Avoid Alabama Nursing Home Arbitration Agreements

Mar 18, 2014 - Nursing Home Neglect, Tuscaloosa by Cross & Smith

Arbitration agreements almost never benefit the consumer, whether they are written into the fine print of an electronics purchase or as a precursor to employment or shoved in front of family members working to admit a loved one into a nursing home.

These agreements require that instead of having any disputes resolved in court, both parties are required to resolve matters before an arbitrator – one who is often chosen by the defendant and paid for by the plaintiff. In theory, the process should be fair. Too often, it’s anything but. Yet these documents have become standard – though not required – in nursing home admissions.

In cases of Tuscaloosa nursing home neglect, plaintiffs may wish to challenge the enforceability of the original agreement. This is being done with increasing frequency – and success – across the country.

Take, for example, the recent case of Pine Hills Health & Rehab., LLC v. Matthews, reviewed by the Arkansas Supreme Court. This case stemmed from an alleged wrongful death that occurred while the patient was receiving care and treatment at a nursing home.

The exact details of what happened aren’t clear, and they aren’t really the subject of the state supreme court’s review. All we know is that the patient was admitted to the facility in December 2/car-accidents/alabama-traffic-accidents-likely-to-increase-with-economic-recovery/ and that he died in March 2012. An administrator for his estate alleges the patient died as a result of negligence, medical malpractice and violations of statutes relating to long-term care. Compensatory and punitive damages were sought.

However, the nursing home moved to compel arbitration. The company argued that the plaintiff, the deceased man’s son, had held power of attorney and had signed an arbitration agreement in 2009, when the nursing home changed management and was purchased by a for-profit buyer. The arbitration agreement is signed by the son as the “responsible party” for the patient, and indicates that “all claims, disputes and controversies arising out of or in connection with or relating in any way” to the care received at the home must be resolved by arbitration. The fact that the agreement was a “binding contract” was underscored in the fine print.

The plaintiffs refuted this, arguing that the arbitration agreement was unenforceable because there wasn’t any evidence of mutual assent. Although it bore the signature of the patient’s son, it lacked the signature of a nursing home representative.

The circuit court denied the motion to compel arbitration, and the state supreme court affirmed.

This is just one example of why an arbitration agreement might be found unenforceable. Another reason might be if the agreement was “unconscionable,” or inherently unfair. Another reason could be if the person who signed the agreement did not have the proper authority to do so on behalf of the patient, or if the patient was not in a clear state of mind at the time the document was signed.

An analysis by Aon Global Risk Consulting looked at some 1,500 closed claims involving long-term care providers filed between 2003 and 2011. In 30 percent of claims where a valid arbitration agreement existed, no money was paid to the plaintiff. This is compared to 19 percent of claims where no arbitration agreement existed or where the arbitration was deemed unenforceable. Comparatively, while 12 percent of claims absent an arbitration agreement resulted in awards of $250,000 or more, only 8.5 percent of claims with a valid arbitration agreement received the same award.

It is usually not in your best interest to sign an arbitration agreement, and generally, it’s not required as a condition of admission. Still, even in cases where an arbitration agreement exists, it is possible that the contract is not enforceable and your case may still proceed to court. Contact an experienced lawyer for more information.

Additional Resources:

Pine Hills Health & Rehab., LLC v. Matthews, March 13, 2014, Supreme Court of Arkansas