Ralph R. Fresquez v. Trinidad Inn ( 2022 )

The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.
SUMMARY
August 25, 2019
2022COA96No. 21CA0118, Fresquez v. Trinidad Inn — Health and Welfare
— Health Care Availability Act — Arbitration Agreements; ADR
— Arbitration; Agency — Actual Authority — Apparent
Authority
A division of the court of appeals considers an agent’s
authority to bind a principal to an arbitration agreement under the
Health-Care Availability Act (the Act), §§ 13-64-101 to -503, C.R.S.
2021. While the Act details the steps a health care provider must
take to form an enforceable arbitration agreement with a patient, it
is silent regarding the requirements that a patient’s agent must
satisfy to bind the patient to an arbitration agreement. In this case,
the division considers the novel issue of whether an agent with
actual authority to execute the documents required to admit the
patient to a health care facility necessarily also possesses the
authority to bind the patient to an arbitration agreement with the
facility.
The division holds that an agent’s actual authority to make
health care decisions for a patient and to sign the documents
necessary to admit the patient to a health care facility does not
encompass the authority to bind the patient to an arbitration
agreement, unless the patient has granted the agent an unlimited
power of attorney or otherwise clearly granted the agent the specific
authority to bind the patient to an arbitration agreement.
COLORADO COURT OF APPEALS 2022COA96Court of Appeals No. 21CA0118
Las Animas County District Court No. 20CV30010
Honorable J. Clay McKisson, Judge
Ralph R. Fresquez, individually and as Personal Representative of the Estate of
Beatrice Trujillo, deceased,
Plaintiff-Appellee,
v.
Trinidad Inn, Inc., d/b/a Trinidad Inn; C&G Health Care Management, Inc.;
and Brittnee Fransua, in her Capacity as Administrator of Trinidad Inn,
Defendants-Appellants.
JUDGMENT AFFIRMED AND CASE
REMANDED WITH DIRECTIONS
Division VII
Opinion by JUDGE LIPINSKY
Navarro and Kuhn, JJ., concur
Announced August 25, 2022
Reddick Law, PLLC, Brian D. Reddick, Robert W. Francis, Little Rock,
Arkansas, for Plaintiff-Appellee
Messner Reeves LLP, Douglas C. Wolanske, Kendra N. Beckwith, Mary Byrne
Fletcher, Darren D. Alberti, Denver, Colorado, for Defendants-Appellants
¶1 The Health-Care Availability Act (the Act), §§ 13-64-101
to -503, C.R.S. 2021, permits health care providers to ask their
patients to sign arbitration agreements. The General Assembly
adopted the Act based on its belief that increasing the number of
medical malpractice cases resolved through arbitration, rather than
through the judicial system, would help “assure the continued
availability of adequate health-care services . . . by containing the
significantly increasing costs of malpractice insurance for medical
care institutions.” § 13-64-102(1), C.R.S. 2021.
¶2 But patients cannot be compelled to surrender their right to
sue health care providers in a court of law. The Act specifies that,
although a health care provider may ask a patient to sign an
arbitration agreement, the patient may not be denied care if the
patient refuses to sign the agreement or timely exercises the
statutory right to rescind an arbitration agreement the patient
previously signed. Thus, a patient must be admitted to a hospital,
skilled nursing facility, or other health care facility even though the
patient declined to consent to arbitrate future disputes involving the
facility.
1
¶3 Significantly, although the Act details the steps a health care
provider must take to form an enforceable arbitration agreement
with a patient, it is silent regarding the requirements that a
patient’s agent must satisfy to bind the patient to an arbitration
agreement. In this case, we consider the novel issue of whether an
agent with actual authority to execute the documents required to
admit a patient to a health care facility necessarily also possesses
the authority to bind the patient to an arbitration agreement with
the facility.
¶4 We hold that when an agent has authority to execute the
documents necessary for admission of a patient to a health care
facility, such authority does not, without more, encompass the
authority to bind the patient to an arbitration agreement where the
patient was unaware the facility would ask the agent to sign an
arbitration agreement and the patient never discussed arbitration
with the agent or with representatives of the facility.
¶5 In his lawsuit against defendants, Trinidad Inn, Inc., a skilled
nursing facility; C&G Health Care Management, Inc., which owns,
operates, and manages Trinidad Inn; and Brittnee Fransua, in her
capacity as administrator of Trinidad Inn (collectively, the Trinidad
2
defendants), plaintiff, Ralph R. Fresquez, alleged that their
negligence caused the death of Fresquez’s mother, Beatrice Trujillo,
while she was a resident at Trinidad Inn. The Trinidad defendants
moved to compel arbitration based on an arbitration agreement that
Fresquez signed, purportedly in his capacity as Trujillo’s agent, at
the time of Trujillo’s admission to Trinidad Inn. Following an
evidentiary hearing, the district court denied the Trinidad
defendants’ motion on the grounds that the arbitration agreement
was invalid.
