Diversicare of Meridian, LLC v. Shelton

• Decision Date: 15 February 2022
• Docket Number: 2020-CA-01362-COA
• Citation: 334 So.3d 487
• Parties: DIVERSICARE OF MERIDIAN, LLC d/b/a Diversicare of Meridian, Diversicare Leasing Company III, LLC, Diversicare Management Services Co., Diversicare Leasing Corp., Chrissy Alexander, Demetri Gordon and Oshaugnessyz McCormick, Appellants v. Linda Dianne SHELTON, individually and as Administratrix of the Estate of Sarah Elizabeth Hamrick, Deceased, for and on Behalf of the Estate and Wrongful Death Beneficiaries of Sarah Elizabeth Hamrick, Deceased, Appellee
• Court: Mississippi Court of Appeals

334 So.3d 487

DIVERSICARE OF MERIDIAN, LLC d/b/a Diversicare of Meridian, Diversicare Leasing Company III, LLC, Diversicare Management Services Co., Diversicare Leasing Corp., Chrissy Alexander, Demetri Gordon and Oshaugnessyz McCormick, Appellants

v.Linda Dianne SHELTON, individually and as Administratrix of the Estate of Sarah Elizabeth Hamrick, Deceased, for and on Behalf of the Estate and Wrongful Death Beneficiaries of Sarah Elizabeth Hamrick, Deceased, Appellee

NO. 2020-CA-01362-COA

Court of Appeals of Mississippi.

February 15, 2022

ATTORNEY FOR APPELLANTS: MARGARET SAMS GRATZ

ATTORNEY FOR APPELLEE: WILLIAM C. HAMMACK

BEFORE WILSON, P.J., McDONALD AND LAWRENCE, JJ.

McDONALD, J., FOR THE COURT:

¶1. Diversicare of Meridian LLC and other appellants¹ (collectively referred to as "Diversicare") appeal the Lauderdale County Circuit Court's denial of their motion to compel arbitration in a wrongful death nursing-home case. Diversicare contends that the circuit court erred in applying Mississippi's Uniform Health-Care Decisions Act, Mississippi Code Annotated section 41-41-211(1) (Rev. 2018), when the deceased had full mental capacity and directed her daughter to sign admission papers that included an arbitration agreement, which was not required for admission. Diversicare also argues that the circuit court erroneously required a written instrument appointing the daughter to be the mother's agent. Considering the facts, relevant precedent, and the arguments of counsel, we find that the circuit court erred in requiring a written instrument to establish the daughter's agency but correctly held that the arbitration agreement was unenforceable, albeit for different reasons. Accordingly, we affirm and remand for further proceedings.

Facts

¶2. Eighty-one-year-old Sarah Elizabeth Hamrick was admitted to Anderson Regional Medical Center for treatment of injuries resulting from a fall. She was discharged to Diversicare for rehabilitative care on August 12, 2019.

¶3. Hamrick's daughter, Linda Diane Shelton, accompanied Hamrick when she was admitted to Diversicare on August 13, 2019. According to an affidavit Shelton submitted, Hamrick was in a wheelchair, very uncomfortable, and nauseated at the time. Hamrick was not in a condition to complete or understand the documents given to her, which already had been filled out. She repeatedly voiced a desire to get to a bed, and her daughter opined that Hamrick needed to resume the oxygen treatment she had been on at the hospital. Hamrick told Diversicare's representative, Chrissy Alexander, that Shelton "could sign the documents" for her, and Hamrick was present when Shelton did. Shelton had no power of attorney, conservatorship, or guardianship order, nor did she have a written healthcare proxy authorizing her to make healthcare decisions for Hamrick. No physician had determined that Hamrick lacked the mental capacity either to sign the paperwork herself or to authorize her daughter to sign on her behalf. The parties agree that Hamrick was mentally competent. In her affidavit, Shelton further said that Diversicare's representative had the paperwork prepared and indicated to Shelton where signatures were needed. Shelton signed all the documents with her name, "Diane Shelton," not Hamrick's name, and with no language indicating she was Hamrick's legal representative. Diversicare did not contest any of the facts in Shelton's affidavit.

¶4. Among the documents Shelton signed was a "Resident Admission/Change Form," which included addresses and phone numbers of the resident and a secondary contact. The form lists Shelton as Hamrick's "Primary Contact & Financially Responsible Party." The form also contains three specific questions about Shelton's status:

The Primary Contact is the Resident Legal Representative as define on the reverse of this form: ___Yes ___No.

The Primary Contact is the Financially responsible Party as defined on the reverse of this form: ___Yes ___No.

The Primary Contact is responsible for the Health Care Decisions as defined on the reverse of this form: ___Yes ___No.

No blanks were checked.

