The Kentucky Supreme Court recently addressed arbitration agreements in the nursing home context. See Extendicare Homes, Inc. v. Whisman, 2013-SC-000426 (Ky. Sept. 24, 2015) (click here for a copy of the decision). The court made two key points in its decision. First, wrongful death beneficiaries are generally not bound by the arbitration agreements entered into by a decedent. The court explained that a wrongful death claim represents a unique property right that belongs only to the beneficiaries, and decedents have no authority to dispose of such rights.
Second, the court addressed the common fact pattern where an attorney-in-fact signs the paperwork, including an arbitration agreement, for the admission of a resident into a nursing home. The court found that “fundamental constitutional rights must be unambiguously expressed in the text of the power-of-attorney document in order for that authority to be vested in the attorney-in-fact.” In other words, broad, general, universal grants of authority in a power-of-attorney document, such as authority “to transact, handle, and dispose of all matters affecting me and/or my estate in any possible way,” or “to do and perform for me in my name all that I might if present,” are NOT sufficient to give authority to an agent to enter into a binding arbitration agreement on behalf of a principal. The court found that in this context of a nursing home arbitration agreement signed by an attorney-in-fact, the power-of-attorney document must expressly provide the agent with authority to waive the fundamental right to an adjudication by a judge or jury.