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Georgia Court of Appeals Refines Ruling on Nursing Home Arbitration Agreement – Health Law and Regulation

Health Law and Regulation Update Blog Post by Eric Frisch.

In the return appearance of a case remanded from the Georgia Supreme Court for further determination, the Georgia Court of Appeals refined its ruling regarding a nursing home arbitration agreement. Plaintiff was the guardian for a nursing home resident, a mentally incapacitated adult. On the resident’s admission, the guardian signed a facility admission agreement, which contained an arbitration clause, and a separate arbitration agreement. The agreements referred to the facility, the resident, and/or the resident’s representative and contained provisions regarding legal review of the agreement. The guardian signed an affidavit saying she was told that the agreements were for admission, were not explained to her, and that she was not told she had the right to have them reviewed by an attorney.

The guardian alleged that the resident was assaulted by his roommate on multiple occasions. In response to the complaint, the facility moved to compel arbitration. The trial court denied the motion, ruling that the arbitration clause was unconscionable.

On remand, the Court of Appeals held that the trial court erred in ruling that the clause was unconscionable. First, the Court held that the arbitration agreements were not “procedurally unconscionable,” writing that “[a]lthough it would have been preferable for someone . . . to have explained the Arbitration Agreement in a form and manner” the guardian understood, a party to a contract is presumed to have read and understood the contents if they sign it. Plaintiff also alleged that the arbitration provisions were invalid because various regulations prohibit execution of it as a precondition to admission. The trial court rejected this and the Court of Appeals affirmed, based on explicit disclaimer language.

Take-home: arbitration agreements and provisions are generally enforceable, but a lot turns on who is signing it, the words used in the agreement, and similar contract concepts. The rules regarding contract construction apply.

The case is CL, SNF, LLC v. Fountain, ___ S.E.2d ___, 2022 WL 2207070 (Ga.Ct.App. June 21, 2022).