Logan v. Country Oaks Partners

Case Number: B312967

Court: Cal. Ct. App.

Date Filed: 2022-08-18

Case Brief – Logan v. Country Oaks Partners

Court: COURT OF APPEAL OF THE STATE OF CALIFORNIA
Date: 2025-09-03
Case Number: B312967
Disposition: Order affirmed; plaintiff awarded costs on appeal.

Holding

The court held that a health‑care agent appointed under California’s Health Care Decisions Law does not possess the authority to bind the principal to an optional arbitration agreement, because such an agreement falls outside the statutory definition of a “health‑care decision” and is not contemplated by the language of the advance directive. Accordingly, the trial court’s denial of Country Oaks’ petition to compel arbitration was affirmed.

Narrative

Lead – When a skilled‑nursing facility attempted to force arbitration through a document signed by a patient’s health‑care agent, the California Court of Appeal drew a clear line: the power granted by an advance directive to make “health‑care decisions” does not extend to waiving a plaintiff’s right to a jury trial. The decision in Logan v. Country Oaks Partners (B312967) resolves a growing dispute over whether agents can bind incapacitated residents to arbitration clauses that are presented as optional but, in practice, are tied to admission.

Procedural backdrop – Charles Logan, a resident of Country Oaks Care Center, executed a California Medical Association Advance Directive in 2017, designating his nephew, Mark Harrod, as health‑care agent. The directive gave Harrod “full power and authority to make” health‑care decisions, including the ability to choose or reject health‑care facilities. After Logan’s primary physician determined he lacked capacity, Harrod signed both the facility’s admission agreement and a separate arbitration agreement on Logan’s behalf on November 29, 2019. Logan later sued Country Oaks and its owner, Sun Mar Management Services, alleging elder abuse, negligence, and violations of the Residents’ Bill of Rights. Country Oaks moved to compel arbitration; the trial court denied the motion, finding Harrod lacked authority to bind Logan to the arbitration clause. Country Oaks appealed.

Issues presented – The sole question on appeal was whether the authority conferred by Logan’s Advance Directive permitted Harrod to execute the optional arbitration agreement on Logan’s behalf. The answer hinged on the statutory construction of “health‑care decision” under Probate Code §§ 4600‑4805 and the interplay with general agency law.

Court’s analysis –

Statutory framework – The Federal Arbitration Act (9 U.S.C. § 2) declares arbitration agreements enforceable unless a legal or equitable defense exists, but California courts apply ordinary contract‑interpretation principles and require a valid, enforceable agreement (Valencia v. Smyth (2010) 185 Cal.App.4th 153). The burden of proof rests on the party seeking arbitration (Flores v. Evergreen at San Diego, LLC (2007) 148 Cal.App.4th 581).
Distinguishing Garrison – Country Oaks relied heavily on Garrison v. Superior Court (2005) 132 Cal.App.4th 253, where a daughter‑in‑fact signed arbitration agreements while admitting her mother to a care facility. The appellate court in Garrison held that the health‑care power of attorney’s authority to “make health‑care decisions” encompassed signing arbitration clauses “executed as part of the health‑care decision‑making process.” The Logan court rejected that broad reading.
Statutory definitions – Probate Code § 4617 defines a “health‑care decision” as a decision concerning the patient’s health, and § 4615 defines “health‑care” as any care, treatment, service, or procedure affecting a patient’s physical or mental condition. An arbitration agreement, which determines the forum for future disputes, does not affect the patient’s condition and therefore falls outside these definitions.
Agency limits – While § 4688 directs courts to apply general agency law to matters not covered by the Health Care Decisions Law, the court emphasized that Civil Code § 2319’s “proper and usual” authority must be grounded in the purpose of the agency. The purpose here was to make health‑care decisions, not to negotiate dispute‑resolution mechanisms. Moreover, the arbitration clause was optional and presented on a separate form, as required by Health & Safety Code § 1599.81 and 42 C.F.R. § 483.70(n)(1). The regulatory history shows that Congress and CMS intended to keep arbitration separate from admission decisions, reinforcing that it is not “necessary or proper” to the agent’s health‑care mandate.
Policy considerations – The court noted that allowing agents to waive a resident’s right to a jury trial would contravene public policy favoring informed consent and the statutory protection that arbitration cannot be a condition of admission (Health & Safety Code § 1599.81). The agency’s authority must be strictly construed to the language of the instrument (Tran v. Farmers Group, Inc. (2002) 104 Cal.App.4th 1202). The Advance Directive listed four specific powers, none of which addressed arbitration or dispute‑resolution.

Conclusion – The appellate court affirmed the trial court’s denial of the petition to compel arbitration, holding that Harrod lacked authority to bind Logan to the arbitration agreement. Logan was awarded costs on appeal.

Impact and unresolved questions – Logan clarifies that health‑care agents cannot be used to sidestep statutory protections against mandatory arbitration in long‑term‑care settings. The decision narrows the reach of Garrison, signaling that future courts will likely require explicit language in a power of attorney or advance directive before an agent may waive procedural rights. However, the ruling leaves open the question of whether a health‑care agent could be granted such authority by a separately executed “general” power of attorney that expressly includes dispute‑resolution powers. Practitioners drafting advance directives should consider incorporating a clear statement either permitting or prohibiting the execution of arbitration agreements, especially given the growing prevalence of optional arbitration clauses in health‑care contracts.

Referenced Statutes and Doctrines

Federal Arbitration Act, 9 U.S.C. § 2
California Probate Code §§ 4600‑4805 (Health Care Decisions Law) – §§ 4615, 4617, 4683, 4684, 4688
Civil Code § 2319 (Agency authority)
Health & Safety Code § 1599.81 (Arbitration clauses in admission contracts)
42 C.F.R. § 483.70(n)(1) (CMS rule prohibiting arbitration as a condition of admission)

Major Cases Cited

Valencia v. Smyth (2010) 185 Cal.App.4th 153 – contract interpretation of arbitration agreements
Flores v. Evergreen at San Diego, LLC (2007) 148 Cal.App.4th 581 – burden of proof to compel arbitration
Garrison v. Superior Court (2005) 132 Cal.App.4th 253 – prior holding on health‑care agents and arbitration
Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699 – “proper and usual” agency authority
Tran v. Farmers Group, Inc. (2002) 104 Cal.App.4th 1202 – strict construction of powers of attorney
Hogan v. Country Villa Health Services (2007) 148 Cal.App.4th 259 – follows Garrison (distinguished)
Young v. Horizon West, Inc. (2013) 220 Cal.App.4th 1122 – dicta questioning Garrison’s scope