Lujan v. Life Care Centers of America, No. 08CA2367.

• Decision Date: 25 November 2009
• Docket Number: No. 08CA2367.
• Citation: 222 P.3d 970
• Parties: Kathryn LUJAN, individually, and the Estate of Estella O. Lujan, through Kathryn Lujan as putative representative, Plaintiffs-Appellees and Cross-Appellants, v. LIFE CARE CENTERS OF AMERICA, a Tennessee corporation, d/b/a Evergreen Nursing Home, Defendant-Appellant and Cross-Appellee.
• Court: Colorado Court of Appeals

222 P.3d 970

Kathryn LUJAN, individually, and the Estate of Estella O. Lujan, through Kathryn Lujan as putative representative, Plaintiffs-Appellees and Cross-Appellants, v. LIFE CARE CENTERS OF AMERICA, a Tennessee corporation, d/b/a Evergreen Nursing Home, Defendant-Appellant and Cross-Appellee.

No. 08CA2367.

Colorado Court of Appeals, Div. V.

November 25, 2009.

Law Office of John Robert Holland, P.C., John Robert Holland, Anna Holland-Edwards, Erica Tick Grossman, Denver, Colorado; Law Firm of Portales & Associates, P.C., R.E. Chips Portales, Joseph Oliva, Denver, Colorado, for Plaintiffs-Appellees and Cross-Appellants.

Kennedy Childs & Fogg, P.C., Barbara Glogiewicz, Ronald Nemirow, Denver, Colorado, for Defendant-Appellant and Cross-Appellee.

Opinion by Judge GABRIEL.

Life Care Centers of America (Life Care) appeals the district court's order denying its motion to compel arbitration. As a matter of first impression in Colorado, we hold that a health care proxy decision-maker (health care proxy) does not have authority to enter into arbitration agreements for incapacitated patients. Accordingly, we affirm.

I. Background

Estella O. Lujan (Mrs. Lujan) was first admitted to a Life Care facility, Evergreen Nursing Home, on November 8, 2005. Ten days later, her physician signed a "Physician's Statement to Initiate Health Care Proxy," which stated that Mrs. Lujan lacked decision-making capacity due to dementia and that the physician would contact family members and other interested persons to advise them of their option to designate a health care proxy.

Thereafter, Mrs. Lujan left Evergreen Nursing Home for a period of time. She was readmitted, however, on October 18, 2006. At that time, her son, Alvin Lujan, purporting to act as Mrs. Lujan's "legal representative," completed the admissions paper work, which included an agreement to arbitrate disputes arising out of or in any way related or connected to Mrs. Lujan's stay and care provided at the facility. Alvin Lujan did not hold any form of power of attorney for Mrs. Lujan, nor was he appointed by any court to act as a conservator or guardian for her.

Mrs. Lujan died on October 21, 2006.

Subsequently, Kathryn Lujan, who is Mrs. Lujan's daughter, and Mrs. Lujan's estate (collectively, plaintiffs) filed a complaint against Life Care, asserting claims for (1) wrongful death, including felonious killing; (2) violations of the Colorado Consumer Protection Act, §§ 6-1-101 to -1120, C.R.S.2009; (3) outrageous conduct; and (4) declaratory relief, seeking a declaration that this action is not subject to arbitration because there was no valid arbitration agreement.

Life Care moved to stay the proceedings and compel arbitration of plaintiffs' claims. Plaintiffs opposed the motion and requested an evidentiary hearing. In a detailed written order, the district court denied Life Care's motion and deemed plaintiffs' request for an evidentiary hearing moot.

Life Care now appeals, and plaintiffs conditionally cross-appeal.

II. Standard of Review

An order denying a motion to compel arbitration is immediately appealable. § 13-22-228(1)(a), C.R.S.2009. We review de novo the district court's decision on a motion to compel arbitration, employing the same legal standards that the district court employed. Moffett v. Life Care Centers, 187 P.3d 1140, 1143 (Colo.App.2008) (Moffett I), aff'd, 219 P.3d 1068 (Colo.2009) (Moffett II).

In considering a motion to compel arbitration, the district court must first determine whether a valid agreement to arbitrate exists between the parties to the action. Id. The court may properly refuse to compel arbitration only when there is no valid agreement to arbitrate or when the issue sought to be arbitrated is clearly beyond the scope of the arbitration provision. Id. Whether a valid agreement to arbitrate exists is a matter of law that we review de novo. Id.

