Residential Health Care Arbitration Agreement Scrutinized in Florida Appellate Decision

Florida allows parties to utilize arbitration to bypass the civil court system. If two parties agree through a formal contract, they can use an arbitrator to decide any conflict that arises during the course of their relationship. The decision by an arbitrator would be as binding as if a decision were rendered through the state’s system. This month, the state’s Fifth District Court of Appeal assessed an arbitration agreement at a health and rehabilitation center following the death of a resident.

The deceased entered the defendant facility in 2015, when her daughter and power of attorney signed an admission agreement that included an arbitration agreement. This agreement stated the parties would use arbitration to settle any disputes, waiving the right to resolve the matter in a court of law. The resident died a little over a month after her admission, and the estate filed a Florida wrongful death case. The estate specifically alleged the center failed to comply with the Florida Nursing Home Resident’s Rights Act. The center moved to compel arbitration, per the agreement, but the estate responded by claiming the agreement signed was void.

The estate first argued the arbitration agreement was void because it required the application of the Alabama Rules of Evidence, even though the center was in Florida and required the application of Florida’s laws of remedies, evidentiary burden of proof, and substantive law. The estate asserted this wrongly limits the ability to recover compensatory damages because Alabama limits recovery for wrongful death to punitive damages. The estate then pointed to the required application of the Alabama Rules of Civil Procedure to pre-hearing discovery, which also incorrectly limited the estate’s discovery to omissions or negligent acts identified at the beginning of the lawsuit. The trial court agreed with the estate and found the agreement was void and against public policy. The court found the provisions could not be severed from the agreement because it would create confusion about which rules of evidence to apply. The center appealed.

The District Court of Appeal initially examined the Nursing Home Resident’s Rights Act (Act), which allows residents to recover actual and punitive damages without caps on pain and suffering. The appellate court noted that while the arbitration agreement requires the application of Florida substantive law, the additional requirement to apply the Alabama Rules of Evidence would negate the Act by disallowing the presentation of evidence of compensatory damages. In its argument to the appellate court, the center pointed to a prior decision that allowed identical provisions to stand, alternatively arguing the arbitration agreement allows the court to sever unenforceable provisions. The estate countered the prior holding did not raise the specific issues within this case.

In its analysis, the court looked at precedent dealing with the severance of contract provisions. The Florida Supreme Court previously held a contract can be upheld if the remaining portions are supported by valid legal promises. If the illegal provision goes to the “very essence” of the agreement, the entire contract is void. The appellate court agreed the noted provision applying Alabama’s Rules of Evidence was illegal, but it disagreed with the trial court’s determination that the entire arbitration agreement was void. The court found the contract could remain intact after the illegal provision concerning the application of the Rules of Evidence was removed. The court did not find the application of Alabama’s Rules of Civil Procedure went against the Act, and it determined that provision could remain. The trial court’s ruling denying the motion to compel arbitration was reversed and the case remanded.

The Florida wrongful death attorneys at Donaldson & Weston can aggressively pursue all avenues of legal relief to maximize your damages. Defendant companies often look to hide behind an arbitration agreement to avoid accountability. Our office has the knowledge and experience to dismantle their attempts to avoid liability. For a free, confidential consultation, contact our office today at 772-266-5555 or 561-299-3999.

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