FLORIDA JUSTICES INVALIDATE NURSING HOME ARBITRATION AGREEMENTS
An article in the November 23, 2001 edition of the ASSOCIATED PRESS reported that the Florida Supreme Court said in two separate cases that nursing home arbitration agreements that limit remedies allowed by state law are invalid. The 5-2 opinions said lower courts erred by requiring arbitration on allegations of negligence against nursing homes instead of letting them go to court.
The ruling will have a widespread effect as virtually all nursing homes require residents to sign arbitration agreements when they enter, said James Wilkes, whose law firm represented the plaintiffs in both cases. "They are going to be spending a lot of time in court," Wilkes said. "This is going to end a lot of appeals."
Arbitration agreements in both cases included bans on punitive damages, which are allowed by state law. One agreement also capped non-economic damages at $250,000. The majority in each case said those limits are contrary to public policy and undermine remedies set by the Legislature.
"We have always encouraged our members to follow guidance provided by the courts related to arbitration agreements and these decisions will enable us to continue doing so," said Kristen Knapp, a spokeswoman for the Florida Health Care Association in an email. The association represents nursing home and other long-term care providers.
Both cases were appealed from the 2nd District Court of Appeal in Lakeland, which had affirmed decisions by trial judges to compel arbitration.
Gayle Shotts sued OP Winter Haven Inc., as personal representative of the estate of Edward Henry Clark, her uncle, following his death in 2003. The complaint filed in Polk County alleged negligence and a breach of legal duties to Clark.
In the other case, Angela Gessa accused Manor Care of Florida Inc., of negligence, violation of resident's rights and breach of legal duties during a stay at its Carrollwood facility in Hillsborough County.
Justice James Perry wrote both opinions. In each he noted that state law has specific remedies - including damages and injunctive relief - for negligence of nursing home residents or the violation of their rights. The law outlines various residents' rights including a guarantee of private communications and the ability to examine the results of nursing home inspections.
"In light of the recognized need for these remedies and the salutary purpose they serve, we conclude that any arbitration agreement that substantially diminishes or circumvents these remedies stands in violation of public policy of the state of Florida and is unenforceable," Perry wrote in the Shotts opinion.
The majority also ruled that a 2010 U.S. Supreme Court decision that an arbitrator, not a court, had to decide whether an arbitration agreement was unconscionable did not apply to either nursing home case.
The federal ruling covers only cases in which challenges had been made against provisions in the agreements that delegate complaints to arbitration. Perry wrote the arbitration agreements in the nursing home cases lacked delegation provisions.
In dissenting from the Shotts ruling, Justice Ricky Polston argued that language in the agreement saying "any dispute" will be arbitrated was effectively a delegation provision. Polston also dissented from the Gessa ruling on grounds the Legislature rather than the Supreme Court should decide if arbitration agreements violate public policy. Chief Justice Charles Canady concurred with both of Polston's dissents.
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