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Georgia Court of Appeals Affirms Nursing Home Arbitration Agreement by Eric Frisch

Health Law and Regulation Update Blog Post by Eric Frisch.

The Georgia Court of Appeals has affirmed enforcement of a separate arbitration agreement executed by the guardian of an adult ward on admission to the facility. The decision follows remand by the Georgia Supreme Court to vacate a prior decision.

On remand, plaintiff first argued that the arbitration agreement could not be enforced because it lacked consideration separate from the residential admission agreement. In response, the facility argued the consideration was the mutual promise to arbitrate and the Court of Appeal agreed, holding that mutuality of an obligation is sufficient consideration.

Next, plaintiff argued the guardian was fraudulently induced to sign the arbitration agreement because they were made to believe that they were required to sign all of the documents given to them for the patient to be admitted. The Court disagreed, reaffirming the general rule that one cannot claim to be defrauded about a matter equally open to the observation of all parties. The Court noted that plaintiff pointed out that the arbitration agreement included capitalized and bolded language that the patient could still receive services even if the arbitration agreement was not signed. Plaintiff further argued the guardian was not given the opportunity to read the documents, but the Court pointed out that nothing in the record showed the guardian was prevented from reading the agreement.

Lastly, plaintiff argued that the arbitration agreement was void under various statutes and regulations regarding residents rights in long-term care facilities. The Court disagreed, holding that parties to a binding arbitration agreement can waive their constitutional rights, including the right to trial. In addition, Georgia law recognizes arbitration in the Official Code of Georgia, meaning that arbitration is not in contravention of public policy.

Take-home: In general, arbitration provisions are enforceable, but the analysis can be fact-specific.

The case is West v. Bowser, ___ S.E.2d ___, 2022 WL 3571458 (Ga.Ct.App. August 19, 2022).

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