CALIFORNIA PROBATE CENTER

The Authority for Probate Litigation and Estate Planning in California

WHAT TO KNOW BEFORE SIGNING THAT LONG TERM CARE CONTRACT

Posted on | November 30, 2010 | No Comments

Today, most contracts in general have arbitration clauses which require the signee to agree pre-dispute to resolve any disputes that may arise via arbitration and not in court. This means that most people are agreeing to resolve any dispute outside of court before any dispute even occurs. The contract world of retirement homes and long term care facilities is no exception to this trend.

Almost all long-term care facility admissions packages have within them arbitration agreements that patients or their guardians sign before they are even admitted into the facility. Our legislature attempted to confront this issue in 2008 under the “Fairness in Nursing Home Arbitration Act”. This bill provided that a pre-dispute arbitration agreement between a long-term care facility and a resident (or anyone acting on the resident’s behalf) shall not be valid or specifically enforceable. The policy behind the bill was that no one should have to agree to a dispute resolution procedure before the dispute even arises. This is because until the wrong has been done, a party will not know whether they want to sue in court or arbitrate out of court. The bill simply found that promising your procedural rights away pre-dispute was unfair, especially in the nursing home scenario. This bill made it past the house of representatives and through the senate judicial committee only to die on the floor of the 110th senate.

The purpose of arbitration agreements is to enable efficiency in dispute resolution. They are meant to help keep court calendars efficient by not clogging the courts with unnecessary disputes. They also help long term care facilities in keeping their litigation costs down. However, on the other side agreeing to this process pre-dispute can leave plaintiff’s in a very tough situation if a dispute arises. In order to hold an arbitration agreement unenforceable most courts across the country require the plaintiff to bear the burden of proof. The plaintiff is required to show that the arbitration agreement is both procedurally and substantively unconscionable. This means that the plaintiff must prove that the process that was used in signing the agreement was procedurally unfair. It also requires the plaintiff to prove that the arbitration agreement is substantively unfair. Both prongs to this argument must be won for the plaintiff to have a chance of rendering the arbitration agreement unenforceable.

Across the country in states like Arizona, California, Florida and Georgia it has been particularly difficult for long-term care residents and their families to meet this burden of proof. The issues in those cases are typically elder abuse, wrongful death, medical malpractice and the likes. This means that most of the plaintiff’s that have been harmed by a long-term care facility want there day in court, but are forced instead to arbitrate because of an agreement they signed upon entering the facility long before any dispute had occurred.

Some advice to keep in mind when admitting yourself or another into a long-term care facility is to take your time and read the contract in its entirety. Have an attorney present if possible and try to negotiate the removal of the arbitration agreement from the contract if that’s what you want. If the facility refuses to remove the arbitration agreement and you must sign, then below your signature write down that you tried to negotiate the arbitration agreement out of the contract but were told it was a “take it or leave it” contract. These words will help down the road if a dispute ever arises to show that the arbitration agreement was unconscionable and that it was a contract of adhesion that you had no bargaining power in.

- Marissa Sirota

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