Judge Christopher K. Lui, Case 21STCV40918 2022-09-02 Tentative Ruling

Pursuant to California Rule of Court 3.1308(a)(1), the Court does not desire oral argument on the motion addressed herein. As required by Rule 3.1308(a)(2), any party seeking oral argument must notify ALL OTHER PARTIES and the staff of Department 76 of their intent to appear and argue. Notice to Department 76 may be sent by email to smcdept76@lacourt.org or telephonically at 213-830-0776. If notice of intention to appear is not given and the parties do not appear, the Court will adopt the tentative ruling as the final ruling.

Plaintiff brings a survival action and wrongful death action based upon an allegedly defective product placed into the stream of commerce by Defendants. The device is a Stockert Heater-Cooler System 3T, which is a cardiopulmonary bypass temperature controller. The device allegedly presented a risk of bacterial growth that could cause infection in post-operative surgical patients who had and people with weakened immune systems or those who have had vascular grafts, prosthetic valves, or any other foreign device implanted into the body.

Decedent Angel Ishkhanian allegedly died due to an infection caused by Mycobacterium Chimaera, which resulted from contamination due to the medical device during surgery.

Defendants Kaiser Foundation Health Plan, Inc. (“Health Plan”), Kaiser Foundation Hospitals, and Southern California Permanente Medical Group (collectively “Kaiser”) move to compel arbitration.

Defendants Kaiser Foundation Health Plain, Inc., et al.’s Petition to Compel Arbitration is GRANTED.

The litigation is ordered stayed pending arbitration. (Civ. Proc. Code, § 1281.4.)

Under California law, arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. (Blake v. Ecker (2001) 93 Cal.App.4th 728, 741 overruled on other grounds by Le Francois v. Goel (2005) 35 Cal.4th 1094.) A party petitioning to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate and the party opposing the petition has the burden of proving, by a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court (1998) 62 Cal.App.4th 348, 356-57.)

Moving party Defendant Kaiser Foundation Health Plan, Inc. admits that it is a California non-profit public benefit corporation which operates a direct service plan providing medical and hospital services to its members. (Petition, Page 2 ¶ 1.)

Plaintiffs argue that the requirements of Health & Saf. Code, § 1363.1 apply to the subject arbitration agreement. § 1363.1 provides:

Any health care service plan that includes terms that require binding arbitration to settle disputes and that restrict, or provide for a waiver of, the right to a jury trial shall include, in clear and understandable language, a disclosure that meets all of the following conditions:

(a) The disclosure shall clearly state whether the plan uses binding arbitration to settle disputes, including specifically whether the plan uses binding arbitration to settle claims of medical malpractice.

(b) The disclosure shall appear as a separate article in the agreement issued to the employer group or individual subscriber and shall be prominently displayed on the enrollment form signed by each subscriber or enrollee.

(c) The disclosure shall clearly state whether the subscriber or enrollee is waiving his or her right to a jury trial for medical malpractice, other disputes relating to the delivery of service under the plan, or both, and shall be substantially expressed in the wording provided in subdivision (a) of Section 1295[1] of the Code of Civil Procedure.

(d) In any contract or enrollment agreement for a health care service plan, the disclosure required by this section shall be displayed immediately before the signature line provided for the representative of the group contracting with a health care service plan and immediately before the signature line provided for the individual enrolling in the health care service plan.

The Federal Arbitration Act does not preempt Health and Safety Code § 1363.1. (Imbler v. PacifiCare of Cal., Inc. (2002) 103 Cal.App.4th 567, 577.) However, Defendants argue that the Medicare Act preempts Health and Safety Code § 1363.1. This position appears to be well-taken, based upon federal district court cases holding that the later versions of the Medicare Act preempt Health & Safety Code § 1363.1. (Drissi v. Kaiser Found. Hosps., Inc. (N.D. Cal. 2008) 543 F. Supp.2d 1076, 1079-80; (Clay v. Permanente Med. Grp. (N.D. Cal. 2007) 540 F.Supp.2d 1101, 1106-10.)

