Harrod v. Country Oaks Partners, LLC - Case Brief

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Case Number: S276545
Court: California Supreme Court
Date Filed: 2025‑08‑31

Holding

The court held that a health‑care agent’s authority under a power of attorney for health care does not extend to executing an optional, separate arbitration agreement; such an agreement is not a “health‑care decision” within the meaning of Probate Code §§ 4615‑4617, and therefore cannot be imposed on the principal.

Narrative

Lead

In a decision that sharpens the boundary between health‑care decision‑making and ancillary contract‑making, the California Supreme Court rejected the argument that a health‑care agent may bind an incapacitated patient to a stand‑alone arbitration clause. The ruling resolves a split among California appellate courts and provides a clear, statutory‑based rule for practitioners drafting and enforcing health‑care powers of attorney.

Procedural History

Logan Charles, a 77‑year‑old who suffered a femur fracture, was admitted to Country Oaks Care Center under a standard, state‑mandated admission agreement. Logan’s nephew, Mark Harrod, had been appointed health‑care agent by a durable power of attorney for health care executed on a California Medical Association form that expressly invoked the Health Care Decisions Law (Probate Code §§ 4600‑4629). While completing the admission paperwork, Harrod signed a second document—an optional arbitration agreement that the facility was required by Health & Safety Code § 1599.81 and 42 C.F.R. § 483.70 to present on a separate form and to make clear it was not a condition of admission.

After a month’s stay, Logan alleged negligence, elder abuse, and violations of Health & Safety Code § 1430(b). He sued Country Oaks Partners, LLC and Sun‑Mar Management Services, Inc., seeking a declaration that the arbitration agreement was unenforceable. The defendants moved to compel arbitration. The trial court denied the motion, holding that Harrod’s authority as a health‑care agent did not include the power to waive Logan’s right to a jury trial. The Court of Appeal affirmed. The defendants appealed, arguing that under Civil Code § 2319 an agent may perform any “proper and usual” act necessary to effectuate the purpose of the agency, and that signing the arbitration agreement was a proper and usual step in securing health‑care services.

Facts

  1. Statutory Framework – California’s Health Care Decisions Law (Probate Code §§ 4600‑4629) authorizes a principal to designate an agent to make “health‑care decisions” defined in § 4617(a) as (i) selection and discharge of health‑care providers and institutions; (ii) approval or disapproval of diagnostic tests, surgeries, and medication programs; and (iii) directions to provide, withhold, or withdraw artificial nutrition, hydration, and other forms of health care.

  2. Power of Attorney – Logan’s instrument, though not the statutory form in § 4701, expressly referenced the Health Care Decisions Law and granted Harrod authority to (a) consent to or refuse any medical care, (b) choose or reject health‑care providers and facilities, (c) receive and release medical records, and (d) make post‑mortem decisions (organ donation, autopsy, disposition of remains).

  3. Admission vs. Arbitration Agreements – The admission contract was a mandatory, state‑standard form (Health & Safety Code § 1559.61) that could not be altered. The arbitration agreement was a separate, optional form required by § 1599.81 to be presented independently and to carry a conspicuous warning that signing it was not a condition of admission. A one‑page “authorization” form signed by Logan listed six categories of documents Harrod could sign; “California admission packet” was checked, but the arbitration agreement was not listed.

  4. Alleged Harm – While at Country Oaks, Logan suffered a second fall, pressure ulcers, and unnecessary diapering, prompting his negligence suit.

Issues

  1. Statutory Interpretation – Does the definition of “health‑care decision” in Probate Code § 4617 encompass the execution of an optional arbitration agreement that is unrelated to the provision of health‑care services?

  2. Agency Scope – Assuming the Health Care Decisions Law is silent on arbitration, does Civil Code § 2319’s grant of “implied authority” to do everything “necessary or proper and usual” extend the agent’s power to include signing a separate arbitration clause?

  3. Policy Considerations – Should the legislature’s intent to preserve a patient’s right to judicial review and a jury trial limit the scope of a health‑care agent’s authority, even where the arbitration clause is presented as optional?

Holding and Reasoning

The Supreme Court affirmed the lower courts. Its analysis proceeded in three stages.

1. The Statutory Definition Is Contained and Exhaustive

The Court began by emphasizing that the Health Care Decisions Law provides a closed definition of “health‑care decision” (Probate Code § 4617). The statute lists specific categories—selection of providers, approval of tests and treatments, and directives concerning life‑sustaining measures. The Court applied the canons of construction that a list of examples “should be read in concert” and that “the term should be given a meaning consistent with the items listed” (see Kleffman v. Vonage Holdings Corp., 49 Cal.4th 334, 343 (2010)).

Arbitration, the Court observed, is “markedly dissimilar” to any of the enumerated items. It is a procedural mechanism governing dispute resolution, not a medical or therapeutic choice. The Court rejected a broad, purposive reading that would stretch the term beyond its textual limits, warning that such an approach would “create unnecessary tension between the Health Care Decisions Law and the Uniform Statutory Form Power of Attorney Act” (which expressly enumerates arbitration as a permissible claim‑related power).

2. Agency Law Does Not Fill the Gap

Turning to Civil Code § 2319, the Court acknowledged the general rule that an agent may perform acts “necessary or proper and usual” to accomplish the agency’s purpose. However, the Court reiterated the principle that implied authority is bounded by the express purpose of the grant (see Blum v. Robertson, 24 Cal. 128, 140 (1864); Garber v. Prudential Ins. Co., 203 Cal.App.2d 693, 701 (1962)).

