The Superior Court of New Jersey Appellate Division (“New Jersey Appellate Court”) refused to enforce an arbitration agreement in a New Jersey nursing home wrongful death action. In its unpublished opinion filed on May 21, 2018, the New Jersey Appellate Court held that there is no evidence either the nursing home resident or the resident’s daughter who signed the arbitration agreement induced the defendant nursing home to engage in any action to its detriment.
The decedent was admitted to the defendant New Jersey nursing home for rehabilitative treatment for pressure wounds on his legs. At the time of and during his sixty-three day nursing home admission, the decedent was mentally competent.
Months after the decedent was discharged from the defendant nursing home, he died of septic shock secondary to the pressure ulcers, allegedly caused by the negligent treatment provided by the defendant nursing home and its employees. The defendant nursing home moved to enforce the arbitration clause in the Admission Agreement that was signed by the decedent’s daughter, arguing that all of the plaintiff’s nursing home negligence claims against it had to be submitted to arbitration in accordance with the arbitration clause.
The trial judge denied the defendant’s motion, finding that the arbitration clause could not be enforced because the agreement containing the arbitration clause was never formed: the decedent never reviewed or signed the agreement and the plaintiff did not have the authority to enter into the agreement on the decedent’s behalf when she signed the agreement, which fact the defendant nursing home did not dispute. The defendant appealed that decision, arguing that the doctrine of equitable estoppel precludes the plaintiff from disavowing the existence of the agreement.
New Jersey Appellate Court Decision
Doctrine Of Equitable Estoppel
The New Jersey Appellate Court stated that in order to establish equitable estoppel, the defendant nursing home must prove that the decedent engaged in conduct, either intentionally or under circumstances that induced reliance, and that the defendant acted or changed its position to its detriment (i.e., detrimental reliance).
The New Jersey Appellate Court stated that the defendant nursing home knew the decedent neither reviewed nor signed the agreement; when the plaintiff signed the agreement, the defendant nursing home knew the decedent had not executed a power of attorney appointing the plaintiff as his attorney-in-fact; and, the defendant nursing home knew or should have known the plaintiff was not the decedent’s authorized agent when she signed the agreement. The New Jersey Appellate Court held that therefore there is no evidence either the decedent or the plaintiff induced the defendant nursing home to engage in any action to its detriment.
Source Summers v. SCO, Silver Care Operations, LLC, Docket No. A-5168-15T2.
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