U.S. Supreme Court Refuses To Hear Appeal By Nursing Homes Seeking To Limit Damages

On April 22, 2013, the United States Supreme Court an appeal taken by nursing homes held accountable, in lower state courts, for elder abuse. The state courts rendered judgments against the nursing homes in wrongful death actions, despite an “arbitration clause” in the nursing home contract. The case was Beverly Enterprises, Inc. v. Ping. 

Upon entering a nursing home, you are frequently presented with something called an “arbitration clause” in the contract. Arbitration clauses are becoming more prevalent in all kinds of documents, from cell phone contracts to nursing home contracts. The clause states that you may not sue in court, but must settle the matter in arbitration, in a forum selected by the person who drafted the contract.

Although courts do not favor these arbitration clauses, the U.S. Supreme Court has already upheld them. The argument against them is that the arbitrators can be bias to the people who pay them. Also, there is a constitutional right in our country to a trial by a jury of one’s peers, and these contracts remove that right.

Oddly, the way the law stands now, if a nursing home is negligent, then because of the arbitration clause, the rights of victim are limited to arbitration. But if the negligence is so egregious that it causes death, the estate of the resident may bring a a wrongful death action against the nursing home in court. In that action the surviving beneficiaries may recover for hospital expenses, funeral expenses, lost earnings, loss of companionship and guidance of the deceased. Since the estate did not sign the nursing home contract they are not bound by the arbitration clause. Pennsylvania law is in accord. 

Stay will until the next post.

Bob Gasparro

Bob Gasparro is an Elder Practitioner (accountant and attorney). He can be reached at Robert.Gasparro@lifespanlegal.com or (484) 297-2050. Comments to this post, and ideas for future posts are welcome.