Magnolia Healthcare, Inc. v. Barbara Jean Barnes

IN THE SUPREME COURT OF MISSISSIPPI

NO. 2006-CA-00427-SCT

MAGNOLIA HEALTHCARE, INC. d/b/a ARNOLD
AVENUE NURSING HOME; FOUNDATION
HEALTH SERVICES, INC. AND DIANE
OLTREMARI, ADMINISTRATOR

v.

BARBARA JEAN BARNES, BY AND THROUGH
HER RELATIVE AND NEXT FRIEND, SHIRLEY
GRIGSBY, AS CONSERVATOR OF THE ESTATE
OF BARBARA JEAN BARNES

DATE OF JUDGMENT: 02/07/2006
TRIAL JUDGE: HON. RICHARD A. SMITH
COURT FROM WHICH APPEALED: WASHINGTON COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANTS: MICHAEL A. HEILMAN
PATRICIA FLEMING KENNEDY
CHRISTOPHER THOMAS GRAHAM
ATTORNEY FOR APPELLEE: GEORGE F. HOLLOWELL, JR.
NATURE OF THE CASE: CIVIL - CONTRACT
DISPOSITION: REVERSED AND REMANDED - 01/10/2008
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

EN BANC.

EASLEY, JUSTICE, FOR THE COURT:

FACTS AND PROCEDURAL HISTORY

¶1. Barbara Jean Barnes (Barnes) is a mentally incompetent person with the mental

capacity of a three-year-old, who is incapable of residing alone. For years, Barnes was cared

for by her grandmother until her grandmother became too old to care for her. Barnes’s
grandmother contacted Atwood Grigsby, Barnes’s cousin, to care for Barnes. Atwood

became Barnes’s primary caretaker. Barnes resided with Atwood and his wife Shirley until

Atwood became seriously ill. Shirley was then unable to care for both her husband and

Barnes. On February 19, 2003, Shirley Grigsby (Grigsby) admitted Barnes into Magnolia

Healthcare, Inc., d/b/a Arnold Avenue Nursing Home, so she could receive assistance with

daily living and personal care.

¶2. On September 12, 2005, Grigsby, acting as the next friend and conservator of the

Estate of Barnes, filed a complaint in Washington County Circuit Court against Magnolia

Healthcare, Inc., Arnold Avenue Nursing Home, Foundation Health Services, Inc., and

Administrator Diane Oltremari (hereinafter referred to as “Magnolia”), alleging that Barnes

was negligently treated, abused, and sexually assaulted while she was a resident of Arnold

Avenue Nursing Home. Magnolia filed a motion to compel arbitration, pursuant to the

arbitration provision in the admission agreement signed by Grigsby.

¶3. The trial court entered an order denying Magnolia’s motion to compel arbitration,

finding that Grigsby did not possess the statutory or agency authority to bind Barnes to the

arbitration provision within the admission agreement. Magnolia now appeals to this Court.

DISCUSSION

¶4. The issue raised by Magnolia on appeal to this Court is whether the trial court

properly denied its motion to compel arbitration. “This Court applies a de novo standard of

review to denials of motions to compel.” Covenant Health Rehab of Picayune, L.P. v.

2
Brown, 949 So. 2d 732, 736 (Miss. 2007) (citing Vicksburg Partners, L.P. v. Stephens, 911

So. 2d 507, 513 (Miss. 2005)).

¶5. The trial court denied Magnolia’s motion to compel arbitration and found that

Grigsby did not possess the statutory or agency authority to bind Barnes to the arbitration

provision in the nursing home admission agreement. Magnolia contends that Grigsby had

the authority to bind Barnes to the arbitration agreement as Barnes’s health-care surrogate

under the Uniform Health-Care Decisions Act, Mississippi Code Annotated Sections 41-41-

201 to 41-41-229 (Rev. 2005).

