Validity of Nursing Home Arbitration Agreements Depends Heavily on Surrounding Facts

Earlier this month, the Supreme Court of Georgia issued a written opinion in a nursing home negligence case that required the court to determine if an arbitration agreement in a pre-admission contract was binding against the deceased resident’s estate in a subsequent wrongful death lawsuit. The court determined that due to the derivative nature of wrongful death lawsuits, the deceased resident’s estate was bound by the agreement.

Signing a ContractThe Facts of the Case

The plaintiff in this case was the husband of a woman who had died while in the care of the defendant nursing home. Prior to the plaintiff’s wife’s admission to the nursing home, the plaintiff’s wife had executed a durable power of attorney in her husband’s favor. This allowed him to make legal decisions regarding his wife’s medical and financial decisions.

Before the plaintiff’s wife was admitted into the defendant nursing home, the plaintiff signed a pre-admission contract that contained an agreement to arbitrate any claims that may arise from the nursing home’s care of his wife. The plaintiff signed the agreement.

About a year after the plaintiff’s wife was admitted to the facility, she passed away from injuries that the plaintiff claimed were due to the nursing home’s negligence. The plaintiff filed a personal injury lawsuit against the nursing home in state court.

In response to the lawsuit, the nursing home filed a motion for summary judgement, asking the court to dismiss the case and compel arbitration, pursuant to the pre-admission agreement. The plaintiff argued that the deceased resident’s beneficiaries could not be bound by the agreement. The trial court rejected the plaintiff’s argument and entered judgment in favor of the defense.

On appeal to the intermediate appellate court, the case was reversed in the plaintiff’s favor. That court determined that an agreement entered into by the resident or someone possessing power of attorney could not bind her legal beneficiaries in a subsequent wrongful death lawsuit. The defendant appealed to the Georgia Supreme Court.

The Georgia Supreme Court reversed the intermediate court’s decision, finding in favor of the defendants. The court explained that wrongful death lawsuits are considered to be “wholly derivative of a decedent’s right of action.” Thus, the court held that in a wrongful death lawsuit, any defense that could be used against the deceased person could also be used against the deceased person’s beneficiaries. The court explained that, since the duty to arbitrate is considered an affirmative defense, the nursing home should have been able to successfully assert that defense here, since there was a signed arbitration agreement.

Have You Been a Victim of Nursing Home Abuse or Neglect?

If you or a loved one has recently spent time in a Maryland nursing home, and you believe that the care that was provided was inadequate or abusive, you may be entitled to monetary compensation. This may be the case even in cases in which an arbitration agreement was signed. Courts have shown a willingness to invalidate nursing home arbitration agreements in certain situations. To learn more about how Maryland law may affect your substantive rights to recover compensation, call 410-654-3600 today to schedule a free consultation with a dedicated personal injury and wrongful death attorney.

More Blog Posts:

Sexual Assault in Nursing Homes Is Too Often Slow to Be Reported or Taken Seriously, Maryland Nursing Home Lawyer Blog, published March 10, 2017.

Nursing Home Arbitration Clauses Are Not Necessarily Binding, Depending on the Circumstances, Maryland Nursing Home Lawyer Blog, published March 31, 2017.

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