¶5. Shelton also signed a ten-page "Admission Agreement," which contained eleven distinct sections. The Preamble to the agreement gives instructions about signing:

If you are able to do so, you must sign this Agreement in order to be admitted to this Center. If you are not able to sign this Agreement, your Legal Representative, who has been given authority by you to admit you to the Center, must sign it on your behalf. This Agreement will become effective on the day you are admitted to the Center regardless of the date you and/or your Legal Representative signs it. You are not required to sign any other document as a condition of admission to the Center .

(Emphasis added). The "parties to the agreement" were identified as "Diversicare of Mdn" and "Sarah Hamrick." At the end of the agreement, there was a signature line for the resident, which was left blank. Below that line was another one, which Shelton signed and which read, "by my signature, I represent that I am a person duly authorized by Resident by law to execute this Admission Agreement and that I accept its terms." Shelton signed "Diane Shelton (daughter)." Thereafter, the form notes that the facility required the submission of "all documents verifying the status of the Legal Representative" at the time of admission. Such documents included "power of attorney, durable power of attorney, healthcare proxy, guardianship appointment, conservator appointment." Shelton had no such documents; she had only verbal authorization by Hamrick to "sign the documents" for her.

¶6. Among the documents presented in the Appendix to the Admissions Agreement was a four-page arbitration agreement purportedly entered into between "Diversicare of Mdn" and "Sarah Hamack."² It was titled "Alternative Dispute Resolution Agreement" and specifically said, "This agreement is not a condition of admission to or continued residence in the center." The document also informed the signor that he or she could revoke the agreement by sending written notice to the nursing home within thirty days.

¶7. Shelton later claimed that she did not have authority to sign the arbitration agreement. In her affidavit, she said that she thought all the paperwork was required for admission and that the agreement and its potential effects were not explained to her; they were in a rush to get Hamrick into a room, so she did not have an opportunity to read all the documents. Although Shelton says she asked for copies of the paperwork to be able to review them and was told copies would be brought to the room, none were ever provided to her until after Hamrick's death.

¶8. Hamrick died two days later on August 15, 2019, while in Diversicare's facility. Shelton retained an attorney in October 2019, and on March 2, 2020, Shelton was appointed as the administratrix of Hamrick's estate. On March 16, 2020, her attorney sent a pre-suit notice of the family's claim for Hamrick's wrongful death to the Diversicare entities and other individuals she claimed were responsible. The notice included a copy of an August 29, 2019 investigative report prepared by the Mississippi Department of Human Services Center for Medicare and Medicaid Services, which noted deficiencies in the care rendered to Hamrick.

¶9. On June 2, 2020, Shelton individually and on behalf of the estate and other wrongful death beneficiaries of Hamrick, filed a wrongful death lawsuit in Lauderdale County Circuit Court. The defendants included Diversicare of Meridian LLC and related Diversicare legal entities,³ Chrissy Alexander, Paula Hazel, Demetri Gordon, Oshaughnessyz McCormick, unknown entities, and John Doe defendants. In her complaint, Shelton alleged that "when [she] present[ed] for admission, the Decedent was unable to comprehend and sign the documents the Diversicare Defendants required for a person to be admitted to the Facility." Shelton further alleged Diversicare's employees breached the standard of care owed to Hamrick by, inter alia, failing to maintain Hamrick's oxygen levels, failing to call a "full code" and administer CPR, and delaying to call emergency responders—proximately causing Hamrick's death.

¶10. On July 10, 2020, Diversicare filed a motion to dismiss the proceeding and to compel arbitration. Diversicare argued that Hamrick, who was mentally competent, gave Shelton express authority to sign the admission paperwork, including the arbitration agreement. Diversicare attached several documents, including the arbitration agreement, but Diversicare filed no affidavit to provide any additional facts of the events on that day that might have differed or supplemented the facts contained in Shelton's affidavit.

¶11. Shelton opposed the motion to dismiss and compel, arguing that she lacked the legal authority to sign for Hamrick under the Uniform Health-Care Decisions Act, Mississippi Code Annotated sections 41-41-201 to -229 (Rev. 2018). Additionally, Shelton argued that Diversicare had waived or was estopped from enforcing the agreement and that the arbitration agreement was procedurally unconscionable.

¶12. On September 1, 2020, the circuit court heard argument on Diversicare's motion, and on September 3, 2020, the court issued an order denying the motion to dismiss and compel arbitration. The circuit court reasoned that the arbitration agreement was not signed by Hamrick but instead by a person acting as her surrogate. Under Mississippi Code Annotated section 41-41-211(1), a surrogate may make a health-care decision for a patient only if that patient's primary physician has determined that the patient lacks capacity and no agent or guardian has been appointed. The circuit court said there was no evidence of a determination of Hamrick's incapacity by her primary physician, and there was no instrument appointing Shelton to act as her agent. Moreover, the circuit court found that Shelton had no written authority to sign...