784 S.E.2d 679
S.C. Ct. App.2016Background
- Eula Mae Davis (the patient) with dementia was transferred to UniHealth nursing facility; her adult son (Son) signed an Admission Agreement and a separate Arbitration Agreement (AA) on her behalf while she was absent.
- Within five hours of admission, Davis died after falling from a bed with a malfunctioning side rail; Daughter (personal representative) sued UniHealth and related entities for wrongful death and survival claims.
- Defendants (Appellants) moved to compel arbitration based on the AA signed by Son; the circuit court denied the motion, finding Son lacked authority to bind Mother under the Adult Health Care Consent Act, common-law agency, third-party beneficiary principles, and equitable estoppel.
- Appellants sought reconsideration and appealed the denial of the motion to compel arbitration.
- The Court of Appeals affirmed, concluding (1) the Act does not authorize signing a separate arbitration agreement, (2) Son lacked actual or apparent authority to sign the AA, (3) Mother’s estate was not bound as a third-party beneficiary, and (4) equitable estoppel did not apply.
Issues
| Issue | Plaintiff's Argument (Daughter) | Defendant's Argument (Appellants) | Held |
|---|---|---|---|
| 1. Authority under Adult Health Care Consent Act (merger) | AA not covered by Act; surrogate lacked authority to bind Mother | AA merged with Admission Agreement which Son could sign under the Act | Held for Plaintiff: Act does not authorize surrogate to sign separate AA; merger argument not preserved and fails on merits (Coleman controls) |
| 2. Common-law agency / apparent authority | Son lacked authority; Mother’s dementia prevented assent | Son had apparent/actual authority from Mother’s prior delegation of financial/health decisions | Held for Plaintiff: No actual/apparent authority—incapacitated principal cannot create apparent authority and agency scope didn’t include waiving jury access |
| 3. Third-party beneficiary | No valid AA existed binding Mother; she did not assent | Mother was intended beneficiary of AA (or Son signed in individual capacity and estate should be bound) | Held for Plaintiff: No enforceable contract by Son on Mother’s behalf; Mother not a third-party beneficiary, and non-signatory-beneficiary rules do not bind estate here |
| 4. Equitable estoppel | Daughter did not seek to enforce AA; estate shouldn’t be estopped | Estate received benefits (admission, care) and facility relied on Son’s representations; estoppel/unconscionability/un-clean-hands apply | Held for Plaintiff: Equitable estoppel inapplicable—AA voluntary and separable; estate’s incapacity precludes estoppel and defendants didn’t show detrimental reliance |
Key Cases Cited
- Coleman v. Mariner Health Care, Inc., 407 S.C. 346, 755 S.E.2d 450 (S.C. 2014) (surrogate lacks authority under Act to sign a separate arbitration agreement)
- Pearson v. Hilton Head Hosp., 400 S.C. 281, 733 S.E.2d 597 (Ct.App. 2012) (standard of review and equitable-estoppel principles in arbitration context)
- Froneberger v. Smith, 406 S.C. 37, 748 S.E.2d 625 (Ct.App. 2013) (elements of apparent authority)
- Dickerson v. Longoria, 414 Md. 419, 995 A.2d 721 (Md. 2010) (agent may have authority for health/financial decisions but not to bind principal to a separate arbitration agreement)
- Int’l Paper Co. v. Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411 (4th Cir. 2000) (doctrine of equitable estoppel in arbitration context)
- Long v. Silver, 248 F.3d 309 (4th Cir. 2001) (non-signatory may be compelled to arbitrate under ordinary state-law agency/contract principles when claims are intertwined)