Articles Posted in Arbitration

Over the past few months, we have frequently covered cases and news stories discussing the issue of mandatory arbitration clauses that are contained in Maryland nursing home contracts. In Maryland and around the country, arbitration clauses continue to be one of the most contentious issues in many cases that are filed against nursing homes based on either the neglect or abuse of a resident. If enforceable, an arbitration clause can prevent a nursing home resident or their loved ones from pursuing a claim against the facility in court.

In a recent case issued by a state appellate court, a nursing home arbitration agreement was held not to be applicable against a resident’s son, although the resident’s son was the person who signed the form. According to the court’s opinion, the resident was admitted to the defendant nursing home in 2015. At the time, he was suffering from sepsis and chronic renal failure. The man’s son (the plaintiff) accompanied him to the nursing home and facilitated his admission.

The day after his father was admitted into the nursing home, the plaintiff was presented with a stack of documents to sign. Among these documents was one that, by signing, the plaintiff purported to consent to arbitration if the mediation process was not successful in resolving the case. All documents were signed.

The legal and ethical implications of mandatory arbitration provisions have been the subject of much discussion over the past few years. Recently, the U.S. Supreme Court issued an opinion in an arbitration case. While the case involves an employment arbitration agreement, the case is relevant to Maryland nursing home cases insofar as it illuminates the Court’s general position on arbitration agreements. Especially interesting is Justice Ginsburg’s dissent to the Court’s opinion.

The case involved a dispute between an employee and his employer, after the employer released the employee’s personal information in response to a phishing scam. Prior to his employment, the employee signed an arbitration agreement. Nowhere in the arbitration agreement was the possibility of a class-action discussed.

After the employee filed a lawsuit against his employer, intending to form a class-action lawsuit against the employer, the employer argued that the arbitration agreement compelled bilateral arbitration, or arbitration between a single employee and the employer.

When someone is admitted into a Maryland nursing home, the nursing home will present the potential resident with pre-admission paperwork that must be completed before the home will accept the resident into its care. This paperwork will often contain an arbitration agreement by which the resident agrees to resolve any disputes that arise through binding arbitration, rather than filing a case in court.

Most nursing home residents are admitted to a Maryland nursing home because they are unable to care for themselves. Thus, the pre-admission paperwork is often filled out by loved ones who are helping their aging relative obtain the care they need. These family members may or may not have power of attorney over their loved one’s affairs. Even if a resident has executed a power of attorney in favor of a loved one, the exact wording of the document is crucial when determining whether the loved one has the ability to bind the resident to an arbitration agreement.

Recently, a court dismissed a nursing home’s request to compel a resident to resolve their case through arbitration. In that case, a man was admitted to the defendant nursing home. At the time of admission, the man was alert and aware of his surroundings. However, he was accompanied by his niece, who signed all nursing home pre-admission paperwork. Included in this paperwork was an agreement to arbitrate all claims. The resident had executed a power of attorney in favor of his niece. However, that document was only effective once the resident became mentally incompetent.

The United States Constitution guarantees all citizens equal access to our court system. However, courts have repeatedly held that the right of access to the court system, like many other important rights, can be waived. In theory, by signing an arbitration agreement a person gives up their right to file any future claim in the court system and agrees to resolve the claim through binding arbitration.

Arbitration clauses are used in many situations, including employment contracts, cell phone contracts, and, of course, nursing home contracts. However, there is a serious concern that those who are asked to sign an arbitration agreement – and, in the process, give up fundamental constitutional rights – do so unknowingly. Indeed, it is not uncommon for the victim of Maryland nursing home abuse to file a claim, only to learn for the first time that they must resolve the claim through arbitration

Despite the important rights that a person gives up when agreeing to arbitration, too often, arbitration clauses consist of a few paragraphs in a much longer contract. These contracts are usually written in small print and, at first glance, would seem to be unimportant. Thus, when consumers, nursing home residents, or employees are presented with these lengthy documents, they frequently overlook the arbitration clause, or at least fail to fully comprehend the importance of the document that they have just been asked to sign.

When someone is admitted as a resident in a Maryland nursing home, they are likely presented with pre-admission paperwork containing an agreement to arbitrate. These agreements, if enforceable, require that any Maryland nursing home abuse or neglect claims arising from a resident’s relationship with the facility are resolved through arbitration rather than through the court system.

In previous posts, we have discussed the pros and cons of resolving claims through arbitration from the resident’s perspective. It is important to note that, by agreeing to arbitration, Maryland nursing home residents give up many of their rights. Most notable of the rights that are waived is that of access to the court system and to appeal an adverse judgment.

For the most part, nursing home arbitration decisions are final. However, if the arbitration was not properly conducted, one of the parties involved in the arbitration may have been deprived of a statutory or constitutional right. In these situations, an arbitration decision can be reviewed by a court. However, establishing that a decision is entitled to review can be difficult. Recently, a state appellate court refused to reconsider an arbitration award that was issued against a nursing home.

