Long term care facilities have recently begun offering residents the option of agreeing to arbitration of disputes that arise during residency. An arbitration agreement may benefit both facilities and residents as an alternative to litigation, by reducing the expense, delay and emotional stress associated with court trials. These agreements are usually enforceable under the Federal Arbitration Act.

These agreements typically are signed upon admission to the facility, along with other agreements covering residency and care. Often they are signed by family members or others who accompany the resident. This may occur because of physical infirmity, mental incapacity or other reasons.

The Nebraska Supreme Court recently held an arbitration agreement invalid that was signed by a nursing home resident’s son in Koricic v. Beverly Enterprises. The son wasn’t the resident’s appointed conservator or guardian and had no power of attorney. Even so, the trial court had found the resident had given her son permission to sign papers for her admission to the nursing home.

On appeal the Nebraska high court reversed, concluding the mother’s statements authorizing her son to sign papers didn’t include the arbitration agreement, because it wasn’t required as a condition for her admission. Since the son wasn’t legally authorized to sign the arbitration agreement it was not binding on his mother’s estate.

Koricic demonstrates that nursing home admissions personnel have to insure that anyone signing an arbitration agreement has legal capacity to enter into a binding commitment for the resident.

Unless the resident is incompetent, the best practice generally calls for the resident to personally sign the arbitration agreement and other admissions documents.

If someone other than a resident must sign admissions documents, they must have legal authority to sign for the resident. That generally means the one signing must be a court-appointed conservator or guardian, or else possess a power of attorney, signed when the resident was competent, authorizing the signer to execute the document on the resident’s behalf.

Knudsen Law Firm can provide long term care facilities with properly drafted arbitration agreements. Just as important, we can advise on training admissions staff to insure a legally authorized person signs the agreement, to make it enforceable and effective.

Knudsen, Berkheimer, Richardson & Endacott, LLP
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