Articles Posted in Arbitration

Nursing home residents and their families often sign admission agreements when a resident enters a nursing home. These agreements frequently contain arbitration provisions, which can have a significant impact in a Maryland nursing home lawsuit.

The U.S. Supreme Court recently heard argument on a case concerning arbitration provisions. The issue before the Court was how courts should decide whether a claim is required to be resolved through arbitration. If two parties have signed a contract that includes an arbitration provision, a later dispute may arise on whether a particular dispute falls within the arbitration provision.

Disputing the Validity of Arbitration Provisions in Nursing Home Agreements

Arbitration provisions are increasingly common in nursing home agreements. If a nursing home resident or a family member signs a contract with an arbitration provision, there may still be a way to keep the case in court. An arbitration agreement can force a matter to be resolved in arbitration, which can have present serious drawbacks for plaintiffs. For one, the arbitrator’s decision is final, meaning that a plaintiff cannot appeal an adverse ruling. However, the arbitration provision itself is not always enforceable.

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Recently, a state appellate court issued an opinion in a wrongful death case discussing the validity of an arbitration contract signed by the plaintiff on behalf of her elderly father. Ultimately, the court concluded that because the plaintiff’s father lacked the mental capacity to sign the contract at the time it was executed, the plaintiff could not be bound by the arbitration agreement. The case is significant because it presents the important and developing issue arbitration clause enforceability, which frequently arises in Maryland nursing home neglect and abuse lawsuits.

The Facts of the Case

The plaintiff was the daughter of a man who died from injuries allegedly sustained while in the care of the defendant rehabilitation facility. According to the court’s opinion, the plaintiff’s father suffered from a history of mental health issues, including dementia. One day, the plaintiff’s father fell and was admitted to the hospital. After about ten days in the hospital, the man was discharged from the hospital and sent to the defendant rehabilitation facility.

Before being moved to the rehab facility, the plaintiff executed several documents in preparation for her father’s transfer. Included in these documents was an agreement to arbitrate any claims arising from the facility’s care of the plaintiff’s father. About two months later, the plaintiff’s father was found unresponsive at the rehab facility. He was transferred back to the hospital, where he then passed away.

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These days, many Maryland nursing home admission agreements often include arbitration contracts or clauses, which require certain claims against the nursing facility to be resolved through arbitration. However, under some circumstances, such agreements may not be enforceable. In one recent case, a plaintiff claimed that the arbitration agreement was not enforceable because the agreement was unconscionable.

In that case, a nursing home resident died in the facility and her husband filed a wrongful death claim against the nursing facility. The husband alleged that the nursing home’s staff negligently allowed his wife to fall multiple times, which ultimately led to her death. The facility filed a motion to compel arbitration based on an arbitration agreement that was signed between the resident and the facility. The husband claimed that the arbitration agreement was unconscionable and could not be enforced.

In that case, there was a signed arbitration agreement, which was separate from the admission agreement. The heading on the cover page read, “EXPLANATION OF BINDING ARBITRATION AGREEMENT,” and stated, “PLEASE READ CAREFULLY.” The cover page of the arbitration agreement stated that the agreement was “voluntary and not a condition for admission” and that the resident could consult with an attorney before signing the agreement. The agreement also stated that the resident could withdraw her consent within thirty days of signing. The resident could do this by writing “CANCELLED” on the agreement and mailing it to the facility. The resident and her husband signed the arbitration agreement and did not withdraw consent within 30 days.

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These days, nursing homes in Maryland and throughout the country often require nursing home residents to sign arbitration agreements upon admission. In a recent case before a state appellate court, the court allowed a case against a nursing home to proceed after the family disputed the validity of the arbitration agreement.

The Facts

The plaintiff sued a nursing home on behalf of her deceased mother after her mother died at the nursing home. The nursing home filed a motion to compel arbitration based on an arbitration agreement that was allegedly signed by the daughter. However, the daughter argued that she did not knowingly sign a mandatory arbitration form on her mother’s behalf when her mother was admitted to the nursing home in 2003.

The 75-year-old mother was admitted to the nursing home on two occasions earlier that year. The first time, the daughter was asked to sign several documents when her mother was admitted, including an arbitration agreement. The daughter refused to sign the arbitration agreement, but the mother was admitted anyways. In court, the nursing home presented another arbitration agreement dated later that month with the daughter’s signature. The daughter claimed that the signature was not authentic and that even if it was, it was obtained by misrepresentation.

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If a resident of a Maryland nursing home has signed an arbitration agreement, they will be prevented from filing a case against the nursing home in court and must instead pursue their claim through the arbitration process. Thus, one of the earliest and most important considerations in a Maryland nursing home abuse or neglect case is whether there is a valid and enforceable arbitration agreement.Most nursing homes present residents with an arbitration agreement. Often, these agreements are buried deep in dense paragraphs, and they may not be fully understood by residents. Importantly, the fact that an arbitration agreement exists is not necessarily determinative of whether a resident will be forced to arbitrate their claim; courts will review arbitration clauses as well as the manner in which they were entered into before determining whether the agreement can be enforced.

One issue that frequently comes up in nursing home negligence and abuse cases in which an arbitration clause is present is whether the party that signed the contract had authority to do so. In a recent case decided by a federal appellate court, the court held that verbal consent given by a resident – rather than the typical document granting power of attorney – was acceptable to form a binding contract.

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The determination of whether a nursing home abuse lawsuit is fought in court or through binding arbitration is often the very first fight in a long battle that many Maryland nursing home residents and their families face when trying to hold an abusive or neglectful nursing home accountable for their actions. Historically, nursing homes fare better when their claims are heard through arbitration. Thus, Maryland nursing homes do everything they can to get cases against them in front of an arbitrator.

Over the years, more and more nursing homes began to include arbitration agreements in their pre-admission paperwork. Often, these clauses are written in small print and included in the middle of large blocks of text. The idea being that the signing party will not take the time to thoroughly read through the entire document.

For a long time, courts were upholding these agreements based on the fact that they were signed. However, over the recent years, courts have been willing to intervene when arbitration agreements are either substantively unfair or were presented to the signing party in an unfair manner. However, arbitration contracts often contain a number of terms. And in some cases, a court will only take issue with a few of the terms in the overall agreement. In these cases, there is significant litigation over whether the whole agreement is invalid or whether the offending clause can be “severed” from the rest of the agreement. A recent case discussed this very issue.

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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.

The 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.

After 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.

At 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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