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The Florida District Court of Appeal upheld a lower court order denying a nursing home's motion to compel arbitration because the designated arbitration rules imposed a greater evidentiary burden on the claimant than was required by the applicable statute.
In Place at Vero Beach, Inc. v. Hanson, No. 4D06-21, 2007 WL 1202242 (Fla. Dist. Ct. App. Apr. 25, 2007), Patricia Hanson sued The Place at Vero Beach (the Place), a nursing home, on behalf of a resident who died during his residency at the Place. The Place filed a motion to compel arbitration pursuant to an arbitration agreement that designated the American Health Lawyers Association (AHLA) as the arbitration administrator.
The trial court denied the motion on the ground that the AHLA imposed an evidentiary burden that exceeded the evidentiary requirements of the Florida Nursing Home Residents Act (the Act). Specifically, under Rule 6.06 of the AHLA Rules of Procedure for Arbitration, an award of punitive damages would have required proof by clear and convincing evidence, whereas the Act only required proof by a preponderance of the evidence.
On appeal, the Place argued that the parties agreed to vary the AHLA's evidentiary burden by including a Florida choice-of-law provision in the arbitration agreement. In rejecting this argument, the Court explained that the choice-of-law provision was intended to guide the interpretation of the agreement, not to vary the rules of arbitration.
The Place also argued that the trial court should have severed the offending provision of the AHLA rules and upheld the remainder of the agreement. The Court rejected this argument because the arbitration agreement was "built around the Place's intent that the AHLA and its rules would control the arbitration."
Setting aside the heightened evidentiary burden, the designation of AHLA as arbitration administrator presented another stumbling block because the AHLA will not administer an arbitration of a patient's health care liability claim in the absence of a post-dispute arbitration agreement or court order. See AHLA Important Rules Amendment. The American Arbitration Association has adopted a similar policy. See AAA Health Care Policy Statement.
In keeping with its view that arbitration is a fair and efficient procedure for the resolution of all claims, and in recognition of the fact that the polarizing force of a dispute often prevents the formation of a post-dispute arbitration agreement, the National Arbitration Forum (FORUM) places no special conditions on the arbitration of health care claims. However, under the FORUM Code of Procedure, parties cannot agree to an elevated burden of proof because Rule 20(D) requires the arbitrator to follow the applicable substantive law. Also, under Rule 37(I) of the FORUM Code of Procedure, the standard burden of proof is a preponderance of the evidence.
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