Nightmare on High Street: The Haunting Effects of Voluntary Arbitration in Nursing Home Administration: Ingram v. Brook Chateau.

• Author: Harrington, Taylor M.

1. INTRODUCTION

   "Ring...Ring...Ring..." It is one o'clock in the morning. The buzz of your phone wakes you from your sleep. You roll over and check to see who could be calling at this hour. You do not recognize the number, but you answer anyway. The words racing from the voice on the other end of the line are too horrific to be true, but they are. Your dreams suddenly turn into a real-life nightmare as you learn that your loved one waits in a hospital room, fighting for their life. You rush to their bedside. You are with them when they die. "How could this happen?" A nursing home is supposed to be a place of safety. Yet the mysterious nature of your loved one's injuries leaves you with more questions than answers. Perplexed by the circumstances surrounding their death, you hire a lawyer. While the investigation reveals significant negligence by the nursing home, it also reveals a signed voluntary arbitration agreement. (1) The agreement holds your signature. At the time, you assumed that it was just another piece of paper required for admission. Now, with one pen stroke, your loved one's most fundamental guarantee, the right to a civil jury trial, has disappeared.

   Arbitration provisions have become standard practice in employment and consumer agreements. However, their place in nursing home contracts is questionable. (2) While claims related to employment or consumer transactions often involve the loss of employment or income, claims against nursing homes are typically much graver. (3) Because these claims commonly involve allegations of wrongful death, abuse, or neglect, critics have argued that mandatory arbitration of nursing home claims is against public policy. (4) In response to these arguments, some nursing homes have transitioned to voluntary arbitration agreements. (5) However, it is debatable how voluntary these agreements really are.

   Issues relating to these voluntary provisions become magnified when the individual consenting to the agreement is an agent acting on behalf of a principal. (6) When an agent mistakes a voluntary arbitration agreement to be mandatory, the question becomes whether the agent held the requisite authority to act. While several courts have limited the enforceability of agreements under such circumstances, (7) the Supreme Court of Missouri recently declined to follow suit. In Ingram v. Brook Chateau, the court held that an attorney in fact, i.e., an agent, had the implied authority to enter into agreements incidental to the authority expressly granted in the power of attorney, including voluntary arbitration agreements. (8) This Note argues that the court's analysis was incomplete and thus concludes that the court incorrectly held that tenets of agency law permit attorneys in fact to enter into voluntary arbitration agreements on behalf of their principals absent express authorization.

   Part II of this Note provides the relevant facts, procedural background, and holding of Ingram. Part III explores the legal background surrounding powers of attorney and explains the role of agency law and its application to power of attorney interpretation. Part IV discusses the majority and dissenting opinions of Ingram. Finally, Part V analyzes the soundness of the majority's opinion from both a legal and public policy standpoint. Because Missourians' constitutional right to a jury should not be implicitly revoked via proxy, this Note ultimately advocates for legislative action that limits Ingram's holding. This Note urges the Missouri General Assembly to revise Missouri law to either: (1) permit attorneys in fact to enter into voluntary arbitration agreements only if such action is expressly authorized in the power of attorney agreements or (2) expressly forbid such authorization altogether.

2. FACTS AND HOLDING

   In November 2015, Theron Ingram ("Ingram") was involved in a motor vehicle accident that resulted in quadriplegia. (9) Upon discharge from the hospital, Ingram executed a written Durable Power of Attorney ("DPOA"). (10) The DPOA identified Andrea Nichole Hall ("Hall") as Ingram's attorney in fact. (11) The DPOA included a durability provision, (12) an effective date provision, (13) and an agent's powers provision. (14) The facts of this case turned on the level of authority conferred to Hall by the subsections of the agent's powers provision, which expressly granted Hall the power to: (A) "make all necessary arrangements for health care services on [Ingram's] behalf . . . "; (B) "move [Ingram] into, or out of, any health care or assisted living/residential care facility . . . "; (C) take any other necessary action as authorized in the DPOA; and (D) "receive information regarding [Ingram's] health care . . . ." (15)