The validity and enforceability of arbitration agreements have recently become very important issues in Maryland nursing home abuse and neglect cases. Typically, these agreements are contained in the pre-admission paperwork that a resident or their loved one is asked to sign before the resident is admitted. Needless to say, this is a very stressful and emotional time, and prospective residents and their family members may not always have a full appreciation for the rights they give up by signing an arbitration agreement.

As a general rule, courts will enforce an arbitration agreement as long as it is valid and executed correctly. One crucial question that courts will ask when determining the validity of an arbitration agreement is whether both parties knew what they agreed to when they entered into the agreement. A recent article discusses a case in which an arbitration agreement did not bind a nursing home resident because the contract was signed by her son, who did not speak English.

Evidently, back in 2017, an 86-year-old woman was admitted to the defendant nursing home after a left-knee replacement surgery. Because of her age and frailty, the woman was identified as a high-risk patient. During her stay at the defendant nursing home, she claimed that a nurse at the facility “recklessly pushed” her wheelchair into a bathroom door, causing her to break her patella.

Maryland nursing home plaintiffs often have to wrestle with the impact of nursing home arbitration agreements. Massachusetts’s Supreme Court will soon decide whether wrongful death plaintiffs in nursing home lawsuits can be forced into arbitration. Many nursing home residents sign arbitration agreements when admitted into a nursing home, which can later limit their ability to bring claims against the nursing home. A recent lawsuit challenged the enforceability of such agreements against a resident’s heirs in bringing wrongful death claims in court.

In this case, a federal appeals court considered whether arbitration agreements can bar a resident’s heirs from later bringing wrongful death claims in the state. The resident had been admitted to a nursing home, and when she was admitted, her daughter signed an arbitration agreement for her as her representative. The agreement stated that any dispute covered by the agreement would be resolved “exclusively by an [alternative dispute resolution] process that shall include mediation and, where mediation is not successful, arbitration.” The agreement also stated that it applied to the resident and “all persons whose claim is or may be derived” through the resident, including the resident’s heirs, representative, executor, and others.

After her mother died while in the care of the defendant nursing home, the daughter later brought a wrongful death suit against the facility, claiming that it was responsible for her mother’s death. The nursing home argued that the claim had to be resolved in arbitration, pursuant to the arbitration agreement the daughter signed on her mother’s behalf. It further argued that the daughter’s claim was derivative of the resident’s claim, and that her claim was bound by the agreement. The daughter argued that she was not bound by the agreement because her claim against the nursing home as a beneficiary in a wrongful death claim is independent of her mother’s claim.

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Historically, Maryland nursing homes have been able to avoid costly lawsuits brought by residents or their family members by including arbitration clauses in the pre-admission paperwork that is presented to residents prior to their admission. By signing an arbitration clause, a nursing home resident gives up their right to a trial by jury, and agrees to resolve any dispute that may arise between the parties through binding arbitration.

While in theory arbitration may not sound like a bad thing for nursing home residents, by agreeing to arbitration, nursing home residents give up important rights and get little to nothing in return. That being the case, it is not surprising that long-term historical data shows that nursing homes fare better in arbitration than they do in traditional courts.

For the past few years, nursing home arbitration contracts have been the subject of much debate. During the Obama Administration, nursing home arbitration contracts were disfavored, and those nursing homes that included these clauses in their pre-admission paperwork were ineligible for federal funding. However, more recently that policy has been stepped back, and nursing homes have seized the opportunity, and have started to rely on arbitration clauses once again.

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Maryland nursing homes often include a clause in their pre-admission paperwork indicating that the parties agree to arbitrate any claims that may arise in the future rather than file a case through the traditional means. However, arbitration can be detrimental to nursing home residents, and residents should not assume that they will be precluded from pursuing a personal injury lawsuit based on a signed arbitration contract.

There are several ways that a Maryland arbitration agreement can be held to be invalid and unenforceable. A recent opinion issued by a state appellate court illustrates the concept of “mutuality of assent,” which is essentially the requirement that both parties know what they are agreeing to when a contract is signed.

The Facts of the Case

The case did not deal with a nursing home lawsuit, but it is relevant because it shows how courts interpret arbitration contracts. According to the court’s opinion, the contract at issue involved a “home service agreement,” by which the defendant would pay for and arrange to complete home maintenance on the plaintiff’s homes in exchange for the contract term price of $1050.

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One of the most controversial topics in Maryland nursing home lawsuits is the applicability and enforcement of arbitration agreements. An arbitration agreement is merely an agreement between parties to submit any disputes that may arise between the parties through arbitration, rather than through the court system.

What Is Arbitration?

Arbitration is a way to resolve claims between parties that does not involve a judge or a jury. Instead, the claim is presented to an arbitrator who hears evidence and arguments from both sides and decides the case.

Arbitration is different from traditional litigation for several reasons, including:

  • the procedural rules governing when a claim must be filed and how quickly the claim is heard are determined by the arbitrator;
  • the rules of evidence that are applied in an arbitration proceeding may be different from the rules that would apply in court;
  • for the most part, an arbitrator’s decision is final, meaning that it cannot be appealed by either party in the event of an unfavorable outcome; and
  • the decisions of an arbitrator are usually kept secret.

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