Arbitration in nursing home contracts
Below are excerpts from an article regarding arbitration clauses in nursing home contracts provided by Dollar, Burns & Becker, L.C. Their firm website is here.
Arbitration clauses in nursing home contracts have come under closer scrutiny in recent years. At the federal level, there has been a push in Congress to pass the Fairness in Nursing Home Arbitration Act, which would make any pre-dispute arbitration agreement between nursing homes and residents invalid and unenforceable.
At the state level, several state courts also have faced the issue of the enforceability of arbitration clauses in long-term care facility contracts. In Illinois, the appellate court upheld a ruling that the Illinois Nursing Home Care Act prevented nursing home residents from waiving their rights to a jury trial. The nursing home argued that the appellate court's ruling contravenes the Federal Arbitration Act (FAA).
The Missouri Supreme Court ruled in Lawrence v Beverly Manor (273 S.W.3d 525) that arbitration agreements in nursing home contracts do not prevent the heirs or successors to the nursing home resident from bringing a wrongful death action in court against the nursing home.
In Lawrence, the daughter of a resident signed the nursing home contract with the arbitration agreement on behalf of her mother. Her mother died in the nursing home shortly after moving in. When the wrongful death action was brought against Beverly Manor, it sought to enforce the arbitration agreement against the daughter and son of the resident. The Missouri court refused to do so, holding that the arbitration agreement was not binding against the family in a wrongful death case.
The Missouri Supreme Court ruled that a wrongful death action is a separate cause of action. The court reasoned that the arbitration agreement did not bind the daughter and son in Lawrence because the deceased mother could not have brought a wrongful death lawsuit against the nursing home had she lived.
Thus, under Missouri state law, arbitration agreements signed by nursing home residents -- or by someone acting on their behalf, such as a son or daughter -- are not enforceable against anyone seeking to bring a wrongful death action in state court.
The Lawrence decision did not invalidate arbitration agreements in nursing home contracts. The Lawrence decision, however, may be used in future cases to attempt to invalidate arbitration agreements in nursing home contracts altogether. Special Judge Glenn A. Norton wrote that he believed any agreements between nursing homes and residents requiring arbitration for personal injury were unconscionable and should be unenforceable.
