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Mariner Health Care, Inc., v. Ferguson, 2006 U.S. Dist LEXIS 47021 (N.D. Miss. 2006)

Defendants in a State court action filed a declaratory judgment action in federal court seeking a declaration as to the validity of an arbitration agreement. The resident’s sister had signed the Agreement for Arbitration. The court found it clear that resident could not have signed the agreement herself due to HIV, CVA with right-side hemiparis, Hyponatremia and dysphagia. The estate, defendant in the federal action, alleged that the sister had no authority to sign the agreement, that Mariner could not prove there was a binding arbitration agreement, that the contract was unconscionable and that it was a contract of adhesion. The court found that there was no power of attorney or other express authority to act and, in the absence of authority, there was no actual or implied agency. Next, applying a three prong test, the court found no apparent authority to act because the resident did nothing to indicate an express or apparent authority existed. Finally the court looked at Mississippi statutes to determine whether there was statutory authority as a health care surrogate to sign the arbitration agreement. Finding that the Mississippi Supreme Court had not reached the issue, the court reviewed cases from other jurisdictions and distinguished authority to make health care decisions from authority to terminate legal rights. The court found that resident’s sister did not have authority to terminate legal rights. There was no authority to create a binding agreement. The action to compel arbitration was dismissed.

This case might have a different outcome following Covenant Health Rehab of Picayune, L.P. v. Brown, 2007 Miss. LEXIS 43 (Miss. 2007).

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