Exercise caution and attention to detail when presenting agreements to nursing home residents and patients.

In this nursing home malpractice case, the defendant facility successfully obtained a grant of summary judgment dismissing the case from the New Jersey Superior Court and compelling arbitration pursuant to a pre-dispute arbitration agreement executed by the plaintiff, attorney-in-fact, who executed the agreement on behalf of his mother, the resident. The Appellate Panel reversed the trial court’s order compelling arbitration.

On appeal, the panel found fiercely disputed factual issues between the parties concerning whether or not the agreement to arbitrate was unconscionable and, hence, unenforceable. The plaintiff contended he was forced to sign the agreement in order for his mother to stay at the facility and that the document was buried in a pile of other pre-admission documents requiring signature. The defendant, conversely, contended the agreement was entirely voluntarily, had no impact upon the mother’s admission and was specifically discussed at a meeting.

New Jersey courts continually recite the general proposition that arbitration is a “favored means of dispute resolution” is cases such as Brown. However, the reality is that enforcing these agreements, particularly in nursing home and medical malpractice cases, remains more the exception than the norm. Plaintiffs are routinely successful in avoiding arbitration when arguing procedural and substantive unconscionability. Courts appear eager to find any question of fact to vacate the previously signed agreement between the parties, despite touting public policy that favors arbitration. Clients offering arbitration agreements need to be aware of decisions such as Brown. Clients should exercise caution and attention to detail when presenting agreements to residents and patients, mindful that future plaintiffs will likely argue unconscionability.

Case Law Alerts, 4th Quarter, October 2014