¶6. The Legislature codified the authority assigned to a health-care surrogate in

Mississippi Code Annotated Section 41-41-211 (Rev. 2005). The section provides in

pertinent part:

(1) A surrogate may make a health-care decision for a patient who is an adult
or emancipated minor if the patient has been determined by the primary
physician to lack capacity and no agent or guardian has been appointed or the
agent or guardian is not reasonably available.

(2) An adult or emancipated minor may designate any individual to act as
surrogate by personally informing the supervising health-care provider. In the
absence of a designation, or if the designee is not reasonably available, any
member of the following classes of the patient's family who is reasonably
available, in descending order of priority, may act as surrogate:

(a) The spouse, unless legally separated;
(b) An adult child;
(c) A parent; or
(d) An adult brother or sister.

(3) If none of the individuals eligible to act as surrogate under subsection (2)
is reasonably available, an adult who has exhibited special care and concern

3
 for the patient, who is familiar with the patient's personal values, and who is
reasonably available may act as surrogate.

....

(6) A surrogate shall make a health-care decision in accordance with the
patient's individual instructions, if any, and other wishes to the extent known
to the surrogate. Otherwise, the surrogate shall make the decision in
accordance with the surrogate's determination of the patient's best interest. In
determining the patient's best interest, the surrogate shall consider the patient's
personal values to the extent known to the surrogate.

(7) A health-care decision made by a surrogate for a patient is effective
without judicial approval. . . .

¶7. The facts demonstrate that Barnes is a mentally incompetent person who is incapable

of residing alone. In fact, the parties do not dispute that Barnes had the mental capacity of

a three-year-old and lacked the ability to reside alone. Grigsby, Barnes’s cousin’s wife, was

her primary caretaker. When Grigsby became unable to continue to care for Barnes due to

the deterioration of her husband’s health, Grigsby admitted Barnes to the Arnold Avenue

Nursing Home on February 19, 2003. Barnes was admitted so she could receive the

assistance and care that she needed. On September 12, 2005, Grigsby, acting as the next

friend and conservator of the Estate of Barnes, filed a complaint in the Circuit Court of

Washington, Mississippi, alleging abuse and sexual assault while Barnes was a resident at

Arnold Avenue Nursing Home. Magnolia filed a motion to compel arbitration, which was

denied by the trial court.

¶8. “It is well established that this Court respects the ability of parties to agree to the

means of dispute resolution prior to a dispute and enforces the plain meaning of a contract

4
as it represents the intent of the parties.” Covenant Heath, 949 So. 2d at 740 (citing Russell

v. Performance Toyota, Inc. 826 So. 2d 719, 722 (Miss. 2002)); IP Timberlands Operating

Co. v. Denmiss Corp., 726 So. 2d 96, 108 (Miss. 1998). In Covenant Heath, the Court

recently addressed whether surrogates can bind patients by signing arbitration agreements

on behalf of the patients. Covenant Heath, 949 So. 2d at 736-37. At the time the trial court

ruled on Magnolia’s motion to compel arbitration, it did not have the benefit of this Court’s

holding in Covenant Health. The Court stated therein:

Plaintiffs assert that the admissions agreement is procedurally unconscionable
because Brown was incompetent and incapable of entering into a contract, and
Goss had no authority to bind Brown.

With regard to Goss's authority to bind Brown, Defendants cite Miss. Code
Ann. § 41-41-211 (Rev. 2005) which says in pertinent part:

....

Plaintiffs submit in their motion that Brown was incapable of managing her
affairs at the time she entered the hospital. Neither party presents a
declaration by Brown's primary physician stating that she was incapable of
managing her affairs prior to the signing of the admission agreement, but
Plaintiffs state in their motion that Brown's admitting physician at the hospital
found that she did not have the mental capacity to manage her affairs. Seeing
that Brown was incapacitated by virtue of admission by her representatives and
corroboration by her admitting physician, she was capable legally of having
her decisions made by a surrogate. Her adult daughter, Goss, was an
appropriate member of the classes from which a surrogate could be drawn,
and thus, Goss could contractually bind Brown in matters of health care.

