ORTIZ v. BRONX LEBANON HOSPITAL CENTER (2018)

The following papers numbered 1 to 3 read on this motion and cross-motion, noticed on March 19, 2018, and duly submitted as no. _ on the Motion Calendar of _.

PAPERS/NUMBERED

NOTICE OF MOTION AND AFFIDAVITS ANNEXED 1

ANSWERING AFFIDAVIT AND EXHIBITS 2

REPLY AFFIDAVIT AND EXHIBITS 3

UPON THE FOREGOING CITED PAPERS, THE DECISION/ORDER IN THIS MOTION IS AS FOLLOWS:

This action was commenced in January 2018 by Jacqueline Ortiz as Administrator of the Estate of Monserrate Garcia, and Carlos J. Martinetti, individually. According to the complaint, Mrs. Garcia's wrongful death was allegedly due to, inter alia, the negligence of the defendant, Concourse Rehabilitation and Nursing Center (Concourse). By notice of motion, Concourse seeks to compel arbitration (CPLR § 7503(a) ) based on the terms of a written “Admission Agreement” and “Arbitration Agreement” dated October 7, 2015, both executed by Ms. Ortiz and Concourse. There is no dispute that when these two agreements were signed, Mrs. Garcia was a resident of Concourse. And there is also no dispute that these agreements were not signed by Mrs. Garcia, but were signed by her daughter, Jacqueline Ortiz, on the lines designated as “Resident/Designated Representative.” At the time she signed these agreements, Ms. Ortiz was not the Administrator—she did not become Administrator until after Mrs. Garcia's death on January 19, 2016.

In opposition, the plaintiffs argue that the arbitration clause is unenforceable because Ms. Ortiz had no legal authority to sign these agreements. According to paragraph 1B of the Admission Agreement, under “Designated Representative,”

“if the person signing this Admission Agreement is not the Resident, the Facility both requires and relies upon the representation by the person that signs this Agreement as Designated Representative, that he or she has been designated or authorized by the Resident or the Court ․ to enter into ․ this Admission Agreement and its ․ accompanying Attachment C [Arbitration Agreement] ․”

It should be noted that handwritten next to the caption “Designated Representative” appears “Carlos Martinetti (Husband).” There is no explanation in any of the papers as to who wrote Mr. Martinetti's name next to Designated Representative, or why his name appears there. In reply, Concourse argues that Ms. Ortiz had the apparent authority to sign these agreements on Mrs. Garcia's behalf.

It is true that agreements executed without proper authority may still be enforceable under the doctrine of apparent authority. (Indosuez v. National, 98 NY2d 238 [2002].) But apparent authority will only be found where the words or conduct of the principal, and not the agent, give rise to a reasonable belief that the agent possessed the authority to enter into the agreement. (Hallock v. State of New York, 64 NY2d 224 [1984].) An agent cannot by her own conduct imbue herself with the apparent authority to act on behalf of the principal. (Id.) Moreover, the mere creation of an agency for a certain purpose does not automatically invest the agent with apparent authority to bind the principal without limitation (Ford v. Unity Hospital, 32 NY2d 464 [1973] ).

The affidavit by Concourse's Assistant Administrator in support of the instant motion does not describe the circumstances under which the agreements in question were executed. More importantly, it does not describe what, if any, words or conduct were conveyed by Mrs. Garcia that would suggest that her daughter, Ms. Ortiz, had authority to sign these agreements. Equally unexplained is the fact that Mr. Martinetti's name appears next to the caption “Designated Representative.” The parties must keep in mind that when dealing with an agent, they do so at their own peril, and they are obligated to make reasonable efforts to discover the true scope of an alleged agent's authority. (Edinburg v. Danko, 55 AD3d 1108 [3rd Dept 2008].) Here, even if there were the slightest indicia of agency related to the signing of these agreements by Ms. Ortiz, Concourse failed to make any reasonable inquiry into her actual authority. Moreover, Concourse should have been highly suspicious of the fact that Mr. Martinetti's name appeared next to Designated Representative, yet it was Ms. Ortiz who was signing these agreements. There is no evidence that any reasonable inquiry was made to resolve this discrepancy. Under theses circumstances, Concourse failed to establish that at the time Ms. Ortiz signed these agreements, she had apparent authority to do so.

Based on the aforementioned, the instant motion is denied. The plaintiffs are directed to serve a copy of this decision/order with notice of entry by first class mail upon all sides within 30 days of receipt of copy of same. This constitutes the decision and order of this court.

Joseph E. Capella, J.