Licata v. GGNSC Malden Dexter LLC.

• Decision Date: 13 January 2014
• Docket Number: SJC–11336.
• Citation: 2 N.E.3d 840,466 Mass. 793
• Parties: Salvatore LICATA, Jr., administrator, v. GGNSC MALDEN DEXTER LLC.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

466 Mass. 793

2 N.E.3d 840

Salvatore LICATA, Jr., administrator,¹

v.GGNSC MALDEN DEXTER LLC.

SJC–11336.

Supreme Judicial Court of Massachusetts,

Suffolk.

Submitted Sept. 4, 2013.

Decided Jan. 13, 2014.

Joseph M. Desmond (Thomas T. Worboys with him), Boston, for the defendant.

Michael R. Rezendes (Patricia J. Rezendes with him), Quincy, for the plaintiff.

Kelly Bagby, of the District of Columbia, & Rebecca J. Benson & Debra Silberstein, Boston, for National Academy of Elder Law Attorneys (Massachusetts Chapter) & another, amici curiae, submitted a brief.

Present: IRELAND, C.J., SPINA, CORDY, BOTSFORD, GANTS, DUFFLY, & LENK, JJ.

DUFFLY, J.

The plaintiff, Salvatore Licata, Jr., commenced this wrongful death action in the Superior Court as the administrator of the estate of his deceased mother, Rita Licata.² The defendant nursing home operator moved to compel arbitration based on an arbitration agreement that Salvatore signed purportedly on his mother's behalf. Because we conclude that Salvatore lacked authority to execute an arbitration agreement on Rita's behalf, and the arbitration agreement does not otherwise bind Rita's estate, we affirm the Superior Court judge's denial of the defendant's motion.³

Background. On August 19, 2008, the day after Rita was admitted to a medical center for evaluation of increased confusion, she signed a health care proxy designating Salvatore as her health care agent, pursuant to G.L. c. 201D, § 5, in the event of her incapacity to make health care decisions.

Three days later, on August 22, 2008, Rita was discharged from the medical center and transferred to a nursing facility operated by the defendant GGNSC Malden Dexter LLC (GGNSC). Rita's attending physician at the medical center authored a transfer report containing a three-page summary of Rita's condition upon entering and exiting the medical center and the treatment Rita received while a patient there. Upon her arrival at the nursing facility, Rita was taken to her room. The nursing facility's admissions director meanwhile brought Salvatore to a separate office, where Salvatore completed Rita's admissions documents. At some point during the admissions process, the admissions director went to Rita's room and informed her that Salvatore was signing papers for her and would discuss them with her later. However, “Rita did not appear to understand and did not respond.” Nothing in the record suggests that Salvatore or anyone else ever discussed any of the documents with Rita.

Among the admissions documents, Salvatore signed an admission agreement in the space provided for “Resident's Legal Representative,” and other documents in the spaces provided for Rita's “Representative” or “Responsible Party.” Salvatore also signed a separate document entitled “Resident and Facility Arbitration Agreement” (arbitration agreement), which provides, in relevant part:

“It is understood and agreed by Facility and Resident that any and all claims, disputes, and controversies ... arising out of, or in connection with, or relating in any way to the Admission Agreement or any service or health care provided by the Facility to the Resident shall be resolved exclusively by binding arbitration....”

The arbitration agreement explained that “execution of this Arbitration Agreement is not a precondition to admission or to the furnishing of services to the Resident by the Facility....” Salvatore signed the agreement in the space provided for the resident's “Authorized representative.” According to the terms of the agreement, by signing in this fashion, Salvatore certified that he was “duly authorized” to execute the agreement on Rita's behalf. Rita did not sign the arbitration agreement and, as the motion judge found, “never did or said anything which would constitute ratification of [Salvatore's] act of signing [it].”

On September 10, 2008, almost three weeks after her admission to the nursing facility, Rita's attending physician completed a one-page document entitled “Documentation of Resident Incapacity Pursuant to Massachusetts Health Care Proxy Act [G.L. c.] 201D,” reflecting his determination that Rita lacked the capacity to make health care decisions. The document provides that this determination was made “in accordance with accepted standards of medical judgment.” It also describes the cause of Rita's incapacity as “[d]ementia,” its nature as “Alzheimer's,” its extent as “moderate,” and its probable duration as “indefinite.”