Id. (Emphasis added).

¶9. The Court applied the language of Mississippi Code Annotated Section 41-41-211,

finding that if the surrogate satisfies the requirements of the statute, then the surrogate can

5
bind the patient contractually in matters of health care. Covenant Heath, 949 So. 2d at 736-

37. The Court determined that Goss could bind Brown contractually as her health-care

surrogate. Id. The Court, in Covenant, noted that neither party produced a declaration by

Brown’s primary physician that she was incapable of managing her affairs, relying instead

on the opinion of the admitting physician. Id.

¶10. Here, as in Covenant, we do not have a declaration by Barnes’s primary physician that

she was incapable of managing her affairs. However, the fact that Barnes had the mental

capacity of a three-year-old and could not reside alone and care for herself is undisputed.

Further, Grigsby was in charge of Barnes’s social security check and, therefore, her finances.

It is clear from the undisputed facts that Barnes was incapable of managing her affairs when

she was admitted to the nursing home. Therefore, in this case, there is no factual question

that Barnes lacked the capacity to manage her affairs or make appropriate medical decisions

on her own behalf. Therefore, the statutory requirement of Mississippi Code Annotated

Section 41-41-211(1) was satisfied.

¶11. We must consider whether, under the facts at hand, Grigsby qualified as Barnes’s

surrogate and whether the arbitration agreement was entered into to obtain health care for the

benefit of Barnes. According to Grigsby, Barnes had no available relatives as listed in

Mississippi Code Annotated Section 41-41-211(2) to make decisions for her. However,

under Section 41-41-211(3), “an adult who has exhibited special care and concern for the

patient, who is familiar with the patient's personal values, and who is reasonably available

may act as surrogate,” when there is no (1) spouse, (2) adult child, (3) parent, or (4) adult

6
brother or sister available. Grigsby was familiar with Barnes’s personal values and was

serving as her primary caretaker.

¶12. Grigsby assumed responsibility for caring for Barnes’s special needs when Barnes’s

caretaker, her grandmother, became too old to care for her. Grigsby acted as Barnes’s

primary caretaker until Grigsby’s husband became ill, consuming too much of Grigsby’s time

to allow her to care for Barnes’s special needs. Grigsby admitted in her response to

Magnolia’s motion to compel arbitration that Barnes was mentally retarded and unable to

care for herself or make her own decisions. Based on the facts, there is no question that

Grigsby qualified as Barnes’s surrogate under Mississippi Code Annotated Section 41-41-

211(3).

¶13. The record reveals that Grigsby’s decision to place Barnes in this nursing home was

based on the need for a facility that could provide care for Barnes’s special needs. In count

XI of the complaint she filed on behalf of Barnes, Grigsby alleged that the nursing facility

was chosen because she believed that it “was a facility with the resources and expertise to

provide appropriate care to the chronically infirm, mentally dysfunctional, and/or those in

need of skilled nursing care and treatment.” The complaint further provides that this was the

material reason that Grigsby chose this facility. Grigsby acknowledges that Barnes had

special needs, having the mental capacity of a three-year-old. Barnes was not in a position

to care for herself, feed herself, or provide for her medical needs. It is clear that Grigsby’s

reason to place Barnes in the nursing home was a health-care decision.

7
¶14. We find that Mississippi Code Annotated Section 41-41-211 and this Court’s holding

in Covenant Health, 949 So. 2d at 737, provide Grigsby authority as Barnes’s health-care

surrogate to bind Barnes to arbitration. Therefore, the trial court erred in denying Magnolia’s

motion to compel arbitration.

CONCLUSION

¶15. We reverse the trial court’s order denying Magnolia’s motion to compel arbitration,

finding that Grigsby had authority to bind Barnes to the arbitration provision within the

nursing home admission agreement, because she was a health-care surrogate under the

Uniform Health-Care Decisions Act, Mississippi Code Annotated Section 41-41-201 (Rev.