¶6 The Trinidad defendants appeal the district court’s order
denying their motion to compel arbitration. We affirm.
I. Background
¶7 Trujillo decided to move into Trinidad Inn after finding it
difficult to live alone. Fresquez assisted Trujillo with her admission
to Trinidad Inn. As part of this process, he provided the social
services assistant at Trinidad Inn with a referral packet from
Trujillo’s primary care physician. The referral packet included a
note from the physician saying that “attorney is requesting nursing
home placement” for Trujillo. The social services assistant said she
3
believed the reference to “attorney” meant that Trujillo had executed
a power of attorney authorizing Fresquez to act on her behalf.
¶8 Fresquez coordinated Trujillo’s admission to Trinidad Inn with
the social services assistant. The social services assistant testified
that, at the time of Trujillo’s admission, Fresquez told her that he
held a power of attorney for Trujillo. The social services assistant
never saw any such power of attorney, however.
¶9 Fresquez recalled that, shortly after he and Trujillo arrived at
Trinidad Inn for Trujillo’s admission, the social services assistant
called him to her office “to sign . . . papers.” One of those papers
was a “Voluntary Agreement for Arbitration” (the arbitration
agreement). The arbitration agreement stated that “[t]he parties
agree that they shall submit to binding arbitration all disputes
against each other.” It defined the parties as “Trinidad Inn,
including its Owners, Managers, Employees, and Agents,” and “the
Resident.” The arbitration agreement defined “the Resident” as
Trujillo and her “family, estate, heirs, personal representatives, or
. . . any person claiming that a duty of care arises from [Trujillo’s]
stay and care at [Trinidad Inn].”
4
¶ 10 Fresquez later said that he signed the arbitration agreement,
together with the other documents the social services assistant
provided to him, because he believed that Trinidad Inn would not
admit Trujillo if he did not sign it. No representative of Trinidad Inn
discussed the arbitration agreement or the other documents with
Trujillo. Trujillo died six months after her admission to Trinidad
Inn.
¶ 11 In denying the Trinidad defendants’ motion to compel
arbitration, the district court ruled that (1) Fresquez possessed
actual authority to bind Trujillo to the arbitration agreement; (2) the
“rule of equal dignities” invalidated such authority, however,
because no document memorialized Fresquez’s authority; and
(3) Fresquez lacked apparent authority to bind Trujillo to the
arbitration agreement.
II. Analysis
¶ 12 The Trinidad defendants contend that the district court erred
by ruling that the arbitration agreement was invalid. They
specifically argue that Trujillo granted Fresquez actual authority to
bind her to the arbitration agreement and that the equal dignities
rule does not apply here, even though no writing memorialized
5
Fresquez’s authority to act on behalf of Trujillo at the time of
Trujillo’s admission to Trinidad Inn. In the alternative, they
contend that Fresquez possessed apparent authority to bind Trujillo
to the arbitration agreement.
A. Standard of Review
¶ 13 “We review de novo the district court’s decision on a motion to
compel arbitration.” Lujan v. Life Care Ctrs. of Am., 222 P.3d 970,
972 (Colo. App. 2009). “In considering a motion to compel
arbitration, the district court must first determine whether a valid
agreement to arbitrate exists between the parties to the action.” Id.“The court may properly refuse to compel arbitration only when
there is no valid agreement to arbitrate or when the issue sought to
be arbitrated is clearly beyond the scope of the arbitration
provision.” Id. “Whether a valid agreement to arbitrate exists is a
matter of law that we review de novo.” Id.¶ 14 In this case, the validity of the arbitration agreement hinges on
the existence and scope of any agency relationship between Trujillo
and Fresquez and, specifically, whether Fresquez possessed the
authority to bind Trujillo to the arbitration agreement. “Whether an
agency relationship exists generally is a question of fact, though the
6
court may decide the question as one of law when the facts are
undisputed.” Villalpando v. Denver Health & Hosp. Auth., 181 P.3d
357, 363 (Colo. App. 2007); see also Gross v. GGNSC Southaven,
L.L.C., 817 F.3d 169, 180 (5th Cir. 2016) (holding that the scope of
a son’s actual authority to bind his mother to a nursing home’s
arbitration agreement was “a question of fact”); Rush Creek Sols.,
Inc. v. Ute Mountain Ute Tribe, 107 P.3d 402, 406 (Colo. App. 2004)
(“The issue of apparent authority is generally an issue of fact to be
determined by the trial court. . . . However, if the underlying facts
are undisputed, fact finding is not required, and the legal effect of
those facts constitutes a question of law.”).
