Court Upholds Validity of Nursing Home Arbitration Contract in Recent Personal Injury Case

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.”

The clause explained that it applied to “all parties whose claims may arise out of or relate to treatment or service provided by the center.” It was also noted that agreeing to the clause was voluntary, and admission to the facility was not contingent upon the plaintiff agreeing to the arbitration clause.

The plaintiff left the defendant’s facility, and later filed a personal injury case against the nursing home, claiming that he was injured as a result of the care provided by the facility. The nursing home moved to dismiss the case based on the arbitration agreement. The lower court denied the nursing home’s motion, finding that the clause lacked mutuality of consideration, was void under state law grounds, and was against public policy based on a 2016 regulation disallowing nursing homes who receive funding from Medicare from using pre-admission arbitration contracts. The nursing home appealed.

On appeal, the court reversed the lower court’s decision. The appellate court held that the lower court made several errors. First, the lower court applied state law when it should have applied federal law. The court explained that federal law applies when “interstate commerce” is involved. Here, the court noted that the plaintiff and nursing home were residents of different states, requiring federal law to be applied.

The court also rejected the lower court’s position that the contract was against public policy. The court explained that the regulation relied upon by the lower court was passed in November 2016, but this contract was entered into back in 2015, well before the regulation was passed. The court was not willing to retroactively enforce the regulation.

Has Your Loved One Suffered in a Maryland Nursing Home?

If you have a loved one in a Maryland nursing home, and you are concerned that they have not been receiving the care they deserve, you should contact the dedicated Maryland nursing home lawyers at Lebowitz & Mzhen, LLC. At Lebowitz & Mzhen, we represent nursing home residents and their families in cases against negligent and abusive nursing homes and their employees. To learn more about how we can help you and your loved one, call 410-654-3600 today. Calling is free, and we will not bill you for our services unless we are able to help you or your loved one recover for the injuries they have sustained.

More Blog Posts:

State’s Push for Stricter Reporting Requirements in Cases of Nursing Home Sexual Abuse, Maryland Nursing Home Lawyer Blog, published June 21, 2018.

Maryland Nursing Home Arbitration Clauses May Be Procedurally or Substantively Invalid, Maryland Nursing Home Lawyer Blog, published July 6, 2018.

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