A Durable Power of Attorney is an important document, but sometimes having one can cause problems.
A recent Florida court ruling scored a major win in the fight against elder abuse. The case established that a health care proxy does not have the authority to waive the right to jury trial and bind a person to a contract.
The case is Hugh Moen v. Bradenton Council on Aging LLC, where the defendants, the nursing home, filed motions to dismiss and to compel binding arbitration. The plaintiff, Moen, was the personal representative of the estate of Norma Silverthrone, appealed the order granting the motions to dismiss. The appeals court sided with the personal representative.
Background on The Case
Norma Silverthorne was admitted to a nursing home in 2013. Her daughter, Susan Moen, accepted a health care proxy designation on her mother’s behalf. Norma never executed a durable power of attorney in her daughter’s favor. Susan signed the nursing home’s admission agreement, which contained a “Voluntary Arbitration Agreement.”
The admission agreement defines a “legal representative” and a “responsible party.” The agreement defined a legal representative is a person “who, under independent legal authority, such as a court order has authority to act on the resident’s behalf.” This would be a person such as a legal guardian or a holder of a Durable Power of Attorney.
The agreement further defined a “responsible party.” A responsible party is one “who voluntarily agrees to honor certain specified obligations of the resident under this agreement without incurring any personal financial liability.” The agreement also said the nursing home could not allow a responsible party to sign the agreement for the resident unless the person has legal access to or physical control of the resident’s income or resources to pay for the care.
Susan signed the admission agreement as a legal representative. However, it was undisputed that when Susan signed these documents, her mother was not competent. Norma’s estate later sued the nursing home and alleged that her death was caused by injuries from improper care by the nursing home.
The issue then became was Norma bound by the agreement her daughter Susan signed on her behalf? The estate wanted to pursue the matter in court, while the nursing home argued it could only go to arbitration due to the agreement Susan signed for her mother.
Here Susan was only a health care proxy, and she did not have the legal rights to bind her mother to an arbitration clause because she did not have guardianship or a durable power of attorney powers. The court held that a health care proxy does not have authority to waive the right to a jury trial and bind a nursing home patient to an arbitration clause because the proxy can only make health care decisions.
What This Means For Estate Planning
This means that guardianships and Durable Power of Attorneys are much more important legal documents because they are needed to make any decision that is not health care related. Once a loved one becomes incompetent, it may be hard to make the best decisions for family members without the necessary powers in place.
When a person becomes incompetent, there are many decisions that must be made for the person. Someone will have to make the health care decisions for the person, and must also pay bills, debts, and manage accounts for the person.
For more information on how to obtain a guardianship or a durable power of attorney contact the estate planning attorneys at The Law Office of David M. Goldman PLLC today.
You may also want to attend one of our workshops on how to Protect Your Stuff in 3 Easy Steps.