Court of Appeal Voids Nursing Home Arbitration Clause Signed Without Patient's Authority

In September 2010, Marylin Young, then 88 years old, suffered a stroke and was transferred to Monterey Pines Skilled Nursing Facility in California. During her ten-day stay, she alleged that facility staff sexually assaulted her. Her daughter, Bobbi Young, had signed an arbitration agreement with the facility at the time of admission.

When Marylin Young filed suit against Horizon West, Inc. and its affiliated entities that operated Monterey Pines, the defendants moved to compel arbitration based on that agreement. The motion raised a fundamental question about who can waive a patient's right to a jury trial and under what authority.

The Santa Clara County Superior Court denied the motion, finding that Bobbi Young had no authority, actual or ostensible, to bind her mother to arbitration. Horizon West appealed. Craig Needham and Kirsten Fish of Needham Kepner and Fish represented Marylin Young at the Court of Appeal.

The Sixth District Court of Appeal affirmed the trial court in a published decision issued October 28, 2013 (220 Cal.App.4th 1122, docket H038736). The court rejected each theory defendants offered to save the agreement. Bobbi did not hold a valid power of attorney for healthcare decisions at the time she signed, and the court declined to find that executing an arbitration agreement constitutes a 'health care decision' within the meaning of the Healthcare Decisions Law. The court also rejected the facility's equitable estoppel argument, noting that Bobbi made no material misrepresentation that could have induced the facility to act differently.

The opinion became a frequently cited precedent in California nursing home arbitration litigation, addressing both the scope of healthcare agent authority and the limits of equitable estoppel. Subsequent courts and legal commentators have relied on Young v. Horizon West when evaluating whether family members signing admission paperwork can bind incapacitated residents to mandatory arbitration clauses.