Plaintiffs assert that the arbitration agreement violates California Health & Safety Code section 1363.1, and is therefore unenforceable. See Malek v. Blue Cross of Cal., 121 Cal. App. 4th 44, 64, 16 Cal. Rptr. 3d 687 (Ct. App. 2004). Defendants respond that application of section 1363.1 is preempted by the Medicare Act.

"[W]hen Congress has 'unmistakably. . . ordained,' that its enactments alone are to regulate a part of commerce, state laws regulating that aspect of commerce must fall." Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S. Ct. 1305, 51 L. Ed. 2d 604 (1977) (quoting Fla. Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142, 83 S. Ct. 1210, 10 L. Ed. 2d 248 (1963)). Here, Congress has unmistakably ordained that Medicare preempts all state regulation:

Relation to State laws. The standards established under this part shall supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to MA plans which are offered by MA organizations under this part.

42 U.S.C. § 1395w-26(b)(3). The standards established under this statute govern the approval and distribution of marketing materials, such as the EOC. See, e.g., 42 C.F.R. §§ 422.80, 422.111. Specifically, 42 C.F.R. § 422.80(c) provides the guidelines for CMS review of Medicare Advantage marketing materials. The CMS review process checks to make sure that the disclosure is printed in a proper format and text size. Id. § 422.80(c)(1). The CMS also reviews the marketing materials to determine whether they include an "[a]dequate written explanation of the grievance and appeals process, including differences between the two, and when it is appropriate to use each." Id. § 422.80(c)(1)(iii).

As California Health & Safety Code section 1363.1 purports to regulate the adequacy of disclosures regarding arbitration agreements imposed by health plans, the foregoing federal regulations preempt its application to Medicare marketing materials. The Court therefore cannot apply section 1363.1 to invalidate the arbitration provision of the EOC governing the relationship between Mrs. Drissi and Defendants.

(Drissi v. Kaiser Found. Hosps., Inc. (N.D. Cal. 2008) 543 F. Supp.2d 1076, 1079-80 [bold emphasis added].)

Similarly, in Clay v. Permanente Med. Grp. (N.D. Cal. 2007) 540 F.Supp.2d 1101, 1106-10, the court applied the following analysis:

Although Defendants assert that their enrollment form and EOC comply with Section 1363.1, their primary position is that the Court need not consider Section 1363.1 because it is preempted by the Medicare Act. The Court agrees.

The Medicare Act explicitly preempts application of state law to the arbitration agreement at issue here. After the most recent amendment, the Medicare Act preempts all state regulation of Medicare Advantage plans not relating to licensing or plan solvency:

42 U.S.C. § 1395w-26(b)(3). The standards established under this statute include 42 C.F.R. § 422.80, "Approval of marketing materials and election forms," and 42 C.F.R. § 422.111, "Disclosure requirements." These regulations set forth the rules governing approval and distribution of Medicare Advantage information to enrollees.

Specifically, 42 C.F.R. § 422.80 (c) provides the guidelines for CMS[2] review of Medicare Advantage marketing materials. The CMS review process checks to make sure that the disclosure is printed in a proper format and text size. Id. § 422.80(c)(1). The CMS also reviews the marketing materials to determine whether they include an "[a]dequate written explanation of the grievance and appeals process, including differences between the two, and when it is appropriate to use each." Id. § 422.80(c)(1)(iii).

These regulations apply to all "marketing materials," as that term is defined in 42 C.F.R. § 422.80(b). This includes any informational materials targeted at Medicare Advantage beneficiaries which, among [*1109] other things, "explain the benefits of enrollment in an MA plan, or rules that apply to enrollees." Id. § 422.80(b)(3) (emphasis added). The regulation provides a number of examples of marketing materials, including, "[m]embership communication materials such as membership rules, subscriber agreements (evidence of coverage), member handbooks and wallet card instructions to enrollees." Id. § 422.80(b)(5)(v) (emphasis added).