¶ 15 “On appeal, we review the trial court’s factual findings under a
clear error standard.” Villalpando, 181 P.3d at 363. We “won’t
disturb such findings if there is any evidence in the record
supporting them.” Woodbridge Condo. Ass’n v. Lo Viento Blanco,
LLC, 2020 COA 34, ¶ 24, 490 P.3d 598, 606, aff’d, 2021 CO 56,
489 P.3d 735.
7
B. Applicable Law
1. Arbitration Agreements Under the Act
¶ 16 As a general rule, Colorado favors arbitration agreements. See
J.A. Walker Co. v. Cambria Corp., 159 P.3d 126, 128 (Colo. 2007).
But health care arbitration agreements, unlike other types of
arbitration agreements, are subject to strict requirements set forth
in the Act. See § 13-64-403, C.R.S. 2021. Although “the [Act]
allows arbitration of disputes, [it] also contains protective provisions
curbing abusive practices in obtaining agreements to arbitrate.”
Moffett v. Life Care Ctrs. of Am., 219 P.3d 1068, 1073 (Colo. 2009).
¶ 17 The Act provides that arbitration agreements must be
voluntary. § 13-64-403(1) (“It is the intent of the general assembly
that an arbitration agreement be a voluntary agreement between a
patient and a health-care provider . . . .”). It specifies that “[n]o
health-care provider shall refuse to provide medical care services to
any patient solely because such patient refused to sign [an
arbitration agreement] or exercised the ninety-day right of
rescission.” § 13-64-403(7). Health care providers must include
this statutory language, among other required disclosures, in any
agreement with a patient containing an arbitration provision.
8
§ 13-64-403(4). The statement must appear “[i]mmediately
preceding the signature lines for such an agreement . . . printed in
at least ten-point, bold-faced type.” Id. A health care provider’s
failure to comply with these statutory requirements renders a
health care arbitration agreement unenforceable. Johnson v.
Rowan Inc., 2021 COA 7, ¶ 24, 488 P.3d 1174, 1179.
2. Actual Authority
¶ 18 “[A]n agent acts with actual authority when, at the time of
taking action that has legal consequences for the principal, the
agent reasonably believes, in accordance with the principal’s
manifestations to the agent, that the principal wishes the agent so
to act.” State Farm Mut. Auto. Ins. Co. v. Johnson, 2017 CO 68,
¶ 21, 396 P.3d 651, 656 (quoting Restatement (Third) of Agency
§ 2.01 (Am. L. Inst. 2006)). Actual authority is premised on “a
principal’s expressive conduct toward an agent, through which the
principal manifests assent to be affected by the agent’s action, and
the agent’s reasonable understanding of the principal’s
manifestation.” Restatement (Third) of Agency § 2.01 cmt. c.
¶ 19 “The focal point for determining whether an agent acted with
actual authority is the agent’s reasonable understanding at the time
9
the agent takes action.” Id. “An agent has actual authority to take
action designated or implied in the principal’s manifestations to the
agent and acts necessary or incidental to achieving the principal’s
objectives, as the agent reasonably understands the principal’s
manifestations and objectives when the agent determines how to
act.” Id. § 2.02(1). “The context in which principal and agent
interact, including the nature of the principal’s . . . personal
situation, frames the reasonableness of an agent’s understanding of
the principal’s objectives.” Id. § 2.02 cmt. e. “An agent’s actual
authority encompasses acts necessary to accomplish the end the
principal has directed that the agent achieve.” Id.
¶ 20 The inquiry into whether an agent possessed the actual
authority to execute a document on behalf of the principal “contains
both an objective and a subjective component: the agent must
subjectively hold the belief that [he] possesses authority, and that
belief must be objectively reasonable in light of the principal’s
actions.” Stein Eriksen Lodge Owners Ass’n v. MX Techs. Inc., 2022
UT App 30, ¶ 26, 508 P.3d 138, 147 (citing Restatement (Third) of
Agency § 2.02 cmt. e).
10
¶ 21 Actual authority incorporates concepts of express and
implied authority. State Farm, ¶ 21, 396 P.3d at 656. “Express
authority exists when the principal directly states that the agent
may perform a particular act on the principal’s behalf.” Id. In
contrast, implied authority includes “the authority to perform acts
that are ‘incidental to, or are necessary, usual, and proper to
accomplish or perform, the main authority expressly delegated to
the agent.’” Id. at ¶ 22, 396 P.3d at 656 (quoting Willey v. Mayer,
876 P.2d 1260, 1264 (Colo. 1994)); see Restatement (Third) of
Agency § 2.01 cmt. b (stating that implied authority is “actual
authority either (1) to do what is necessary, usual, and proper to
accomplish or perform an agent’s express responsibilities or (2) to
act in a manner in which an agent believes the principal wishes the
agent to act based on the agent’s reasonable interpretation of the
principal’s manifestation in light of the principal’s objectives and
other facts known to the agent”). “Implied authority is actual
authority circumstantially proved.” Citywide Banks v. Armijo, 313
P.3d 647, 652 (Colo. App. 2011).
