Nursing home arbitration agreement ruled unenforceable.

In a recent HCLA case, the Court of Appeals affirmed the trial court’s denial of defendant’s motion to compel arbitration, agreeing that the arbitration agreement was an unenforceable contract of adhesion.

In Stancil v. Dominion Crossville, LLC, No. E2021-01378-COA-R3-CV (Tenn. Ct. App. July 29, 2022), plaintiff filed an HCLA claim on behalf of her mother (who died while this litigation was pending) based on the care she received at defendant nursing home. At the time of the mother’s admission to the nursing home, she had dementia, so plaintiff signed the admission documents on her behalf as her durable general power of attorney and durable power of attorney for health care.

After plaintiff filed this suit, defendant filed a motion to compel arbitration based on an arbitration provision in the admission contract. Considering the evidence presented, the trial court denied the motion, and the Court of Appeals affirmed this denial.

The trial court ruled that the arbitration agreement relied on by defendants “was a contract of adhesion and unconscionable,” and the Court of Appeals agreed. The Court specifically noted that the arbitration agreement was not highlighted or bolded in the text of the contract at all; that the waiver of jury trial provision was also not highlighted and was listed in a separate portion of the contract; that the arbitration provision was on pages eight and nine of a thirteen page document; that although the agreement prohibited punitive damages and stated that plaintiff would share equally in the costs of arbitration, these provisions were not discussed with plaintiff at the time of signing; that no one explained to plaintiff what arbitration was at the time of signing; and that signing the arbitration agreement was a condition to admission at the nursing home. Further, the Court pointed out that based on the mother’s advancing dementia, her previous care issues, and the coming winter months combined with plaintiff’s fear that her mother would wander and become lost, plaintiff “reasonably determined that there was no adequate alternative to [defendant nursing home] to provide assisted living care for her mother and her worsening condition.” Accordingly, the ruling that the arbitration agreement was an unconscionable, unenforceable contract of adhesion was affirmed.

This case is very fact specific, but it is a good example of an arbitration agreement not being enforced in a healthcare setting. Litigants arguing the enforceability of a nursing home arbitration agreement should be aware of this opinion.

This opinion was released one month after oral arguments in this case.


Contact Information