The operative arbitration provision in this dispute is contained in the June 2004 EOC. By federal regulation, the EOC is considered "marketing material" and must be approved by the CMS. The CMS has a set of standards it uses in evaluating marketing materials, including the adequacy of the formatting and font size and the adequacy of the description of any grievance procedures. Pursuant to 42 U.S.C. § 1395w-26(b)(3), these regulations supersede any state law or regulation with respect to Medicare Advantage plans such as the Health Plan Senior Advantage plan in which Mr. Clay was enrolled. To the extent California Health & Safety Code section 1363.1 purports to regulate the adequacy of any disclosures in the EOC, it is superseded by federal law, and its application here is preempted.

Congressional intent confirms this result. The Conference Report accompanying the MMA clearly demonstrates that, in amending 42 U.S.C. 1395w-26, Congress intended to broaden the preemptive effects of the Medicare statutory regime, and that it intended to apply the new rules to all subsequent litigation:

The conference agreement clarifies that the MA program is a federal program operated under Federal rules. State laws, do not, and should not apply, with the exception of state licensing laws or state laws related to plan solvency. There has been some confusion in recent court cases. This provision would apply prospectively; thus, it would not affect previous and ongoing litigation.

At oral argument, Plaintiffs' counsel advanced two arguments against preemption. First, counsel asserted that because Section 1363.1 does not conflict with federal law - that is, compliance with one does not require violation of the other - federal law does not preempt. Second, counsel relied on the decision in Pagargigan, where the California Court of Appeal, on very similar facts, found that the Medicare Act did not preempt application of Section 1363.1. See 102 Cal. App. 4th at 1135-36. Both arguments fail because they rely on older versions of the Medicare Act.

Prior to the passage of the BIPA in 2000, Congress had not explicitly preempted state regulation of Medicare Advantage marketing materials. As such, preemption analysis required a court to consider whether compliance with both federal and state law was possible. In that situation, it was permissible for states to impose higher standards than federal law did. Because the preemption is now explicit, the state regulations must fall. See Jones, 430 U.S. at 525.

The Pagarigan court followed the implied preemption analysis in reaching its conclusion that Section 1363.1 was not preempted. See 102 Cal. App. 4th at 1147 ("As Congress has expressly stated, state standards regarding matters outside the specified areas are superseded only to the extent any state regulation is 'inconsistent' with such federal regulations (citing previous version of 42 U.S.C. § 1395w-26(b)(3)(A)) (emphasis in original). Under the facts of that case, application of the older preemption statute was appropriate. Pagarigan had enrolled in the Medicare program in 1995, the governing EOC had been approved in January [*1110] 2000, and Pagarigan died in June 2000. Id. at 1149. All of this preceded passage of the BIPA, when Congress first made the decision to explicitly preempt state regulation of Medicare marketing materials such as the EOC. Id. The same was true in Zolezzi v. Pacificare of Cal., 105 Cal. App. 4th 573, 129 Cal. Rptr. 2d 526 (Ct. App. 2003), on which Plaintiffs also rely. Id. at 588 ("However, that provision was added by BIPA's amendment of the Act on December 21, 2000, which was subsequent to all of the relevant or operative acts and omissions of which Zolezzi complains in her first amended complaint."). Here, the explicit preemption was well-established before the CMS reviewed and approved the governing EOC, and before Defendants are alleged to have committed any of the wrongful acts identified in the Complaint. Nothing in Pagarigan compels a different result.

Accordingly, the Court will not address whether the subject arbitration agreement complied with Health & Saf. Code, § 1363.1

Here, the Petition to Compel Arbitration alleges at ¶¶ 5 – 12 in pertinent part as follows:

5. [Decedent] Angel Ishkhanian became enrolled as a Medicare-eligible member of Kaiser Permanente Senior Advantage effective March 1, 2009, and under Health Plan’s Senior Advantage Special Needs Plan effective January 1, 2014. She remained so enrolled as a Medicare Senior Advantage Health Plan member from that date until September 1, 2020, following her death on August 10, 2020. Effective on January 1 of each year, Health Plan entered into a Kaiser Permanente Senior Advantage Agreement/EOC with Ms. Ishkhanian, through which Health Plan offered to arrange certain hospital and medical services for Medicare-eligible individuals enrolled thereunder. A true and correct copy of the Kaiser Permanente Senior Advantage Special Needs Agreements/EOCs in effect in 2014 and 2020 are attached to this verified Petition as Exhibits A & B, and by this reference incorporated herein as though fully set forth.

