an incapacitated person to health
care decisions, and a durable power of attorney, guardianship,
or conservatorship, all of which authorize broad decision-making
power on behalf of an incompetent person, including over the
person's financial interests and estate." Johnson, supra at
784-785. See Miller, supra at 681-682 (durable power of
attorney is sufficient to authorize family member to sign
arbitration agreement on behalf of principal). In the instant
case, Scott held at most a health care proxy;7 he did not have a
power of attorney, and he was not a guardian or a conservator.
7
The parties essentially treat the health care proxy as
having been signed contemporaneously with the arbitration
agreement, as part of the admission process. The timing of when
Elizabeth actually signed the health care proxy is uncertain, as
it may not have been signed until the day after Scott signed the
arbitration agreement. Regardless, even if the proxy were
signed prior to the arbitration agreement, it would not have
been sufficient.
8
The court in Johnson and Licata also distinguished the
authority to sign ordinary nursing home documents from
arbitration agreements. As the court stated, a "person's
designation in a health care proxy may establish the
individual's trustworthiness and familiarity with the principal
and, therefore, enable the individual to sign many of the
documents included in a nursing home's admissions package. But
it does not follow that such a person also can sign an
arbitration agreement, which requires the power of an authorized
fiduciary." Johnson, supra at 789.
In addition to the health care proxy, however, we have here
Elizabeth's relationship to Scott and her request that Scott
complete the admission process prior to her arrival. We agree
that her parent-child relationship with Scott, and her request
and representation that he act on her behalf in the admission
process, further enhances his authority to act as her agent in
the nursing home admission process. See Theos & Sons, Inc. v.
Mack Trucks, Inc., 431 Mass. 736, 742 (2000) (Theos) (agency
relationship is created when there is mutual consent that agent
is to act on behalf of principal and subject to principal's
control). "Even where an agent-principal relationship exists,
however, the principal has liability for the agent's acts toward
third parties only if the agent was acting with the actual or
9
apparent authority of the principal in that transaction." Id.
at 743 (emphasis added).8
In the instant case, Brandon Woods has provided no evidence
suggesting that Elizabeth knew Scott was signing an arbitration
agreement as part of her admission into the nursing home or made
any representation to Brandon Woods to that effect. She was not
in the room when he signed it. See Licata, supra at 802. It
was not a part of the two-page admission authorization form.
The agreement was not a condition of admission. Finally, Scott
attested that he did not inform her of his signing of the
arbitration agreement. On the factual record before us, Brandon
Woods has not met its burden of showing that signing the
arbitration agreement was within the scope of Scott's actual or
apparent authority to act on her behalf in the nursing home
admission process. See id. at 801. See also Theos, supra at
745; Walker v. Collyer, 85 Mass. App. Ct. 311, 323-325 (2014).
2. Third-party beneficiary. Brandon Woods's argument that
the arbitration agreement bound Elizabeth as a third-party
8
Actual authority "is the agent's power to affect the
principal's relations with third parties as manifested" by the
principal to the agent. Theos, supra at 743-744, citing
Restatement (Second) of Agency § 7 (1958). Apparent authority
arises from "written or spoken words or any other conduct of the
principal which, reasonably interpreted, causes the third person
to believe that the principal consents to have the act done on
his behalf by the person purporting to act for him."
Restatement (Second) of Agency § 27 (1958).
10
beneficiary is similarly unavailing. "There can be no third-
party beneficiary . . . in the absence of a contract." Licata,
supra at 803, citing Restatement (Second) of Contracts §§ 304
comment b, 309(1) & comment a (1981). No contract was formed
here because no one with authority to do so signed the
agreement. See ibid. Although Brandon Woods argues that Scott
may be deemed to have signed the contract in his individual
capacity, this is contradicted by the intent of the parties as
manifested by the terms of the agreement itself. See
Constantino v. Frechette, 73 Mass. App. Ct. 352, 355 (2008).
