From AARP:
A New Mexico appeals court upheld a trial court’s ruling that a patient’s condition at the time she was admitted to a nursing home rendered her unable to understand the ramifications of an arbitration clause that was buried more than half-way into a long, complicated document. The court found the clause was unenforceable, allowing her family to proceed in court with its personal injury and wrongful death case. AARP Foundation Litigation attorneys filed AARP’s “friend of the court” brief advocating this result on behalf of the family in Adkins v. Laurel Healthcare of Clovis, LLC. The nursing home has asked the state Supreme Court to review the matter so AARP may have another opportunity to weigh in on this issue.
Ruth Painter was 57 years old and suffered from several serious health conditions (including heart disease, chronic obstructive pulmonary disease, and arterial fibrillation) when she was taken by emergency transport to a medical center. When she was discharged more than a week later, she was physically unable to care for herself and decided to move to a nursing home on a temporary basis. She and her son visited the Laurel Healthcare facility and she and her daughter returned the next day so she could be admitted. While she was being admitted, Painter became short of breath and was literally propped up in bed receiving oxygen during the admissions process. Three days after admission, her health seriously deteriorated and she was taken by ambulance to a hospital where she died. Her family sued Laurel Healthcare, alleging negligent care and breach of contract. The facility moved to dismiss the suit based on a clause in the admissions contract that required that all disputes be resolved in arbitration.
Arbitration is an out-of-court dispute resolution process that can be extremely expensive for consumers, provides them with fewer procedural protections than they have in court, limits access to documents, does not require adherence to court precedent and other basic legal principles, and requires that proceedings take place behind closed doors (leaving the evidence of wrongdoing hidden from view of others who may be concerned about their own relatives’ well being). While arbitration has been used for a long time in commercial agreements -- where the parties have similar knowledge, sophistication, and equal bargaining power -- it poses serious questions of fairness when one party is more powerful and the other party basically is offered a “take it or leave it” contract with no power to change unfavorable terms. Despite this, mandatory arbitration clauses are flourishing in the fine print of virtually every type of transaction in which most people routinely engage, including those involving employment, health insurance, credit cards, consumer loans, cell phones, and computer sales.
In Adkins, a trial court declared the arbitration clause unconscionable and unenforceable based on its findings that: Ruth Painter had a 10th-grade education; for more than a year prior to her death her mental condition seemed to decline and her son had assumed responsibility for her finances; and the admissions agreement was 41 pages long and contained various other documents, including several contractual agreements, health directives, and explanations of legal rights. According to the court, “more than thirty (30) pages into this collection of disparate documents are the three (3) pages of the Laurel Arbitration Agreement. Much of the Agreement is in small print, and [the admissions director] admitted it was often inconsistent and could be confusing.” In addition, Painter’s purported signature appeared suspicious in several places, with wide variations in writing styles and shapes of letters, and she repeatedly misdated the documents despite being corrected. Ultimately, the trial court ruled that “[r]equiring a heavily medicated, seriously ill individual, such as Ruth Painter, who had limited education and comprehension to sign an Arbitration Agreement that was hidden away in the middle of a confusing and complicated Admission Agreement, would be unconscionable.”
The facility appealed, and AARP and the National Citizens’ Coalition for Nursing Home Reform filed a “friend of the court” brief on behalf of Painter’s family. The brief addressed how the circumstances that typically attend the nursing home admissions process, such as those in this case, do not allow patients or their families an opportunity to review documents in a meaningful way. They therefore should not be bound by contract provisions that have a substantial adverse affect on their rights. Prospective nursing home residents and their families typically are vulnerable when faced with the pressing need to find a nursing home that can meet their needs. Numerous studies have noted the chaotic nature of the nursing home admissions process and the stress and pressures faced by prospective residents and their family members.
The need for admission typically arises quickly, often in the midst of a crisis brought on by a precipitous deterioration in health or the loss of a care giver. Prospective residents and their families do not have the time to “shop around” among facilities or to read, deliberate, understand, and try to negotiate the terms of an admissions agreement, assuming they even know it is in their interest to do so. Admissions agreements typically are pre-printed contracts offered on a “take it or leave it” basis, and residents or their families typically sign the documents placed before them with no choice or meaningful opportunity to negotiate the terms. The nursing home should not be allowed to use its superior knowledge, sophistication and bargaining power to impose unfair contract terms on prospective residents.
AARP has filed briefs in cases around the country arguing that mandatory arbitration clauses should not be enforced in nursing home admissions contracts and contracts for other products and services. Approximately 1.5 million people live in nursing homes across the United States, underscoring the far-reaching implications of cases such as Adkins.
Patti's Comments: I think the process families find themselves in when a loved one is being discharged from a hospital is a stressful time for my clients. They often will sign anything put in front of them because the hospital gave them 24 hours notice (if that) to find a nursing home for their loved one. The discharge planners try to help, but all they really do is give the families lists of places to go look at or call for openings. This article outlines how very important it is to be aware of everything that is signed at this stressful time!!
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