On bеhalf of her decedent husband, Edward Goldman, Judy Goldman sued for alleged neglect by the operators of two skilled nursing facilities: Carmichael Care and Rehabilitation Center (Carmichael Care) and Rosewood Terrace Care and Rehabilitation (Rosewood Terrace). 1 In the same complaint, Judy also sued all defendants in her individual capacity for negligent infliction of emotional distress and wrongful death.
Carmichael Care and Rosewood Terrace each sought to compel arbitration based on documents Judy signed when Edward was admitted to each of the facilities. 2 Plaintiff opposed the petition and motion, and the trial court refused to compel arbitration. The trial court found Judy did not have authority to sign on Edward’s behalf, and she did not sign in her individual capacity. The trial court also exercised its discretion under Code of Civil Procedure section 1281.2, subdivision (c), to adjudicate the arbitrable and nonarbitrable claims in order to avoid the possibility of inconsistent rulings. 3
Carmichael Care and Rosewood Terrace appeal from the orders refusing to compel arbitration and present nearly identical arguments. Defendants contend (1) Judy had authority to sign the admissions papers containing the arbitration agreements because Edward was unable to sign for himself, (2) Judy signed not only on Edward’s behalf, but also for herself when she agreed to arbitration, (3) public policy compels enforcement of the arbitration
We conclude Judy did not have authority to sign the arbitration agreements on Edward’s behalf and did not sign the agreements in her individual capacity. We reject the contention that public policy requires plaintiffs to arbitrate their claims in the absence of the existence of a valid arbitration agreement. Accordingly, we affirm the trial court’s orders denying Carmichael Care’s pеtition and Rosewood Terrace’s motion to compel arbitration.
BACKGROUND
The Complaint
In May 2011, Edward—by and through his successor, Judy—filed a complaint setting forth causes of action for elder abuse, fraud, and violations of the Patients Bill of Rights (Health & Saf. Code, § 1430, subd. (b); Cal. Code Regs., tit. 22, § 72527).
The complaint alleged Edward was 61 years old on February 25, 2010, when he was admitted to Carmichael Care, a skilled nursing facility. Edward was transferred to Carmichael Care after a short stay at the Veterans Administration (VA) Medical Center where he had been treated for gastrointestinal bleeding. Although Edward suffered a stroke in 2008 that left him weak on his left side, he had been living independently at home with Judy. Over the course of four months at Carmichael Care, Edward sustained six falls—several of which were undоcumented by the facility’s staff. On the sixth fall, Edward fractured his left hip. The facility staff did not document the fall or immediately respond to Judy’s requests to have X-rays taken of Edward’s hip. Three days after the fall, an X-ray was taken and Edward was rushed to the emergency room. On June 28, 2010, Edward’s hip was surgically repaired at Mercy San Juan hospital.
In addition to appearing as Edward’s successor, Judy also sued on her own behalf to assert causes of action for negligent infliction оf emotional distress and wrongful death.
Carmichael Care’s Petition to Compel Arbitration
In July 2011, Carmichael Care petitioned to compel arbitration and introduced copies of the arbitration agreements signed by Judy. Carmichael Care also introduced a copy of Edward’s VA advance directive; Durable Power of Attorney for Health Care and Living Will (VA advance directive), which included a durable power of attorney appointing Judy as his health care agent in the event he became unable to make decisions for himself. In pertinent part, Edward’s VA advance directive stated: “I appoint the person named below to make decisions about my health care if there ever comes [a] time when I cannot make those decisions.” Judy was listed as the person to be appointed in such a circumstance. The VA advance directive was signed by Edward and witnessed on February 9, 2010.
Plaintiff opposed the petition and introduced a declaration by Judy that Edward was capable of and actually did make health care decisions for himself before and during his stay at Carmichael Care. Judy’s declaration further stated: “As to the signing of the arbitration agreement, a person from the facility merely told me that I needed to sign some more forms for my husband. The person from the facility did not say what the forms were, that they involved arbitration, or that there was a choice in the signing of the
In reply, Carmichael Care submitted a form titled “Authorizations, Acknowledgments and Consents” signed and initialed multiple times by Judy. The form had a blank line following text stating, “If Resident is unable to sign this form, please state the reason.” On this line, Judy wrote “Stroke.”
