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Torts/Agency: Enforceability of Agreement to Arbitrate in Nursing Home Contract

Posted by Ted A. Schmidt | Feb 12, 2016 | 0 Comments

Escareno v. Kindred Nursing Centers West, LLC, 731 Ariz. Adv. Rep. 41 (App. Div. II, January 26, 2016) (J. Vasquez)

TO ESTABLISH AGENCY IT MUST BE PROVEN THE PRINCIPAL HAS MANIFEST ASSENT TO THE EXISTENCE OF AGENCY RELATIONSHIP

Plaintiff's decedent mother died in defendant's nursing home. When  plaintiff had placed mom, she was incapacitated so he signed the nursing home contract and an alternative dispute resolution [ADR]agreement for her. After her death plaintiff sued defendant under the Adult Protective Services Act.  The trial court ruled the matter was subject to arbitration under the ADR agreement. The Arizona Court of Appeals reversed and remanded finding the plaintiff did not have authority to bind his mother to the terms of the ADR agreement. 

Despite evidence that plaintiff's mother had become unable to care for herself years before being admitted to Kindred and that plaintiff had cared for all her needs, took care of her finances and signed numerous documents in different settings on her behalf, plaintiff was not his mother's agent and could not bind her to the ADR agreement.  There  was  no  evidence that mom has affirmatively made him her  agent and she could not do so when she was incapacitated in any event. 

To establish the existence of agency it must be shown that the principal has led others to believe the person in question is the principal's agent (apparent agency)  or has affirmatively confirmed that the person in question is in fact the principal's agent (actual agency).   “[A] pattern of care-giving alone is insufficient to create an agency relationship, particularly in the absence of any evidence showing a manifestation of assent on the part of the elderly person.”

About the Author

Ted A. Schmidt

Ted's early career as a trial attorney began on the other side of the fence, in the offices of a major insurance defense firm. It was there that Ted acquired the experience, the skills and the special insight into defense strategy that have served him so well in the field of personal injury law. Notable among his successful verdicts was the landmark Sparks vs. Republic National Life Insurance Company case, a $4.5 million award to Ted's client. To this day, it is the defining case for insurance bad faith, and yet it is only one of several other multi-million dollar jury judgments won by Ted during his career. He is certified by the State Bar of Arizona as a specialist in "wrongful death and bodily injury litigation".

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