Holley v. Silverado Senior Living Management - Case Brief

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Holley v. Silverado Senior Living Management

Case Number: G058576

Court: Cal. Ct. App.

Date Filed: 2020-08-07

Case Brief – Holley v. Silverado Senior Living Management

Court: COURT OF APPEAL OF THE STATE OF CALIFORNIA
Date: 2025-09-05
Case Number: G058576
Disposition: The order denying the motion to compel arbitration is affirmed. The Holleys are entitled to their costs on appeal.

Holding

The court held that the arbitration agreement signed by temporary conservators of the person was unenforceable because the conservators lacked authority to bind the conservatee to a contract relinquishing substantive rights without a prior adjudication of incapacity, and the agreement likewise could not be enforced against the conservators in their individual capacities.

Narrative

A senior‑living facility’s attempt to compel arbitration in a wrongful‑death and elder‑abuse suit was rebuffed by the Fourth District Court of Appeal, a decision that underscores the limits of conservators’ contractual power under California probate law.

Procedural backdrop. In November 2017 Elizabeth Holley, a 77‑year‑old with dementia, was admitted to Silverado Senior Living after her daughter Diane and son James were appointed temporary conservators of her person. Shortly after admission the Holleys signed a “Resident‑Community Arbitration Agreement” embedded in a stack of admission paperwork, without Elizabeth’s signature or an explicit explanation that the clause was a condition of care. Following Elizabeth’s death in February 2018, the Holleys sued Silverado for elder abuse, negligence, breach of contract, and wrongful death. Silverado moved to compel arbitration based on the signed agreement; the Orange County Superior Court denied the motion, finding the conservators lacked authority to bind Elizabeth. Silverado appealed.

Key factual issues. The arbitration clause required the “undersigned” to be either the resident or a duly authorized representative, and it expressly bound “personal representatives, executors, administrators, successors, guardians, heirs, and assigns.” Diane signed the form; James signed beneath her name. At the time of signing, the Holleys were temporary conservators of Elizabeth’s person only; a court order expanding their authority to include the estate was entered six days later, on October 30, after the arbitration agreement had already been executed.

Legal questions. (1) Whether a temporary conservator of the person may, absent a court determination of incapacity, enter into an arbitration agreement that waives the conservatee’s right to judicial redress; (2) Whether the arbitration clause can be enforced against the conservators in their individual capacities; and (3) Whether the Federal Arbitration Act (FAA) governs the dispute.

Court’s analysis. The appellate panel reaffirmed California’s strong public‑policy favoring arbitration but emphasized that arbitration is a matter of consent, not coercion. The burden to prove a valid agreement rests on the party seeking to compel arbitration. Applying the substantial‑evidence standard to the trial court’s factual findings, the court concluded that the record did not show the Holleys possessed the requisite authority.

The court distinguished Hutcheson v. Eskaton FountainWood Lodge (17 Cal.App.5th 937) and Garrison v. Superior Court (132 Cal.App.4th 253), which upheld arbitration clauses executed by health‑care powers of attorney. Those cases involved permanent agents with expressly delegated health‑care decision authority, not temporary conservators whose statutory duties are circumscribed. Under Probate Code §§ 2350‑2361, a temporary conservator of the person may arrange immediate care but must avoid long‑term commitments that could wait for a general conservator’s appointment. The arbitration agreement, which irrevocably surrendered the right to judicial relief, constituted a long‑term decision beyond the temporary conservator’s scope.

Moreover, Probate Code § 2354 requires a conservatee’s consent to medical treatment unless adjudicated lacking capacity; absent such adjudication, a conservator’s consent alone is insufficient. The court noted that Elizabeth’s capacity was not adjudicated until after the arbitration form was signed, rendering the Holleys’ authority to bind her nonexistent.

Regarding enforcement against the Holleys personally, the court found no evidence they intended to waive their own claims. The agreement’s language binding “heirs” and “personal representatives” could not operate where the underlying contract was void for lack of authority. Finally, the FAA was deemed irrelevant because there was no enforceable contract to invoke its provisions.

Disposition and costs. The appellate court affirmed the trial court’s denial of the motion to compel arbitration and awarded the Holleys their costs on appeal.

Implications. This decision clarifies that temporary conservators of the person cannot, without a court finding of incapacity, execute arbitration clauses that strip a conservatee of statutory protections. Practitioners should ensure that any arbitration provision in health‑care admissions is signed by a duly authorized agent—typically a permanent health‑care POA—or that a conservator obtains explicit court approval before waiving rights. The ruling also signals that blanket “heir” language will not rescue an otherwise invalid arbitration agreement. Unresolved questions remain about the precise line between permissible short‑term health‑care arrangements and prohibited long‑term contractual waivers under temporary conservatorships, a point likely to generate further litigation as senior‑care facilities continue to embed arbitration clauses in admission packets.

Referenced Statutes and Doctrines

  • Probate Code §§ 2350‑2361 – Powers and duties of a conservator of the person.
  • Probate Code § 2354 – Consent to medical treatment; limitation on conservator authority absent adjudication of incapacity.
  • Probate Code § 2355 – Requirement of court adjudication of incapacity for certain decisions.
  • Probate Code §§ 4671 (Health Care Decisions Law) & 4000 et seq. – Health‑care powers of attorney.
  • Federal Arbitration Act, 9 U.S.C. § 2 – Scope of enforceability of arbitration agreements.
  • California Public Policy Favoring Arbitration – Avila v. Southern California Specialty Care, Inc., 20 Cal.App.5th 835 (2018).
  • Standard of Review for Arbitration Motions – Laswell v. AG Seal Beach, LLC, 189 Cal.App.4th 1399 (2010).
  • Substantial‑Evidence Standard – McDermott Will & Emery LLP v. Superior Court, 10 Cal.App.5th 1083 (2017).

Key Cases Cited

  • Hutcheson v. Eskaton FountainWood Lodge, 17 Cal.App.5th 937 (2017).
  • Garrison v. Superior Court, 132 Cal.App.4th 253 (2005).
  • Avila v. Southern California Specialty Care, Inc., 20 Cal.App.5th 835 (2018).
  • Laswell v. AG Seal Beach, LLC, 189 Cal.App.4th 1399 (2010).
  • McDermott Will & Emery LLP v. Superior Court, 10 Cal.App.5th 1083 (2017).
  • Young v. Horizon West, Inc., 220 Cal.App.4th 1122 (2013).
  • Baker v. Osborne Development Corp., 159 Cal.App.4th 884 (2008).