The United States Court of Appeals for the Sixth Circuit (“Federal Appellate Court”) held in its opinion filed on August 5, 2019, in a case where a nursing home was attempting to compel arbitration of the nursing home negligence claims involving the resident’s third and final period of residency at the nursing home, that the nursing home resident’s failure to sign the arbitration agreement that was part of the admissions packet presented at the beginning of the third period of residency, despite the resident signing the two earlier, identical arbitration agreements for the two prior admissions that provided that the arbitration agreement “shall remain in effect for all care and services rendered to the Resident at or by the Facility regardless of whether the Resident is subsequently discharged and readmitted to the Facility without renewing, ratifying, or acknowledging this Agreement,” meant that the arbitration agreement was unenforceable because the third arbitration agreement was not signed by the resident and the two earlier arbitration agreements had be abandoned.
“The same contract—with identical terms—was presented to the [resident] three times. Each contract said that it would last in perpetuity and apply to each subsequent admission … The effect of the [resident’s] refusal to sign the third Agreement was that no contract was formed, and the earlier contracts were abandoned. This basic give-and-take of acceptance and rejection is the bedrock of contract law … If the Agreement is a contract that stays in force upon each successive admission—and the Supreme Court has said clearly that the normal rules of contract apply to arbitration contracts—then the actions of these parties at the third admission clearly bespeak a mutual intent to abandon the Agreement.”
The Federal Appellate Court reasoned: “If the Agreement is so comprehensive that it binds the parties to arbitration forever, then why did it need to be presented upon each successive visit? This does not bespeak an intent to ratify but an intent to offer the same choice again to the re-admitted resident. Otherwise representment simply offers the resident a choice they are not contractually allowed to make, or a choice that is meaningless … When the parties’ “positive and unequivocal” actions are inconsistent with a contract’s existence, the intent of both parties is to discard the contract … We can reach no conclusion other than that re-presenting the contract to the [resident] was behavior unmistakably showing that no prior agreement controlled.”
“Here, each party took an action with legal significance. The nursing home was not required to present the [resident] with a new agreement, but did … And by electing not to sign the new agreement, the [resident] acquiesced in the nursing home’s abandonment of the earlier agreement … In this case, the legal effect is abandonment.”
GGNSC, et al. v. Estate of Robert C. Bramer, et al., No. 18-6059.
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