The Florida Supreme Court ruled that nursing facilities can shield themselves from wrongful death suits via arbitration clauses.
Decisions regarding admissions into a long-term care facility are typically made in the midst of a crisis brought on by a precipitous deterioration in health or the deterioration or death of a caregiver. During this emotionally-charged tumult, nursing home residents or families are asked to sign a stack of admissions documents. For many, it is only later that they learn the details of the contracts they have signed, often including provisions mandating arbitration of any disputes.
Arbitration is a form of dispute resolution originally developed for business-to-business disputes, between parties with equal sophistication and bargaining power, where the parties agree to forego many legal procedures that ordinarily protect litigants’ rights if in court. For example, arbitration agreements often limit discovery, eliminate reliance on precedential court decisions, close the arbitration proceedings, have decisions that are blocked from public view, and limit the ability to bring disputes on a class action basis – all of which can be very important when one party (i.e. the nursing facility) controls access to documents and employees, has a vested interest in not having disputes go public, and has greater resources to prepare for and select an arbitrator.
In light of the emotionally charged atmosphere of a nursing facility admission as well as the often difficult to understand nature of the rights parties give up in arbitration, many state courts have concluded mandatory arbitration clauses cannot be enforced against nursing facility residents and their family members in disputes about the care that the facility provided to the resident. Florida’s highest court decided that it will enforce these agreements against families who bring wrongful death cases.
Harry Lee Stewart passed away while in a nursing home operated by Avante Group, and his family sued the nursing facility claiming inadequate care. Avante sought to have the dispute dismissed, citing a mandatory arbitration provision signed at admission.
AARP’s friend-of-the-court brief, written by attorneys with AARP Foundation Litigation, described the importance of private lawsuits given the inadequacy of the regulatory enforcement process to correct repeat violations by nursing homes; pointed out that while Stewart may have signed the contract, his family did not and it is his family who is bringing the wrongful death suit; and that contract law precludes allowing an arbitration clause to foreclose a lawsuit by a third party who was not party to the agreement.
The Florida Supreme Court ruled that survivor’s rights were derivative of those possessed by the person signing the contract, that Stewart had agreed to an arbitration clause that was valid and legitimate, and therefore his heirs could not proceed with a wrongful death lawsuit in court.
What’s at Stake
When people enter nursing facilities, they are emotionally distraught and in no position to understand the rights they give up when they sign an arbitration agreement buried among many other admissions documents. Arbitration limits a nursing facility’s exposure to liability and publicity for wrongdoing, removing an important incentive they may have to provide high quality care. Because of the unfair bargaining position residents and their families find themselves in when signing admissions contracts, and because of the significant rights that are waived when an arbitration clause is agreed to, AARP has been working to level the playing field among the parties. Ensuring access to a fair and impartial legal system is part of that effort.
Laizure v. Avante at Leesburg was decided by the Supreme Court of Florida. The parties will now have to proceed to arbitration.