Rita suffered personal injuries while a resident at GGNSC's nursing facility, resulting in her death on August 10, 2009. As administrator of Rita's estate, Salvatore filed a complaint in the Superior Court alleging that GGNSC caused Rita's injuries and wrongful death, and raising a number of additional claims for relief, among them negligence, breach of contract, and unfair or deceptive acts or practices under G.L. c. 93A. Relying on the arbitration agreement signed by Salvatore, GGNSC filed a motion to dismiss the complaint and to compel arbitration pursuant to the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1–16 (2012), and the Massachusetts Arbitration Act (MAA), G.L. c. 251 §§ 1–19. Because arbitration is a matter of contract, neither the FAA nor the MAA compels arbitration of claims brought by one who is not covered by an arbitration agreement. See Equal Employment Opportunity Comm'n v. Waffle House, Inc., 534 U.S. 279, 289, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002); Ladd v. Scudder Kemper Invs., Inc., 433 Mass. 240, 246, 741 N.E.2d 47 (2001). Accordingly, a judge of the Superior Court ordered that an evidentiary hearing take place to resolve factual questions relating to the issue of Salvatore's authority to sign the arbitration agreement on Rita's behalf.

Following the hearing, the motion judge concluded that although the arbitration agreement was not unconscionable, Salvatore lacked authority to execute the arbitration agreement on Rita's behalf. The judge therefore denied GGNSC's motion to dismiss and to compel arbitration. GGNSC took an interlocutory appeal as a matter of right pursuant to 9 U.S.C. § 16 and G.L. c. 251, § 18 ( a ). We transferred the case to this court on our own motion.

Discussion. GGNSC presents a number of arguments for enforcing the arbitration agreement, notwithstanding Rita's failure to sign it. We address each of these arguments in turn. In so doing, we review questions of law de novo and defer to the motion judge's findings of fact unless clearly erroneous. See Sheriff of Suffolk County v. Jail Officers & Employees of Suffolk County, 465 Mass. 584, 588, 990 N.E.2d 1042 (2013), and cases cited.

1. Authority under the health care proxy. GGNSC argues that Salvatore was authorized to sign the arbitration agreement as Rita's health care agent. Pursuant to the health care proxy statute, G.L. c. 201D, “[e]very competent adult shall have the right to appoint a health care agent by executing a health care proxy.” G.L. c. 201D, § 2. The proxy authorizes a health care agent to make “health care decisions” on the principal's behalf should the principal become incompetent. G.L. c. 201D, §§ 5, 6. The proxy must, among other things, state both the health care agent's authority to make health care decisions and that “the agent's authority shall become effective if it is determined pursuant to section six that the principal lacks capacity to make health care decisions.” G.L. c. 201D, § 4. In accordance with these requirements, Rita's health care proxy states:

“My Agent shall have the authority to make all health care decisions for me, including decisions about life-sustaining treatment ... if I am unable to make health care decisions myself. My Agent's authority becomes effective if my attending physician determines in writing that I lack the capacity to make or to communicate health care decisions.”

Although Rita's attending physician had not yet executed the “Documentation of Resident Incapacity Pursuant to Massachusetts Health Care Proxy Act [G.L. c.] 201D” at the time Salvatore signed the arbitration agreement, GGNSC maintains that the transfer report, prepared while Rita was still a patient at the medical center, activated the health care proxy because it included a diagnosis by her attending physician that Rita suffered from “dementia of the Alzheimer type” and noted that her “[i]nsight and judgment were chronically impaired.” GGNSC then contends that signing an arbitration agreement constitutes a health care decision within the authority of a health care agent.

Our decision in Johnson v. Kindred Healthcare, Inc., 466 Mass. 779, 781, 2 N.E.3d 849, 2014 WL 92187 (2014), disposes of GGNSC's claim by holding that “a health care agent's decision to enter into an arbitration agreement is not a health care decision as that term is defined and used in the health care proxy statute.” Nonetheless, because the question has been raised and the parties have fully briefed the issue whether a transfer report or similar medical record can activate a health care proxy, we address that question. See Royal–Globe Ins. Co. v. Craven, 411 Mass. 629, 636, 585 N.E.2d 315 (1992).

General Laws c. 201D, § 6, sets forth detailed requirements concerning the determination of incapacity for purposes of activating a health care proxy. The patient's attending physician must determine, and set forth in writing, that “the principal lacks the capacity to make or to communicate health care decisions.” G.L. c. 201D, § 6. As defined by G.L. c. 201D, § 1, lack of capacity means that the patient lacks “the ability to understand and appreciate the nature and consequences of health care decisions, including the benefits and risks of and alternatives to any proposed health care, and to reach an informed decision.” The attending physician must make this determination “according to accepted standards of medical judgment,” and if the patient's incapacity derives from mental illness or developmental disabilities, the physician either must...