Rosewood Terrace’s Motion to Compel Arbitration
In September 2011, Rosewood Terrace filed a motion to compel arbitration and introduced arbitration agreements signed by Judy.
Plaintiff opposed Rosewood Terrace’s motion and submitted a declaration by Judy that stated Edward was capablе of and actually did make health care decisions for himself before and during his stays at Rosewood Terrace. Mirroring her earlier declaration, Judy’s declaration in opposition to the Rosewood Terrace motion stated: “As to the signing of the arbitration agreement, a person from the facility merely told me that I needed to sign some admission forms for my husband. The person from the facility did not say what the forms were, that they involved arbitration, or that there was a choice in the signing of the documents. The person from the facility never inquired of me whether my husband was capable of signing the documents or discussed with me that the documents needed to be signed by my husband if he was capable. Had this issue been raised, I certainly would have told the facility employee that my husband was capable of making his own health care decisions.”
Orders Denying the Petition and Motion to Compel Arbitration
The trial court refused to order plaintiff to arbitrate her claims. As to Carmichael Care, the trial court found that Judy signed two arbitration agreements on Edward’s behalf when he was admitted to that facility. At the same time she signed the arbitration agreements, Judy also signed a document noting she was signing on Edward’s behalf due to “Stroke.” However, the trial court found Carmichael Care “presented no evidence that such a determination was ever made by Edward Goldman’s primary care physician.”
As to Rosewood Terrace, the trial court concluded there was no evidence showing Edward’s primary care physician ever made a determination Edward lacked capacity to make his own health care decisions. Instead, the court noted plaintiff had “submitted a doctor’s report indicating that at the time Edward Goldman was admitted to Rosewood, he was ‘awake’ and ‘alert,’ and communicated to the doctor in a manner inconsistent with a person who was too ill to make health care decisions. [Citation.] Defendants have failed to meet their burden to establish that the Advance Health Care Directive was in effect, and thus, that Judith Goldman was authorized to execute thе arbitration agreements on Edward’s behalf.”
Finally, the trial court stated that “even if there were a valid agreement to arbitrate, the court would exercise its discretion under [Code of Civil Procedure section] 1281.2. The Court is also denying [Carmichael Care’s] petition to arbitrate, and the claims against the remaining defendant North American Health Care, Inc., are not subject to arbitration. Plaintiff’s claims under the Patient’s Bill of Rights are not subject to arbitration pursuant to the terms of the Arbitration Agreement.”
Carmichael Care and Rosewood Terrace each timely filed a notice of appeal from the orders denying the petition and motion to compel arbitration. (Code Civ. Proc., § 1294, subd. (a).)
DISCUSSION
I
Authority to Agree to Arbitration on Behalf of a Spouse
Carmichael Care аnd Rosewood Terrace contend Judy had authority to sign the arbitration agreements on Edward’s behalf. We are not persuaded.
Agreements to Arbitrate Future Disputes
California courts “have consistently found a strong public policy favoring arbitration agreements.”
(Coon
v.
Nicola
(1993)
As the
Flores
court explained, “Generally, a person who is not a party to an arbitration agreement is not bound by it.
(Buckner v. Tamarin, supra,
Whether Edward Agreed to Arbitration at Carmichael Care and Rosewood Terrace
The record in this case shows that approximately three weeks bеfore his admission to Carmichael Care, Edward executed a VA advance directive, which conferred upon Judy authority to make decisions on his behalf only if he became unable to do so for himself. Under the plain language of the VA advance directive, Edward agreed to give Judy authority to make health care decisions on his behalf only “if there ever comes [a] time when I cannot make those decisions.” Plaintiff introduced evidence that Edward was lucid and mentally capable at the time of his admission to Carmichael Care. Plaintiff also introduced evidence that Edward was alert and oriented at the time of his admission to Rosewood Terrace. During his time at Carmichael Care and Rosewood Terrаce, Edward made numerous health care decisions for himself. Also, on July 1 (the day he was admitted to Rosewood Terrace) and July 20 (while at Rosewood Terrace), Edward signed a physician order for life-sustaining treatment (POLST) form.
