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Alternative Dispute Provisions in Nursing Home Agreements

old-people-735910-m-2In a recent unpublished opinion, the Kentucky Court of Appeals considered the appeal of a nursing home and its related business entities in a nursing home negligence case. They were appealing from a circuit court’s denial of their motion to dismiss or to stay proceedings and compel arbitration.

The case arose when a woman named Wandalene Bullock was admitted as a resident of the nursing and rehabilitation facility in 2011. Her daughter had power of attorney. A week after Wandalene was admitted, her daughter signed an alternative dispute resolution agreement. This agreement required the facility and resident to resolve any disputes by way of mediation or binding arbitration if mediation was unsuccessful.

In this case, the agreement also noted that the parties waived the right to a jury trial, the right to a bench trial and the right to appeal the arbitrator’s decision. Unlike some similar agreements, the agreement indicated that signing it was optional and stated that other local nursing homes might not require you to sign an agreement with an alternative dispute provision.

Wandalene died a few weeks later. The daughter was appointed administratrix of her estate. She sued the nursing home and related facilities for wrongful death, personal injury and statutory violations of KRS 216.515 related to long-term care.

The nursing home tried to dismiss or compel arbitration. The circuit court denied the motion, ruling that the power of attorney did not give the daughter the authority to sign an arbitration agreement on her mother’s behalf. The power of attorney did allow the daughter to enter into contracts, convey personal property, invest money and give consent for medical treatment. However, it did not allow her to guarantee or endorse in connection with accommodation or give away property.

The nursing home appealed, arguing that the power of attorney did permit the daughter to sign the alternative dispute agreement on behalf of the mother. The circuit court had relied on a Kentucky Supreme Court case with similar facts where the Supreme Court had ruled that the power of attorney didn’t vest the daughter with authority to execute an arbitration agreement on her impaired mother’s behalf. The Court found that the scope of authority is left to the principal (in this case, the mother) to decide. In the earlier case, the arbitration agreement was deemed not to be a health care decision; it was not something the daughter had to sign to get the mother admitted. The daughter lacked authority to enter into the arbitration agreement.

The nursing home in this case argued that the power of attorney authorized the daughter to make and sign any and all contracts or agreements. The appellate court explained that the language was not as expansive as the nursing home had argued. There has to be an express statement by the person who is executing a power of attorney that she intends to waive constitutional access to the courts.

The court also explained that a wrongful death claim is not derived from the resident but accrues independently to the family of the deceased. The decedent cannot bind a beneficiary to arbitrate a wrongful death claim. Accordingly, the trial court’s decision was upheld and the arbitration agreement was deemed unenforceable.

If you are seriously hurt or a loved one is killed due to nursing home negligence, you should consult with an attorney as soon as possible to determine whether any relief is available to you. The knowledgeable Kentucky and Tennessee personal injury attorneys of English, Lucas, Priest & Owsley may be able to help you. Contact us at 270-781-6500 or via our online form.