2005). Therefore, the judgment of the Circuit Court of Washington County is reversed, and

this case is remanded to the trial court for proceedings consistent with this opinion.

¶16. REVERSED AND REMANDED.

SMITH, C.J., WALLER, P.J., CARLSON AND RANDOLPH, JJ., CONCUR.
GRAVES, J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY
DIAZ, P.J. DICKINSON, J., DISSENTS WITH SEPARATE WRITTEN OPINION
JOINED BY LAMAR, J.

GRAVES, JUSTICE, DISSENTING:

¶17. The majority finds that Mississippi Code Annotated Section 41-41-211 and this

Court’s holding in Covenant Health Rehab of Picayune, L.P. v. Brown provide Grigsby

with the authority to act on behalf of Barnes as her health-care surrogate and, further, to bind

Barnes to arbitration. Miss. Code Ann. § 41-41-211 (Rev. 2005); Covenant Health Rehab

of Picayune, L.P. v. Brown, 949 So. 2d 732 (Miss. 2007). While I do not disagree that

8
Grigsby was Barnes’s health-care surrogate, I disagree with the majority’s finding that the

decision to arbitrate is a “health-care decision” as defined in Section 41-41-203(h). Miss.

Code Ann. § 41-41-203(h) (Rev. 2005). Therefore, I respectfully dissent.

¶18. This Court conducts a bifurcated inquiry when determining whether parties should be

compelled to arbitrate a dispute. “Under the first prong, the court should determine whether

the parties have agreed to arbitrate the dispute.” Rogers-Dabbs Chevrolet-Hummer, Inc. v.

Blakeney, 950 So. 2d 170, 173 (Miss. 2007) (citation omitted). The first prong involves two

considerations: “‘(1) whether there is a valid arbitration agreement and (2) whether the

parties’ dispute is within the scope of the arbitration agreement.’” Id. (quoting East Ford,

Inc. v. Taylor, 826 So. 2d 709, 713 (Miss. 2002)). “If the court determines that the parties

did in fact agree to arbitrate their dispute, the second prong is applied.” Rogers-Dabbs, 950

So. 2d at 173. The United States Supreme Court has determined that the second prong

examines “‘whether legal constraints external to the parties’ agreement foreclosed arbitration

of those claims.’” Id. (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,

473 U.S. 614, 626, 105 S. Ct. 3346, 87 L. Ed. 2d 444 (1985)).

¶19. Magnolia contends, and the majority agrees, that Grigsby had the authority to bind

Barnes to the arbitration provision found within the nursing home admission agreement by

acting as a health-care surrogate under the Uniform Health-Care Decisions Act. While the

record does not include documentation from Barnes’s physician regarding her lack of

capacity to act on her own behalf, it is undisputed by either party that Barnes lacked the

mental faculties to reside alone and was mentally incompetent. Moreover, it is clear from

9
the record that Grigsby, while not a blood relative of Barnes, exhibited special care and

concern for Barnes, was familiar with Barnes’s values (to the limited extent that the values

of an individual with the capacity of a three-year-old would be evident), and was therefore

acting on her behalf as a health-care surrogate. While it is clear that Grigsby was Barnes’s

health-care surrogate, Grigsby could bind Barnes only to health-care decisions while acting

in that capacity. Mississippi Code Annotated Section 41-41-203(h) defines “health-care

decision”:

(h) “Health-care decision” means a decision made by an individual or the
individual’s agent, guardian, or surrogate, regarding the individual’s health
care, including:

(i) Selection and discharge of health-care providers and institutions;
(ii) Approval or disapproval of diagnostic tests, surgical procedures, programs
of medication, and orders not resuscitate; and
(iii) Directions to provide, withhold or withdraw artificial nutrition and
hydration and all other forms of health care.