III. Alvin Lujan's Authority to Execute the Arbitration Agreement

Sections 15-18.5-103 and 15-18.5-104, C.R.S.2009, provide for the selection of a health care proxy to make medical treatment decisions and health care benefit decisions on behalf of an incapacitated patient. Specifically, these provisions allow a health care proxy to act on behalf of another when

an adult patient's attending physician determines that such patient lacks the decisional capacity to provide informed consent to or refusal of medical treatment and no guardian with medical decision-making authority, agent appointed in a medical durable power of attorney, person designated as a designated beneficiary with the right to act as a proxy decision-maker ..., or other known person has the legal authority to provide such consent or refusal on the patient's behalf.

§ 15-18.5-103(1), C.R.S.2009.

Section 15-18.5-103 sets forth the procedure for the selection of a health care proxy. That section provides, in substance, that upon determining that an adult patient lacks decisional capacity to provide informed consent to or refuse medical treatment, the treatment provider must make reasonable efforts to notify the patient of the patient's lack of decisional capacity and to locate as many "interested persons" as practicable. § 15-18.5-103(3), C.R.S.2009. "Interested persons" include the patient's spouse, parents, adult children, siblings, grandchildren, and close friends. Id. The treatment provider must inform the interested persons that the patient lacks decisional capacity and that a health care proxy should be selected for the patient. Id. The interested persons must then make reasonable efforts to reach a consensus as to who among them shall make medical treatment decisions on behalf of the patient. § 15-18.5-103(4)(a), C.R.S.2009. The person selected to act as the patient's health care proxy should be the person who has a close relationship with the patient and who is most likely to be currently informed of the patient's wishes regarding medical treatment decisions. Id. If any of the interested persons disagrees with the selection or the decision of the health care proxy, or if, after reasonable efforts, the interested persons are unable to reach a consensus as to who should act as the proxy, then any of them may seek guardianship in appropriate judicial proceedings. Id.

As the foregoing provisions make clear, a health care proxy is distinct from an attorney-in-fact under a power of attorney. "A power of attorney is an instrument by which a principal confers express authority on an agent to perform certain acts or kinds of acts on the principal's behalf." In re Trust of Franzen, 955 P.2d 1018, 1021 (Colo. 1998). Thus, the execution of a power of attorney creates a principal-agent relationship. Moffett II, 219 P.3d at 1074.

In contrast, a health care proxy is not selected by the patient. Nor does the patient have any role in determining what authority the health care proxy may exercise on his or her behalf. Rather, the proxy's authority is established and governed by statute. See §§ 15-18.5-103 & -104. Specifically, a properly selected health care proxy is authorized to make "medical treatment" decisions under § 15-18.5-103 and "health care benefit decisions" under § 15-18.5-104 on behalf of the incapacitated patient. Id.

The principal question before us is whether Alvin Lujan, purportedly acting as a health care proxy, had the authority to enter into an arbitration agreement on behalf of Mrs. Lujan. The district court concluded that an agreement to arbitrate is not a "health care benefit decision," and Life Care does not assert on appeal that this determination was error. Accordingly, the issue that we must decide is whether a decision to agree to arbitrate is a "medical treatment decision." We conclude as a matter of first impression in Colorado that it is not.

We review de novo issues of law involving statutory interpretation. Moffett I, 187 P.3d at 1143. Our primary goal in statutory interpretation is to find and give effect to legislative intent. Id. We first look to the language of the statute, giving words and phrases their plain and ordinary meanings. Id. When a court construes a statute, it should read and consider the statute as a whole and interpret it in a manner giving consistent, harmonious, and sensible effect to all its parts. Id. In doing so, a court should not interpret the statute so as to render any part of it either meaningless or absurd. Id. at 1144.

If the statute is unambiguous, we look no further. Id. If a statute is ambiguous, however, then we may consider prior law, legislative history, the consequences of a given construction, and the underlying purpose or policy of the statute. Id.

Pursuant to section 15-18.5-102, C.R.S. 2009, "medical treatment decision" is defined by reference to the definition set forth in section 15-14-505(7), C.R.S.2009, which applies to medical durable powers of attorney. That section defines "medical treatment" as

the provision, withholding, or withdrawal of any health care, medical procedure, including artificially provided nourishment and hydration, surgery, cardiopulmonary resuscitation, or service to maintain, diagnose, treat, or provide for a patient's physical or mental health or personal care.

Construing the plain and unambiguous language of this statutory definition, we conclude that an agreement to arbitrate is not a "medical treatment" decision.

As an initial matter, we fail to perceive how an agreement to arbitrate is a decision concerning "the provision, withholding, or withdrawal of any health care, medical procedure, ... or service to maintain, diagnose, treat, or provide for a patient's physical or mental health or personal care." Although we agree with Life Care that a decision to admit an incapacitated patient to a hospital or nursing home appears to fall within this definition, this does not mean that a decision to execute an arbitration agreement likewise falls within this definition, even if the arbitration agreement is included in...