Like other industries providing services to vulnerable populations, nursing homes are no strangers to lawsuits. However, simply because nursing homes and similar long-term care businesses often find themselves in courts does not mean they like to be there. Indeed, nursing homes routinely have their incoming residents sign arbitration agreements providing that potential claims against the nursing home be resolved through informal arbitration rather than formal litigation. Given that arbitration panels are often believed to be biased, the enforceability of such arbitration provisions is frequently at issue. For instance, in a recent decision, Sovereign Healthcare of Tampa, LLC v. Estate of Schmitt, Florida’s Second District Court of Appeals addressed whether a nursing home resident’s wife had the authority to sign an arbitration agreement on his behalf.
Sovereign Healthcare arose from incidents of alleged negligence at Bayshore Pointe Nursing & Rehabilitation Center in Tampa, Florida. The plaintiff in this case was the widow of a resident who spent two separate stints at Bayshore prior to his death. Before each of the deceased’s residencies at Bayshore, a “Resident Admission and Financial Agreement” was executed. The agreements included identical arbitration clauses that provided for the arbitration of disputes related to the deceased man’s residency at Bayshore. After the widow of the deceased man filed suit on behalf of his estate, Bayshore made a motion to compel arbitration, arguing that the arbitration provision in the first residence agreement required that the claims asserted be arbitrated. The trial court denied the motion, and Bayshore appealed the adverse ruling.
Despite Bayshore’s desire to arbitrate, the Second District found the arbitration clause was unenforceable and affirmed the trial court’s ruling. Indeed, when the first of the residence agreements was executed, it had not been signed by the deceased but instead by his wife. Although a third party, including a spouse, may in certain circumstances sign on another’s behalf, the evidence showed that the widow did not have power of attorney or any other authority to execute agreements on her husband’s behalf. Since the widow lacked the authority to execute agreements on her husband’s behalf, the arbitration provision in the residence agreement was unenforceable. See, e.g., Sovereign Healthcare of Tampa, LLC v. Estate of Yarawsky, 150 So. 3d 873, 877-78 (Fla. 2d DCA 2014) (holding that an arbitration clause in a residence agreement was unenforceable because the agreement was only signed by the wife of the resident, who did not have any legal authority to execute the agreement on behalf of her spouse).
Although the plaintiff will still need to ultimately prove the nursing home’s liability for her late husband’s injuries, this ruling is nevertheless a major victory, for the plaintiff will likely benefit from having the formal rules of standard litigation in play. Arbitration clauses are not uncommon and, in some instances, need not be signed to be considered binding. Accordingly, people who have been injured and who may be subject to arbitration should consider finding counsel experienced in mounting challenges to the enforceability of arbitration agreements. The elder abuse attorneys at Frankl & Kominsky have considerable experience in both challenging arbitration clauses and representing clients in arbitration when avoiding arbitration is not possible. If you or a loved one have recently been harmed as a result of possible negligent nursing home care and are curious about your legal options, feel free to contact us for a free case consultation.