¶ 22 In Moffett, the supreme court held that a patient’s attorney-in-
fact possesses the authority to bind the patient to an arbitration
11
agreement under the Act where the governing power of attorney
does not limit the agent’s authority “to waive the right to a jury trial
and submit to arbitration” on behalf of the patient. 219 P.3d at
1076. The supreme court concluded in Moffett that the patient’s
attorney-in-fact was authorized to bind the patient to an arbitration
agreement “[a]bsent a restriction or limitation on his authority
under the [power of attorney] he holds.” Id. at 1079. “The [Act] and
Colorado’s recognized policy favoring arbitration coexist with well-
established statutory and common law doctrines governing agency
and [powers of attorney].” Id. at 1074.
¶ 23 For purposes of section 13-64-403, the section of the Act
addressing arbitration agreements, “the term ‘patient’ . . . includes
a person acting with legal authority under a [power of attorney] to
enter into such an agreement on behalf of [an] incapacitated
patient.” Id. The authority of the person acting on behalf of the
patient can arise from a source other than a power of attorney. See
id. at 1078 (“[S]ection 13-64-403 cannot be read without regard for
the extensive statutory and common law doctrine permitting
authorized agents to bind principals in all kinds of contracts,
including arbitration agreements.”); Lujan, 222 P.3d at 977 (holding
12
that a determination of an agent’s scope of authority under a
medical durable power of attorney must include an analysis of the
“common law agency principles or applicable statutory powers of
attorney”) (emphasis omitted).
¶ 24 Moffett teaches that courts must carefully scrutinize the scope
of an agent’s actual authority to determine whether the agent was
empowered to bind a patient to a health care arbitration agreement.
The reasoning of Moffett, therefore, is not limited to cases in which
the principal executed a power of attorney. For this reason, courts
must apply the law of agency, subject to the restrictions imposed
under the Act, to determine whether a patient’s agent is authorized
to waive the patient’s right to seek damages in a court of law.
3. Apparent Authority
¶ 25 In contrast to actual authority, “[a]pparent authority is the
power held by an agent or other actor to affect a principal’s legal
relations with third parties when a third party reasonably believes
the actor has authority to act on behalf of the principal and that
belief is traceable to the principal’s manifestations.” Restatement
(Third) of Agency § 2.03 (emphasis added). “Apparent authority . . .
‘flows only from the acts and conduct of the principal.’” State Farm,
13
¶ 20, 396 P.3d at 656 (quoting Zions First Nat’l Bank v. Clark Clinic
Corp., 762 P.2d 1090, 1095 (Utah 1988)). It is “established by proof
of ‘written or spoken words or other conduct of the principal which,
reasonably interpreted, causes a person to believe that the principal
consents to have the act done on his behalf by a person purporting
to act for him.’” Villalpando, 181 P.3d at 363 (quoting Lucero v.
Goldberger, 804 P.2d 206, 209 (Colo. App. 1990)).
C. Fresquez Lacked Actual Authority to Bind Trujillo to
the Arbitration Agreement
¶ 26 We now turn to the nature of the authority that Trujillo
granted to Fresquez and whether, under that authority, Fresquez
could bind Trujillo to the arbitration agreement. This analysis
requires us to determine the type of authority that Trujillo provided
to Fresquez and the scope of that authority. The parties agree, and
the record reflects, that Trujillo never executed a power of attorney
appointing Fresquez as her agent before Fresquez signed the
arbitration agreement.
1. The District Court Did Not Clearly Err by Finding that
Fresquez Possessed Actual Authority to Make Health Care
14
Decisions and Execute Documents Necessary to Admit Trujillo
to Trinidad Inn
¶ 27 Based on undisputed evidence presented at the hearing, the
district court found that
 Trujillo wanted Fresquez to make decisions regarding her
medical care and her admission to Trinidad Inn;
 Fresquez possessed actual authority to “make admission
decisions and sign documents for the purpose of having
[Trujillo] admitted to Trinidad Inn”;
 before Trujillo’s admission, Trujillo manifested her assent
for Fresquez to sign such documents;
 Fresquez “signed the admission documents so that
[Trujillo] could be admitted” to Trinidad Inn;
 Fresquez “reasonably believed that he was carrying out
[Trujillo’s] wishes when he signed the admission
documents”; and
 “Trujillo’s actions and statements after her admission
corroborate [Fresquez’s] testimony that he was
authorized to make admission decisions and sign
15
documents for the purpose of having her admitted to
Trinidad Inn.”
