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Power of Attorney: Sword and Sheild?

Written by on Jun 1, 2009| Posted in: General

Just how far will a power of attorney reach even when you don’t want it to reach all that far?

It’s generally a good idea to have a written power of attorney you, in the event you become incapable of making your own decisions. The power of attorney will authorize someone to act for you and your best interests by conducting your financial and legal affairs.

Many questions arise in the probate and trust litigation context regarding whether, and to what extent, a person can act for another under a written power of attorney. Often, questions arise as to whether a written power of attorney grants certain powers that are not specifically addressed in the written document.

The Florida legislature, like most states, has adopted the Uniform Power of Attorney Act. Importantly, this statute confers broad authority for someone acting for another when equipped with a written power of attorney, including the right to enter into a contract for another:

“Unless otherwise stated in the durable power of attorney, the durable power of attorney applies to any interest in property owned by the principal, including, without limitation, the principal’s interest in all real property, including homestead real property; all personal property, tangible or intangible; all property held in any type of joint tenancy, including a tenancy in common, joint tenancy with right of survivorship, or a tenancy by the entirety; all property over which the principal holds a general, limited, or special power of appointment; choses in action; and all other contractual or statutory rights or elections, including, but not limited to, any rights or elections in any probate or similar proceeding to which the principal is or may become entitled.” Fla.Stat. ยง709.08(6).

Even though there is statutory guidance for interpreting the powers conferred by these instruments, judicial interpretation is often requested and courts routinely intervene to resolve disputes among family members and others who cannot agree on the authority granted or reserved under the written power of attorney instrument.

One recent case illustrates the issues surrounding power of attorney disputes. In Jaylene v. Moots, 995 So.2d 566 (Fla. 2nd DCA 2008), the court dealt with a situation wherein, Moots was acting as Personal Representative of the Estate of Ethelwin A. Crisson. Crisson had evidently been cared for by Jaylene, a nursing home, and other defendants, and after her death, Moots filed an action claiming that the decedent’s rights had been violated under the Florida Nursing Home Residents Rights Act. Jaylene filed a motion to compel arbitration in accordance with an arbitration clause in the Agreement for Care (the Agreement) that Ms. Moots had executed on May 11, 1999, as the decedent’s attorney-in-fact under her durable power of attorney (the POA). The court denied Jaylene’s motion to compel arbitration, finding that the “arbitration clause herein is valid, but the Power of Attorney did not authorize the agent to agree to arbitration.”

The clause read as follows:

OPTIONAL ARBITRATION CLAUSE (If the parties to this Agreement do not wish to include the following arbitration provision, please indicate so by marking an “X” through this clause. Both parties shall also initial that “X” to signify their agreement to refuse arbitration.) Any controversy or claim arising out of or relating to the Agreement, or the breach thereof, shall be settled by arbitration in accordance with the provisions of the Florida Arbitration Code found at Chapter 682, Florida Statutes, and judgement [sic] upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

The parties to the Agreement did not mark an “X” through the arbitration clause.

The POA did not contain any provisions specifically granting the attorney-in-fact the power to consent to arbitration or to waive the decedent’s right to a jury trial. However, the appellate court looked to the general grant of authority to the attorney-in-fact under the POA and found it to be extremely broad and unambiguous. In pertinent part, the POA provided:

My Agent shall have full power and authority to act on my behalf. This power and authority shall authorize my Agent to manage and conduct all of my affairs and to exercise all of my legal rights and powers, including all rights and powers that I may acquire in the future.

The Court also observed that POA included a comprehensive list of specific powers granted by the principal to the attorney-in-fact, which included the power to:

4. Take any and all legal steps necessary to collect any amount or debt owed to me, or to settle any claim, whether made against me or asserted on my behalf against any other person or entity.

5. Enter into binding contracts on my behalf.

The Court found that “two of the powers specifically mentioned in the POA lend some support to the conclusion that the POA authorizes the attorney-in-fact to consent to arbitration. The POA not only authorizes the attorney-in-fact to “enter into binding contracts,” it also authorizes the attorney-in-fact to settle claims held by the principal. Not unlike agreeing to arbitrate, settling a claim typically involves foregoing the remedy of submitting a claim to a court for final adjudication. We are not prepared to state that a grant of the authority to settle claims includes the authority to consent to arbitration. However, the specific grant of authority to settle claims in the document under review in this case is consistent with the view that the POA’s broad grant of authority includes the power to consent to arbitration.”

This case is a reminder that some Courts will go to great lengths to impose arbitration on parties, even those who did not specifically agree to waive their right to a jury trial. In fact, the Jaylene opinion was relied on where the Court made a similar finding of jury waiver when it imposed an arbitration agreement on the parties in Five Points Health Care Ltd., v. Mallory, 998 So.2d 1108 (Fla. 1st DCA 2008).

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