Background
In 2014, Marjorie Henderson executed a medical durable power of attorney (MDPOA) appointing her daughter Brenda Wills as attorney-in-fact. The MDPOA granted Wills authority over health care decisions — consenting to treatments, signing documents for facility transfers, and authorizing admissions — but expressly prohibited her from acting on Henderson’s behalf for any purpose unrelated to health care.
Nearly a decade later, Henderson was admitted to Sharmar Village Care Center, a Pueblo nursing home. During the admission meeting, Henderson left early to attend another appointment, and Wills completed the paperwork alone, including signing a voluntary arbitration agreement covering negligence, wrongful death, and other health-care-related claims extending to Henderson’s heirs.
Approximately one month after admission, Henderson suffered two falls within forty-eight hours. She was placed on palliative care and died three days later. Her daughter Vicki Reno, as personal representative of Henderson’s estate, sued Sharmar for negligence, wrongful death, and violations of the Colorado Consumer Protection Act. Sharmar moved to compel arbitration based on the agreement Wills had signed. The district court denied the motion, finding Wills lacked authority under the MDPOA and lacked actual or apparent authority based on her words or conduct. Sharmar appealed.
The Court’s Holding
The Colorado Court of Appeals affirmed the denial of Sharmar’s motion to compel arbitration. The court held that an MDPOA does not confer authority on an agent to enter into a voluntary arbitration agreement on behalf of a principal unless the MDPOA expressly grants that specific authority. Because Henderson’s MDPOA limited Wills to health care decisions and the execution of a voluntary arbitration agreement is not itself a health care decision under Colorado law, Wills had no power to bind Henderson to arbitration.
The court expressly declined to follow the earlier division opinion in Moffett I, 187 P.3d 1140 (Colo. App. 2008), which had held that an MDPOA agent’s authority to execute a voluntary arbitration agreement is assumed unless restricted. Instead, the court aligned itself with Lujan v. Life Care Centers of America, 222 P.3d 970 (Colo. App. 2009), and Fresquez v. Trinidad Inn, Inc., 2022 COA 96, concluding that signing a voluntary arbitration agreement is not the provision of health care. The court noted that Colorado’s Health Care Availability Act (HCAA) explicitly delinks arbitration from medical treatment by prohibiting any health care provider from conditioning admission on the signing of an arbitration agreement.
The court also rejected Sharmar’s arguments that Wills possessed actual authority (express or implied) or apparent authority to sign the arbitration agreement. Henderson’s departure from the meeting before paperwork was complete did not, without more, signal consent for Wills to waive Henderson’s right to a court of law. Sharmar proffered no evidence of any discussions between Henderson and Wills about arbitration. The court likewise declined to reach Sharmar’s estoppel argument, which had been raised for the first time in a reply brief below and was therefore unpreserved.
Key Takeaways
- An MDPOA limited to health care decisions does not — without an express provision — authorize the agent to sign a voluntary arbitration agreement with a health care facility.
- Under Colorado’s HCAA, arbitration agreements must be voluntary and cannot be a condition of admission; this statutory “delinking” of arbitration from health care reinforces that agreeing to arbitrate is not itself a health care decision.
- A patient leaving an agent to finish signing admission paperwork does not, standing alone, create actual or apparent authority to waive the patient’s right to litigate — there must be evidence the principal specifically authorized the waiver of that right.
- The court expressly disagreed with Moffett I‘s presumption-of-authority approach, noting that the out-of-state precedents on which Moffett I relied have since been disapproved or distinguished, including by the California Supreme Court in Harrod v. Country Oaks Partners, LLC, 544 P.3d 1138 (Cal. 2024).
- An estoppel argument raised for the first time in a reply brief is not preserved for appeal.
Why It Matters
This decision significantly tightens the requirements for nursing homes and other health care facilities in Colorado to enforce arbitration agreements signed by an agent acting under an MDPOA. Facilities can no longer rely on a broad reading of an MDPOA’s health care authority to encompass arbitration; they must ensure the MDPOA expressly grants the agent power to waive the principal’s right to a jury trial. Practitioners drafting MDPOAs for clients who may one day need long-term care — or who wish to preserve litigation rights — should consider whether to include or exclude an express arbitration clause.
More broadly, the ruling adds Colorado to a growing national consensus — joining California, Wyoming, Mississippi, South Carolina, Georgia, and Tennessee — that distinguishes an MDPOA agent’s health care decision-making authority from the power to bind a principal to a voluntary arbitration agreement. Given the volume of nursing-home admissions handled under MDPOAs, the practical effect on how Colorado facilities structure their intake process is substantial.