Calif. Court Holds Signing Agent Not Bound by Nursing Home Arbitration Agreement

On Friday, at the State of California Court of Appeals, Judge Terry O’Rourke authored an opinion for an appellate panel that clarified that California state law did not mandate that a signing agent for a now-deceased mentally incapacitated relative is bound to an arbitration agreement in a nursing home resident contract.

The underlying litigation involved the surviving spouse of a deceased victim of alleged nursing home negligence filing a wrongful death and elder abuse suit against the purported neglector, Silverado Senior Living. The defendant claimed that the plaintiff served as a signing agent for the contract, containing the arbitration clause at issue clearly made applicable to surviving spouses, that permitted the deceased spouse to reside in the defendant’s facility. As such, Silverado averred, California law compelled arbitration of the surviving spouse’s tort claims as the law treats a signing agent as the equivalent of a party to the arbitration agreement at issue, if the agreement is otherwise applicable to the agent. 

The appellate court disagreed and reversed the trial court’s order to compel arbitration of the plaintiff’s claims, in part. The court explained that arbitration agreements are binding for all claims agreed to by individuals in their “personal capacity.” As such, the plaintiff’s wrongful death claim, a personal claim capable of being brought only by the surviving spouse (or similarly situated relative), was not subject to arbitration. In a similar fashion, the elder abuse claim brought by the surviving spouse was subject to arbitration, not because the plaintiff agreed to such an arbitration in her “personal capacity” but because the contract was ambiguous on the question of who was bound to arbitration. It was unambiguous that the elder abuse claim only could be brought by the deceased spouse but also was assignable to the plaintiff, but it was ambiguous as to whether the law mandated arbitrability upon the assigning of the personal claim.

The appellate panel explained that California law required arbitrability of the claims in these ambiguous situations of contractual arbitrability, as California law resolved ambiguity in favor of arbitration. The court concluded by writing, “While we may question the wisdom of the parties’ choice, and decry the potential for inefficiency, delay, and conflicting rulings, the parties were free to choose their arbitration rules. The court will not rewrite their contract.”

The plaintiff was represented by Peck Law Group. Silverado was represented by Giovanniello Law Group.