Articles Posted in Arbitration

Although one hopes that Maryland nursing home abuse will never happen, state law understands that, when it inevitably does, the individuals affected have a right to bring a civil suit against the nursing home. However, many nursing homes may ask residents and their families to sign away that right by signing an arbitration agreement. Arbitration agreements, which vary depending on the nursing home, generally bind both the resident and the home to settling any disputes that arise through an arbitrator, rather than in a judicial forum.

With a valid arbitration agreement, when an individual is injured or suffers a premature death as the result of the nursing home’s negligence, the victim or their family must pursue their claim confidentially, through an arbitrator chosen by the facility. Arbitration, although it is quicker and potentially less burdensome than bringing a suit in court, may still be disadvantageous for plaintiffs. For example, nursing homes typically have the power to choose the arbitrator, who acts as the judge, and they may choose one they have worked with before. Additionally, there is no jury, and no appellate process.

Generally, signed arbitration agreements are valid and enforceable, and a nursing home can compel arbitration if a resident or their family ever file a suit against them in court. However, like all contracts, nursing home residents can challenge a contract that they signed without knowing what they were signing, claiming they never agreed to waive their right to sue. Recently, a state appellate court considered a case where this happened. According to the court’s written opinion, the plaintiff required 24-hour nursing care due to multiple disabilities. When he was admitted to the defendant nursing home, they had him sign 12 documents, including an arbitration agreement, but the facility’s employees never explained the arbitration agreement to him or gave him a copy to review.

Arbitration has been a hot-button issue during the current administration. When President Trump took office back in 2017, there were strict rules set in place by President Obama that prevented nursing homes who used pre-admission arbitration contracts from receiving federal funds. The effect of this rule was to all but eliminate pre-admission arbitration contracts in Maryland nursing homes, as many received these types of funds.

Earlier this year, however, the administration was successful in amending the old rules to allow for nursing homes to include binding arbitration clauses in their pre-admission paperwork. Under the new regulations, nursing homes could use arbitration clauses as long as 1.) it is clear that the resident knew what they were signing, 2.) the document does not discourage residents from reporting non-compliance, and 3.) the arbitrator named in the agreement is neutral and mutually convenient. Nursing homes also had to allow residents a 30-day rescission period in which they could change their minds. While there were some protections for Maryland nursing home residents, most industry experts believe that this was a significant step backward.

According to a recent news report, in September, the U.S. House of Representatives passed the Forced Arbitration Injustice Repeal (FAIR) Act (the “Act”) by a vote of 255 – 186. The premise for the Act, as stated by one congressman, is that arbitration clauses have “seeped into just about every nook and cranny of our lives, including cell phone contracts, medical bills, employee handbooks, credit cards, nursing home contracts – you name it. Supporters of the FAIR Act recognize that the deck is “stacked against American consumers” and has been for far too long. One lawmaker described arbitration as, “just another tool for powerful corporate interests to avoid accountability.” The Act prohibits businesses, including nursing homes, from using binding, pre-dispute arbitration agreements. Under the Act, arbitration is allowed; however, the parties must agree after a dispute arises.

Under the current state of the law, Maryland nursing homes can ask potential residents to sign arbitration agreements. Often, these agreements are included in the pre-admission paperwork that must be completed before a resident is admitted. However, there are many issues that an arise affecting the enforceability of an arbitration agreement.

For example, courts have repeatedly held that an arbitration agreement is not valid if one party tells the other they must sign it. Similarly, for the most part, an arbitration agreement must be signed by the resident, because this is the person whose rights the agreement affects. However, routinely, nursing homes do not comply with the procedural and substantive rules governing arbitration agreements, rendering the agreements unenforceable. In a recent opinion, a state appellate court held that an arbitration agreement was unenforceable based on several criteria.

According to the court’s opinion, the plaintiff’s mother was a resident at the defendant nursing home. During her stay, she developed severe skin ulcers that ultimately required the amputation of her leg. The plaintiff’s mother died just a few days after leaving the home, and the plaintiff filed a wrongful death lawsuit against the facility.

Generally, when a nursing home resident enters a facility, the nursing home administration asks the resident (or the loved one accompanying them) to sign an arbitration agreement. If valid, arbitration agreements require the resident to resolve any cases that arise between the parties through arbitration. However, when a Maryland nursing home resident is the victim of abuse or neglect, there are frequently several parties – often the resident’s children – who may pursue a claim against the facility. This can complicate the effectiveness of arbitration, as shown by a recent state appellate decision.

According to the court’s opinion, a son helped his mother get admitted to a nursing home after a shoulder injury. Upon admission, the woman was confused and could not sign any paperwork due to her injury. Thus, her son signed the pre-admission paperwork, including an arbitration agreement.