6. At the time the purported wrongful acts alleged in the Complaint occurred, Ms. Ishkhanian was enrolled as a Kaiser Permanente Medicare Senior Advantage member, having been enrolled thereunder since March 1, 2009. Health Plan’s records reflect that Ms. Ishkhanian thereafter enrolled in the Senior Advantage Special Needs Plan effective January 1, 2014, for which she completed an Individual Enrollment Request Form online on October 28, 2015. Ms. Ishkhanian also obtained additional, dual Kaiser coverage under Medicaid, through Medi-Cal’s Los Angeles

plan, since January 1, 2015. However, her Medicare Senior Advantage membership in Health Plan remained her primary coverage until her death. A true and correct copy of an eligibility printout showing Ms. Ishkhanian’s enrollment history and her Senior Advantage Individual Enrollment Request Form submitted to Health Plan on December 4, 2013 are attached to this verified Petition as Exhibits C & D, and by this reference incorporated herein as though fully set forth.

8. Page 197 of the 2014 Senior Advantage Special Needs Agreement/EOC (Ex. A) provides that all terms and conditions of the Agreement/EOC are binding on all members who elect coverage or accept benefits under the Agreement/EOC:

By electing coverage or accepting benefits under this Evidence of Coverage, all members legally capable of contracting, and the legal representatives of all members incapable of contracting, agree to all provisions of this Evidence of Coverage.”

A similar provision is contained in each of the 2015 through 2020 Senior Advantage Agreements/EOCs under which Ms. Ishkhanian was enrolled.

9. Pages 200-203[3]of the 2014 Senior Advantage Special Needs Agreement/EOC (Ex. A) were negotiated to provide and do provide for binding arbitration of Plaintiff’s claims. The Binding Arbitration provision states, in part:

· The claim arises from or is related to an alleged violation of any duty incident to or arising out of or relating to this Evidence of Coverage or a member Party’s relationship to Kaiser Foundation Health Plan, Inc.

were improperly, negligently, or incompetently rendered), for premises liability, or relating to the coverage for, or delivery of, services or items,

· The claim is asserted by one or more member Parties against one or more Kaiser Permanente Parties or by one or more Kaiser Permanente Parties against one or more member Parties.

· Governing law does not prevent the use of binding arbitration to resolve the claim.

Members enrolled under this Evidence of Coverage thus give up their right to a court or jury trial, and instead accept the use of binding arbitration except that the following types of claims are not subject to arbitration:

As referred to in this “Binding Arbitration” section, member Parties” include:

· Any person claiming that a duty to him or her arises from a member’s relationship to one or more Kaiser Permanente Parties.

· Any Southern California Permanente Medical Group or The Permanente Medical Group physician.

· Any employee or agent of any of the foregoing “Claimant” refers to a member Party or a Kaiser Permanente Party who asserts a claim as described above. “Respondent” refers to a member Party or a Kaiser

Additionally, the Binding Arbitration provision of the 2014 Senior Advantage Agreement/EOC details, at pages 200-203, how arbitration proceedings should be initiated and various procedural and substantive rules by which the arbitration will be governed. A substantially similar provision requiring binding arbitration of claims is contained in each annual Senior Advantage Agreement/EOC effective for the years 2015 through 2020 under which Ms. Ishkhanian was enrolled. The Binding Arbitration provision incorporates (at p. 202) the Rules for Kaiser

Permanente Member Arbitrations Overseen by the Office of the Independent Administrator, a true and correct copy of which Rules are attached hereto as Exhibit H, and by this reference incorporated herein as though fully set forth.

