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Power of Attorney ruled not binding in nursing home abuse case

Hospital Patient

In Kindred Healthcare, Inc. v. Cash, a woman appointed another individual as her attorney-in-fact in 1999. As part of the process, the woman executed a notarized power of attorney. In 2006, the woman entered a nursing home. At the time of her admission, the woman’s appointee signed a number of documents on her behalf, including an optional agreement to resolve any future disputes with the facility through binding arbitration. The alternative dispute resolution agreement stated that it was not a precondition to entering the skilled nursing facility, and it could be revoked within 30 days. Neither the woman nor her attorney-in-fact provided the nursing home with notice of revocation at any time.

After the nursing home resident passed away, the woman’s daughter was named administratrix of her estate. The woman’s daughter filed a personal injury and wrongful death lawsuit alleging nursing home abuse in Graves County Circuit Court against the skilled nursing facility. In her complaint, the administratrix accused the nursing home of caring for her mother in a negligent manner that ultimately caused her death. In response, the nursing home filed a motion to compel arbitration based on the optional agreement that was signed by the woman’s attorney-in-fact. Relying on Kentucky Supreme Court precedent in Donna Ping, Executrix of the estate of Alma Calhoun Duncan vs. Beverly Enterprises Inc., the Graves County Circuit Court denied the facility’s motion. The nursing home then filed an interlocutory appeal with the Kentucky Court of Appeals.

The appellate court first stated that a party seeking to enforce a written agreement to arbitrate has the burden of demonstrating it was valid under both the Kentucky Uniform Arbitration Act and the Federal Arbitration Act. The court next said the two laws are normally interpreted in a consistent manner. In addition, the court stated that an arbitration agreement is subject to state contract law. The appeals court added that the Federal Arbitration Act will not typically preempt Kentucky contract principles even though the Act generally favors arbitration agreements.

Next, the Kentucky Court of Appeals examined the language included in the power of attorney document that was executed by the deceased woman. The court said that, since a “power of attorney is a form of agency,” the scope of authority granted to the  resident’s attorney-in-fact must be expressly stated in the document. The appellate court then stated Kentucky Supreme Court precedent requires a court to construe the authority granted under a power of attorney in relation to those types of transactions referenced in the text of the document. According to the court, the power of attorney that was signed by the decedent related primarily to her property, financial transactions, and medical decisions.

Although the skilled nursing facility attempted to distinguish the case from Ping, the Kentucky Court of Appeals held that the power of attorney at issue was not sufficiently broad to allow the deceased woman’s agent to bind her to an optional alternative dispute resolution agreement. Finally, the appellate court affirmed the Graves County Circuit Court’s decision denying the nursing home’s motion to compel arbitration.

If you or someone close to you suffered abuse or neglect while residing in a Kentucky nursing home, you should contact an experienced Bowling Green personal injury lawyer to discuss your rights. To schedule a free confidential consultation with one of our attorneys, call English, Lucas, Priest & Owsley, LLP at (270) 781-6500 today or contact us online.

Additional Resources:

Kindred Healthcare, Inc. v. Cash, Ky: Court of Appeals 2014

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Photo Credit: PennyWise, MorgueFile