NURSING HOMES & MANDATORY ARBITRATION

 

A new practice by nursing homes of burying a mandatory arbitration clause in the admission records has now been held legal by the case brought in the U.S. Supreme Court of Marmet Health Care Center v. Brown, et al in February, 2012.  Long term care facilities across the country are amending their admission agreement to provide that all disputes be resolved by binding arbitration.  The nursing homes stand to benefit by resolving disputes at arbitration.  The clauses force the patients to waive their right to a jury trial.  This benefit for nursing homes takes away the sympathy factor of juries.  The nursing homes claim from an economic standpoint that arbitration is cost-effective and an efficient means of resolving disputes while lawsuits take years to resolve.

In an article in the Westchester Business Journal published in Westfair Communications by Lori Semlies on March 24, 2016, points out journals and newspapers have expressed outrage over forcing people who enter a nursing home to waive their right to a jury trial.  Those nursing homes take advantage of the elderly who have diminished mental capacity by hiding or concealing an arbitration clause in an already long and complex admission documents.  Even family members of these elderly are too distraught to read or even understand the document they are signing.  Opponents of this practice claim that these admission forms become contracts that are binding.  However, the patient who signs must have the mental capacity to enter into the contract.

The Federal Arbitration Act (FAA) was intended to promote swifter and more economical resolutions of lawsuits.  The Marmet case in the Supreme Court of the United States declared that FAA pre empty any state laws or public policy that states arbitration cannot be used to resolve personal injury lawsuits.  The party moving to enforce arbitration must establish certain Federal procedures and demonstrate that the contract is procedurally and subsequentially conscionable.  The contract cannot be one sided or adhesive.  There must be equal bargaining power on both sides and the parties entering the contract must have the capacity to do so.

In 2015, the first case to test an arbitration provision in a nursing home admission form is the case of Friedman v. Hebrew Home for the Aged in Riverdale, NY.  Mr. Friedman, who was his mother’s power of attorney, bought a lawsuit when his mother fell and fractured her hip.  On admission to the home, the son with the power of attorney signed the admission agreement in every place where a signature was required and the arbitration clause just above the signature line stated “by executing this agreement the undersigned acknowledges that he/she/they are waiving the right to a trial by jury or a Judge in a Court of law and have instead agreed to binding arbitration”.  The nursing home moved to enforce the arbitration clause and the injured patient has argued that the provision was buried among other documents that most people at the time of stress do not read.  The Trial Court declined to compel arbitration.  However, on appeal, the First Judicial Department unanimously ruled that the agreement was enforceable and was not unconscionable.

The states of Florida, New Mexico, California, Texas, Mississippi, Alabama and Michigan have  ruled that a resident’s signature on an admission agreement can bind his or her heirs to arbitration in a wrongful death suit.  Arizona, Pennsylvania, Kentucky, Illinois, Washington, Missouri, Utah and Ohio refuse to allow the arbitration clause.  New York legislators have not yet addressed the issue and must do so or the arbitration clauses will be enforced by the New York Courts.

If you or a love one has sustained an injury or death as a result of the nursing home negligence, contact the Law Firm of Dominick J. Robustelli & Associates at (914) 288-0800 or on our webpage of White Plains-Personal Injury-Lawyer.