Corum v. Roswell Senior Living Llc

• Decision Date: 15 October 2010
• Docket Number: No. 28,314.,28,314.
• Citation: 2010 -NMCA- 105,149 N.M. 287,248 P.3d 329
• Parties: Sherri CORUM, as Personal Representative of the wrongful death beneficiaries of Mary Jo Hebert, deceased, Plaintiff–Appellee,v.ROSWELL SENIOR LIVING, LLC, d/b/a Roswell Senior Living Community, a/k/a La Villa, Sunwest Management, Inc., Jon M. Harder, Darryl E. Fisher, Divine Investments, LLC, The Fisher Joint Revocable Trust, Diedra J. Duvall, Administrator, and Does 1 through 100, Defendants–Appellants.
• Court: Court of Appeals of New Mexico

149 N.M. 287

248 P.3d 329

2010 -NMCA- 105

Sherri CORUM, as Personal Representative of the wrongful death beneficiaries of Mary Jo Hebert, deceased, Plaintiff–Appellee,

v.ROSWELL SENIOR LIVING, LLC, d/b/a Roswell Senior Living Community, a/k/a La Villa, Sunwest Management, Inc., Jon M. Harder, Darryl E. Fisher, Divine Investments, LLC, The Fisher Joint Revocable Trust, Diedra J. Duvall, Administrator, and Does 1 through 100, Defendants–Appellants.

No. 28,314.

Court of Appeals of New Mexico.

July 29, 2010.Certiorari Denied, Oct. 15, 2010, No. 32,612.

Harvey Law Firm, LLC, Dusti D. Harvey, Feliz A. Rael, Jennifer J. Foote, Albuquerque, NM, for Appellee.Keleher & McLeod, P.A., Thomas C. Bird, Spring V. Schofield, Kathleen M. Wilson, Albuquerque, NM, for Appellants.AARP Foundation, Kelly Bagby, Washington, DC, Doerr & Knudson P.A., Randy Knudson, Portales, NM, for Amicus Curiae, AARP.

OPINION

ROBLES, Judge.

{1} Roswell Senior Living, LLC, d/b/a Roswell Senior Living Community, a/k/a La Villa, Sunwest Management, Inc., and other investors (collectively, Defendants) appeal from the district court's denial of a motion to compel arbitration. On appeal, we are asked to clarify the authority of surrogacy within the context of the New Mexico Health–Care Decisions Act (the Act), NMSA 1978, §§ 24–7A–1 to –18 (1995, as amended through 2009). In this case, a purported surrogate for a person admitted into the Roswell Senior Living Community signed an admission agreement that contained an arbitration clause. On appeal, the parties take opposite positions as to whether the purported surrogate had authority to agree to arbitration. They argue over whether the agreement to arbitrate is a health-care decision that, under the Act, surrogates are permitted to make. We conclude that the critical, first-step requirement or condition precedent to admission was not followed, and because proof of that first step must be established before we can venture into whether a surrogate's agreement to arbitrate was a permitted health-care decision, we do not discuss whether a surrogate has the authority to enter an agreement to arbitrate. That first, critical, and essential requirement or condition precedent is whether the person admitted to the facility was admitted based on conclusions of two physicians in regard to the capacity of the person admitted. In addition, a second requirement is that, if there exists an individual with the express power to make health-care decisions on behalf of a principal, there must be a showing of that individual's approval or unavailability before a surrogate may make healthcare decisions. We hold that there is no showing in the record that either of the two foregoing requirements were satisfied. We also address Defendants' final contention that the district court applied special scrutiny to the agreement to arbitrate, which is not allowed by the Federal Arbitration Act. Upon review, we do not come to the conclusion that the district court applied special scrutiny. We therefore affirm the district court's denial of the motion to compel.

I. BACKGROUND

{2} In December 2003, Mary Jo Hebert executed a two-part power of attorney titled “DURABLE FINANCIAL & MEDICAL POWER OF ATTORNEY,” in which Article I set forth financial powers granted, and Article II set forth medical powers granted. Both sections became effective immediately upon signing and designated Hebert's daughter, Sherri Lynn Corum, as attorney-in-fact. On March 15, 2006, Hebert was admitted into Defendants' nursing home facility, La Villa, by her husband, Edward Hebert (Husband). At the time, Husband had no written authority designating him as an agent with power of attorney, guardian, or designation as a surrogate. Husband signed La Villa's “Assisted Living Admission Agreement” in the areas provided, which were titled “Responsible Party” and as “Guarantor.” The document stated:

[T]he term “Responsible Party” shall have the same meaning as “agent,” “concerned person” and “surrogate decision maker” under New Mexico law and means an agent under a valid power of attorney or designated in writing by the Resident; a legally appointed guardian; or an executor, executrix, administrator or administratrix of the estate of the deceased Resident.