10. Members enrolling in Health Plan’s Medicare Senior Advantage Individual Plans after January 1, 2008, including Ms. Ishkhanian, have the right to opt-out of the binding arbitration program within 60 days of his or her initial Senior Advantage effective date. (See Ex. A, p. 200

[outlining opt-out right].) An Arbitration Opt-Out Notice is sent to each Senior Advantage individual enrollee with his or her Senior Advantage Membership Card. A true and correct copy of the Arbitration Opt-Out Notice is attached hereto as Exhibit E, and by this reference incorporated

herein as though fully set forth. A Notice Letter, entitled “Your Right to Opt Out of Kaiser Permanente Senior Advantage’s Arbitration Program,” was mailed to Ms. Ishkhanian following her Medicare Senior Advantage enrollment. Health Plan’s records reflect that the Opt-Out Notice letter was mailed to Ms. Ishkhanian on March 6, 2009, and Health Plan’s records contain the following information reflecting the mailing:

The member may opt-out of the Binding Arbitration provision by completing the Arbitration Opt-Out Notice and returning it to the Office of Independent Administrator (“OIA”) in an enclosed pre-addressed envelope. The OIA’s records reflect that Ms. Ishkhanian did not submit an Arbitration Opt-Out Notice.

11. Health Plan’s Arbitration Opt-Out Notice was approved by CMS on October 15, 2007. Health Plan’s submission of the Arbitration Opt-Out Notice and CMS’s notification of approval are attached hereto as Exhibits F & G to this Petition, and by this reference incorporated herein as though fully set forth. The 2014 and 2020 Agreements/EOCs, the Senior Advantage Individual Enrollment Request Form, and the Arbitration Opt-Out Notice (Exs. A, B, D, and E hereto) are all Medicare Act marketing materials approved by CMS under the Medicare Act.

12. Health Plan members who are eligible for Medicare and have elected enrollment in Health Plan’s Senior Advantage Individual Plans, including Ms. Ishkhanian, are mailed a copy of the applicable Senior Advantage EOC upon enrollment and annually thereafter through the 2017

plan year. Thereafter, a notice was mailed to her annually advising that a copy of the Senior Advantage Agreement/EOC will be sent upon request, in accordance with existing Medicare regulations as issued by the United States Centers for Medicare and Medicaid Services (“CMS”). The Senior Advantage Agreement/EOC is also available to enrollees online on Kaiser’s website.

Decedent Angel Ishkhanian, through the Power of Attorney exercised by Plaintiff Lia Ishkhanian, signed the Enrollment Application on December 4, 2013, which led to an Effective Date of Coverage on January 1, 2014. (Petition, Exh. D, Page 494.) Decedent had 60 days to opt-out of the arbitration program, but failed to do so. (Petition, Exhs. F, G; Declaration of Danny Harris Covarrubio, ¶ 5; Declaration of Judy Tome, ¶ 3.) Decedent had open-heart surgery on January 21, 2014. (Complaint, ¶ 62.)

Based upon the forgoing allegations and supporting Exhibits attached to the Petition, there is evidence that an agreement to arbitration Plaintiffs’ claims exists as between Plaintiffs and moving Defendants.

Plaintiffs asserted the following claims in the Complaint: (1) survival action for products liability (strict products liability—design defect, manufacturing defect, failure to warn and negligence); and (2) wrongful death—medical negligence. However, only the second cause of action for wrongful death is asserted against these moving Kaiser defendants, Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, and Southern California Permanente Medical Group. The first cause of action is asserted against the manufacturing Defendants and thus need not come within the scope of the arbitration agreement.

