Professional Negligence Law Reporter

A New Mexico appellate court held that a nursing home resident’s durable power of attorney did not grant her daughter the legal authority to bind her to an arbitration agreement.

Here, Fannie Deal had granted her daughter, Wisdoma Lifewarrior, a durable power of attorney to act on her behalf for financial and health care decisions. The POA did not authorize Lifewarrior to make decisions regarding claims and litigation but did authorize her to decide medical and nursing care issues, among other things. When Deal was admitted to Life Care Center, Lifewarrior signed an admission agreement, including an arbitration agreement, as Deal’s personal representative. After Deal’s death, Lifewarrior, as co-representative of Deal’s estate, sued the nursing home’s operator and others, alleging wrongful death, negligence, intentional misrepresentation, and violation of state law. The trial court denied the state’s motion to compel arbitration on the basis that the POA did not grant Lifewarrior the authority to enter into the arbitration agreement on her mother’s behalf.

Affirming, the appellate court found that any authority that Deal had granted to Lifewarrior resulted from the POA, which was limited in scope and deliberately and on its face did not authorize her to take actions regarding claims and litigation, including arbitration, the court said. Thus, the court concluded, the defendants’ reliance on the POA as the source of Lifewarrior’s authority to enter into the arbitration agreement was not reasonable. Citing case law, the court added that where a principal expressly withholds authority, a court will not override this decision. Consequently, the court held that the arbitration agreement here was unenforceable against Deal’s estate.

Citation: Harrison v. Farmington Operations, LLC, 2020 WL 3259521 (N.M. Ct. App. June 11, 2020).

Plaintiff counsel: Donna Oh and Mary Ellen Reilly, both of Phoenix.