Making Sure Arbitration Agreements are Enforceable

Long term care facilities have recently begun offering residents the
option of agreeing to arbitrate 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.

Arbitration 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

3800 VerMaas Pl

Suite 200

Lincoln NE 68502

402 475 7011

402 423 4768 (H)

402 440 3731 (M)

402 475 8912 (F)

www.knudsenlaw.com