The wrongful death cause of action is based upon the alleged medical negligence of the Kaiser (Hospital) Defendants in using the Stockert 3T, which carried a significant risk of patient infection, and a breach of the duty to ensure the Stockert 3T used during decedent’s open-heart surgery on January 21, 2014 was safe for use, and the failure to ensure it was properly and adequately cleaned and disinfected. (Complaint, ¶¶ 155-157.) The Hospital Defendants also allegedly knew that decedent was at risk of contracting an NTM infection given her exposure to the bacteria during her open-heart surgery. (Id. at ¶ 158.) The Hospital Defendants also allegedly failed to inform or warn decedent or her treating physicians that she may have been exposed to NTM and/or that she may be suffering from an NTM infection. (Id., ¶ 161.)

Because the arbitration agreement expressly applies to claims for medical or hospital malpractice, the claim against moving Defendants is subject to arbitration. Additionally, Plaintiff Lia Ishkanian, who asserts her wrongful death claim, is a “member Party,” since that term is defined in the arbitration clause to include “[a] member’s heir, relative, or personal representative,” and “[a]ny person claiming that a duty to him or her arises from a member’s relationship to one or more Kaiser Permanente Parties.” (Petition, Exh. A, Evidence of Coverage, Page 201 (Exh. A – Page 222).) Further, Plaintiff’s claims are asserted against “Kaiser Permanente Parties,” as that term is defined in the arbitration clause to include moving Defendants Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, and Southern California Permanente Medical Group. (Id.)

As such, the moving Kaiser Defendants have demonstrated that an agreement to arbitrate the claims asserted them. The burden shifts to Plaintiffs to demonstrate that such agreement should not be enforced.

1. There is no evidence before this Honorable Court that Plaintiffs’ decedent signed an arbitration agreement; The only signature submitted with the Petition is on an enrollment form which does not contain any provision for arbitration. Moreover, Petitioner’s citation to the purported language setting forth the arbitration terms is absent. Petition cites Exhibit A, pages 200-203 for the proposition that is where the arbitration agreement is found in this massive, 239 page “enrollment agreement”; pages 200-203 have been excerpted and attached for reference as Plaintiffs’ Exhibit 1; no such language for arbitration exists therein;

2. Even had Petition cited the correct pages of its Exhibit for the proposition it advances for arbitration, correctly found (with difficulty) in Petitioner’s Exhibit A, at pages 221 & 222 (Plaintiffs’ Exhibit 2), the purported arbitration provisions are indistinguishable from the other, many provisions and thus, as a matter of law, does not comply with Health & Safety Code §1361.1 that such terms be “prominently displayed,” and not buried within this massive document and are not enforceable. (Malek v. Blue Cross of California (2004) 121 Cal.App.4th44, 64-65);

For the reasons discussed above, the Medicare Act preempts Health & Safety Code § 1361.1. This argument is not persuasive.

3. The purported arbitration provision violates Health & Safety Code §1361.1 because is not even contained in the only signature provided to this court as evidence of Ms. Ishkhanian’s enrollment, and absent and not immediately preceding the signature on the enrollment form, Exhibit D to the Petition at pages 488-494 (Plaintiffs’ Exhibit 3), and thus is unenforceable under unambiguous law so holding: Malek v. Blue Cross of California (2004) 121 Cal.App.4th44, 64-65 and Imbler v. Pacificare of California, Inc. (2002) 103 Cal.App.4th 567, 577-580; and,

For the reasons discussed above, the Medicare Act preempts Health & Safety Code § 1361.1. This argument is not persuasive.

4. The Petition is so flawed as to be incomprehensible, further supporting Plaintiffs’ Opposition that Petition has failed to meet its burden of proof.

This argument is simply hyperbole, and is unpersuasive given the above analysis.

The Court continued the hearing on this motion to allow moving parties to submit a copy of the Power of Attorney in effect on December 4, 2013, the date Plaintiff Lia Ishkhanian, signed the Enrollment Application on behalf of Decedent Angel Ishkhanian.

