Perry ex rel. Perry v. Sovereign Healthcare of Metro West, LLC

Elizabeth Perry (“Appellant”) was a resident of Metro West Nursing Home and Rehab Center (“the Facility”) from November 2004 through October 2009. At the time of Elizabeth Perry’s admission to the Facility, her daughter, Bertha L. Johnson, signed a residency agreement that contained an arbitration provision. In 2010, Joyce Perry, another daughter of Elizabeth Perry, filed suit on her behalf against Appellee, alleging, among other things, that the Facility deprived Elizabeth Perry of her nursing home rights. Appellee filed a motion to compel binding arbitration and to stay the proceedings based upon the contractual terms of the residency agreement. Appellant contends there was no valid agreement because Johnson had no authority to sign the agreement on Elizabeth Perrry’s behalf. At the time of her admission to the nursing home facility, Elizabeth Perry was competent and her mental faculties were not impaired in any way. The trial court agreed with Appellee and found Elizabeth Perry was a third-party beneficiary to the residency agreement and that the arbitration agreement was enforceable.

On appeal, Appellant relies on In re Estate of McKibbin, 977 So.2d 612 (Fla. 2d DCA 2008), whereas Appellee relies on Alterra Healthcare Corp. v. Estate of Linton ex rel. Graham, 953 So.2d 574 (Fla. 1st DCA 2007). In Estate of McKibbin, the son of the resident signed a residency agreement, under a durable power of attorney on behalf of his mother. The agreement contained an arbitration provision. After the son filed suit against the healthcare facility, the facility filed a motion to compel arbitration. The lower court granted that motion. On appeal, the Second District found the power of attorney did not give the attorney-in-fact the power to enter into the arbitration agreement on the resident’s behalf. As such, the court held the resident’s estate was not bound by the arbitration agreement.

In Estate of Linton, Mrs. Linton’s son signed the residency agreement, which contained an arbitration provision, on her behalf. 953 So.2d at 576. Mrs. Linton suffered from advanced Alzheimer’s disease. Mrs. Linton’s estate sued the health care facility after she died while a resident at the facility. The facility moved to compel arbitration pursuant to the terms of the residency agreement. The estate maintained the agreement was unenforceable, in part, because Mrs. Linton’s son did not have the authority to sign the agreement on her behalf. The trial court rejected this argument. On appeal, the First District found Mrs. Linton was an intended third-party beneficiary to the contract and, therefore, the arbitration clause was enforceable.

Joyce Perry o/b/o Elizabeth Perry appealed the non-final order granting a motion to compel binding arbitration and a stay of proceedings by Appellee, Sovereign Healthcare Metro West, LLC, d/b/a Metro West Nursing Home and Rehab Center. Appellant contended the lower court erred in: (1) granting the motion because no valid arbitration agreement existed between Elizabeth Perry and the Facility; and (2) finding Elizabeth Perry was a third-party beneficiary of the arbitration agreement. The court agreed with Appellant’s contentions and reversed.