¶ 28 The evidence confirms that Trujillo wanted Fresquez to act as
her agent in making medical care decisions on her behalf, including
the decisions necessary for her admission to Trinidad Inn. We thus
conclude that the district court did not clearly err by finding that
Fresquez possessed actual authority to make medical care decisions
for Trujillo and to execute the admission documents on her behalf.
2. The District Court Erred by Determining that Fresquez
Possessed Actual Authority to Bind Trujillo to the
Arbitration Agreement
¶ 29 The district court’s characterization of Fresquez’s actual
authority did not stop with its finding that Trujillo authorized
Fresquez to make medical care decisions for her and to execute
Trinidad Inn’s admission documents on her behalf. The district
court also said that, by signing the arbitration agreement, Fresquez
was “making an admission decision for . . . Trujillo” and “the
[arbitration agreement] was within the scope of documents that
[Trujillo] gave [Fresquez] authority to sign.”
¶ 30 These statements can be read in one of two ways. They can be
read as further findings of fact. Alternatively, they can be
16
interpreted as a legal conclusion that, under the Act, Fresquez’s
actual authority “to make admission decisions and sign documents
for the purpose of having her admitted to Trinidad Inn” necessarily
meant he possessed the authority to bind Trujillo to the arbitration
agreement.
¶ 31 If the district court’s statements are findings of fact based on
evidence presented at the hearing, we review them for clear error.
See Villalpando, 181 P.3d at 363. If they are a legal determination,
we review de novo whether, under the Act, Fresquez’s authority to
“make admission decisions” and sign admission documents for
Trujillo necessarily encompassed the authority to bind Trujillo to
the arbitration agreement. See Johnson, ¶ 16, 488 P.3d at 1178.
a. If the District Court’s Statements Regarding Fresquez’s
Authority to Bind Trujillo to the Arbitration Agreement Were
Findings of Fact, They Were Clearly Erroneous
¶ 32 The record does not establish that, based on Trujillo’s
“expressive conduct,” Fresquez reasonably understood that Trujillo
wished for him to waive her right to seek a legal remedy through the
judicial system. See Restatement (Third) of Agency § 2.01 cmt. c
(explaining that determining whether the agent is authorized to
perform certain acts requires both the “principal’s expressive
17
conduct” and the agent’s “reasonable understanding” of the
principal’s wishes manifested through that conduct).
¶ 33 The district court did not find, and the record does not show,
that Trujillo and Fresquez ever discussed the arbitration agreement
specifically or the concept of arbitration generally. The record
contains no evidence that any of Trujillo’s words or conduct related
in any way to arbitration. Therefore, the district court had no
evidentiary basis to support a finding of fact that Fresquez
reasonably understood that Trujillo had granted him actual
authority to bind her to the arbitration agreement.
¶ 34 The Trinidad defendants argue that, because Fresquez made
certain financial and administrative decisions on Trujillo’s behalf,
his actual authority necessarily extended to binding Trujillo to the
arbitration agreement. But the record shows that those financial
and administrative decisions related exclusively to Trujillo’s
admission to and residency at Trinidad Inn. Such decisions were
thus “incidental to, or [were] necessary, usual, and proper to
accomplish or perform, the main authority expressly delegated to
the agent.” State Farm, ¶ 22, 396 P.3d at 656 (quoting Willey, 876
P.2d at 1264); see Restatement (Third) of Agency § 2.01 cmt. b.
18
¶ 35 For the same reasons, to the extent the district court found
that Fresquez reasonably believed he possessed the authority to
bind Trujillo to the arbitration agreement simply because he was
authorized to make health care decisions for her and to sign the
admission documents, such finding was also clearly erroneous.
The arbitration agreement expressly stated, consistent with the Act,
that Trinidad Inn could not “refuse to provide medical care services”
to a patient who declined to sign it. For this reason, the arbitration
agreement cannot be reasonably understood to be an “admission
document.” Thus, nothing in the record indicated that Fresquez
could have reasonably believed, through Trujillo’s expressed wish
that he make health care decisions for her and sign the admission
documents, that he possessed actual authority to bind Trujillo to
the arbitration agreement. Rather, the record shows that, as
Trujillo was being admitted to Trinidad Inn, the social services
assistant handed Fresquez documents and he signed them.