The Court has reviewed the Supplemental Documents submitted by Defendant which states that Decedent Angel Ishkhanian authorized her daughter Lia Ishkhanian “to make or cancel appointments to speak with doctors and medical staff or any Kaiser associates to obtain any and all medical and non medical information concerning [her] file at Kaiser Permanente.” (See notice of Filing of Amended Exhibit A To Supplemental Documents). This does not constitute a power of attorney in accordance with Prob. Code § 4121[4], nor does it grant Lia Ishkhanian the authority to enter into agreements on behalf of Decedent.

However, the question is whether Lia Ishkhanian was the ostensible agent of Decedent Angel Ishkhanian.

Generally, a person who is not a party to an arbitration agreement is not bound by it. (Buckner v. Tamarin, supra, 98 Cal.App.4th at p. 142.) However, there are exceptions. For example, a patient who signs an arbitration agreement at a health care facility can bind relatives who present claims arising from the patient's treatment. (Mormile v. Sinclair (1994) 21 Cal.App.4th 1508, 1511–1516 [26 Cal. Rptr. 2d 725]; Bolanos v. Khalatian (1991) 231 Cal. App. 3d 1586, 1591 [283 Cal. Rptr. 209].) Further, a person who is authorized to act as the patient's agent can bind the patient to an arbitration agreement. (Garrison, supra, 132 Cal.App.4th at pp. 264–266; see Buckner, supra, 98 Cal.App.4th at p. 142.)

In Garrison, the court held that a daughter who had a durable power of attorney to make health care decisions for her mother could bind her mother to an arbitration agreement in a residential care facility's admission documents. (Garrison, supra, 132 Cal.App.4th at p. 265.) The Garrison court reasoned that the decision whether to accept an arbitration provision in the admission documents was “part of the health care decisionmaking process” authorized in the durable power of attorney for health care. (Id. at p. 266.)

Here, Josephina did not sign the arbitration agreements; thus, this is not a case where a signatory patient binds his or her spouse who asserts a claim derived from the patient's care. Further, unlike the situation in Garrison, at the time Luis signed the arbitration agreements he did not have a power of attorney authorizing him to act as Josephina's agent. Thus, there was no written instrument conferring agency power on Luis.

Even when there is no written agency authorization, an agency relationship may arise by oral consent or by implication from the conduct of the parties. (van't Rood v. County of Santa Clara (2003) 113 Cal.App.4th 549, 571 [6 Cal. Rptr. 3d 746].) However, an agency cannot be created by the [*588] conduct of the agent alone; rather, conduct by the principal is essential to create the agency. Agency “can be established either by agreement between the agent and the principal, that is, a true agency [citation], or it can be founded on ostensible authority, that is, some intentional conduct or neglect on the part of the alleged principal creating a belief in the minds of third persons that an agency exists, and a reasonable reliance thereon by such third persons.” (Lovetro v. Steers (1965) 234 Cal. App. 2d 461, 474–475 [44 Cal. Rptr. 604]; see Civ. Code, §§ 2298, 2300.) “ ‘ “The principal must in some manner indicate that the agent is to act for him, and the agent must act or agree to act on his behalf and subject to his control.”…’ [Citations.] Thus, the ‘formation of an agency relationship is a bilateral matter. Words or conduct by both principal and agent are necessary to create the relationship … .’ ” (van't Rood, supra, 113 Cal.App.4th at p. 571, italics added.)

Applying these principles, in Pagarigan, supra, 99 Cal.App.4th at pages 301–302, the appellate court affirmed the denial of a nursing home's motion to compel arbitration, finding there was no evidence that a comatose mother had authorized her daughters to act as her agents to bind her to a nursing home arbitration agreement. Pagarigan rejected the nursing home's contention that the daughters' act of signing the agreements created agency status, explaining that conduct by the principal was necessary to show the agency. (Ibid.)

(Flores v. Evergreen at San Diego, LLC (2007) 148 Cal.App.4th 581, 587-88 [bold emphasis added].)

