Not All Nursing Home Arbitration Agreements Are Legally Binding

When someone is seeking admission into a Maryland nursing home, they will almost certainly be presented with a pre-admission contract. This contract goes over the rights and responsibilities of both the nursing home as well as the soon-to-be resident. In most nursing home pre-admission contracts, there is also an arbitration clause agreeing to forego the court system in lieu of arbitration in the event of a disagreement or lawsuit.

Signing a ContractArbitration clauses are generally enforced if they are entered into by the proper parties and are found to be within the constraints of the law. For example, some arbitration clauses have been invalidated because they are “buried” in the fine print of a lengthy contract with nothing indicating the significance of the rights the reader is giving up by signing the document.

Like all contracts, arbitration agreements must be validly entered into in order to be binding. This means that if a resident is found to have been incompetent, or is determined to have been forced to sign an agreement, the contract will not be enforced. A recent news article discusses a Kentucky case in which the court invalidated a nursing home arbitration contract because it was signed by the resident’s sister without the proper power of attorney.

The Facts

The plaintiff was the sister of a woman who passed away in a nursing home facility. The plaintiff believed that the nursing home was responsible for the premature death of her sister, so she filed a personal injury lawsuit against the nursing home.

The nursing home moved to compel arbitration pursuant to a contract between the resident and the nursing home. However, at the time the contract was signed, the resident was not mentally competent, and the plaintiff signed the document for her sister. At the time, the plaintiff had a document giving her power of attorney over some of her sister’s affairs. The document specifically mentioned that the plaintiff had power of attorney over her sister’s financial and health care decisions. There was no mention of the power over the resident’s ability to waive the right to use the court system.

The court ended up siding with the plaintiff, finding that when she signed the pre-admission contract on behalf of her sister, she did not have the authority to consent to arbitration. The nursing home argued that the court should infer the power to consent to arbitration from the specifically granted power over health care decisions. However, the court disagreed, determining that the right to use the court system was too important and required that it be specifically mentioned. As a result of the court’s decision, the plaintiff’s lawsuit will be permitted to proceed toward trial or settlement negotiations.

Is Your Loved One at Risk?

If you have a loved one in a Maryland nursing home facility, and you believe that they may have been subject to abuse or neglect, you may be entitled to monetary compensation through a Maryland nursing home lawsuit. The dedicated nursing home attorneys at the law firm of Lebowitz & Mzhen, LLC have extensive experience handling nursing home abuse and nursing home negligence cases, and they know what it takes to be successful on behalf of their clients. To learn more, and to speak with an attorney knowledgeable in nursing home law, call 410-654-3600.

More Blog Posts:

Court Upholds Jury’s Decision to Award Punitive Damages in Nursing Home Case, Maryland Nursing Home Lawyer Blog, published October 13, 2017.

Pre-Trial Discovery in Maryland Nursing Home Cases, Maryland Nursing Home Lawyer Blog, published October 6, 2017.

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