Articles Posted in Arbitration

Recently, a state appellate court issued a written opinion in a personal injury case that illustrates a key issue that arises in many Maryland nursing home negligence cases. The case presented the court with the opportunity to discuss the validity of an arbitration clause contained in the nursing home’s pre-admission paperwork. Ultimately, the court concluded that the clause should be upheld and dismissed the plaintiff’s case, holding that the plaintiff was required to submit the case through arbitration.

Reviewing the ContractThe Facts of the Case

The plaintiff arranged for himself to stay at the defendant nursing home. The plaintiff was a resident of Nebraska, and the nursing home was a North Dakota corporation with its principal place of business in South Dakota.

Prior to his admission, the nursing home presented the plaintiff with a pre-admission contract. Contained in the contract was an arbitration clause. The clause contained a check-box next to the statement that the parties agree that “any legal controversy, dispute, disagreement or claim arising between the Parties” would be resolved through arbitration. The plaintiff checked the box marked “yes, I do.”

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A state appellate court recently ruled on a case in which a nursing home’s arbitration agreement failed to strictly comply with the state’s requirements concerning arbitration agreements. In that case, when the patient had moved into the nursing home, she received an admissions packet with forms that included an arbitration agreement. The state’s Health Care Availability Act required that arbitration agreements contain a four-paragraph notice in a particular font size and bold-faced type. In the arbitration agreement on the patient’s form, the language was in the correct font size, but was not printed in bold typeface.

Arbitration ClauseAfter the patient’s death, her family brought a wrongful death claim against the nursing home. The nursing home moved to compel arbitration based on the arbitration agreement. A trial court and a state appeals court found that the agreement was void because it failed to strictly comply with the Act’s requirements in that the required language was not printed in bold type.

On appeal to the state’s supreme court, however, the court found that the Act only required substantial compliance, not strict compliance. The court also concluded that the agreement in this case substantially complied with the requirements under the Act. Here, the nursing home had printed the relevant language in all capital letters, which the court found substantially satisfied the law’s requirements. The court held that the nursing home brought attention to the text in the same way that bold type would have. Therefore, the nursing home was able to force the family into arbitration to resolve the wrongful death claim against it.

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The right of unhindered access to the court system is one of the bedrock principles the founding fathers enshrined in the United States Constitution. At its essence, the concept stands for the proposition that anyone who has been harmed by another party should have equal access to a neutral forum that will hear the evidence presented and decide the case.

Signed ContractAt the same time, parties generally have a right to freely structure business arrangements through the use of binding contracts. A common example of this is an arbitration clause that may be included in the pre-admission paperwork in a Maryland nursing home facility.

What Is Arbitration?

Arbitration is an alternative to the court system, in which an arbitrator – rather than a judge – will hear the evidence and come to a conclusion. Arbitration is less formal than the traditional court system, and may have slightly different rules of evidence and procedure. Generally speaking, parties that frequently engage in litigation prefer to arbitrate claims. This is because arbitration yields a faster result, is less expensive than, and more private than the traditional court system.

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