The phrase “health-care decision” does not include decisions made pursuant
to Sections 41-39-31 through 41-39-51, the “Anatomical Gift Law.”

Miss. Code Ann. § 41-41-203(h) (Rev. 2005).

¶20. When interpreting a statute, this Court must first determine whether the statute is

ambiguous. Harrison v. State, 800 So. 2d 1134, 1137 (Miss. 2001). “When a statute is

unambiguous, this Court applies the plain meaning of the statute and refrains from the use

of statutory construction principals [sic].” Gilmer v. State, 955 So. 2d 829, 833 (Miss. 2007)

(citing Pinkton v. State, 481 So.2d 306, 309 (Miss. 1985)). When the meaning of a statute

10
is clear, this Court may not enlarge or restrict the statute. Gilmer, 955 So. 2d at 833 (citing

State v. Traylor, 100 Miss. 544, 558-59, 56 So. 521 (1911)).

¶21. Mississippi Code Annotated Sections 41-41-211 and 41-41-203(h) are unambiguous.

The Legislature clearly and specifically defined “health-care decision,” being careful to list

specific instances which qualify as “health-care decision[s]” that a health-care surrogate is

authorized to make on behalf of the patient. There is nothing within the statute that would

indicate the Legislature’s intent to allow a health-care surrogate to enter into contracts which

agree to things that are not strictly related to health-care. The decision to submit to

arbitration is not a health-care decision. See Mariner Healthcare, Inc. v. Green, 2006 U.S.

Dist. LEXIS 37479 (N.D. Miss. June 7, 2006) (surrogate’s authority to make health-care

decisions does not extend to arbitration); Mariner Health Care, Inc. v. Guthrie, 2005 U.S.

Dist. LEXIS 42651(S.D. Miss. Aug. 24, 2005) (holding the same); see also Pagarigan v.

Libby Care Ctr., Inc., 99 Cal. App. 4th 298, 120 Cal. Rptr. 2d 892 (Cal. Ct. App. 2002);

Blankfeld v. Richmond Health Care, Inc., 902 So. 2d 296, 301 (Fla. Dist. Ct. App. 2005).

Furthermore, arbitration is not among those matters specifically delineated in the statute as

a “health-care decision.” Miss. Code Ann. § 41-41-203(h) (Rev. 2005).

¶22. The majority relies on Covenant Health Rehab of Picayune, L.P. v. Brown in finding

that a health-care surrogate can bind a patient to arbitration. In that case, when addressing

whether a surrogate has the authority to bind an incompetent person to an arbitration

agreement, this Court summarily stated, “[h]er adult daughter, Goss, was an appropriate

member of the classes from which a surrogate could be drawn, and thus, Goss could

11
contractually bind Brown in matters of health care.” Covenant Health Rehab of Picayune,

L.P. v. Brown, 949 So. 2d 732, 737 (Miss. 2007). It is noteworthy that Brown did not cite,

address, or analyze “health-care decision” as defined in Mississippi Code Annotated Section

41-41-203(h).

¶23. It is clear from a plain meaning interpretation of the statute that a health-care surrogate

is not authorized by Section 41-41-203(h) to waive or compromise a patient’s property rights,

such as the right to trial by jury or civil remedies in negligence, and therefore, cannot bind

a patient to arbitration. Accordingly, I disagree with the majority’s finding that Grigsby had

the authority as a health-care surrogate pursuant to Mississippi Code Annotated Section 41-

41-211 to bind Barnes to the arbitration provision in the Nursing Home Admission

Agreement.

¶24. For the foregoing reasons, I respectfully dissent.

DIAZ, P.J., JOINS THIS OPINION.

DICKINSON, JUSTICE, DISSENTING:

¶25. Once again, a majority of this Court chooses to judicially amend a clear, unambiguous

provision of the Mississippi Code. Thus, as I have in the past, when a majority of this Court

has taken such liberties, I respectfully dissent.1

1
Lamar v. Thomas Fowler Trucking, Inc., 956 So. 2d 878, 881 (Miss. 2007); Weiner
v. Meredith, 943 So. 2d 692, 694 (Miss. 2006).