As counsel for Carmichael Care acknowledged at oral argument, there is no evidence Edward’s primary care physician ever declared Edward to lack capacity to make his own decisions. Probate Code section 4658 requires a determination by a primary physician in order to establish a lack of capacity by providing: “Unless otherwise specified in a written advance health care directive, for the purposes of this division, a determination that a patient lаcks or has recovered capacity, or that another condition exists that affects an individual health care instruction or the authority of an agent or surrogate, shall be made by the primary physician.” A determination of incapacity cannot be tacit because Probate Code section 4732 provides that “[a] primary physician who makes or is informed of a determination that a patient lacks or has recovered capacity” is required to “promptly record the determination in the patient’s health care record and communicate the determination to the patient, if possible, and to a person then authorized to make health care decisions for the patient.”
Carmichael Care and Rosewood Terrace do not contend the VA advance directive expired or that Edward lost capacity to make his own decisions about whether to enter into an arbitration agreement at the time he was admitted to their facilities. Indeed, both acknowledge Edward “could make decisions, for example decisions about such things as his own health care.”
Carmichael Care and Rosewood Terrace assert that even though Edward had the capacity to make his own decisions, someone had to sign documents for him because he could not do so himself. In the trial court, none of the defendants offered evidence or even made an offer of proof regarding Edward’s inability to sign documents when admitted to their care. Consequently, the contention has not been preserved for review.
(Shaw
v.
County of Santa Cruz
(2008)
Carmichael Care asserts Judy’s mere status as Edward’s wife gave her authority to sign the arbitration agreements on his behalf, “[otherwise, the married couple would have to go through the formality of creating a formal agency relationship, just to sign the various long-term care documents.” Rosewood Terrace echoes the assertion. A nearly identical contention was rejected in
Flores, supra,
The
Flores
court also rejected the argument that Luis’s status as Josephina’s spouse inherently gave him authority to execute an arbitration agreement on her behalf.
Flores
explained, “Although we agree that spouses are fiduciaries and owe a duty of support in the family law context, these duties do not create a power to contractually bind each other in the agency context. ‘[I]t is well established that an agency cannot be implied from the marriage relation alone.’
(Lovetro v. Steers
[(1965)] 234 Cal.App.2d [461,] 475
The present action presents an even stronger case than in
Flores
for rejecting marital status as sufficient to confer agency because Edward’s VA advance directive expressly reserved to him the right to make his own deсisions until and unless he became incapacitated. (See
Flores, supra,
148 Cal.App.4th at pp. 584, 589.) For this reason, we .also reject the suggestion at oral argument by counsel for Carmichael Care that the “close relationship” between Judy and Edward gave her authority to sign for him. We decline to carve from
Flores’
s holding an exception for marriages deemed to be especially “close.” Even apart from the difficulty in formulating such a test, the
status
of marriage cannot substitute for the
act
of conferring agency to a spouse.
(Id.
at p. 589;
Russell v. Dopp, supra,
The Flores court affirmed even though Evergreen introduced a power of attorney executed by Josephina in Luis’s favor after her admission to the facility. (Flores, supra, 148 Cal.App.4th at pp. 588-589.) As Flores noted, “no facts were presented suggesting that by signing the power of attorney form Josephina intended to ratify Luis’s earlier agreement to the arbitration.” (Ibid.) For the same rеason, we reject Carmichael Care and Rosewood Terrace’s assertion that “[g]iven their marital relationship, given the situation which required that he receive long-term care, and given that he was ‘alert,’ ‘oriented,’ and ‘capable,’ the only reasonable inference to draw is that [Edward] was or soon would be aware of what she had done.” Here, as in Flores, there was no evidence Edward ratified Judy’s signing of the arbitration agreements. (Flores, supra, 148 Cal.App.4th at pp. 588-589.) Thus, we also reject Rosewood Terrace’s contention that Judy “signed for [Edward], just as most people in the situation sign for their spouses, and there is no evidence that he ever objected to her doing so.” Edward did not need to object in order to preserve his right to make his own health care decisions. (Ibid.)
