Arbitration Agreements and Nursing Homes

Look carefully at contracts you sign. These days, it’s likely you’ll find an arbitration clause in most of them. Arbitration is a way to resolve disputes using an independent, private third party, but it limits your ability to sue in court.

In an effort to shield themselves from being sued for elder abuse and wrongful death, nursing homes are inserting arbitration clauses into the agreements they require prospective residents to sign. If you don’t sign, you don’t get to live there. Once the agreement is signed by the resident, it has the force of a legal contract; such agreements are almost always upheld by the courts, in accordance with basic contract law.

But if the person who signed the agreement was not the resident, does the arbitration clause still apply?

The South Carolina Case of Thompson v. Pruitt Corp

In this case, a son and daughter had their mother admitted to a nursing home during January, 2011, that was owned by Pruitt Corporation. Because the mother was suffering from severe dementia, she was not legally competent to sign the nursing home agreements. South Carolina’s Adult Health Care Consent Act (AHCCA) permitted the children to make health care decisions for the mother. Therefore, the son signed the admission agreement and an arbitration agreement, along with other documents. It is important to note that:

• The person being admitted did not sign.
• The arbitration agreement was a separate document from the admission agreement.
• Signing the arbitration agreement was not required for admission.
• The arbitration agreement allowed the disclaiming of the agreement within 30 days.

Five hours after admission, the mother fell out of bed because of a broken bed railing, and she died as a result of her fall. The daughter filed a wrongful death suit against the nursing home. The nursing home tried to force arbitration, but was denied.

What Did the Courts Rule?

The trial court ruled that the son had no authority to execute an arbitration agreement for his mother, and the Court of Appeals of South Carolina affirmed the decision when it was appealed. Therefore, there was to be no binding arbitration, and the wrongful death case could move forward in the courts. The reasons given by the Court of Appeals were:

• The son had no authority to execute an arbitration agreement for his mother because it was a separate document that did not deal with his mother’s health care, as covered by the AHCCA.
• The arbitration agreement was also not a requirement for admission to the nursing home; therefore, it was not related to the mother’s health care.
• Because of the mother’s dementia, she could not give her consent for her son to act as her agent in this matter.
• Additionally, even if the mother had the ability to consent to her son acting as her agent in this matter, the standard power of attorney (POA) for health care does not permit the person wielding the POA to enter into an arbitration agreement. The reason is that such an agreement results in the waiving of the mother’s right to legal relief, and to a jury trial, in the court system.

It will be interesting to see what impact this ruling will have on future cases involving nursing homes and arbitration agreements.

When life goes wrong, we fight for what’s right.

When someone you love has been hurt, it can feel like nothing will ever be right or fair again. When this happens, the experienced South Carolina arbitration lawyers at the Louthian Law Firm can review your legal options and work with you to determine the most appropriate next step.

Arbitration is not an easy road to navigate. Arbitration cases have their own procedures, norms, and culture. It is of the utmost importance to find an attorney who is familiar with the process and who has a good track record both in court and in arbitration. Additionally, many South Carolina nursing homes and assisted living facilities are part of larger chains, complete with their own legal departments. Thus it is crucial that you have the legal assistance you need to secure justice.

Our attorneys can help you evaluate your case, protect your legal rights, stand by your side throughout the legal process, and get you the best possible results. For a free consultation, call the Louthian Law Firm today at 1-803-454-1200.