12
¶26. The majority sends Barbara Barnes to arbitration, not because she agreed to arbitrate

her case, but because Shirley Grigsby signed an arbitration agreement on her behalf. The

legal basis cited by the majority is Mississippi Code Annotated Section 41-41-211, which

states in pertinent part:

(1) A surrogate may make a health-care decision for a patient who is an adult
or emancipated minor if the patient has been determined by the primary
physician to lack capacity and no agent or guardian has been appointed or the
agent or guardian is not reasonably available.

Miss. Code Ann. § 41-41-211 (Rev. 2007) (emphasis supplied). Thus, the decision before

this Court seems simple: If Grigsby met the statutory requirements, she had authority to bind

Barnes to the arbitration agreement; but if she did not meet the statutory requirements, she

had no authority to bind Barnes to arbitration.

¶27. By its crystal-clear language, the statute requires that “the patient has been determined

by the primary physician to lack capacity.” One would think that this threshold requirement

would lead us to some cite in the record where Barnes “has been determined by [her] primary

physician to lack capacity.” Not so. The record contains not one grain of evidence that

Barnes’s primary physician made any such finding. In fact, the record in this case does not

even disclose the identity of Barnes’s primary physician. This, of course, begs the question

of why the majority would ignore such a clear statutory requirement.

¶28. The majority rationalizes its use of statutory blinders by citing Covenant Health

Rehab of Picayune, L.P. v. Brown, 949 So. 2d 732 (Miss. 2007). In that case, the

defendants raised three issues:

13
 1) whether the admissions contract is enforceable when the resident and her
responsible party signed the agreement; 2) whether the trial court erred in
finding the contract substantively unconscionable; and 3) whether the trial
court erred in denying Defendant’s motion to compel.

Id. at 736. Although the issue of a health-care surrogate’s primary physician was not directly

before us as an issue raised on appeal, we noted in dictum that neither party presented

a declaration by Brown’s primary physician stating that she was incapable of
managing her affairs prior to the signing of the admission agreement, but
Plaintiffs state in their motion that Brown’s admitting physician at the hospital
found that she did not have the mental capacity to manage her affairs.

Id. at 736-37. Because the issue was not directly raised on appeal, we were not required to

analyze whether Brown’s “admitting physician” was her “primary physician.” Thus, Brown

serves as no authority (other than dictum) for today’s decision.

¶29. In today’s case, by contrast, we have no finding of any kind by any physician. Never

mind, says the majority, because we have decided that there should be an exception to the

statutory requirement. Thus (the majority announces to the legal public), you do not need

to comply with the statute, so long as

facts demonstrate that [the patient] is a mentally incompetent person who is
incapable of residing alone, [And]. . . the parties do not dispute that [the
patient has] the mental capacity of a three-year-old and lack[s] the ability to
reside alone.

(Maj. Op.¶7). The majority’s language now serves as a substitute for the actual language

included in the statute. By the way, it should be clearly noted that the majority does not even

pretend to interpret the actual language or provisions of the statute. Instead, the majority –

believing itself to be accomplishing the statute’s purposes – makes up its own “statutory

14
language” to be applied in this case and, presumably, those that follow. A more obvious and

blatant example of judicial activism would be difficult to find.

¶30. Courts should apply statutes as they are written and enacted by the Legislature.

Section 41-41-211 allows surrogates to make health-care decisions for a patient “if the

patient has been determined by the primary physician to lack capacity.” (Emphasis

supplied.) The statute which imposes this requirement has no qualifications, ambiguities,

or exceptions. Today’s decision, however, is based upon an exception to the statute which

was born in the minds of judges. Because I believe such meddling in the Legislature’s

constitutional prerogative is inappropriate, I respectfully dissent.

LAMAR, J., JOINS THIS OPINION.

15