A North Carolina case from earlier this year involving the effectiveness of nursing home arbitration agreements put nursing home operators on notice that some agreements can be deemed unenforceable if the terms of the agreement have changed.
The case, Crossman v. Life Care Centers of America, was recently heard by the North Carolina Court of Appeals. The decision revolved around a document known as a “pre-dispute arbitration agreement.” These are agreements that nursing home residents or their legal representatives enter into with nursing facilities which says that they will agree to arbitrate disputes rather than file a lawsuit in court in the event that something goes wrong.
The case began when a man was admitted to a Life Care facility in North Carolina and signed a pre-dispute arbitration agreement at that time. The agreement stated that any dispute with the facility would be submitted to arbitration before a board of arbitrators chosen from the American Arbitration Association and using rules from the AAA.
The problem was that the year before the agreement was signed, the AAA issued a statement making clear that it would no longer assist in arbitrating claims between individual patients and healthcare providers under pre-dispute arbitration agreements and would only become involved during post-dispute issues. When the man later died at the Life Care facility, his widow sued for negligence. The facility tried to force arbitration, which the wife’s attorney said was impossible given that the terms of the agreement could no longer be implemented.
The lower court, and later the Appeals Court, agreed with the widow and refused to enforce the arbitration agreement. Though the Court was clear that they still strongly support the idea of arbitration agreements, the judges emphasized that the terms need to be precise and must be able to be followed. This means that many nursing home facilities in North Carolina will likely begin a review of their arbitration agreements to make sure that the designated arbitrators are still in business. According to the North Carolina Court of Appeals, to allow inoperable provision to remain in an arbitration agreement opens the agreement up to being discarded entirely, allowing cases to move forward in court.
About the Editors: The Shapiro, Lewis & Appleton & Favaloro personal injury law firm, which has offices in Virginia (VA) and North Carolina (NC), edits the injury law blogs Virginia Beach Injuryboard, Norfolk Injuryboard and Northeast North Carolina Injuryboard as pro bono services.