While in the facility’s care, the woman passed away due to what appeared to have been nursing home neglect. The woman’s son, as well as her other children, filed a wrongful death case against the nursing home. The nursing home objected to the lawsuit being filed in court, pointing to the arbitration agreement signed by the woman’s son.

For decades, arbitration has been the favored way for Maryland nursing homes to resolves dispute made by residents and residents’ families. In part, this is because arbitration is confidential, meaning that the facility does not need to worry about the news of a resident’s injuries or suffering getting out. However, there is also evidence suggesting that nursing homes get better results in cases that go to arbitration. Arbitration is also less expensive, which primarily benefits nursing homes, as they are the party who is frequently engaged in litigation.

While arbitration is rarely, if ever, in the best interest of a nursing home resident, many residents end up signing agreements to arbitrate their claim. Often, prospective residents are presented with these agreements in highly stressful times when they may feel as though they have limited options. Other times, residents sign arbitration agreements because they do not fully understand the rights they are giving up by signing, and feel pressured to sign. Consequently, many residents who suffer abuse or neglect at the hands of their caregivers are devastated to learn that they cannot file a lawsuit in court, and must proceed through the arbitration process.

In 2017, the Center for Medicare and Medicaid, under the Obama administration, implemented a ban on arbitration agreements in pre-admission paperwork for all nursing homes that accepted Medicare or Medicaid. However, under a new rule scheduled to go into effect on September 16, 2019, nursing homes will once again be able to include arbitration contracts in their pre-admission paperwork.

Most nursing home admission paperwork contains an arbitration clause. By signing an arbitration clause, a nursing home resident agrees to resolve any claims that may arise between the resident and the nursing home through arbitration, rather than through the court system. It is widely understood that arbitration offers great benefits to nursing homes, often to the detriment of nursing home residents and their family members. Thus, plaintiffs in Maryland nursing home lawsuits often seek to void arbitration clauses so they can pursue a claim in court.

Recently, a state appellate court issued an opinion in a nursing home negligence lawsuit requiring the court to determine if an arbitration clause required the plaintiff to resolve his wrongful death claim through arbitration. According to the court’s opinion, the plaintiff’s father passed away while in the care of the defendant nursing home. The plaintiff filed a wrongful death claim in court against the parent company of the nursing home.

Evidently, the plaintiff’s father signed an arbitration clause upon his admission to the facility. The clause was signed by the plaintiff’s father and a nursing home representative. The document contained a “delegation clause” stating that the agreement included “all affiliates, parents, officers, owners, members, agents, successors and assigns” of the nursing home. The nursing home claimed that the agreement required the plaintiff to resolve his claim through arbitration.

In some Maryland nursing home abuse and neglect cases, the determination as to whether a plaintiff’s claim is heard by an arbitrator or by a court can mean the difference between success and defeat. Most legal experts agree that nursing home arbitration contracts only benefit the nursing home. Thus, one of the most common preliminary matters in nursing home lawsuits is determining whether there is a binding arbitration clause.

As a general rule, arbitration clauses are binding on all parties if they are valid and properly executed. However, numerous issues can preclude the enforcement of an arbitration clause. One question that courts have recently been wrestling with is when a resident’s loved one (rather than the resident) signs the arbitration agreement. Recently a state appellate court decided that it would not review an appeal from a nursing home resident whose husband signed the agreement on her behalf.

According to the lower court’s opinion, the plaintiff was admitted to the defendant nursing home. At the time of admission, the plaintiff was accompanied by her husband, who signed the pre-admission paperwork on the plaintiff’s behalf. Among the documents the plaintiff’s husband signed was an agreement to arbitrate any claims arising from the plaintiff’s residence at the facility.

Arbitration clauses are very popular in the nursing home industry. Arbitration is a way to resolve a legal dispute without using the court system. Generally, arbitration is quicker and less expensive than a traditional lawsuit. At first glance, this may seem like a good alternative for many Maryland nursing home residents who want to bring a case against a negligent or abusive nursing home employee. However, arbitration typically favors the nursing home and should be avoided whenever possible.

Often, the paperwork presented to a prospective resident or the loved one in charge of their care contains an arbitration clause. These clauses essentially waive a resident’s right to pursue a case against the nursing home in court for any claim brought against the nursing home. However, nursing home residents are not provided anything waiving this right, and should carefully consider whether it is a right they want to waive.

Arbitration involves an independent arbitrator who hears the claim and renders a decision. The arbitrator that will hear the case is determined by the nursing home, and is typically included in the arbitration clause. Arbitration hearings often have strict time frames and relaxed rules of evidence, allowing savvy nursing homes who are familiar with the process and its rules to effectively defend against cases brought by residents. In a way, this gives nursing homes the “home-field advantage.”

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.

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