Based on the allegations contained in the Complaint, which constitute judicial admissions against Plaintiff[5], Decedent, by her acts of undergoing the surgery knowing that her daughter had signed the Senior Advantage Special Needs Agreement/EOC containing the arbitration agreement on behalf of Decedent. This is because the Complaint does not allege that Decedent was incapacitated or otherwise unconscious at the time Plaintiff Lia signed the Senior Advantage Special Needs Agreement/EOC, nor when Decedent received the open heart surgery. In fact, Plaintiff admits that, following the surgery, Decedent appeared to be recovering well from the surgery and was discharged from the hospital, but later bean to complain of excessive fatigue, loss of appetite, unintentional weight loss, intermittent fevers, chills. (Complaint, ¶¶ 61, 63, 64.) Thus, Plaintiff admits Decedent was conscious and coherent at the time she received the open heart surgery, which medical care she received as a result of Plaintiff Lia signed the Senior Advantage Special Needs Agreement/EOC on behalf of Decedent. Thus, Decedent at least negligently, if not intentionally, had allowed Lia to represent herself as having authorization to sign the Senior Advantage Special Needs Agreement/EOC on behalf of Decedent.

As such, Plaintiff’s judicial admissions demonstrate that Plaintiff Lia Ishkhanian had ostensible authority to enter into the arbitration agreement on behalf of Decedent. A such, Plaintiff’s objection on this ground is not persuasive.

Plaintiff has failed to demonstrate that the arbitration agreement should not be enforced against her. As such, the petition to compel arbitration is GRANTED.

The litigation is ordered stayed pending arbitration. (Civ. Proc. Code, § 1281.4.)

[1] CCP § 1295(a) provides:

(a) Any contract for medical services which contains a provision for arbitration of any dispute as to professional negligence of a health care provider shall have such provision as the first article of the contract and shall be expressed in the following language: “It is understood that any dispute as to medical malpractice, that is as to whether any medical services rendered under this contract were unnecessary or unauthorized or were improperly, negligently or incompetently rendered, will be determined by submission to arbitration as provided by California law, and not by a lawsuit or resort to court process except as California law provides for judicial review of arbitration proceedings. Both parties to this contract, by entering into it, are giving up their constitutional right to have any such dispute decided in a court of law before a jury, and instead are accepting the use of arbitration.”

Cal. Civ. Proc. Code § 1295(a).

[2] Center for Medicare and Medicaid Services.

[3] The arbitration clause is found at Exhibit A Pages 221-23, but technically the pages are 200-203 of the Evidence of Coverage document. As such, Plaintiffs’ protestation about the page number is much ado about nothing.

[4] A power of attorney is legally sufficient if all of the following requirements are satisfied:

(a) The power of attorney contains the date of its execution.

(b) The power of attorney is signed either (1) by the principal or (2) in the principal’s name by another adult in the principal’s presence and at the principal’s direction.

(c) The power of attorney is either (1) acknowledged before a notary public or (2) signed by at least two witnesses who satisfy the requirements of Section 4122.

(Prob. Code § 4121.)

[5]

Judicial admissions may be made in a pleading, by stipulation during trial, or by response to request for admission. (Citations omitted.) Facts established by pleadings as judicial admissions “‘are conclusive concessions of the truth of those matters, are effectively removed as issues from the litigation, and may not be contradicted, by the party whose pleadings are used against him or her.’ (Citations omitted.) ‘“[A] pleader cannot blow hot and cold as to the facts positively stated.”’ (Citation omitted.)

Not every document filed by a party constitutes a pleading from which a judicial admission may be extracted. Code of Civil Procedure section 420 explains that pleadings serve the function of setting forth “the formal allegations by the parties of their respective claims and defenses, for the judgment of the Court.” (Code Civ. Proc., § 420.) “The pleadings allowed in civil actions are complaints, demurrers, answers, and cross-complaints.” (Code Civ. Proc., § 422.10.) When these pleadings contain allegations of fact in support of a claim or defense, the opposing party may rely on the factual statements as judicial admissions. (St. Paul Mercury, supra, 111 Cal.App.4th at p. 1248.) [*747]

(Myers v. Trendwest Resorts, Inc. (2009) 178 Cal.App.4th 735, 746-747.)