From all your friends at McCumber Daniels, we would like to wish you a Happy New Year, as we say in this country. It has been quite a tumultuous year, and hopefully not a harbinger of things to come in the next decade. So before we dig into 2010 and the impending health care reform, still fledgling housing market, and people hiding explosives in their underwear, kick back and raise your glass to another year gone by.
Earlier this year in Jaylene v. Moots, 995 So.2d 566 (Fla. 2nd DCA 2009) McCumber Daniels attorneys Mark B. Hartig and Mara B. Levy, convinced the Second District Court of Appeals to reverse a trial court decision denying the enforcement of a nursing home’s arbitration agreement. In Moots, the Second District ruled that a Power of Attorney does not need to specifically provide for the right to arbitrate disputes so long as the agreement grants the attorney in fact broad authority to handle the business affairs. On November 13, 2009, Mr. Hartig and Ms. Levy secured two more significant decisions from the Second District reversing the trial courts’ orders denying motions to compel arbitration.
In Jaylene, Inc. v. Steuer, the Second District rejected the trial court’s finding a nursing home resident’s power of attorney did not confer the authority to agree to arbitration on the resident’s behalf and the trial court’s finding that the arbitration agreement was void as against public policy. The power of attorney included provisions granting the authority to execute contracts as well as to institute, prosecute, defend, compromise or settle civil claims and litigation. The Second District determined that this power of attorney was sufficiently broad to confer upon the attorney-in-fact the authority to bind the resident to the arbitration provision in the admissions contract. With regard to the public policy issue, the Second District’s reaffirmed its decision in Rollins, Inc. v. Lighthouse Bay Holdings, Ltd., 898 So. 2d 86 (Fla. 2d DCA 2005), that “[t]he arbitrator should in the first instance decide the validity of the remedial restrictions in the arbitration provision.” Id. at 87. Under Rollins, the trial court should have let the arbitrators decide any challenges based on public policy.
The second case, Candansk, LLC v. Estate of Hicks, dealt solely with whether the power of attorney granted the attorney-in-fact the authority to agree to waive a jury trial and have any dispute resolved by arbitration. The Court concluded that the power of attorney executed by the resident was sufficiently broad to confer the authority to agree to arbitration because it referred to “claims and litigation.” In reaching this conclusion, the Court rejected the plaintiff’s argument that a reference to “property” in the power of attorney somehow limited this broad grant of authority. The Court first explained that the resident’s claim against the nursing home is the property of the Estate. This is significant because in many cases, plaintiff attorneys, especially Wilkes and McHugh as in these cases, attempt to draw attention away from the provisions of a power of attorney that confer broad authority over contracts or claims and litigation by arguing that these provisions are limited to specific property interests. In this case, the Second District made it clear that if a power of attorney includes provisions that are sufficient to confer the authority to agree to arbitration, the fact that the power of attorney refers to property elsewhere is not inconsistent with this broad grant of power. The Court also noted that the form power of attorney that the resident used in this case is typical of forms used throughout the country. In the states that have statutes that provide for these forms, the inclusion of “claims and litigation” uniformly empowers the attorney-in-fact to submit to arbitration.
These two cases provide much needed guidance to litigants and the trial courts regarding the correct interpretation of powers of attorney and will significantly reduce plaintiffs’ ability to argue that the authority conferred under many standard powers of attorney is not broad enough to include the authority to agree to arbitration.
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