As arbitration agreements have become routine in many nursing facilities, questions may arise after ownership of the facility has been changed. Like other agreements, Maryland nursing home arbitration agreements can generally be assigned. An assignment of an agreement allows the assignee to “stand in the shoes” of the original party to the contract by granting all the rights the assignor previously had under the agreement.
A recent federal court decision considered whether an arbitration agreement could be enforced against residents after the facility had been transferred to new owners and new agreements had been signed. The case raised issues about when an arbitration agreement is properly assigned and transferred.
In that case, two residents entered a nursing facility in 2019. In April 2019, one resident entered the facility and signed numerous admission documents, including an arbitration agreement, though the agreement was not a condition of admission. The arbitration agreement stated that all claims relating to the resident’s stay were required to be decided through arbitration. In August 2019, the second resident was admitted and signed the same admission documents. In February 2020, the facility was sold and transfer to a new entity. A transfer agreement assigned the new entity as the assignee for certain agreements.