Articles Posted in Arbitration Clauses

In this case, the Kentucky Supreme Court’s clear-statement rule was held to violate the Federal Arbitration Act by singling out arbitration agreements for disfavored treatment.

The Federal Arbitration Act (the Act) makes arbitration agreements “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract,” 9 U.S.C. ¶ 2, establishes an equal-treatment principle:  A court may invalidate an arbitration agreement based on “generally applicable contract defenses,” but not on legal rules that “apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue,” AT&T Mobility, LLC v. Concepcion, 563 U.S. 333, 339.

The Act thus preempts any state rule that discriminates on its face against arbitration or that covertly accomplishes the same objective by disfavoring contracts that have the defining features of arbitration agreements.

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The family of Lola Norton, deceased  brought a wrongful death action against a number of defendants who were affiliated with a nursing home in which Bernard Norton’s wife, Lola  died.

Bernard and family claimed that negligent treatment caused Lola’s death. The the nursing home defendants filed a motion to dismiss the complaint or, in the alternative, to stay the proceedings and compel arbitration of all claims in accordance with an agreement entered into by Lola at the time she was admitted to the nursing home.

The trial court granted the motion to stay and compel arbitration, and Bernard appealed, contending that, as a wrongful death beneficiary, he could not be bound to Lola’s arbitration agreement. The Court of Appeals reversed the trial court and found that Lola’s beneficiaries were not required to arbitrate their wrongful death claims against the nursing home defendants.

Arbitration clauses commanding arbitration in nursing home abuse and neglect cases have been the bane of many lawyers seeking to protect nursing home residents from abuse and injury. Under the Illinois Nursing Home Care Act, arbitration clauses were considered to undermine the purpose of the act by making it mandatory for residents and their families to abide by a confusing nursing home contract on admission to a nursing home.

The Illinois Nursing Home Care Act was intended to protect residents from exploitation by nursing homes and their parent corporations. It would seem to be against Illinois public policy for residents admitted to Illinois nursing homes to be compelled to sign a contract. In some cases, these contracts contained arbitration clauses that would essentially remove a common law lawsuit as an option should the resident be injured by neglect or abuse by a nursing home and its personnel.

The Centers for Medicare and Medicaid Services (CMS) implemented a new rule that prohibited federal funds for nursing homes that enter into binding arbitration agreements with residents. However, in a U.S. District Court in the Northern District of Mississippi, an order was entered that found that the CMS did not have authority to enact the mandate without statutory authority.

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An appeal was taken from an order entered on June 18, 2015 that denied the motion of the defendants, Manor Care of Carlisle PA, LLC, etc., for reconsideration after the circuit court judge denied their motion to compel arbitration in this nursing home abuse case. It is well-settled that “denial of reconsideration is not subject to appellate review.”

On Dec. 13, 2012, Mary J. Churlick, in her capacity as executrix of the estate of Mary J. Yohn (hereinafter the “decedent”) filed a lawsuit against the defendant nursing home and its parent company. The complaint contained claims in negligence and negligence per se as well as claims under the survival statute and wrongful death statute.

On Sept. 6, 2013, the trial judge overruled the defendants’ preliminary objection and the nature of the motion to compel arbitration. That order was an appealable order.

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An Ohio Appellate Court has held that an arbitration agreement signed by the son of a resident at the time of the father’s admission to a nursing home did not justify compelled arbitration. Marcus Vickers signed an arbitration agreement when his father, Jack Johnson, was admitted to the Canal Pointe Nursing & Rehabilitation Center.

After Johnson’s death, his son, Marcus Vickers, filed suit against the nursing home for negligence and wrongful death.  The lawsuit alleged survivorship as well as wrongful death claims.

The defendant nursing home filed a motion to stay the proceedings and compel arbitration.  The trial judge granted the nursing home’s motion and Vickers appealed.

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According to a recent report in the New York Times, an agency within the federal Health and Human Services Department issued a rule that bars any nursing home that receives federal funding from requiring that its residents resolve disputes in arbitration as an alternative to a lawsuit in a court.

As in many situations, the admission contracts of nursing home residents encounter clauses within that contract that makes arbitration mandatory should disputes of any kind arise. That includes most often neglect and abuse matters.

The nursing home industry has long preferred arbitration instead of lawsuits that residents raise for neglect and abuse.  Arbitration is a benefit to the nursing home industry because the cost of litigating cases in arbitration is much less than might be in a state court. The arbitration clauses that are found in some nursing home admission contracts are designed to limit the amount of recovery for an injured or neglected resident.

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A Kentucky Appellate Court has held that an admission agreement’s arbitration clause signed by the resident’s son at the time of her nursing home admission did not apply to the son’s subsequent wrongful death lawsuit against the nursing home and its operators.

John Cox III signed an agreement to admit his mother Elizabeth Cox to the Kindred Nursing Centers. The agreement included a clause, as do many nursing home agreements, authorizing arbitration of claims against the nursing homes. After Elizabeth died, her son brought a lawsuit against the nursing home and its operators claiming wrongful death and other claims of nursing home abuse and resulting damages.

The nursing home and its operators moved to compel arbitration. The trial judge granted the motion as to all claims except the plaintiff’s wrongful death action.

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A Pennsylvania Superior court held that a trial judge did not violate the Federal Arbitration Act (FAA) by refusing to split up a plaintiff’s wrongful death and survival claims arising out of the death of a nursing home resident. Margaret Tuomi was a resident at Kenric Manor, an assisted living facility. She developed contractures, pressure sores, a urinary tract infection, pneumonia, infection from a skin break and other medical issues. She was treated at a hospital. After she was transferred to Extendicare Health Facilities nursing home, she developed additional health problems from which she later died.

Tuomi’s husband and the administrator of her estate filed a wrongful death lawsuit on behalf of her beneficiaries and a survival action against Extendicare and Kendric Manor. Extendicare moved the trial court to compel arbitration under an arbitration agreement signed by Tuomi’s husband when she was admitted to Extendicare.

The trial judge held that Tuomi’s wrongful death beneficiaries, who were non-signatories to the arbitration agreement, could not be compelled to arbitrate. The trial judge also held that under Pennsylvania’s procedural law, the case brought as a wrongful death claim and survival action could be consolidated and in fact were required to be consolidated and remained together in court.

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In a nursing home dispute, the Illinois Appellate Court weighed in on an issue of whether a health-care power of attorney holder could bind the nursing home resident to an arbitration provision in order to gain admission to the long-term care facility. In this case, Edward M. Fiala Jr. sued Bickford Senior Living Group in Kane County, Ill. Bickford moved to compel arbitration based on an agreement, called “the establishment contract” that his daughter, Susan Kahanic, signed as attorney-in-fact under a health-care power of attorney.

Kahanic’s signature on the establishment contract was required in order to get Fiala admitted to Bickford Senior Living Group’s facility.

It was argued that the health-care power of attorney did not authorize Kahanic to consent to the arbitration provision in the establishment contract. The trial court agreed and denied Bickford’s motion.

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