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The Massachusetts Supreme Court held that an arbitration agreement in a nursing home resident's admissions contract was valid and enforceable because admission to the home was not conditioned on agreeing to arbitrate and an employee of the nursing home clearly explained the terms of the agreement.
In Miller v. Cotter, SJC-09817, 2007 WL 925792 (Mass. Mar. 30, 2007), Miller signed an arbitration agreement when admitting his father to a nursing home. The agreement was in a separate document and drafted in clear, unambiguous language.
Additionally, a social worker employed by the nursing home verbally explained the contract's terms and that acceptance of the arbitration agreement was not a prerequisite to the admission to the nursing home.
Miller's father subsequently died while under the nursing home's care, and Miller filed suit for negligence, reckless conduct, and failure to obtain informed consent. Then nursing home brought a motion to compel arbitration of the claims, and Miller argued that the agreement was unconscionable.
The Court found no evidence of unconscionability and compelled arbitration. While other courts have invalidated arbitration agreements in the nursing home context, those decisions generally involved arbitration clauses buried in the text of the admissions agreement and offered on a "take-it-or-leave-it" basis. See, e.g., Small v. HCF of Perrysburg, Inc., 159 Ohio App.Ct. 66 (Ohio Ct. App. 2004); Howell v. NHC Healthcare-Fort Sanders, Inc., 109 SW.3d 731 (Tenn. Ct. App. 2003).
Here, nothing in the execution or terms of the agreement suggested that it was procedurally or substantively unconscionable. Miller was a sophisticated individual experienced with arbitration clauses, and agreeing to arbitration was not a condition of admission to the nursing home. Moreover, the agreement gave both parties the power to commence arbitration proceedings, and Miller had thirty days to cancel the agreement.
Finally, the Court considered Miller's argument that arbitrating some of his claims, while proceeding in court against other defendants, was a threat to judicial economy. The Court rejected this argument because both Miller and the nursing home defendants had a clear-cut right to arbitrate their claims. To the extent that parallel arbitration and litigation proceedings were "inconvenient, duplicative, or inefficient," such was the result of the choice Miller made by signing the arbitration agreement.
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