A divided Colorado Supreme Court held in its opinion filed on June 11, 2018 that despite the defendant nursing home’s failure to strictly comply with the Colorado statute requiring that notice regarding nursing home arbitration agreements be emphasized by at least ten-point font and bold-faced type (the defendant nursing home’s notice was in twelve-point font but not bold-faced), “we hold section 13-64-403 of the HCAA [Health Care Availability Act] demands only substantial compliance, and that the agreement here substantially complies with its formatting requirements, despite its lack of bold-faced type.”
The Colorado Supreme Court stated in its majority opinion, “We don’t believe that the General Assembly intended to elevate form over function. And function—that is, notice to the patient consumer of services—is better served by the flexibility substantial compliance affords.” The Colorado Supreme Court further stated, ” … unlike a strict-compliance standard, a substantial-compliance standard would send the right issues to court. A strict-compliance standard would invite litigation of the underlying merits any time an agreement suffered from a minor technical deficiency, even if the parties had executed the agreement voluntarily. But under substantial compliance, agreements with only minor technical deficiencies—those that don’t bear on voluntariness in any material sense—will keep parties in arbitration and avoid the costs of full-blown merits litigation. A party seeking to litigate the merits will have a colorable substantial-compliance issue to litigate only when an arbitration agreement suffers more serious deficiencies—those that could actually bear on voluntariness. So, the litigation that will result from imposing a substantial-compliance standard is more consistent with the General Assembly’s purpose in enacting the HCAA.”
The Colorado Supreme Court further justified applying the substantial compliance standard in nursing home arbitration agreements by stating, “Punishing health care providers for minor typographical deficiencies that don’t affect voluntariness wouldn’t serve the statute’s or the Act’s purposes. But because more significant deficiencies in the HCAA-required disclaimer might affect voluntariness, punishing providers for failure to substantially comply would further the statute’s purpose of ensuring voluntariness … the ease of compliance bears on neither the specific purpose of that section (ensuring voluntariness) nor the general purpose of the Act (keeping medical malpractice costs low).”
The dissenting opinion stated that “The structure and language of section 13-64-403, C.R.S. (2017), suggest quite plainly that the legislature intended strict compliance with the statute’s terms … subsection 403(4) sets out a detailed, specifically worded four-paragraph notice that “shall be printed in at least ten-point, bold-faced type” and placed “[i]mmediately preceding the signature lines for such an agreement.” § 13-64-403(4). We have never found that this kind of legislative specificity—the provision of specific and detailed language that must be included in a notice in order to comply with the law—required only substantial compliance.”
The dissenting opinion continued: “Further evidence of the legislature’s intent that the provisions of section 13-64-403 be strictly complied with lies in subsection 9 of section 403, in which the legislature provided that “[i]f a health care provider . . . fails to comply with the requirements of subsection (3) or (4) or both of this section,” that failure “shall constitute unprofessional conduct as such term is used under the relevant licensing statute governing that particular care provider.” § 13-64-403(9). The majority takes the severity of this consequence as evidence that the legislature must have intended substantial compliance. Maj. op. ¶ 35. Quite to the contrary, this language is a strong statement from the general assembly that it meant to have the provisions of section 13-64-403 complied with and was therefore willing to impose significant consequences on health care providers who fail to comply. Again, this language adds further support to the conclusion that section 13-64-403 should be interpreted under a strict compliance standard.”
Source Colorow Health Care, LLC v. Fischer, 2018 CO 52.
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