Getting Out: Binding Arbitration Part II
By Ted Sherwood
So now you find yourself in a predicament. You or your parent has signed an Admission Contract with a nursing home. The Admission Contract contains a Binding Arbitration clause. Something has happened, a serious injury or perhaps even death. Now you need to know, have you or your parent given up your right to a jury trial?
Generally speaking, Binding Arbitration clauses in contracts are enforceable. They are encouraged under state and federal law, although, in my opinion, they are decidedly anti-consumer. However, it is a closer question as to whether they are enforceable in a nursing home Admission Contract because Oklahoma’s Nursing Home Care Act prohibits waiver of trial by jury.
Nevertheless, some courts have held that an Admission Contract containing a binding arbitration clause can be enforced. Before you give up however, you should know there are at least five ways to get out of Binding Arbitration:
- Binding Arbitration is only enforceable by the parties to the contract. Typically a claim of nursing home negligence will be made against the company that holds the state license to operate the nursing home or the owner of the facility. Recently we found that the Admission Contract containing the offensive arbitration provision identified completely different corporation as a party to the contract. So check who is listed as the party on the contract first, Binding Arbitration may not even apply.
- The Admission Contract has been assigned to another corporation after the injury or death occurred. The right to bring a claim for damages vests or is determined upon the date of the injury or death. Sometimes one corporation will assign its rights in the Admission Contract to another corporation. If that assignment occurred after the date of injury or death, the arbitration provision would not apply.
- The Admission Contract was signed by a family member as a responsible party not as a guardian or power of attorney. Only a duly appointed guardian, or an attorney-in-fact armed with a power of attorney can waive the legal rights of another person.
- The Admission Contract was signed by a person with a power of attorney, but the patient was not competent to sign the power of attorney when it was made. I have seen this before; the nursing home wants to accept a resident who is clearly not competent, but insists that the Admission Contract be signed by a person with power of attorney. The family members rush to get a power of attorney prepared and signed by their mom or dad. But if the person is not competent to manage their own legal affairs, they are not competent to sign a power of attorney. Therefore, the binding arbitration provision is not enforceable.
- The person who signed the Admission Contract was not competent at the time the contract was signed. As luck would have it, the nursing home has an Admission Contract, or even a later amendment, signed by the nursing home resident. But, the resident, due to dementia, Alzheimer’s disease, or some other infirmity, was not mentally capable of managing his or her own affairs. The binding arbitration provision is therefore void and does not apply.
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