As arbitration agreements have become routine in many nursing facilities, questions may arise after ownership of the facility has been changed. Like other agreements, Maryland nursing home arbitration agreements can generally be assigned. An assignment of an agreement allows the assignee to “stand in the shoes” of the original party to the contract by granting all the rights the assignor previously had under the agreement.

A recent federal court decision considered whether an arbitration agreement could be enforced against residents after the facility had been transferred to new owners and new agreements had been signed. The case raised issues about when an arbitration agreement is properly assigned and transferred.

In that case, two residents entered a nursing facility in 2019. In April 2019, one resident entered the facility and signed numerous admission documents, including an arbitration agreement, though the agreement was not a condition of admission. The arbitration agreement stated that all claims relating to the resident’s stay were required to be decided through arbitration. In August 2019, the second resident was admitted and signed the same admission documents. In February 2020, the facility was sold and transfer to a new entity. A transfer agreement assigned the new entity as the assignee for certain agreements.

In April 2020, the two residents filed suit against the facility for violations of the state’s Patient’s Bill of Rights. In May 2020, the new entity asked residents to sign new contracts, including new arbitration clauses. The residents’ children completed the contracts but declined the arbitration clause. The facility then moved to compel arbitration based on the 2019 agreements.

The language in the 2019 agreements included a statement that any subsequent agreements would not have any effect, unless written and signed by the parties. The 2020 contracts were written and signed, and thus seemingly superseded the 2019 agreements. The 2020 contract also stated that it was a “complete agreement” and included a separate arbitration agreement. The facility contended that the 2020 contracts were not executed because the residents made a counteroffer to the facility by striking out the arbitration clause, and that the facility rejected the offer. However, the court found it did not have sufficient information and ordered additional discovery on whether the 2020 contract was executed. The court also noted that 2019 federal regulations state that nursing facilities cannot require a resident to sign an arbitration agreement as a condition of admission or for continued care at the facility. The residents also argued that the transfer agreement did not include the arbitration agreement. The court found it was not clear which documents fell within the assigned agreements, and also ordered discovery on whether the 2019 arbitration agreements were included in the assigned agreements.

Contact a Maryland Nursing Home Attorney

If you or a loved one has signed an arbitration agreement and want to file a claim against a nursing facility, contact a Maryland nursing home attorney as soon as possible. The nursing home lawyers at Lebowitz and Mzhen, LLC, will gladly evaluate your case and provide you with effective advocacy at every step along the way. Our attorneys know how to properly handle a claim against a nursing home for abuse, neglect, or medical malpractice. Call us at 1-800-654-1949 or contact us through our online form for a free, no-obligation consultation.