The health‑care power of attorney’s purpose is to make decisions directly affecting the principal’s physical or mental health. The Court found no indication—either in the instrument or in the statutory scheme—that the principal intended to empower the agent to waive procedural rights unrelated to medical treatment. The Court distinguished Madden v. Kaiser Foundation Hospitals (17 Cal.3d 699, 706 (1976)), where a state board possessed an express statutory mandate to negotiate group medical contracts, including grievance procedures. Here, the agent’s authority was limited to health‑care decisions; there was no statutory or contractual language granting “contract‑negotiation” powers.

Thus, the Court concluded that the arbitration clause fell outside the scope of the agent’s implied authority. The “proper and usual” standard could not be stretched to encompass a discretionary waiver of the principal’s right to judicial review.

3. Legislative Policy Supports a Narrow Construction

The Court examined the legislative findings underlying the Health Care Decisions Law, which stress patient autonomy, dignity, and the right to control one’s own medical treatment (Probate Code §§ 4650, 4650‑a). The Court noted that the law was designed to protect substantive health‑care choices, not procedural rights concerning litigation. Moreover, the statute expressly distinguishes “health‑care decisions” from “personal care decisions” (Probate Code § 4671(b)), the latter covering matters such as residence, meals, and transportation—areas where a principal may delegate broader discretion.

By keeping arbitration outside the health‑care decision definition, the legislature preserved the patient’s ability to retain a judicial forum for grievances, aligning with the public policy that “the right to a jury trial is a fundamental safeguard against abuse in health‑care facilities” (citing Pagarigan v. Libby Care Center (2002) 99 Cal.App.4th 298, 302).

Accordingly, the Court affirmed the trial court’s denial of the motion to compel arbitration and remanded for further proceedings consistent with that determination.

Impact and Unresolved Questions

The decision resolves a circuit split: the Court of Appeal’s view in Logan v. Country Oaks Partners (2022) 82 Cal.App.5th 365, which held that arbitration agreements were outside the health‑care agent’s authority, now carries the weight of Supreme Court precedent. Practitioners must now ensure that any arbitration clause presented to a patient under a health‑care power of attorney is separately authorized—either by a distinct power of attorney for claims and litigation (Probate Code §§ 4400‑4459) or by an explicit, written limitation in the health‑care instrument.

The ruling also raises questions about ostensible agency. While the Court declined to address whether a facility could argue that the patient’s “authorization” form created an apparent agency relationship, it left open the possibility that a facility could rely on Pagarigan‑type analysis if the principal’s conduct—rather than the agent’s authority—induced reliance. Future litigation may explore whether a facility’s presentation of the arbitration form, combined with a patient’s signature on a general “authorization” sheet, could create an implied agency despite the statutory limits identified here.

Finally, the decision underscores the importance of document design. Facilities must continue to segregate arbitration agreements from admission contracts, use conspicuous warnings, and avoid any implication that signing the arbitration form is required for admission. Failure to do so could expose facilities to both contractual challenges and potential liability for violating Health & Safety Code § 1599.81.

In sum, Harrod clarifies that a health‑care agent’s authority is strictly medical, not contractual, and that arbitration waivers must be pursued through a separate, expressly authorized channel. The ruling will shape drafting practices, facility compliance programs, and the strategic calculus of litigators representing both patients and long‑term care providers.

Referenced Statutes and Doctrines

  • Probate Code §§ 4600‑4629 – Health Care Decisions Law; definitions of “health care” and “health‑care decision.”
  • Probate Code §§ 4671, 4678, 4683, 4688, 4700‑4701, 4711‑4712 – Power of attorney requirements, agency provisions, and surrogate authority.
  • Probate Code §§ 4400‑4459 – Uniform Statutory Form Power of Attorney Act (claims and litigation powers, including arbitration).
  • Health & Safety Code §§ 1559.61, 1599.81, 1418.8 – Admission agreement standards; optional arbitration clause requirements; next‑of‑kin authority.
  • Civil Code § 2319 – General agency authority (“necessary or proper and usual”).
  • Code of Civil Procedure § 372(a)(1) – Representation of incapacitated parties.

Key Cases

  • Logan v. Country Oaks Partners, LLC, 82 Cal.App.5th 365 (2022) – Prior appellate decision holding arbitration agreements outside health‑care agent authority.
  • Garrison v. Superior Court, 132 Cal.App.4th 253 (2005) – Earlier appellate view that arbitration agreements could be within health‑care decision‑making.
  • Hogan v. Country Villa Health Services, 148 Cal.App.4th 259 (2007) – Follow‑on to Garrison.
  • Pagarigan v. Libby Care Center, Inc., 99 Cal.App.4th 298 (2002) – Ostensible agency analysis in nursing‑home context.
  • Madden v. Kaiser Foundation Hospitals, 17 Cal.3d 699 (1976) – Agency authority to include arbitration in statutory grant.
  • Blum v. Robertson, 24 Cal 128 (1864) – Limits on implied agency powers.
  • Garber v. Prudential Ins. Co., 203 Cal.App.2d 693 (1962) – Implied authority must be within the principal’s purpose.
  • Kleffman v. Vonage Holdings Corp., 49 Cal.4th 334 (2010) – Construction of statutory lists.
  • Winn v. Pioneer Medical Group, Inc., 63 Cal.4th 148 (2016) – Interpreting general terms via listed examples.
  • Bernard v. Foley, 39 Cal.4th 794 (2006) – Restrictive construction of statutory terms.
  • Johnson v. Kindred Healthcare, Inc. (Mass. 2014) – Comparative analysis of arbitration waivers.

These authorities collectively shape the Court’s reasoning that a health‑care agent’s authority is confined to decisions directly affecting medical treatment, and that arbitration agreements must be authorized through a distinct statutory mechanism.