   When Ingram was discharged from the hospital in March 2016, he was admitted into a residential care facility, Brook Chateau. (16) As Ingram's attorney in fact, Hall executed the paperwork necessary for Ingram's admission into the facility. (17) Among the admissions paperwork was a document titled "Voluntary Arbitration Agreement" ("the Agreement"). (18) The Agreement provided, in part, that: (1) any claims arising out of or relating to the Agreement were subject to arbitration; (19) (2) the Agreement could be canceled within thirty days of admission into the facility; (20) (3) the Agreement was binding on all parties and party affiliates; (21) and (4) all parties agreed that consent to the Agreement constituted a health care decision. (22) Furthermore, the opening clause of the Agreement stated: "The parties are waiving their right to a trial before a judge or jury of any dispute between them. Please read carefully before signing. The patient will receive services in this center whether or not this agreement is signed." (23) Despite the latter exemption, Hall executed the Agreement. (24)

   In February 2018, Ingram brought suit against Brook Chateau. (25) Ingram alleged negligence, claiming that support staff at Brook Chateau failed to properly turn him where his quadriplegic state left him unable to turn himself. (26) Ingram argued that the staff's failure resulted in pressure ulcers and other wounds, causing him significant pain and suffering. (27) In response to Ingram's claims, Brook Chateau filed a motion to dismiss and compel arbitration according to the Agreement. (28) After reviewing the evidence, the circuit court overruled Brook Chateau's motion, (29) and Brook Chateau appealed. The Missouri Court of Appeals for the Western District affirmed. (30) Pursuant to Section 435.440, Brook Chateau filed for interlocutory appeal, (31) and the Supreme Court of Missouri granted transfer. (32)

   Ingram argued to the Supreme Court that the DPOA did not grant Hall the authority to execute the Agreement. (33) Specifically, Ingram contended that Hall had the authority only to "make all necessary arrangements for health care services on [Ingram's] behalf." (34) Thus, Ingram reasoned that, because the Agreement was voluntary and not necessary for admission to Brook Chateau, Hall did not have the authority to execute the Agreement under the DPOA. (35) The Supreme Court of Missouri disagreed, however, and held that relevant Missouri law "obligated the circuit court to order the parties to proceed to arbitration" because "the Agreement was signed by Hall on behalf of Ingram pursuant to Hall's authority established by the DPOA." (36)

3. LEGAL BACKGROUND

   The relevant history of arbitration in the United States begins with the Federal Arbitration Act ("FAA"). Since the FAA's enactment, the Supreme Court of the United States has significantly expanded its scope. (37) FAA expansion has led to questionable outcomes in some context, including the enforcement of arbitration agreements that are signed by attorneys in fact, pursuant to a power of attorney. (38) When an attorney in fact signs a document on behalf of the principal, the question becomes whether the attorney in fact had the authority to do so. (39) While there is some ambiguity in the way courts address this question, Missouri law and the Restatement (Second) of Agency provide direction on when an agent may reasonably take legal action under these circumstances. (40) Further, other jurisdictions that have addressed this issue provide similar guidance.

   1. Development and Operation of Arbitration in the United States

      The FAA was enacted in 1925. (41) Generally, the FAA mandates that arbitration clauses be deemed presumptively valid, irrevocable, and enforceable. (42) Some have argued that Congress intended for the FAA to apply only to contracts between businesspersons--as opposed to contracts involving consumers. (43) However, in AT&T Mobility v. Concepcion, the United States Supreme Court opted to implicitly extend the scope of the FAA to consumer contracts. (44) Many states have attempted to limit this expansion, particularly in the nursing home context, by enacting legislation that prohibits the enforceability of arbitration clauses in some cases. (45) However, the Supreme Court has made clear that these laws are preempted by the FAA and therefore unenforceable, (46) leaving plaintiffs with no choice but to proceed with arbitration.

      Arbitration is a type of alternative dispute resolution where disputes between parties are resolved privately by an arbitrator rather than publicly by a judge or jury. (47) Similar to judges and juries, an arbitrator can review the evidence and hear testimony by the parties prior to deciding the outcome. (48) However, arbitration is not bound by the traditional rules of evidence used by the courts, so the tools of discovery are extremely limited. (49) As noted by the United States Supreme Court, "the factfinding process in arbitration usually is not equivalent to judicial factfinding," (50) and, in many cases, this limited factfinding can harm the outcome of the case. (51) As a policy matter, arbitration outcomes are generally binding and final. (52) To protect the integrity of the arbitration...