A nursing home arbitration agreement that forced residents or family members to split fees in a dispute has been deemed “unconscionable,” a ruling that may pave the way for more lawsuits against providers.
The Pennsylvania Superior Court last week affirmed a lower state court’s ruling that an agreement used by Highland Park Care Center in PIttsburgh -— and other facilities owned by Grane Healthcare — could not be enforced.
The estate of Fay Vincent sued the nursing home, a hospital and affiliates, citing negligence in the 67-year-old woman’s death. A trial court twice previously denied Highland Park’s attempt to force the case into arbitration, the Insurance Journal reported.
In its precedential opinion, the court noted that Vincent’s decision to sign the arbitration agreement was complicated by her condition at admission: She was blind, in pain and on medication and without family. The facility also did not give her a copy of the agreement, even though she would have had 10 days to revoke her consent.
The court also ruled that a provision requiring the resident to pay half of the costs of any arbitration, including arbitrator’s fees, was “substantively unconscionable because it imposed additional expenses for bringing a claim that Decedent would not have to bear in a court action.”
“Imposing this additional expense on all claims for damages brought by a resident unreasonably favors the nursing home and is sufficient to satisfy the requirement of substantive unconscionability where, as here, the record establishes that the resident was not given full information concerning her choices or any opportunity to inform herself of what she was signing or to exercise those choices,” read the July 5 opinion.
A message left Monday with Grane Healthcare from McKnight’s Long-Term Care News was not returned by production deadline.
Kristin Hoffman of Wilkes & Associates represented the plaintiff. She told the Legal Intelligencer that the “decision breaks from a pattern of recent case law favoring defendants in challenges to arbitration agreements.”
Hoffman said fee-splitting language is commonly used by the nursing home sector. This was the first time she was aware of a court striking down that provision and impacting enforceability, and the move may make it easier for plaintiff’s counsel to target that clause.
