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Adams v. Mt. Lebanon Operations, LLC

Adams v. Mt. Lebanon Operations, LLC

In Adams v. Mt. Lebanon Operations, LLC d/b/a Mt. Lebanon Rehabilitation and Wellness Center (Center), 2022 Pa Super 100, the Pennsylvania Superior Court  concluded that the Center’s binding arbitration agreement was invalid.

Doreen Adams filed a complaint asserting Center’s negligent care of her mother, Margherita Daquino, resulting in her death. Specifically, Adams alleged shortly after her mother’s admission to Center’s facility on November 24, 2018, her mother developed a swallowing disorder that increased her risk for aspiration, requiring her to be monitored during meals. Adams further asserted that her mother aspirated and died on January 25, 2019 because she was left unsupervised.

Upon Margherita’s admission to Center, Adams signed an Admission Agreement that contained a provision requiring all disputes be resolved in binding arbitration. In a separate section of the Admission Agreement titled “Legal Representative,” Adams circled “Yes” in response to a question asking whether Adams was Margherita’s power of attorney (POA). In another section of the Admission Agreement Adams indicated that Margherita chose her to be her assigned authorized representative, but was not authorized by State or federal law. The Admission Agreement further directed Adams to attach documentation to the Admission Agreement evincing their legal status regarding representation of the resident; however, upon disclosure of the Admission Agreement, there was no POA, or any other legal documentation, attached to the Admission Agreement.

In response to Adams’ complaint, the Center asked the court to compel arbitration of Adams’ claims because Adams executed a mandatory binding arbitration agreement as Power of Attorney. Adams opposed Center’s attempt to compel arbitration because Center failed to submit evidence that Adams was: (1) Margherita’s POA, or (2) authorized by Margherita to sign the Admission Agreement on her behalf. Adams argued that agency could not be inferred simply because she was Margherita’s daughter.

The trial court concluded the arbitration agreement was invalid and unenforceable because Center failed to prove Adams had a valid POA or any other evidence demonstrating that she had the power to bind Margherita to the Admission Agreement. The trial court also found the arbitration provision to be procedurally and substantively unconscionable because: (1) Adams functionally had no choice but to promptly sign this agreement upon her mother’s admission; and (2) the arbitration provision was buried in a 26-page admission packet and did not explicitly state that by agreeing, the signor is giving up their right to a judge or jury.

In determining whether the trial court should have compelled arbitration, the Superior Court needed to determine if the arbitration agreement was valid. Washburn v. Northern Health Facilities, Inc., 121 A.3d 1008, 1012 (Pa. Super. 2015). For an arbitration agreement between a nursing facility and a resident’s purported POA agent to be valid, there must be an agency relationship between the resident/principal and the POA agent. Petersen v. Kindred Healthcare, Inc., 155 A.3d 641, 645 (Pa. Super. 2017). In Wisler v. Manor Care of Lancaster PA, LLC, 124 A.3d 317, 323-24 (Pa. Super. 2015), the court held:

  • An agency relationship may be created by any of the following: (1) express authority, (2) implied authority, (3) apparent authority, and/or (4) authority by estoppel. Agency cannot be inferred from mere relationships or family ties, and we do not assume agency merely because one person acts on behalf of another. Apparent agency exists where the principal, by word or conduct, causes people with whom the alleged agent deals to believe that the principal has granted the agent authority to act. An agent cannot simply by his own words, invest himself with apparent authority. Such authority emanates from the action of the principal and not the agent. The party asserting the agency relationship bears the burden of proving it by a preponderance of the evidence.

A valid, durable power of attorney constitutes a grant of express authority per its terms. See 20 Pa.C.S.A. § 5601(a); however, because there was no POA, the court concluded there was no express authority for Adams to act on Margherita’s behalf. Moreover, the court held that even if Adams had the authority to consent to medical treatment on her mother’s behalf, there was no evidence that she had the authority to consent to the binding arbitration agreement. Because the court concluded that the arbitration agreement was invalid, it did not need to address the question as to whether the Admission Agreement was procedurally or substantively unconscionable.

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