At Center’s Urging, Court Publishes Decision Holding that Residential Care Facilities for the Elderly Are Responsible for Demonstrating the Validity of Arbitration Agreements

March 8, 2022

The Third District Court of Appeal has granted the Center’s request to publish Rogers v. Roseville SH, LLC (2022) 75 Cal.App.5th 1065. As a result, it is now clear to the state’s trial courts that residential care facilities for the elderly (RCFEs) hold the responsibility of demonstrating the validity of arbitration agreements signed by third parties. If a resident’s family member signs the arbitration agreement, the RCFE must show that the senior gave them the authority to do so — especially if the senior has the capacity to personally sign such agreements. This guidance is particularly salient at a time when RCFEs frequently file arbitration petitions in response to litigation initiated by RCFE residents and their families. 

As Rogersv. Roseville emphasizes, RCFE administrators should not assume that residents entering their care have given their family members authority to speak for them — or that they cannot speak for themselves. In this case, when Claude Rogers was admitted to an RCFE, he was accompanied by his son Richard. Claude had mild cognitive impairments, but was able to read, understand, and sign documents. Nonetheless, the facility administrator had Richard sign the admission documents, and later sent him an arbitration agreement to sign. Richard did not have a durable power of attorney or other legal authority to sign an arbitration agreement on his father’s behalf, and Claude had not told the administrator that Richard had authority to sign for him. 

Rogers clarifies that it was the facility’s burden to demonstrate that a valid arbitration agreement existed between the facility and Claude. The RCFE in this case could not satisfy that requirement. The Court held that the RCFE had no evidence that Claude had given Richard any express authority to sign an arbitration agreement on his behalf.

Additionally, the Court rejected the facility’s argument that because the arbitration agreement could be rescinded within 30 days, Claude had had sufficient opportunity to reject it. Even though the agreement could theoretically have been rescinded, no one at the facility had spoken to Claude about the arbitration agreement that his son signed; indeed, there was no evidence that Claude knew about the agreement at all. Thus, Claude had not — and could not have — given consent to arbitrate. 

Whether a senior has delegated legal authority to make financial decisions is a matter of the utmost importance; a facility may not simply presume that a resident’s family members have the legal authority to make critical decisions on the resident’s behalf. RCFEs also should not assume that residents are unable to make decisions for themselves; to the contrary, the presumption is and must be that all adults have decision-making capacity unless it is affirmatively demonstrated that they do not.

The Center was joined in its publication request by a group of distinguished legal services organizations, including Housing and Economic Rights Advocates, the Legal Aid Society of San Diego, the National Consumer Law Center, and the Public Law Center.