¶ 36 Based on the district court’s findings of fact, supported by the
evidence, that Fresquez’s actual authority included making medical
care decisions for Trujillo and executing the documents necessary
for Trujillo’s admission to Trinidad Inn, we next turn to the legal
19
question of whether, under the Act, such authority necessarily
encompassed the authority to bind Trujillo to the arbitration
agreement.
b. If the District Court’s Statements Regarding Fresquez’s
Authority to Bind Trujillo to the Arbitration Agreement Were a
Legal Determination, They Were Erroneous
¶ 37 “An agent has a duty to take action only within the scope of
the agent’s actual authority.” Restatement (Third) of Agency § 8.09.
In other words, “[i]n the context of the agent’s relationship with the
principal, the boundary of an agent’s rightful action is the scope of
the agent’s actual authority.” Id. § 8.09 cmt. b. “An agent’s actual
authority encompasses acts necessary to accomplish the end the
principal has directed that the agent achieve.” Id. § 2.02 cmt. e; see
also State Farm, ¶ 22, 396 P.3d at 656.
¶ 38 Here, the “end” that Trujillo directed Fresquez to achieve was
her admission to Trinidad Inn so she could receive medical care at
that facility. The district court found that “Trujillo’s actions and
statements after her admission corroborate [Fresquez’s] testimony
that he was authorized to make admission decisions and sign
documents for the purpose of having her admitted to Trinidad Inn.”
(Emphasis added.)
20
¶ 39 In making its determination that Fresquez’s actual authority
regarding health care and admission decisions included the
authority to bind Trujillo to the arbitration agreement, the district
court distinguished Lujan on four grounds: (1) this case does not
involve a health care proxy, and Trujillo was neither incapacitated
nor mentally incompetent at the time of her admission to Trinidad
Inn; (2) Trujillo chose her decision-maker and relied on him for that
purpose; (3) Trujillo “determined that [Fresquez] had authority to
make decisions on her behalf that included decisions related to her
admission at Trinidad Inn”; and (4) this case involves evidence of “a
formal understanding” between Fresquez and Trujillo regarding the
existence and scope of Fresquez’s authority. We disagree that the
reasoning of Lujan is inapposite here.
¶ 40 We acknowledge that, in Lujan, a division of this court
considered whether a designated health care proxy is empowered to
bind an incapacitated patient to an arbitration agreement. 222
P.3d at 971. But, despite the narrowness of the issue presented in
Lujan, the division’s discussion of the distinction between the
documents required to admit a patient to a skilled nursing facility
and an arbitration agreement is pivotal to our analysis. Id. at 973-
21
74. Particularly relevant here, the division contrasted a health care
proxy’s statutorily prescribed authority with the more expansive
authority that a principal-agent relationship can create. Id. at 973.
¶ 41 “[A] health care proxy is distinct from an attorney-in-fact
acting under a power of attorney.” Id. at 977. The division
reasoned that “the statutory authority afforded a health care proxy
should be construed narrowly, unlike the broad powers presumed
to be afforded under a medical durable power of attorney.” Id.; see
also Moffett v. Life Care Ctrs. of Am., 187 P.3d 1140, 1145 (Colo.
App. 2008) (“[A]bsent a limitation in the medical durable power of
attorney, an attorney-in-fact can make exactly the same types of
medical treatment decisions that the principal could make if he or
she had the mental capacity to do so.”), aff’d, 219 P.3d 1068.
¶ 42 Lujan’s reasoning is not limited to cases involving health care
proxies, which are executed on behalf of a patient who “lacks
decisional capacity to provide informed consent to or refuse medical
treatment.” 222 P.3d at 972. The division in Lujan noted the “clear
legislative intent to distinguish between an agreement to provide
medical services (including an agreement to admit a patient to a
22
health care facility) and an agreement to arbitrate a health care
dispute.” Id. at 974 (citing § 13-64-403(7)).
¶ 43 For purposes of the health care proxy provisions at issue in
Lujan, “medical treatment” means “specific medical procedures
(e.g., artificial nourishment and hydration) or forms of healing (e.g.,
religious and spiritual healing).” Id. (citing § 15-18.5-101(1)(a), (2),
C.R.S. 2021). In addition, the part of the probate code addressing
powers of attorney similarly defines “‘medical treatment’ as ‘the
provision, withholding, or withdrawal of any health care, medical
procedure, including artificially provided nourishment and
hydration, surgery, cardiopulmonary resuscitation, or service to
maintain, diagnose, treat, or provide for a patient’s physical or
mental health or personal care.’” Id. at 973 (quoting
§ 15-14-505(7), C.R.S. 2021).
