Kentucky Appellate Court Refuses To Enforce Nursing Home Arbitration Agreement

In its opinion rendered on May 4, 2018, the Commonwealth of Kentucky Court of Appeals (“Kentucky Appellate Court”) held: ” … [the defendant nursing home] failed to meet its burden of establishing the existence of a valid and enforceable arbitration agreement. The partial agreement and extrinsic evidence presented by [the defendant nursing home] was insufficient to establish a complete contract. Furthermore, [the defendant nursing home] failed to establish that [the nursing home resident’s husband] was authorized to execute the Arbitration Agreement on [the resident’s] behalf. Therefore, the trial court properly denied [the defendant nursing home’s] motion to compel arbitration.”

The Underlying Facts

The resident was admitted to the defendant nursing home on September 11, 2012. She died at the defendant nursing home on March 19, 2016. The resident’s daughter was appointed as administratrix of her mother’s estate on June 8, 2016. Shortly afterwards, the Estate filed its Kentucky nursing home negligence and wrongful death lawsuit against the defendant nursing home, alleging claims for negligence, medical negligence, corporate negligence, violations of the Long Term Resident’s Rights Act, and wrongful death. The resident’s husband alleged a separate claim for loss of consortium.

The defendant nursing home filed a motion to compel arbitration, alleging that when the resident was admitted to the defendant nursing home, her husband signed a document entitled “Alternative Dispute Resolution Agreement” (“Agreement”), which required arbitration of all claims and waived the resident’s right to a jury trial. However, the defendant nursing home produced only the signature page of the Agreement, stating that the rest of the Agreement was not in its file.

The trial court denied the defendant’s motion to compel arbitration, and the defendant appealed.

The Kentucky Appellate Court Opinion

The Kentucky Appellate Court stated that the enforcement and effect of an arbitration agreement is governed by the Kentucky Uniform Arbitration Act (“KUAA”), KRS 417.045 et seq., and the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq., both of which evince a legislative policy favoring arbitration agreements, or at least shielding them from disfavor.

Under both the KUAA and the FAA, a party seeking to compel arbitration has the initial burden of establishing the existence of a valid agreement to arbitrate. That issue is controlled by state law rules of contract formation; the FAA does not preempt state law contract principles, including matters concerning the authority of an agent to enter into a contract and which parties may be bound by that contract.

Noting that the defendant nursing home in the present case has the initial burden of establishing the existence of a valid and enforceable agreement to arbitrate, the Kentucky Appellate Court stated that the defendant produced only an executed partial copy of the original agreement and was attempting to establish the rest of the agreement by extrinsic evidence. The Kentucky Appellate Court stated that mere evidence of a common habit or practice of presenting arbitration agreements for signature is not evidence that the nursing home presented a complete arbitration agreement for signature on a particular occasion.

The Kentucky Appellate Court stated that even if the signature page and the nursing home attorney’s affidavit regarding the defendant’s common practice were sufficient to establish that the complete Agreement was executed at the time of the resident’s admission, the defendant still failed to establish that her husband was authorized to execute it on his wife’s behalf (the Power of Attorney executed by the wife unambiguously stated that it would become effective upon her disability or incapacity, and there was no evidence that she was medically disabled or unable to answer questions at the time of her admission to the defendant nursing home).

Furthermore, the husband signed the purported Agreement only as a “Family Member” of the resident, with no indication that he was acting as her attorney-in-fact; the husband’s apparent authority to execute his wife’s admission documents does not extend to collateral agreements, such as the arbitration Agreement.

New Meadowview Health and Rehabilitation Center, LLC v. Booker, No. 2017-CA-000073-MR.

If you or a loved one suffered injuries (or worse) while a resident of a nursing home in Kentucky or in another U.S. state due to nursing home neglect, nursing home negligence, nursing home abuse, or nursing home under-staffing, you should promptly find a nursing home claim lawyer in Kentucky or in your U.S. state who may investigate your nursing home claim for you and file a nursing home claim on your behalf, or behalf of your loved one, if appropriate.

Click here to visit our website to be connected with medical malpractice attorneys (nursing home claim attorneys) in your U.S. state who may assist you with your nursing home claim, or call us toll-free in the United States at 800-295-3959.

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This entry was posted on Friday, May 25th, 2018 at 5:23 am. Both comments and pings are currently closed.

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