ARBITRATION RULES IN NURSING HOME AGREEMENTS

In a recent decision from Florida’s Second District Court of Appeal, the issue of nursing home arbitration agreements was once again explored. As addressed in previous blog posts, it is very common for nursing home residents to execute arbitration agreements prior to their acceptance in the home. Further, it is very common for nursing home arbitration agreements to have restrictions and limitations which may include caps on damages and requirements for arbitrators.

The 2nd District Court of Appeals addressed a provision of an arbitration agreement that involved the arbitrators and the rules of arbitration available to the resident. See Sarasota Facility Operations, LLC v. Manning So.3d FLW D1008 (Fla. 2nd DCA 5-8-2013). The arbitration agreement included a provision stating that arbitration was to be conducted by a National Arbitration Forum (“NAF”) panel and in accordance with the NAF code of regulations. The agreement further mandated that it was governed by the Federal Arbitration Act (“FAA”) and that damages were to be awarded in accordance with Florida law.

When the NAF arbitrators and NAF rules were unavailable, the plaintiffs moved to invalidate the arbitration agreement. The trial court agreed, ruling that it was without authority to appoint replacement arbitrators and that the entire agreement was invalid. As a result the defendants appealed.

The 2nd DCA held that while it found the “rules” of the arbitrators or their code of regulations were against public policy as they may limit a plaintiff’s remedies, such a determination was not before the court. Rather, the issue was solely as to whether a replacement arbitrator could be named. The court found that both the FAA and Florida law provide a mechanism for appointment of replacement arbitrators if the designated pool of arbitrators is unavailable and thus overturned the trial court’s ruling.

Nursing home cases can be challenging and likely will include legal and procedural issues as it pertains to an arbitration agreement. As such, seeking legal counsel is recommended. If you or a loved one has been a victim of nursing home abuse we invite you to contact our office for a free consultation.

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