Wyoming Supreme Court holds that Agent under Power of Attorney had authority to consent to arbitration in nursing home admission contract


It is not uncommon for nursing home admissions contracts to include provisions requiring the resident to consent to binding arbitration of any dispute. In this recent case in Wyoming, the question was the enforceability of an optional arbitration clause. The nursing home admission contract for Aletha Boyd was signed by her Agent under a General Durable Power of Attorney (DPOA) which expressly gave the Agent the actual authority to perform all acts “without limitation” on behalf of the principal (Boyd). In bold print, the contract stated that the resident had the option at that time of whether or not to consent to arbitration. The Agent consented to arbitration at the time of signing. 

Ms. Boyd died within two weeks of admission, allegedly due to negligent nursing care, and her Estate sued the facility, Kindred. Kindred filed a motion to compel arbitration pursuant to the signed admissions contract. The motion was denied by the trial court, but on appeal, the Wyoming Supreme Court reversed and ordered that the case be sent to arbitration. The Court’s rationale was that the authority to consent to arbitration was encompassed within the expressed broad power of the DPOA the arbitration clause was not unconscionable because it was optional, and the fact that the designated arbitrator was no longer in service did not void the contractual provision.  The case is called Kindred Healthcare v. Boyd. 

When selecting a nursing home, the applicant or their duly authorized Agent under POA or legal guardian is often faced with making an urgent decision, reviewing lengthy detailed contracts, and making arrangements for this move under time pressure. Senior care planning requires careful consideration of the rights and obligations of the parties involved, and legal advice is helpful to ensure that the individual and family understand what they will be facing. 

Call us for help  in senior care and estate planning, elder law and nursing home admissions issues …. 732-382-6070


Power of Attorney isn’t just a “form”

I’ve been thinking a lot about Power of Attorney issues lately because of a variety of problems my clients have encountered. A power of attorney is a document that reflects a relationship created between one person and another person in which the principal person appoints the other person as their “Agent and attorney-in-fact” with power to carry out different kinds of transactions for the principal.  This is a fiduciary relationship in which one person trusts the other to act on their behalf. The document spells out the limits of the powers given. New Jersey has a power of attorney statute, N.J.S.A. 2B:46-1 et seq. Many states have their own laws. A document signed in another state should be usable in New Jersey, but it may be met with confusion or suspicion by the business which is being asked to accept it.

One of my clients was trying to assist her family member, who at the time was a patient in New York. She found a New York power of attorney form on line. New York, unlike New Jersey, has a “statutory POA” in a prescribed form. The family member signed it in front of a notary. Later, the patient came to New Jersey. When my client took the document to the bank in NJ in order to have her name listed as “POA” to write checks, the bank refused to accept it because it turned out the form was a very old form that had been replaced by the State of New York some years ago, so it wasn’t valid on the day it was signed.

In another situation, the agent showed me a power of attorney which allowed banking transactions and sale of real estate, but that was all. He didn’t have authority to hire people for her, sign contracts, deal with her annuities and stocks, and many other tasks.

There are also cases where the principal signs a banking power of attorney on a form provided by their bank, which lists the account numbers. Well that authorization isn’t good for anything other than transactions on the listed accounts.

Other clients have brought in powers of attorney that require two agents to act together, yet one of them is out of state or is fighting with the other so now nothing can get done. Or the document isn’t notarized, which means it will not be accepted by the county clerk if the agent is selling the property. Of course, if the document doesn’t allow gift transfers, the agent cannot do gifting. Another issue is that some POAs are not “durable” — they only are usable while the principal is of sound mind. Or they may be “springing” and only become effective once the doctor certifies (to the satisfaction of the third party) that the principal is incapacitated.

If you want someone such as your child to be able to fully assist you with elder care planning when the time comes, it is vital that you sign a comprehensive general durable general power of attorney which is properly witnessed and notarized. The advice of an attorney will help ensure that you establish the POA relationship that will fully serve your needs.

Call us for advice on power of attorney, trusts, estate and elder care planning … 732-382-6070

Durable Power of Attorney Plus: How to make your POA better

Back on June 5, 2014 I posted a blog called Advance Directives for Lifestyle. My concept was that as we age, we have to think about how our life will be managed by a third party when we aren’t so capable any more, and we should build more instructions into our documents to guide our agents regarding our preferences. Now I have ideas on strengthening the Durable Power of Attorney to build in extra protections for the principal (the person who signs it).

You sign a Durable Power of Attorney while you are still cognizant, so that it is available should you ever become incapable. In signing a POA (or DPOA) you select someone as your agent – your fiduciary – and give them a wide range of powers. You can expand and limit those powers in the document you sign. NJ law doesn’t prescribe the form for the document (unlike some other states) but it does provide some rules. The statute is at NJSA 46:2B-8.1 to 19. For instance, a POA can only be revoked by the person who signed it (you) or by a court “for good cause.” . Also, the agent cannot give away your money (make gifts) unless the document expressly authorizes this to be done.http://law.justia.com/codes/new-jersey/2013/title-46

The POA relationship is based on trust. You select someone you trust who you feel will manage your money prudently for your benefit, and who will take necessary steps to safeguard your legal interest. You are giving them a tremendous amount of power.  Since a person’s overall risk of total disability is high statistically, it is forseeable that if the principal lives long enough, there will be a need for your agent to start acting under the power you’ve given them.

Unfortunately if family members don’t get along, lack of transparency breeds suspicion even when nothing is being done improperly. In other cases,  it does happen from time to time that the agent abuses their authority and leaves the principal in a bad neglected situation without support. So you may want to “hope for the best, but plan for the worst” by building in some protections. Here are my ideas:

Joint Co-Agents: This arrangement ensures joint action by your appointed agents, but can be unwieldy. Make sure your 2 agents really like each other and trust each other.

“Either or” co-agents: This arrangement is more convenient because either person can act on your behalf, but doesn’t require the knowledge of the other agent. Again, select the co-agents carefully.

I’m not a big fan of co-agency so I have other suggestions instead:

Mandatory reports: You can obligate your Agent to provide data, financial records, and other documentation to certain people either upon request or on a schedule.  That in turn would enable them to keep an eye on what is going on and could provide a basis for legal action to protect you.

Require consent of a third party in writing for certain major acts: You could require the agent to confer with and obtain consent from a 3rd party for certain specified decisions such as your relocation, selection of a facility, mortgaging or selling your house, or disposal of certain prized possessions. You would also want to mandate the disclosure of annual tax returns and financial records. You can give the 3rd party the right to sue to enforce these provisions. There is also a statute in NJ called the Protective Arrangements Act which could provide your 3rd party with standing to initiate a suit in these circumstances — NJSA 3B:12-1 to 12-3. .http://law.justia.com/codes/new-jersey/2013/title-3b/section-3b-12-1/

Require that the agent give certain people access to you personally: This can prevent you from becoming isolated in the event of a dispute between your agent and other members of your family or friends.

Your estate and fiduciary planning should be customized for your preferences. Call us to discuss the planning that you need… 732-382-6070.