Rosewood Terrace contends that for Judy “to have actual authority to sign the agreements on [Edward’s] behalf, it was not needed for [Edward] to literally state T now declare my wife, Judith Goldman, as my agent,’ or
Both Carmichael Care and Rosewood Terrace focus on Judy’s conduct and statements in signing the arbitration agreements. For example, they point to the fact she signed as Edward’s “representative” and indicated she was signing due to his “Stroke.”
5
We disagree because “agency cannot be created by the conduct of the agent alone; rather,
conduct by the principal
is essential to create the agency. Agency ‘can be established either by agreement between the agent and the principal, that is, a true agency [citation], or it can be founded on ostensible authority, that is, some intentional conduct or neglect on the part of the alleged principal creating a belief in the minds of third рersons that an agency exists, and a reasonable reliance thereon by such third persons.’
(Lovetro v. Steers[, supra,]
Here, defendants did not introduce any evidence that Edward—by words or actions—agreed to have Judy sign arbitration agreements or make health care decisions for him while he was capable of making them for himself. Thus, defendants failed to meet their burden of proof to establish Edward agreed to arbitration of any legal disputes.
(Garrison, supra,
In an argument made by Carmichael Care, and repeated by Rosewood Terrace, defendants contend Judy did not need authority as Edward’s agent to sign the arbitration agreement because the California Arbitration Act (Code Civ. Proc., § 1280 et seq.) uses the word “representative[]” in section 1280,
In sum, neither Carmichael Care nor Rosewood Terrace met its burden to establish Judy had authority to agree to arbitration on Edward’s behalf.
II
Whether Judy Signed on Her Own Behalf
Carmichael Care and Rosewood Terrace contend Judy “acknowledged when she signed the arbitration agreements that she agreed to arbitrate her own claims arising from the care that she was requesting on [Edward’s] behalf.” We disagree.
A.
The Carmichael Care Arbitration Documents
In pertinent part, the arbitration agreement signеd by Judy at the time of Edward’s admission at Carmichael Care provides: “This agreement, made on 3/24/10 (date) by and between the parties, Resident Goldman, Edward and Resident’s Legal Representative _ (collectively referred to hereinafter as ‘Resident’), and the Facility Carmichael Care Center, is an Agreement intended to require that Disputes (the scope of which is described in section ‘B’) be resolved by arbitration. The Resident’s Legal Representative agrees that he or she is executing this agreement as a party, both in his or her representative and individual capacity.” (Italics indicates handwritten interlineations.)
Elsewhere in the agreement, Judy indicated she accepted the agreement with her “Initial of Resident/Legal Representative.” At the end of the
Judy also signed a medical practice arbitration agreement that provided in pertinent part: “This agreement, made on 3/24/10 (date) by and between the parties, Resident Goldman Edward and Resident’s Legal Representative _ (collectively referred to hereinafter as ‘Resident’), and the Facility Carmichael C. Center, is an Agreement intended to require that Disputes (the scope of which is described in section ‘B’) be resolved by arbitration. The Resident’s Legal Representative agrees that he or she is executing this agreement as a party, both in his or her representative and individual capacity.” (Italics indicates handwritten interlineations.) For this agreement, Judy signed on the line labeled “Initial of Resident/Legal Representative.” At the end of the seven-page agreement, Judy signed on a line indicating “Signature of Resident’s Legal Representative in his/her Individual and Representative Capacity.”
B.
