Are Mandatory Arbitration Provisions in Nursing Home Contracts Going Away?

Two significant rulings occurred for those who seek admission to a care facility, which elder law attorneys, and even personal injury lawyers, should take note of. As we age, many of us require additional services and attention. Florida, for example, has a robust elderly population, and in response to the graying of America, a number of nursing homes, assistant living facilities and other care facilities have opened up and expanded. When being admitted to a care facility, many times, the admission documents, or contract, contain a mandatory arbitration provision, providing that any disputes between the resident or patient, and the care facility, should NOT go to a state or federal court, but rather to arbitration. If this sounds like a contract with your stock broker, you are right on the money.But are these mandatory arbitration provisions appropriate? What if the resident or patient is not well enough to admit himself or herself and an adult child or POA signs them in? Can that adult child or power of attorney (attorney in fact, in Florida) who signs a contract with the care facility bind the patient or resident to a mandatory arbitration provision? Well, it depends…………..

• The mandatory arbitration provisions which seem to be present in most admission contracts for nursing homes may be going away.
• Why? Well here in Florida, on September 22, 2016, the Florida Supreme Court issued its opinion in the Mendez case. Here’s a link to read this elder law opinion: http://www.floridasupremecourt.org/decisions/2016/sc14-1349.pdf.
• The issue in Mendez was whether a father admitted to a care facility was bound by an arbitration provision in the paperwork, or contract, signed by his son. (Father did not sign the contract.)
• Florida’s District Courts of appeal were split, with the 3rd District suggesting that since the father was a third party beneficiary of the admission contract signed by the son, he was bound to arbitrate any disputes with the care facility.
• Other District Courts in Florida, notably Palm Beach’s appeals court, the 4th District Court of Appeal, have held differently.
• Florida’s Supreme Court came down on the side of 4th DCA, or the father (now deceased) who was admitted, and held that the son could not bind the father to an arbitration provision in the contract.
• The Florida Supreme Court discussed the third party beneficiary concept, but did not discuss, in as great detail, what authority the son had, or did not have. Business lawyers who write or draft contracts, and commercial litigators who handle contract litigation, should read Mendez.
• In today’s New York Times, Jessica Silver-Greenberg and Michael Corkery report that: “An agency within the Health and Human Services Department on Wednesday issued a rule that bars any nursing home that receives federal funding from requiring that its residents resolve any disputes in arbitration, instead of court.”
• Here is the link: http://www.nytimes.com/2016/09/29/business/dealbook/arbitration-nursing-homes-elder-abuse-harassment-claims.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region&region=top-news&WT.nav=top-news