Justices nix arbitration for nursing homes

TALLAHASSEE — Nursing home arbitration agreements that limit remedies allowed by state law are invalid, the Florida Supreme Court said in two separate cases Wednesday.

The 5-2 opinions said lower courts erred by requiring arbitration on allegations of negligence against nursing homes instead of letting them go to court.

The ruling will have a widespread effect as virtually all nursing homes require residents to sign arbitration agreements when they enter, said James Wilkes, whose law firm represented the plaintiffs in both cases.

"They are going to be spending a lot of time in court," Wilkes said. "This is going to end a lot of appeals."

Arbitration agreements in both cases included bans on punitive damages, which are allowed by state law. One agreement also capped noneconomic damages at $250,000.

The majority in each case said those limits are contrary to public policy and undermine remedies set by the Legislature.

"We have always encouraged our members to follow guidance provided by the courts related to arbitration agreements and these decisions will enable us to continue doing so," said Kristen Knapp, a spokeswoman for the Florida Health Care Association in an email. The association represents nursing home and other long-term care providers.

Both cases were appealed from the 2nd District Court of Appeal in Lakeland, which had affirmed decisions by trial judges to compel arbitration.

Gayle Shotts sued OP Winter Haven Inc., as personal representative of the estate of Edward Henry Clark, her uncle, following his death in 2003. The complaint filed in Polk County alleged negligence and a breach of legal duties to Clark.

In the other case, Angela Gessa accused Manor Care of Florida Inc., of negligence, violation of resident's rights and breach of legal duties during a stay at its Carrollwood facility in Hillsborough County.

Justice James Perry wrote both opinions. In each he noted that state law has specific remedies — including damages and injunctive relief — for negligence of nursing home residents or the violation of their rights. The law outlines various residents' rights including a guarantee of private communications and the ability to examine the results of nursing home inspections.

"In light of the recognized need for these remedies and the salutary purpose they serve, we conclude that any arbitration agreement that substantially diminishes or circumvents these remedies stands in violation of public policy of the state of Florida and is unenforceable," Perry wrote in the Shotts opinion.

Justices nix arbitration for nursing homes 11/24/11 [Last modified: Thursday, November 24, 2011 9:24pm]

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