Written authorization not required for arbitration agreements signed by family, court rules

The residents' children had oral authority to sign the arbitration agreements, but further court proceedings will decide if that is formal enough
The residents' children had oral authority to sign the arbitration agreements, but further court proceedings will decide if that is formal enough

Family members of nursing home residents do not need written power of attorney from the resident to sign the facility's arbitration agreement on their behalf under Mississippi law, a U.S. Circuit Court ruled on Monday.

The case involved two residents living in separate Golden LivingCenter facilities in northwest Mississippi, whose adult children had signed the facilities' arbitration agreements for them. One resident, Ida Roberson, died in 2011, five months after admission; the second, Pauline Tillman Wagner, died in 2012 after living in the facility for three years. Both residents' families sued the facilities for negligence, medical malpractice and wrongful death.

The nursing homes moved to compel arbitration based on the agreements the residents' children signed. Arbitration in both cases was denied by two federal courts since the residents' children did not have formal, written authority to sign the agreements on their mothers' behalf.

The U.S. Court of Appeals for the Fifth Circuit, which consolidated both cases for their similar issues, vacated the lower courts' rulings and remanded the cases for further proceedings. In his opinion, Chief Judge Carl E. Stewart said that while written authorization isn't necessary to grant power of attorney, both cases lacked evidence as to whether the residents' “orally conveyed” authority — or, in Roberson's case, lack of objection to the agreement's signing — was formal enough.

“There is no dispute that Roberson was in the room when the arbitration agreement was executed and that she did not say anything at the time,” Stewart wrote. “This evidence is insufficient to prove even that Roberson was aware of what her daughter was signing for her, much less that she was on notice that her silence would constitute ratification.”

Stewart's ruling also noted the fact that one of the agreements relied on the National Arbitration Forum was a “another serious obstacle” in the case, but declined to make a decision on the issue.