¶ 44 According to the division in Lujan, under either definition, an
agent’s authority to make decisions regarding a patient’s “medical
treatment” does not encompass the authority to sign an arbitration
agreement. Id. at 974. Importantly, the division in Lujan held that
a decision to execute an arbitration agreement “is not integral to a
patient’s health and well-being.” Id. at 976. Instead, a decision to
23
arbitrate pertains exclusively to a person’s legal rights and
remedies. See Colo. Const. art. XVIII, § 3; §§ 13-22-201 to -230,
C.R.S. 2021. Thus, a decision to arbitrate, or not to arbitrate, is
fundamentally different from a decision involving medical
treatment.
¶ 45 In examining the scope of the authority granted to an agent
through a health care proxy, the Lujan court noted section
13-64-403(7)’s express prohibition on conditioning the provision of
medical services upon execution of an arbitration agreement.
Lujan, 222 P.3d at 974. The General Assembly’s decision to delink
the concept of arbitration from the concept of providing medical
services underscores that granting an agent authority to make
medical care decisions for a patient does not authorize the agent to
waive the patient’s right to seek relief in a court of law. Thus, the
authority of an agent to execute an arbitration agreement on behalf
of a patient must rest on a source other than the agent’s
authorization to make health care decisions for the patient.
¶ 46 Following the compelling logic of Lujan and the language of the
Act, we hold that an agent’s actual authority to make health care
decisions for a patient and to sign the documents necessary to
24
admit the patient to a health care facility does not encompass the
authority to bind the patient to an arbitration agreement, unless
the patient has granted the agent an unlimited power of attorney or
otherwise clearly granted the agent the specific authority to bind
the patient to an arbitration agreement. Thus, we conclude that, as
a matter of law, the scope of Fresquez’s actual authority did not
extend to binding Trujillo to the arbitration agreement. In light of
our holding, we need not consider whether the district court erred
by holding that Fresquez lacked authority to bind Trujillo to the
arbitration agreement under the rule of equal dignities.
D. The District Court Did Not Err By
Finding That Fresquez Lacked Apparent Authority
¶ 47 Having concluded that Fresquez lacked actual authority to
bind Trujillo to the arbitration agreement, we next review the
district court’s determination that he also lacked apparent authority
to do so. “The issue of apparent authority is generally an issue of
fact to be determined by the trial court.” Rush Creek, 107 P.3d at
406. Apparent authority can apply to “agents who act beyond the
scope of their actual authority.” Restatement (Third) of Agency
§ 2.03 cmt. a.
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¶ 48 We conclude that the district court did not clearly err by
making this finding.
1. Fresquez Did Not Have Apparent Authority to
Bind Trujillo to the Arbitration Agreement
¶ 49 The Trinidad defendants argue that the district court erred by
requiring that “a principal’s manifestation of an agent’s authority to
act be made prior to the act in question.” They contend that the
district court improperly inserted a temporal requirement into the
apparent authority analysis by considering only Trujillo’s
statements and conduct preceding Fresquez’s execution of the
arbitration agreement. They further argue that the Restatement of
Agency rejects this temporal requirement by providing that
apparent authority “applies to any set of circumstances under
which it is reasonable for a third party to believe that an agent has
authority.” Restatement (Third) of Agency § 2.03 cmt. c (emphasis
added).
¶ 50 We need not consider the timing of a principal’s
manifestations of an agent’s apparent authority, however, because
the record lacks any evidence that Trujillo ever gave any
manifestations regarding arbitration. As the district court found,
26
Trujillo generally knew of and authorized Fresquez to sign the
documents and make the decisions related to her admission to and
care at Trinidad Inn, both before and after she moved in. But the
Trinidad defendants could not have reasonably believed that
Fresquez also possessed apparent authority to sign the arbitration
agreement on Trujillo’s behalf.
¶ 51 The district court based its finding that Fresquez lacked
apparent authority to bind Trujillo to the arbitration agreement on
the testimony of the social services assistant and Fransua, Trinidad
Inn’s administrator, at the hearing. Those employees conceded
that, before Trujillo’s admission to Trinidad Inn, she did not make
any manifestation to them, whether by word or deed, that Fresquez
was authorized to bind her to the arbitration agreement.
¶ 52 Indeed, nothing Trujillo said or did at any time suggested that
she was aware of the arbitration agreement or that she intended to
grant Fresquez the authority to sign away her right to a trial in a
court of law. Moreover, the record does not contain any evidence
suggesting that Trujillo ever learned of the existence of the
arbitration agreement.
