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Georgia Court Refuses to Enforce Nursing Home Arbitration Agreement

Many nursing care facilities in Georgia pressure their residents to sign arbitration agreements. This means that in the event of a dispute, such as allegations of negligence or abuse against the nursing home, the resident waives his or her right to seek a jury trial and instead must allow an arbitrator to hear the case. Nursing homes and other health care providers prefer arbitration because it can limit a victim’s right to discovery–i.e., to seek evidence of abuse or neglect, and the final decision cannot be reviewed in court.

United Health Services of Georgia, Inc. v. Alexander

Judges will enforce nursing home arbitration agreements even when the terms are unfair to residents. But what happens when a family member signs an agreement on behalf of a deceased resident? The Georgia Court of Appeals recently addressed such a case.

The main defendant in this case is a nursing home in Monroe County, Georgia. The plaintiff is the daughter (and executor) of a now-deceased resident of the defendant’s facility. One of the resident’s other children actually signed her admission forms, which included an arbitration agreement. The arbitration clause was considered “optional” and could be revoked by the resident within 30 days.

The resident did not personally sign, witness, or directly approve her daughter’s consent to the arbitration agreement. The resident died about eight months later while under the defendant’s care. The plaintiff subsequently sued the defendant for wrongful death, negligence, and medical malpractice. The defendant moved to compel arbitration. The trial court denied this motion, holding there was “no valid and enforceable arbitration agreement.”

The Court of Appeals upheld the trial judge’s decision. There was no agreement because the daughter who signed the admissions forms never had the authority to waive her mother’s right to sue the defendant. The defendant argued the daughter “had both express and implied authority,” but the Court of Appeals disagreed.

Express authority is normally conferred by a power of attorney or similar written document. There was no such document here. And while the resident “had not objected” when her daughter signed other medical forms on her behalf, the Court of Appeals said that did not equate to express consent to enter into a binding arbitration agreement.

As for “implied” consent, the appeals court said the defendants never “presented any evidence of words or conduct of [the resident] that could have caused the nursing home to believe that she consented to having the arbitration agreement signed on her behalf by her daughter.” Nor was the Court of Appeals persuaded by the fact that other states, such as Alabama, have enforced nursing home arbitration agreements signed by family members on circumstances similar to this case: “While decisions of foreign courts may be instructive,”they are not binding on this court.”

While federal law “favors” arbitration in most circumstances, the Court said that was irrelevant since no agreement to arbitrate existed in the first place.