The agreement is plainly titled "Resident and Facility
Arbitration Agreement," and in the first paragraph, the parties
to the agreement are listed as "BWD [Brandon Woods Dartmouth]"
and "Elizabeth W. Barrow." Scott only purported to sign the
arbitration agreement as Elizabeth's "Resident Representative."
The contract does not support a reading that either Brandon
Woods or Scott intended that he sign the agreement in his
individual capacity. See ibid. (nurses at care facility were
not parties to contract between nursing home and resident where
nurses were not named as parties and did not assume obligations
under contract).
3. Equitable estoppel. Finally, Brandon Woods argues that
we should apply equitable estoppel, as the judge did below, to
hold that Scott is bound by the agreement. Equitable estoppel
11
may be raised where the defendant can prove that he was harmed
because the plaintiff's conduct or representation induced him to
do something different from what he otherwise would have done.
See Boston & Albany R.R. Co. v. Reardon, 226 Mass. 286, 291
(1917). Nevertheless, "[t]he law does not regard estoppels with
favor," Licata, supra at 804, quoting from Reardon, supra at
291, and estoppel is applied only to avoid injustice. See
Reardon, supra at 291 ("[T]he doctrine of estoppel is not
applied except when to refuse it would be inequitable"). "To
establish estoppel, a party must show (1) a representation
intended to induce reliance on the part of a person to whom the
representation is made; (2) an act or omission by that person in
reasonable reliance on the representation; and (3) detriment as
a consequence of the act or omission." Licata, supra at 804
(quotation omitted). See Harrington v. Fall River Hous. Authy.,
27 Mass. App. Ct. 301, 308 (1989) (quotation omitted)
(describing the elements of estoppel as follows: "first, a
material misrepresentation of a party who had reason to know of
its falsity; second, reasonable reliance upon the
misrepresentation; and third, some disadvantage to the party
seeking to assert estoppel fairly traceable to the
misrepresentation"). See also Walker, 85 Mass. App. Ct. at 319.
The principles and elements of equitable estoppel neither
require nor favor its application here. The flaw in Brandon
12
Woods's argument is that it points only to Scott's purported
actions and alleged misrepresentations, and not to any act or
omission of its own that was done in response to or in reliance
of such actions. Even if we were to accept, for the sake of
argument, that the first element is satisfied by any of Scott's
purported representations in signing the agreement, the second
and third elements cannot be met on these facts. Brandon Woods
cannot show that any representations induced it to do something
different than it otherwise would have done, as signing the
arbitration agreement was not a condition of admission, and
Brandon Woods does not argue that it would have treated
Elizabeth differently in any other way if the agreement had not
been signed. Cf. Looney v. Trimount Theatres, Inc., 282 Mass.
275, 278-279 (1933) (lessee who was misled and disadvantaged by
lessor's misrepresentation regarding title to property fixtures
could assert estoppel where lessee had acted on
misrepresentation by acquiring title to fixtures from another).
Likewise, Brandon Woods does not attempt to show that it
suffered any detriment as a consequence of Scott's purported
representation. Cf. Cellucci v. Sun Oil Co., 2 Mass. App. Ct.
722, 729 (1974), S.C., 368 Mass. 811 (1975) (plaintiff
detrimentally relied on defendant company's representation that
company would buy plaintiff's land where plaintiff broke off
negotiations for land sale with other competitor companies). As
13
such, we cannot say that application of equitable estoppel is
necessary to avoid injustice here.
Conclusion. We conclude that Scott did not have the
authority to execute the arbitration agreement on his mother's
behalf; he did not sign the agreement in his individual
capacity; and equitable estoppel is not warranted on these
facts. Therefore, Scott, as executor of his mother's estate,
shall be permitted to seek redress in court for Elizabeth's
allegedly violent and unnatural death while in the defendants'
care. The judgment confirming the arbitration award is vacated,
and the matter is remanded to the Superior Court for proceedings
consistent with this opinion.
So ordered.