Court of Appeals invalidates nursing home arbitration agreement

May 07, 2013 (Press-News.org) In the paperwork involved when someone enters a nursing home for care, residents or their legal representatives often sign something called a pre-dispute arbitration agreement. This agreement basically means that the resident and the facility must settle any disputes through arbitration instead of pursuing a lawsuit. In a case recently decided by the North Carolina Court of Appeals, however, the court found a nursing home's arbitration requirement invalid and allowed a lawsuit to continue against the facility for alleged nursing home negligence.

Nursing home arbitration agreement

In the case, Crossman v. Life Care Centers of America, Inc., et al., a resident and the nursing home signed a pre-dispute arbitration agreement when he entered the facility. According to the court's ruling, the arbitration agreement stated that, should any dispute arise between the resident and the facility regarding his care or treatment, the dispute would be settled by binding arbitration "before a board of three arbitrators selected from the American Arbitration Association (AAA), and the arbitrators would apply the applicable rules of the AAA."

A year before the resident's arbitration agreement was signed, however, the AAA changed its policy, stating that it would not arbitrate claims between residents and health care providers any more if the resident and the facility had a pre-dispute arbitration agreement. Instead, the AAA would only arbitrate health care claims if the resident and the facility agreed to arbitration after the dispute arose, under a post-dispute arbitration agreement.

Nursing home sued for alleged negligence

After some time in the nursing home, the resident passed away, and his wife sued the facility for alleged negligence in causing his death. The wife claimed the arbitration agreement did not prevent a lawsuit because the AAA no longer arbitrates these types of disputes; because the arbitration agreement's specific terms could not be enforced, she argued, she could file a lawsuit against the nursing home instead.

The trial court agreed with the wife, and so did the North Carolina Court of Appeals when the nursing home appealed the trial court's decision. Both courts ruled that the arbitration agreement is not enforceable because it is impossible to comply with some of its terms. This decision signals that nursing home arbitration agreements may be interpreted strictly by courts according to their precise language, and that, if any provision of the agreement fails, the arbitration agreement as a whole may not be enforced, allowing a lawsuit to proceed against a nursing home.

If you or a loved one has suffered from negligent care in a nursing home, contact a personal injury lawyer with experience in nursing home cases to discuss your legal options.

Article provided by Baker Billick, P.A.
Visit us at www.bakerlawfirmpa.com