ARBITRATION CLAUSES IN NURSING HOME AGREEMENTS:
BE CAREFUL WHAT YOU SIGN
Deciding to admit a loved one into a long term-care facility is never an easy decision. To add to the stress, the resident, or many times, the resident’s family member, is required to sign an overwhelming amount of forms and documents during the admission process. Often times the resident or family member feels pressured to sign these documents, and does not carefully read or understand what he/she is signing, especially if the resident is ill or elderly. If the agreement is not read carefully, the resident may unknowingly agree to waive their right to have a future dispute with the long-term care facility settled though the court system, and also waive their right to a jury trial.
It is fairly common to see an arbitration clause in a long-term care agreement. A typical arbitration clause will usually state that the resident agrees to have any future dispute with the long-term care facility settled through arbitration rather than going through the courts and having the matter decided by a jury. If the resident signs the agreement it may be very difficult to later argue that the contract is unenforceable absent showing that there was duress or that the contract was unconscionable. Therefore, it is essential that if the resident is signing the agreement on their own behalf that they understand what they are signing and what they are agreeing to. In many cases the resident need not even agree to an arbitration provision as a condition to admission, yet the resident may not be aware of this and will sign the agreement for fear that they will be denied admission.
Pennsylvania courts tend to favor arbitration agreements if validly executed. However, in some cases a court may find that the arbitration clause is unenforceable if the individual signing on behalf of the resident did not have the authority to consent to arbitration. For example, if an Agent under a Power of Attorney signs a long-term care agreement while acting for the Principal under a Power of Attorney, the arbitration clause may be found to be invalid if the Power of Attorney document does not specifically state that the Agent has the authority to agree to an arbitration clause, and waive the Principal’s right to access the court system and have the matter decided by a jury. Such was the outcome of a Pennsylvania court case in which the Court held that the Power of Attorney document did not allow the Agent to waive the Principal’s litigation rights, the Court held that:
“to the extent that the power of attorney granted H. Randall Wisler the ability to sign admissions paperwork for Decedent, nothing indicates that it also allowed him to waive litigation rights in favor of arbitration. As the trial court noted, the authority to consent to medical treatment and care on behalf of a principal does not necessarily entail the authority to consent to arbitration, agreement to which was not a precondition to be admitted to ManorCare Lancaster.” Wisler v. Manor Care of Lancaster PA, LLC, 124 A.3d 317, 324 (Pa. Super. 2015).
It is therefore advisable to include language in a Power of Attorney document indicating that the Agent does not have the authority to agree to a pre-dispute arbitration agreement or clause, or waive the Principal’s right to a jury trial, as part of their admission to a long-term care facility.
If you or a loved one is entering a long-term care facility, it is important to read the agreement that the resident or family member is asked to sign and to make sure that the resident is not agreeing to settle a future dispute by arbitration. It is also advisable to review any current Power of Attorney document to make sure that it contains language stating that the Agent does not have the authority to enter into a pre-dispute arbitration clause on behalf of the Principal.