The Rosewood Terrace Arbitration Documents
In support of its motion to compel arbitration, Rosewood Terrace introduced a document titled “Arbitration of Medical Malpractice Disputes,” which stated in pertinent part: “By signing this arbitration agreement below, Resident agrees to be bound by the forgoing arbitration provisions, [f] . . . [f] This arbitration agreement shall bind the parties hereto, including the heirs, representatives, executors, administrators, successors, and assigns of such parties.” The signature line labeled “Resident” is blank. Edward’s name does not appear anywhere on the form. Instead, Judy signed only on the line labeled “Responsible Party.”
Edward’s name also does not appear anywhere on the form titled “Arbitration of Other Disputes,” which provided that “Resident and the Facility further agree that any dispute arising between them from torts, contracts or otherwise, including any claims for punitive damages and any actions brought on behalf of the Resident by third-parties, but exception [sic] claims pertaining to the amount of the Facility’s charges, shall be submitted upon request of either the Resident or the Facility to arbitration as provided by California law.” The signature line for “Resident” is blank. Judy’s signature appears on the line labeled “Responsible Party (if any).”
On the same day as she signed admissions forms fоr Edward’s admission to Rosewood Terrace, Judy also signed an advisement stating, “Your Rights as a Resident.” Judy signed on a line simply marked “Signature.”
Judy Was Not a Party to the Arbitration Agreements
It is well settled that “[t]he strong public policy in favor of arbitration does not extend to those who are not parties to an arbitration agreement, and a party cannot be compelled to arbitrate a dispute that he [or she] has not agreed to resolve by arbitration.
(County of Contra Costa v. Kaiser Foundation Health Plan, Inc.
(1996)
1. Carmichael Care Arbitration Agreements
Judy was not a party to the Carmichael Care arbitration agreement. Clearly, she was not a “resident” of the facility. And our conclusion that Judy did not have authority to sign the arbitration agreements on behalf of Edward means she was not his “[l]egal [Representative” as described in Carmichael Care’s arbitration agreement. Moreover, Carmichael Care did not include Judy’s name on the blank line provided to name the resident’s legal representative.
Nonetheless, Carmichael Care asserts Judy herself was bound by the arbitration agreements because the arbitration agreement provided that “. ... Resident’s Legal Representative agrees that he or she is executing this agreement as a party, both in his or her representative and individual capacity.” (Italics added.) Carmichael Care points to Judy’s signature on the line labeled “Signature of Resident’s Legal Representative in his/her Individual and Representative Capacity.” We reject the argument.
Although Judy signed as Edward’s legal rеpresentative, the fact of her signing did not cast her in that status.
(Flores, supra,
148 Cal.App.4th at pp. 585, 589.) There was no such person as Edward’s legal representative at the time Judy signed the Carmichael Care arbitration agreement. Thus, the signature in that capacity was a mistake. “The doctrine of mistake customarily involves such errors as the nature of the transaction,
the identity of the parties,
the identity of the things to which the contract relates, or the occurrence of collateral happenings.”
(Odorizzi v. Bloomfield School Dist.
(1966)
At most, the arbitration agreement is ambiguous as to whether it intended Judy to sign in hеr individual capacity independent of her description as “Resident’s Legal Representative.” However, as the California Supreme Court noted in another case involving the interpretation of an arbitration agreement, “ambiguities in standard form contracts are to be construed
2. Rosewood Terrace Arbitration Agreement
Judy also is not individually bound by the arbitration agreement with Rosewood Terrace. Rosewood Terrace’s arbitration agreement provides only that “. . . Resident agrees to be bound by the forgoing arbitration provisions.” (Italics added.) Judy was not the resident, and this agreement did not make anyone other than the facility and Edward parties to the contract. Consequently, Judy is not precluded from bringing her own claims. Even though the agreement purports to bind the unidentified resident, including his or her “heirs, representatives, executors, administrators, successors, and assigns of such parties,” Judy did not waive any of her individual claims by purporting to sign on Edward’s behalf. As explained in part I, Judy had no authority to sign on behalf of Edward.
