Beware of Arbitration Clauses in Nursing Home Admission Contracts

Hook Law News | Nov 9, 2018 | Jennifer S. Rossettini

A recent Court decision out of West Virginia has many trial lawyers concerned about nursing homes being able to enforce the arbitration clause in an admission contract, despite the fact that the person who signs the admission contract, usually an agent under a Power of Attorney, may not have the authority to waive a jury trial.

In the case of AMFM LLC v. Shanklin on behalf of Est. of Nelson, Ms.Shanklin, who was Ms. Nelson’s successor agent under a Power of Attorney, signed nursing home admission documents, including an arbitration agreement, on behalf of Ms. Nelson. After Ms. Nelson passed away, Ms.Shanklin, on behalf of Ms. Nelson’s estate, filed suit against the nursing home. The nursing home moved to dismiss the case from court and compel arbitration based on the arbitration agreement that Ms.Shanklin signed on Ms. Nelson’s behalf. Ms.Shanklin argued that the arbitration agreement was invalid, because she did not have the authority as a “successor” agent to sign the arbitration agreement. The West Virginia Supreme Court found that, under Section 119 of the state’s Uniform Power of Attorney Act, the nursing home properly relied on the Power of Attorney presented by Ms.Shanklin because it was without actual knowledge (1) that the Power of Attorney was void, invalid or terminated; (2) that Ms.Shanklin’s authority was void, invalid or terminated; or (3) that Ms.Shanklin was exceeding or improperly exercising her authority. The end result was that the court dismissed the case, and the parties were compelled to engage in arbitration, instead of a jury trial, pursuant to the arbitration agreement.

A similar provision is found in Virginia’s Uniform Power of Attorney Act at §64.2-1617(B) of the Virginia Code and reads as follows:

“A person that in good faith accepts an acknowledged power of attorney that has been signed in accordance with § 64.2-1603 without actual knowledge that the power of attorney is void, invalid, or terminated, that the purported agent’s authority is void, invalid, or terminated, or that the agent is exceeding or improperly exercising the agent’s authority may rely upon the power of attorney as if the power of attorney were genuine, valid, and still in effect, the agent’s authority were genuine, valid, and still in effect, and the agent had not exceeded and had properly exercised the authority…”(emphasis added).

In light of these rules, how can an agent under a Power of Attorney make sure that they are not binding their loved one/principal to arbitration when filling out those nursing home admission forms?  According to our good friend and personal injury attorney, Carlton F. Bennett, Esq., a relatively simple solution is to be sure to cross out the arbitration clauses when filling out the paperwork. Another solution is to put the nursing home on notice that the agent DOES NOT in fact have the authority to agree to arbitration by including such language in the Power of Attorney document. We encourage all of our readers to review their Power of Attorney documents to make sure arbitration authority is specifically excluded.

Ask Kit Kat – Protecting Whales

Hook Law Center: Kit Kat, what you can tell us about what the Navy is doing to protect endangered whales off the East Coast of the United States?

Kit Kat: Well, this is interesting, and the Navy should be commended for taking these steps. What the Navy is trying to do is help save the endangered North Atlantic right whale. Back in the 1890s, the right whale was plentiful. It roamed from New England, where it fed and mated in the warmer months, to Florida where it had its young in the winter. Now the National Marine Fisheries Service estimates there are only 450 left. The right whale is not one of the more glamorous whales—it’s dark in color, has no dorsal fin, and has raised patches of rough skin on top of their heads.

What the Navy has decided to do is limit their use of sonar in the entire area the right whale frequents and limit explosions in the same areas. This represents an expansion of protected areas, so much more area is included. Sonar, especially, could be considered as a type of noise pollution. Their delicate hearing cannot take the subtle (to our ears) sonar pings. It interferes with their whale-to whale-communication, which in turn, affects their behavior. In the Jacksonville, FL area, for example, they will not conduct shock trials on ships based there Nov.15-April 15, which is calving season. Shock trials are done on new ships to test their capability to withstand underwater explosions. The Navy, will also alert any ships, even commercial ones, if they happen to see a right whale in a certain location, so that speed can be reduced in order to lessen the chance of a possible collision and to reduce undesirable noise. Navy vessels based in Hampton Roads don’t normally interfere with the right whale, because they train in much deeper water as a matter of course, which are beyond the normal migration pattern of the whale.

The Navy will also alter some of its practices in the certain areas of the Gulf of Mexico in order to protect the Bryde’s  whale. They are even more endangered than the right whale—only 100 remain. There they will limit the use of explosives, except during mine warfare  training. It is hoped these efforts will help both types of whales make a gradual comeback. The Navy should be applauded for being respectful of their seafaring neighbors and fellow mammals! (Brock Vergakis, “Navy to limit sonar; explosions in more areas off East Coast to protect endangered whales,” The Virginian-Pilot, November 2, 2018, p.1 &4)

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Jennifer S. Rossettini

Attorney, Shareholder, CFP®
757-399-7506 | 252-722-2890
[email protected]

Jennifer Rossettini is a Shareholder of Hook Law where she focuses her practice in the areas of elder law, estate planning, estate and trust administration, and financial planning. Her practice includes complex estate planning for clients with a net worth over $5 million as well as simple plans for individuals with very limited assets. Ms. Rossettini rejoined the firm in 2018 after spending ten years as a CERTIFIED FINANCIAL PLANNER™ professional with the wealth management divisions of two regional financial institutions. She is a member of the Financial Planning Association, serving as Secretary for the Hampton Roads chapter and serves on the Board of Directors of the non-profit organization, PrimePlus Senior Centers. Jennifer lives in Virginia Beach with her husband and two daughters. She is active in the Girl Scout organization, serving as both a troop leader and as the treasurer for the local Service Unit.

Practice Areas

  • Elder Law
  • Estate & Trust Administration
  • Estate Planning
  • Financial Planning
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