Arbitration not automatic under AHCCA agreements

A woman who checked her sister into a Florence nursing home had the legal authority to sign a contract that would make her financially liable for the care she received—but didn’t have the authority to bind her sister to an arbitration agreement with the same nursing home, the South Carolina Supreme Court ruled March 12.

Ann Coleman brought her sister, Mary Brinson, to Faith Health Care Center in 2006. Because Brinson was unable to consent to treatment when she was admitted, Coleman signed two documents on her behalf pursuant to the state’s Adult Heath Care Consent Act—an admission and financial agreement, and an agreement for arbitration.

Brinson died in 2007. Coleman, as her next of kin, brought wrongful death and survival actions against the nursing home. The nursing home moved to compel arbitration, citing the agreement that Coleman had signed. Coleman opposed the motion, arguing that the law did not allow her to sign away her sister’s right to sue the nursing home in court.

A majority of the Supreme Court agreed, finding that the AHCCA gives a surrogate two kinds of authority: to consent to providing or withholding medical care, and to obligate the patient to pay for that care. The arbitration agreement, which was not required for admission, concerned neither health care nor payment, the court said, but instead provided an optional method for dispute resolution.

The nursing home had also argued that even if Coleman could not legally bind her sister to the arbitration agreement, Coleman herself should still be bound by its terms as a matter of fairness. The nursing home argued that under state law, the admission agreement and the arbitration agreement were merged and the courts should interpret them as a single contract.

Justice Costa Pleicones, writing for the majority, said that ordinarily, that would be the correct reasoning. However, the court noted that the admission agreement contained a clause providing that its terms constituted the entirety of the parties’ agreement and superseded any other agreements between the parties. The court said that clause—plus the fact that the arbitration agreement could be rescinded within 30 days while the admission agreement could not—meant that the two agreements were separate contracts that could not be legally merged.

Chief Justice Jean Hoefer Toal dissented, arguing that there was “an inherent inconsistency between reading the statutes more broadly than the literal language to allow a surrogate to bind a patient financially to a healthcare contract, but also reading the language narrowly to prohibit the surrogate from binding the patient to arbitration of the same contract.” Toal also argued that the ruling would encourage nursing homes to insert adhesive arbitration clauses into their contracts instead of letting patients enter into such agreements voluntarily and that it conflicted with the U.S. Supreme Court’s directives concerning arbitration clauses.

The 12-page decision is Coleman v. Mariner Health Care, Inc. (Lawyers Weekly No. 010-023-14). The full text of the opinion is available online at sclawyersweekly.com.

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