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¶ 53 The social services assistant’s and Fransua’s testimony does
not indicate otherwise. The social services assistant testified that
(1) she received paperwork from Trujillo’s referring doctor saying
that Trujillo’s “attorney” wanted Trujillo to move to a nursing home;
(2) the social services assistant coordinated Trujillo’s move to
Trinidad Inn with Fresquez; and (3) Fresquez signed the admission
documents while Trujillo settled into her room. Fransua testified
that she believed Fresquez was Trujillo’s representative for purposes
of signing the arbitration agreement because he “was present with
[Trujillo] in asking [the primary care physician] for the nursing
home placement,” and he and Trujillo “work[ed] towards that goal of
getting [Trujillo] in the nursing home.” This testimony supports the
district court’s finding that Fresquez lacked apparent authority to
bind Trujillo to the arbitration agreement.
¶ 54 Although the district court found that Fresquez told the
Trinidad defendants he was Trujillo’s attorney-in-fact, neither the
social services assistant nor Fransua ever saw such a power of
attorney. (A power of attorney must be in writing. See Willey, 876
P.2d at 1264 (explaining that a power of attorney is “a written
document by which one party, as principal, appoints another as
28
agent (attorney-in-fact) and confers upon the latter the authority to
perform certain specified acts or kinds of acts on behalf of the
principal”).)
¶ 55 Further, the Trinidad defendants contend that the purpose of
the apparent authority doctrine is to “protect[] third parties who, in
good faith, rely on their belief that an agency relationship exists
between the apparent principal and agent.” See Villalpando, 181
P.3d at 363. But nothing in the record shows that they relied on
their belief that Fresquez possessed the authority to bind Trujillo to
the arbitration agreement. As noted in Part II.B.1 supra, Trinidad
Inn could not have refused admission to Trujillo even if the Trinidad
defendants learned at the time that Trujillo had not executed a
power of attorney. Thus, consistent with section 13-64-403 of the
Act, the validity of the arbitration agreement, and Fresquez’s
authority to bind Trujillo to it, was of no consequence to Trinidad
Inn’s decision to admit Trujillo.
¶ 56 The Trinidad defendants further assert that their reliance on
Trujillo’s manifestations following Fresquez’s execution of the
arbitration agreement “caused [them] to forebear pressing further
for the power of attorney . . . or to request a signature from . . .
29
Trujillo” on the arbitration agreement. But nothing in the record
supports this assertion.
¶ 57 Indeed, the social services assistant asked Fresquez to provide
her with a copy of the power of attorney after Trujillo’s admission.
But she dropped the subject after contacting him about it “a few
times.” The social services assistant’s testimony undercuts the
Trinidad defendants’ argument that Trujillo’s manifestations caused
them to forebear pressing Fresquez further for the purported power
of attorney. The social services assistant did not say that she
stopped asking Fresquez for the power of attorney based on
anything Trujillo said or did. And nothing in the record indicates
that Trujillo would have signed the arbitration agreement if Trinidad
Inn had asked her to do so or that Trujillo’s manifestations induced
the Trinidad defendants not to ask her to sign it.
¶ 58 In sum, Trujillo’s words and actions indicated only that
Fresquez possessed the authority to make decisions related to
Trujillo’s medical care and her admission to Trinidad Inn. Trujillo
never made any manifestations indicating that Fresquez also had
the authority to bind her to the arbitration agreement. See Lujan,
222 P.3d at 976. Thus, we affirm the district court’s determination
30
that Fresquez lacked apparent authority to execute the arbitration
agreement on Trujillo’s behalf.
2. Trujillo Did Not Ratify the Arbitration Agreement
¶ 59 For the same reasons, we conclude that Trujillo did not ratify
the arbitration agreement. The Trinidad defendants argue that,
even if Fresquez lacked apparent authority to bind Trujillo to the
arbitration agreement, Trujillo later ratified his execution of the
arbitration agreement through her “knowledge that [Fresquez] was
making decisions on her behalf without objection — even without
specific knowledge of the [arbitration agreement].”
¶ 60 Ratification occurs “when a party ‘with knowledge of all
material facts’ adopts and confirms an act performed or entered
into on his behalf by another, without authorization.” Fiscus v.
Liberty Mortg. Corp., 2014 COA 79, ¶ 40, 373 P.3d 644, 652
(quoting Siener v. Zeff, 194 P.3d 467, 471 (Colo. App. 2008)), aff’d
on other grounds, 2016 CO 31, 379 P.3d 278. Here, Trujillo did not
possess “full knowledge of all material facts.” Id. The district court
did not find that Trujillo ever knew of the existence or terms of the
arbitration agreement.
31
¶ 61 Therefore, we conclude that Trujillo did not ratify Fresquez’s
execution of the arbitration agreement.
III. Conclusion
¶ 62 The order denying the Trinidad defendants’ motion to compel
arbitration is affirmed, and the case is remanded for further
proceedings consistent with this opinion.
JUDGE NAVARRO and JUDGE KUHN concur.
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