Signing Arbitration Contracts on Admission to a Nursing Home – Who Is Bound?

As our population ages, more and more people are being admitted to nursing homes at or near the end of their lives.  But when a person is admitted to a nursing home and they sign a contract agreeing to arbitrate any disputes arising out of the care they receive, should their heirs and the estate be bound by that contract?  The situations typically arise when the admitted person has died and the heirs or estate want to bring a tort action against the nursing home. The nursing home moves to compel arbitration and the heirs or estate wish to avoid arbitration.

There are strong arguments on both sides.  On the one hand, the only person who could effectively contract with the nursing home is the person being admitted, and that person should be able to contract with anyone they want to resolve their disputes. On the other hand, the estate and the heirs may have claims against the nursing home that are independent of the claims that the admitted patient may have had.

Courts across the country have not reached consensus on this topic. Recently, there was a case from the United States Court of Appeal for the Eighth Circuit, GGNSC Omaha Oak Grove, LLC v. Payich, which held that Ivan Payich could sue on behalf of himself and the estate of his mother Nada Payich. This was despite the fact that Nada had signed a form agreeing to arbitrate any claims “relating in any way to the Admission Agreement or any service or health care provided by the Facility to the Resident shall be resolved exclusively by binding arbitration.”

Contrasting this case is Laizure v. Avante at Leesburg, Inc., in which Debra Laizure was made to arbitrate the wrongful death of Harry Lee Stewart who signed a similar agreement to the one in the Payich case. In Laizure, the Florida Supreme Court held that “in wrongful death actions in Florida, the defendant's liability flows from actions toward the decedent, and the ability of the estate and heirs to recover is predicated on the decedent's entitlement to maintain an action and recover damages if death had not ensued.”

Courts across the nation make decisions every day about whether a particular set of litigants are required to arbitrate or whether they will process their disputes in court. Lawyers also try to shape arbitration contracts to serve their clients’ desire to achieve prompt and efficient resolution of disputes. As courts and attorneys continue to debate this topic and work to reach more of a consensus, we’ll continue to monitor and report any updates that may occur.