Justices Take Up Nursing Home Arbitration Case

     WASHINGTON (CN) — The U.S. Supreme Court agreed Friday to decide whether residents of a Kentucky nursing home should be bound by the arbitration agreements their representatives signed.
     When Kentucky justices looked at the issue last year, their decision consolidated three cases brought by residents of the Shady Lawn Nursing Home and the Winchester Centre For Health and Rehabilitation.
     Both nursing homes tried to force arbitration when they were hit with lawsuits in circuit court asserting personal injuries, violations of state law and wrongful death of the nursing homes’ resident.
     Parent companies Extendicare and Kindred Nursing Centers noted that all of the residents in question were admitted only after an attorney-in-fact for the resident executed written arbitration agreements.
     Those documents provided “that any claims or disputes arising out of the relationship between the resident and the nursing home would be submitted to arbitration, rather than adjudication in the courts,” according to the Kentucky Supreme Court’s ruling.
     The circuit court found in each case, however, that none of the power-of-attorney instruments authorized the resident’s attorney-in-fact to waive the resident’s right to access to the courts for the resolution of disputes.
     After the Court of Appeals ruled against Kindred and Extendicare, the Kentucky Supreme Court affirmed last year.
     “The central issue is whether, based upon the language of the particular power-of-attorney instrument, an arbitration agreement was validly formed between the respective nursing home facility and the resident whose interests were thereby affected,” the ruling states.
     Belinda Whisman and Tony Adams brought the only case against Extendicare, as co-administrators of the estate of Van Adams.
     Kindred Nursing had been sue both by Beverly Wellner, on behalf of the estate of Joe Wellner, and by Anis Clark, on behalf of the estate of Oliver Clark.
     The Supreme Court’s ruling specifies that, for Whisman and Wellner’s cases, “the authority to enter into a pre-dispute arbitration agreement was not among the powers granted to respective attorney-in-fact and, therefore the arbitration agreements were not formed with the assent of the party to be bound thereby.”
     “Lacking the essential element of assent, we conclude that the arbitration agreements in those cases were never validly formed,” the justices continued.
     The petition for certiorari asks the U.S. Supreme Court whether the Federal Arbitration Act pre-empts “a state-law contract rule that singles out arbitration by requiring a power of attorney to expressly refer to arbitration agreements before the attorney-in-fact can bind her principal to an arbitration.”
     Attorneys for the nursing homes note that the broad powers of attorney include “the power to make contracts.
     The Kentucky Supreme Court found the authority lacking, however, “because those agreements waive a ‘divine God-given right’ to a jury trial,'” the petition states
     Going against Kentucky law, according to the petition, “the court concluded that only an express mention of arbitration agreements in the power of attorney permits an attorney-in-fact to bind her principal to an arbitration agreement.”
     Per its custom, the Supreme Court did not issue any statement Friday on its decision to take up the case.

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