(Emphasis omitted.) The parties are in agreement that, on the day of admission to La Villa, Hebert lacked capacity to enter the agreement for herself. On June 4, 2007, Corum filed a complaint against Defendants on behalf of Hebert, alleging wrongful death, negligence, misrepresentation, and violation of the Unfair Trade Practices Act. Defendants responded by requesting that the district court stay the proceedings and compel arbitration. Attached to their motion to compel, Defendants supplied the court with an affidavit of La Villa's administrator, which stated that, on the day Husband signed the agreement, the administrator attempted to call Corum, but was unsuccessful. Following a hearing on the motion, the district court denied Defendants' motion, finding that Husband did not have the power to enter the arbitration agreement.

II. DISCUSSION

{3} “We apply a de novo standard of review [from a lower] court's denial of a motion to compel arbitration.” Cordova v. World Fin. Corp. of N.M., 2009–NMSC–021, ¶ 11, 146 N.M. 256, 208 P.3d 901; Medina v. Holguin, 2008–NMCA–161, ¶ 7, 145 N.M. 303, 197 P.3d 1085. The question of whether a valid contract to arbitrate a dispute exists is a question of contract law. DeArmond v. Halliburton Energy Servs., Inc., 2003–NMCA–148, ¶ 9, 134 N.M. 630, 81 P.3d 573. The party attempting to compel arbitration carries the burden of demonstrating a valid arbitration agreement. See id.; Flores v. Evergreen at San Diego, LLC, 148 Cal.App.4th 581, 55 Cal.Rptr.3d 823, 826 (2007); Goliger v. AMS Props., Inc., 123 Cal.App.4th 374, 19 Cal.Rptr.3d 819, 820 (2004).

A. The Parties' Arguments Relating to Surrogacy

{4} Both parties allege that Husband was a surrogate. Defendants argue that regardless of Hebert's designation of Corum as attorney-in-fact, Husband had the authority as surrogate to sign the admission agreement and bind Hebert and, therefore, Corum, to the arbitration clause within the agreement. Corum contends that the arbitration clause within the admission agreement can be held as void as a matter of law without nullifying the rest of the admission agreement, that the clause is void because a surrogate only has power to make health-care decisions, and an agreement to arbitrate is not focused on health care. Corum notes that the admission agreement contains a severability clause that states “[i]f any term or provision of this Agreement proves to be invalid, illegal or unenforceable, the remainder of this Agreement shall remain in full force and effect.”

{5} The Act closely follows the Uniform Health–Care Decisions Act (the Uniform Act) approved in 1993 by the National Conference of Commissioners on Uniform State Laws. See Unif. Health–Care Decs. Act §§ 1 to 19 (1993); see also Protection & Advocacy Sys., Inc. v. Presbyterian Healthcare Servs., 1999–NMCA–122, ¶ 6, 128 N.M. 73, 989 P.2d 890. Our interpretation of the Act should effectuate the purpose of uniformity with other states that have likewise adopted the Uniform Act. See NMSA 1978, § 12–2A–18(B) (1997). Both parties in this appeal urge this Court to consider other jurisdictions that have interpreted the same or similar statute or have applied a rule that provides guidance in similar situations. See NMSA 1978, § 12–2A–20(B)(1), (2) (1997) (stating that as an aide to construction, courts may consider other jurisdictions' interpretations of uniform acts or same or similar statutes). Statutory interpretation “should begin with an examination of the statute's language, which is the primary indicator of legislative intent [.]” Gonzales v. State Pub. Employees Ret. Ass'n, 2009–NMCA–109, ¶ 13, 147 N.M. 201, 218 P.3d 1249 (internal quotation marks and citation omitted). “In construing a statute, our charge is to determine and give effect to the Legislature's intent.” Marbob Energy Corp. v. N.M. Oil Conservation Comm'n, 2009–NMSC–013, ¶ 9, 146 N.M. 24, 206 P.3d 135. The plain meaning rule requires a court to give effect to the statute's language and refrain from further interpretation when the language is clear and unambiguous. U.S. Xpress, Inc. v. State ex rel. N.M. Taxation & Revenue Dep't, 2006–NMSC–017, ¶ 11, 139 N.M. 589, 136 P.3d 999. “If, however, the language of the statute is ambiguous, we must interpret the statute, and determine legislative intent.” Hanson v. Turney, 2004–NMCA–069, ¶ 7, 136 N.M. 1, 94 P.3d 1.

{6} In New Mexico,

[a] surrogate may make a health-care decision for a patient who is an adult or emancipated minor if the patient has been determined according to the provisions of Section 24–7A–11 ... to lack capacity and no agent or guardian has been appointed or the agent or guardian is not reasonably available.

Section 24–7A–5(A). A “surrogate” is defined as “an individual, other than a patient's agent or guardian, authorized under the [Uniform Act] to make a health-care decision for the patient.” Section 24–7A–1(V). A surrogate may be created in one of two ways. First, a principal may designate an individual as a surrogate “by personally informing the supervising health-care provider.” Section 24–7A–5(B). Second, the statute also provides that

[i]n the absence of a designation or if the designee is not reasonably available, any member of the following classes of the patient's family who is reasonably available, in descending order of priority, may act as surrogate:

(1) the spouse, unless legally separated or unless there is a pending petition for annulment, divorce, dissolution of marriage or legal separation;

(2) an individual in a long-term relationship of indefinite duration with the patient in which the individual has demonstrated an actual commitment to the patient similar to the commitment of a spouse and...