McKean v. GGNSC Atlanta, LLC
329 Ga. App. 507
| Ga. Ct. App. | 2014Background
- Patricia McKean was admitted to a nursing home on March 9, 2012 while newly paraplegic; no power of attorney existed at admission.
- Her son, Dwayne McKean, signed the facility admission paperwork and an "Alternative Dispute Resolution Agreement" (ADR) at admission in a space labeled "Signature of Resident’s Legal Representative," indicating his capacity as "Son."
- Patricia did not sign or expressly consent to the ADR, and there is no evidence she was present or knew of the ADR when it was signed.
- Nineteen days later Patricia executed a durable power of attorney naming Dwayne as attorney-in-fact with authority to sign arbitration agreements; she died about 40 days after that.
- Defendants moved to compel arbitration; the trial court compelled arbitration, reasoning Patricia ratified the ADR (or Dwayne ratified by failing to revoke within 30 days). The court of appeals reversed.
Issues
| Issue | Plaintiff's Argument (McKean) | Defendant's Argument (Facility) | Held |
|---|---|---|---|
| Whether a valid arbitration agreement exists because McKean signed for Patricia | McKean lacked authority to sign for Patricia at admission; Patricia did not assent | ADR is binding because McKean signed as her representative and acknowledged authority | No — no evidence of express, implied, or apparent authority by Patricia; signature alone insufficient |
| Whether Patricia ratified McKean’s prior signing by later granting power of attorney | Ratification requires the principal’s full knowledge of material facts; Patricia lacked knowledge of the ADR | Granting power of attorney that authorizes future arbitration constitutes ratification of past acts | No — power of attorney executed after signing does not establish ratification absent knowledge of the prior act |
| Whether failure to revoke ADR within 30 days (after power of attorney) ratified the ADR | Silence cannot ratify without principal’s knowledge of material facts | Dwayne’s failure to revoke after he became attorney-in-fact ratified the ADR | No — ratification requires the principal’s knowledge; no evidence Patricia knew of ADR; attorney-in-fact cannot unilaterally substitute his own prior knowledge for the principal’s |
| Whether arbitration may be compelled via third‑party‑beneficiary or estoppel theories | Plaintiff: not a party; no assent — cannot be third‑party beneficiary or equitably estopped | Facility: Patricia is a third‑party beneficiary or McKean is estopped from denying ADR because he signed and later gained authority | No — third‑party beneficiary theory fails given lack of assent; estoppel rejected because defendants did not show reasonable diligence or good‑faith reliance |
Key Cases Cited
- Miller v. GGNSC Atlanta, 323 Ga. App. 114 (Ga. Ct. App.) (standard of review for arbitration motions)
- Ashburn Health Care Center v. Poole, 286 Ga. App. 24 (Ga. Ct. App.) (burden on party seeking arbitration to prove agreement)
- Triad Health Mgmt. of Ga. III, LLC v. Johnson, 298 Ga. App. 204 (Ga. Ct. App.) (contract‑formation principles govern arbitration validity)
- Walker v. Williams, 177 Ga. App. 830 (Ga. Ct. App.) (agent’s unilateral acts cannot alone create agency)
- Omni Builders Risk v. Bennett, 313 Ga. App. 358 (Ga. Ct. App.) (apparent authority depends on principal’s conduct)
- Merritt v. Marlin Outdoor Advertising, 298 Ga. App. 87 (Ga. Ct. App.) (ratification requires knowledge of material facts)
- Ellis v. Fuller, 282 Ga. App. 307 (Ga. Ct. App.) (ratification ineffective without principal’s knowledge of unauthorized act)
- Lankford v. Orkin Exterminating Co., 266 Ga. App. 228 (Ga. Ct. App.) (ratification/acceptance of contract benefits can bind non‑signing party when benefits accepted)