Resident's family won't be forced to arbitrate claims, court rules

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The family of a deceased Kentucky nursing home resident will not have to arbitrate a dispute with the facility following a federal court's ruling. The decision arrived last week, just over a month before the Supreme Court is scheduled to hear arguments in a case debating the validity of arbitration agreements.

The Kentucky case involves the son of Judith VanArsdale, a former resident of a Preferred Care facility located in Richmond, KY. He filed a suit in state court claiming her death was caused by negligence.

Preferred Care filed a case in federal court seeking an order to compel arbitration of VanArsdale's claims.

The facility where VanArsdale lived was taken over by Preferred Care two years after she was admitted. As part of that transition VanArsdale's son, who had power of attorney, signed an arbitration agreement on her behalf.

The state court found that the arbitration agreement signed by VanArsdale's son was not enforceable since Kentucky law did not give him authority to enter such an agreement on his mother's behalf. The court also stayed the provider's federal action pending the conclusion of the state suit. Preferred Care then sought an injunction from the U.S. District Court for the Eastern District of Kentucky.

In a ruling released Friday, the U.S. Court of Appeals for the Sixth Circuit agreed with the District Court's decision to decline the provider's injunction, citing the previous opinion that VanArsdale's son lacked the authority to sign the arbitration agreement. The appeals court's ruling puts the federal case on hold until the state case is resolved.

This is the second arbitration-related court case involving Preferred Care in recent weeks. The Sixth Circuit last Wednesday denied a request from a resident's estate seeking to appeal a lower court decision that required them to arbitrate their dispute.