Hutcheson v. Eskaton Fountainwood Lodge, C074846A

Background

Decedent Barbara Lovenstein executed (1) a health care power of attorney in 2006 naming niece Robin Hutcheson as health-care agent, and (2) a statutory personal care power of attorney in 2010 naming sister Jean Charles (and Hutcheson) as attorneys-in-fact; the personal care POA expressly did not authorize medical/health-care decisions.
On Feb. 24, 2012, Charles (acting under the personal care POA) voluntarily admitted Lovenstein to Eskaton FountainWood Lodge, a licensed residential care facility for the elderly, and signed an admission agreement that contained a mandatory arbitration clause.
FountainWood obtained and was given Lovenstein’s health care POA (naming Hutcheson), but FountainWood did not contact Hutcheson about admission or the arbitration clause; there is no evidence Hutcheson participated in the admission decision.
After admission, FountainWood staff allegedly overadministered Ativan; Lovenstein was later hospitalized with aspiration pneumonia and died. Hutcheson (as successor) and Charles sued FountainWood; FountainWood moved to compel arbitration under the admission agreement.
Trial court denied the petition to compel arbitration, finding admission and execution of the arbitration clause were health care decisions and Charles lacked authority under the personal care POA to make them; FountainWood appealed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether admitting Lovenstein to a residential care facility and signing the admission agreement (with arbitration clause) was a "health care decision" under the Health Care Decisions Law	Admission to a facility that provides dementia/custodial/health-related services is a health care decision and thus requires authorization under a health care POA (Hutcheson)	Admission to a residential care facility is personal care, not a health care decision; FountainWood did not contract to provide health care	Held: Admission here was a health care decision because FountainWood contracted to provide dementia/custodial care that falls within HCDL’s broad definitions of "health care" and "health care institution."
Whether Charles had authority under the personal care POA to execute the admission agreement and bind Lovenstein to arbitration	Charles could sign contracts related to personal care and had authority over claims and arbitration under the personal care POA	FountainWood argued Charles’ personal care POA authorized contracting/arbitration or she had other authority outside the POA	Held: Personal care POA did not authorize health care decisions; Charles lacked authority to admit Lovenstein to receive health-related custodial care or to execute the arbitration clause as part of that health care decision.
Whether FountainWood can enforce the arbitration clause via estoppel/ostensible agency because it reasonably relied on Charles’ authority	FountainWood: Lovenstein/Charles’ conduct led FountainWood to reasonably believe Charles was authorized to sign	Plaintiffs: FountainWood had Lovenstein’s health care POA naming Hutcheson and therefore knew Hutcheson had priority; no principal conduct created ostensible authority	Held: No ostensible agency — agency requires principal’s conduct; possession of the health care POA naming Hutcheson put FountainWood on notice Hutcheson had priority, so FountainWood cannot rely on ostensible agency.
Whether definitions from other statutes (e.g., MICRA, Health & Safety licensing) preclude treating a residential care facility as a "health care institution" under HCDL	FountainWood: Because RCFEs aren’t "health facilities" under other statutes, they shouldn’t be "health care institutions" for HCDL purposes	Plaintiffs: HCDL defines "health care institution" broadly for autonomy/proxy decision purposes and can include RCFEs providing health-related custodial care	Held: HCDL’s definitions are broader and serve different purposes; RCFEs may qualify as health care institutions/providers for HCDL and the PAL-context question at issue.

Key Cases Cited

Engalla v. Permanente Medical Group, 15 Cal.4th 951 (1997) (party seeking arbitration bears burden to prove agreement exists)
Garrison v. Superior Court, 132 Cal.App.4th 253 (2005) (agent authorized to act for patient can bind patient to arbitration)
Flores v. Evergreen at San Diego, LLC, 148 Cal.App.4th 581 (2007) (discusses when facility admission binds relatives to arbitration)
Hogan v. Country Villa Health Servs., 148 Cal.App.4th 259 (2007) (admission-to-facility can be a health care decision; arbitration clause viewed in that context)
Buckner v. Tamarin, 98 Cal.App.4th 140 (2002) (nonparty generally not bound by arbitration agreements absent agency/authorization)
Mormile v. Sinclair, 21 Cal.App.4th 1508 (1994) (patient’s signature can bind relatives presenting claims)
Kotler v. Alma Lodge, 63 Cal.App.4th 1381 (1998) (RCFE not a "health facility" under licensing statutes; addresses scope of statutory definitions)