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August 18, 2022 Practice Points

Nursing Home Arbitration Provision Fails Again

If the owners of care facilities wish to enforce arbitration clauses, they need to make the arbitration agreements more visible and train intake personnel on how to explain them.

By Robert Arrington

Buffi Lynn Stancil held a power of attorney from her mother, Rebecca Gentry. Using the power, she admitted Gentry to an assisted living facility operated by Dominion Crossville, LLC. The admissions agreement contained an arbitration provision.

When her mother’s condition worsened, Stancil filed suit in Tennessee state court asserting health care liability claims against Dominion and its related entities. The defendants moved to compel arbitration. The trial court denied the motion and the defendants appealed.

The Tennessee Court of Appeals affirmed the denial. The court held that the contract at issue was a contract of adhesion, which became an unconscionable contract because the arbitration provision was outside the reasonable expectations of an ordinary member of the community. The opinion suggests that Dominion perhaps could have saved the arbitration agreement if its admitting employee had explained the ramifications of arbitration to Stancil either verbally or in writing. But neither happened. Stancil v. Dominion Crossville, LLC, No. E2021-01378-COA-R3-CV (Tenn. Ct. App.2022)

One can nitpick with the court’s reliance on the expectations of the consumer of Dominion’s services considering how ubiquitous arbitration agreements have become, but the decision is perhaps best understood as being in a long line of decisions, in Tennessee and elsewhere, that are suspicious of arbitration provisions signed by harried family members who are desperate to find care facilities for disabled or elderly relatives.

If the owners of care facilities wish to have more success in enforcing arbitration clauses, they need to make the arbitration agreements more visible and train intake personnel on how to explain them.

Robert Arrington is of counsel at Wilson Worley in Kingsport, Tennessee.

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