The Arbitration Clause Problem In Nursing Homes

The line "cross the bridge when you get there" is never truer than when older people are forced to consider the details of a proposition that could affect their quality of life in their final years. During their twilight years, some people, either by choice or necessity, arrange for themselves to live in assisted-living communities better known as nursing homes. This decision is usually dictated by their desire for companionship of people their age and direct access to trained and compassionate professionals to support them in their decline. However, the instance of nursing homes requiring an arbitration and mediation clause in their contracts has become a hot-button issue for courts.

The main focus of the problem is defining who is bound by the contract. Most people assume that the contract only binds the signatory parties, both the nursing home and the individual. It would be somehow illegal to be bound to a contract that someone else has signed.

However, because of the age of the individuals involved, their families often end up being bound by the contract. Practical consequences of this practice include disputes regarding an individual's quality of care, billing details and even their death, when they pass away. Parties want to know if the arbitration clause applies to the individual's family and/or estate. Most nursing home facilities favor its application while the families do not.

Because courts have not yet stated their stand on this issue, matters are complicated further. Courts have not reached a unanimous ruling despite the multiple suits being brought to them for resolution.

The recent decision handed down by the Eighth Circuit of the Court of Appeal of the United States known as "GGNSC Omaha Oak Grove, LLC v. Payich" found that the son of a deceased resident at a nursing home could indeed sue despite the fact that his mother had signed an arbitration agreement with the facility. On the other hand, the Florida Supreme Court recently found in its ruling on "Laizure v. Avante at Leesburg, Inc." that the arbitration clause had to be enforced because the estate of the deceased was an extension of the deceased and thus bound by their agreements in life.

A resolution for a hot topic like this will take time. An advisable stop-gap for this is being clear on the terms of a contract before entering a loved one into a nursing home. However, when you find yourself in the situation, a civilized and respectful resolution will often be attained through the use of an experienced mediator or facilitator.

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