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SJC Again Rejects Arbitration Agreement


In yet another victory for patients and consumers against nursing homes, the Supreme Judicial Court last week held that the estate of a patient was not bound by a mandatory arbitration agreement signed by the patient’s son as part of her admission process. In Barrow v. Dartmouth House Nursing Home, Inc., the SJC refused to enforce the arbitration agreement where there was no evidence that the patient was aware that the son had signed it on her behalf.

Relying on its earlier decision in Johnson v. Kindred Health Care, Inc., the Court again noted that the existence of a health care proxy permits the authorized person to make health care decisions on behalf of the patient, including consent to admission or treatment, but does not permit the proxy to sign away legal rights. Even with the added fact that the patient had requested that her son complete the admission paperwork on her behalf was not enough to make the arbitration agreement enforceable, at least where there was no evidence that the patient was aware of the agreement, intended to authorize her son to sign it, or that it was a condition of admission.

The SJC also rejected the nursing home’s other arguments, that the son was bound individually by what he had signed, and that he was equitably estopped to deny the enforceability of the agreement he had signed. The Court noted that there was no evidence that the nursing home relied on the agreement, or that it did or did not do anything because the son had signed it. Indeed, the evidence was to the contrary, that the agreement was not required as a condition of admission to the nursing home, and that the patient’s care did not depend on the execution of the agreement.

It would have been relatively easy for the SJC to justify enforcing the agreement at least against the son, who was a beneficiary of the wrongful death claim. Even though the agreement was not signed by the son in his individual capacity, a less consumer-oriented court might have found that the agreement was binding at least on the signatory son, if not on anyone else. The Court’s refusal to take this leap is good news for consumers, who are confronted with arbitration agreements with increasing frequency.

Read the Court’s decision in Barrows v. Dartmouth House here.

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