Based on Judy’s ineffective signatures on the Carmichael Care and Rosewood Terrace arbitration agreements, we reject defendants’ reliance on
Ruiz, supra,
The fundamental difference between
Ruiz,
and the present case is that this action does not involve a valid agreement to arbitrate—either by Edward or by Judy. In
Ruiz,
the Supreme Court noted it has “emphasized that arbitration derives its legitimacy from the fact that the parties consent to resort to the arbitral forum rather than to litigation, with its possibility of a jury trial.”
(Ruiz, supra,
III
Public Policy
Finally, Carmichael Care and Rosewood Terrace argue that “[p]ublic policy dictates that the arbitration agreements should be enforced.” We reject the argument because we are not at liberty to ignore the well-established California law that “[t]he party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement.”
(Flores, supra,
DISPOSITION
The orders denying (1) the petition to compel arbitration filed by SunBridge Healthcare, LLC (formerly known as SunBridge Healthcare Corporation), Regency Health Services, Inc., Sun Healthcare Group, Inc., and SunBridge Carmichael Rehabilitation Center (doing business as Carmichael Care and Rehabilitation Center), and (2) the motion to compel arbitration filed by Carmichael Care, Inc. (doing business as Rosewood Terrace Care and Rehabilitation), North American Health Care, Inc., and John Sorensen are
Hull, Acting P. J., and Butz, J., concurred.
Appellants’ рetition for review by the Supreme Court was denied January 15, 2014, S214959.
Notes
Due to their shared surname, we refer to the Goldmans by their first names.
The first set of defendants relates to Edward’s stay at Carmichael Care and consists of SunBridge Healthcare, LLC (formerly known as SunBridge Healthcare Corporation), Regency Health Services, Inc., Sun Healthcare Group, Inc., and SunBridge Carmichael Rehabilitation Center (doing business as Carmichael Care and Rehabilitation Center).
The second set of defendants relates to Edward’s two stays at Rosewood Terrace and consists of Carmichael Care, Inc. (doing business as Rosewood Terrace Care and Rehabilitation), North American Health Care, Inc., and John Sorensen.
Carmichael Care filed a “petition” to compel arbitration and Rosewood Terrace filed a “motion” to compel arbitration. The parties assert no legal difference in the names of the procedural vehicles chosen by the two sets of defendants. Even though Code of Civil Procedure section 1294, subdivision (a), renders appealable “[a]n order dismissing or denying a petition to compel arbitration,” in this context “petition” and “motion” have been treated as interchangeable. For example, one court recently stated that “. . . Code of Civil Procedure section 1294, subdivision (a) makes an order denying a
petition
to compel arbitration appealable, an order granting a
motion
to compel arbitration is not appealable.”
(Kinecta Alternative Financial Solutions, Inc. v. Superior Court
(2012)
Code of Civil Procedure section 1281.2, subdivision (c), provides that “[i]f the court determines that a party to the arbitration is also a party to litigation in a pending court action or special proceeding with a third party,” the trial court “may refuse to enforce the arbitration agreement and may order intervention or joinder of all parties in a single action or special proceeding.”
Carmichael Care’s recitation of the procedural history of this case in its opening brief asserts the trial court “refused to provide a statement of decision.” However, Carmichael Care does not develop any argument on the point. Accordingly, we decline to address this issue.
(In re S.C.
(2006)
As noted in our recitation of the factual and procedural history of this case, Edward’s stroke occurred in 2008—after which he lived independently at home with Judy and executed what defendants do not dispute was a valid VA advance directive.
Our conclusion that Judy did not have authority to sign the arbitration agreements for Edward and that she did not sign them on her own behalf obviates the need to consider whether the trial court properly exercised its discretion under Code of Civil Procedure section 1281.2, subdivision (c), to adjudicate the arbitrable and nonarbitrable claims in order to avoid the possibility of inconsistent rulings. We also express no opinion on defendants’ claims that Code of Civil Procedure section 1281.2, subdivision (c), is preempted by the Federal Arbitration Act. So too, we decline to address defendants’ arguments that the arbitration agreements were not unconscionable or oppressive.