Arbitration In Nursing Home Litigation

By Ted Babbit
Published April 2017

The issue of whether a child signing a nursing home agreement which includes an arbitration provision on behalf of his or her parent binds the parent has been a subject of a number of district court cases.  The First and Third Districts held that a resident is bound by the contract because the resident is the intended third party beneficiary of the contract.  Mendez v. Hampton Court Nursing Ctr., LLC, 140 So. 3d 671 (Fla. 3rd DCA 2014), Alterra Health Care Corp. v. Estate of Linton, ex rel. Graham, 953 So. 2d 574 (Fla. 1st DCA 2007).

On the other hand, the Second, Fourth and Fifth Districts have held exactly to the contrary.  Perry ex rel. Perry v. Sovereign Healthcare Metro W., LLC, 100 So. 3d 146, 147-48 (Fla. 5th DCA 2012), Fletcher v. Huntington Place Ltd. P’ship, 952 So. 2d 1225, 1227 (Fla. 5th DCA 2007); Lepisto v. Senior Lifestyle Newport Ltd. P’Ship, 78 So. 3d 89, 92 (Fla. 4th DCA 2012); In re Estate of McKibbin, 977 So. 2d 612, 613 (Fla. 2d DCA 2008).

The tie has now been broken by the Supreme Court in Mendez v. Hampton Court Nursing Ctr., LLC, 203 So. 3d 146 (2016).  In Mendez, supra, the son of a resident signed a nursing home contract with the defendant which included an arbitration clause.  The father did not sign the contract.  The Circuit Court granted a motion to compel arbitration and the Third District affirmed.  The case came to the Supreme Court on conflict jurisdiction based upon the above cited cases.  The Supreme Court concluded that the third party beneficiary doctrine does not permit two parties to bind a third without the third party’s agreement even if the third party is conferred some benefit by the contract.  At Page 149, the Court distinguishes the use of the third party beneficiary theory where the plaintiff is utilizing that theory to bring an action and an action like the one under discussion where the attempt is to bind the third party beneficiary without consent.

We agree that when a plaintiff sues under a
contract to which the plaintiff is not a party –
unlike the father in this case – we will ordinarily
enforce an arbitration clause contained in
that contract, absent some other valid
defense.  Cf.  Nat’l Gypsum, 417 So. 2d at

  1. However, the rule of National Gypsum,

does not apply here because the father does
not bring suit as a third-party beneficiary
for the benefit of a contract signed by others.

The issue of whether the son in this case was acting as an agent for his father was not found to be dispositive by the Court because the defendant expressly disclaimed any reliance on agency principles.  If, in fact, agency was at issue, the Court holds that where there is any conflicting evidence, the question of agency is one for the jury.

The Court also held that the mental capacity of the resident did not impact the outcome of the case.  At Page 150

Finally, we hold that the father’s mental capacity
does not impact the outcome of this case.  Hampton
Court explicitly concedes that a nursing home
resident’s “mental capacity or competence is
irrelevant to the question of whether an individual
can be bound to the terms of a contract as a
third party beneficiary.” . . .  If Hampton Court
were concerned that the father lacked the
required mental capacity to execute binding
contracts, it could have availed itself of the
Legislature’s comprehensive statutory scheme
governing incapacitated individuals.

This case presents binding Florida law on the question of whether a child can bind his or her parent to an arbitration agreement when entering a nursing home.  In recent case of Moen v. Bradenton Council on Aging, LLC, 42 Fla. L. Weekly D279 (Fla. 2nd DCA Jan. 27, 2017), the Second District found itself bound in similar circumstances by the Mendez opinion.  Thus, in Florida absent an agency relationship, a child may not bind his or her parent to an arbitration agreement when entering a nursing home.

NOTE:  BECAUSE A NUMBER OF PEOPLE HAVE REQUESTED COPIES OF PAST ARTICLES, A COMPILATION OF THESE ARTICLES IS NOW AVAILABLE TO MEMBERS OF THE PALM BEACH COUNTY BAR ASSOCIATION, FREE OF CHARGE, BY CALLING (561) 684-2500.

 

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