1. As a practical matter, what was the impact of the court’s ruling on Johnson and Golden Living?

2. Was it reasonable for Golden Living to assume that Johnson had authority for Cooper’s health care decisions? Why or why not? Could Cooper’s conversation with the nursing home staff during admissions be sufficient to satisfy the first prong of the test? What words would indicate authority? 

Johnson was the court-appointed representative of her brother’s estate and filed a wrongful death lawsuit against GGNSC Batesville, LLC d/b/a Golden Living Center (Golden Living) alleging that Golden Living’s negligence caused the death of her brother Mose Cooper who was a former resident of the Golden Living nursing home. Golden Living moved to compel arbitration based on an arbitration clause in its standard admission agreement. The trial court denied the motion and ruled that no valid contract existed because Johnson, not Cooper, signed the agreement during the nursing home’s admissions process and Johnson had no legal authority to act as Cooper’s agent.

The Mississippi Supreme Court affirmed the decision of the trial court and ruled in favor of Johnson. The court held that Golden Living had failed to provide any evidence that Johnson had any actual authority for health care or other decisions on Cooper’s behalf. The court rejected Golden Living’s argument that the relationship between Johnson and Cooper coupled with Johnson’s presence during the admissions process was sufficient to establish apparent authority.

“To prove that Johnson had apparent authority over Cooper, Golden Living must put forth sufficient evidence of (1) acts or conduct of the principal indicating the agent’s authority, (2) reasonable reliance upon those acts by a third party, and (3) a detrimental change in position by the third person as a result of that reliance. The record is utterly devoid of any acts or conduct of Cooper indicating that John-son was his agent for the purpose of making health care decisions. Because Golden Living failed to put forth sufficient evidence, or indeed any evidence at all, of prong one, we need not address prongs two and three. Thus, Johnson did not have the apparent authority to bind Cooper to the contract, and consequently, a valid contract does not exist.”