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Johnson v. Heritage Healthcare – When Nursing Home Waives the Right to Arbitrate

Courts generally enforce the strong federal policy that favors arbitration where such an agreement exists. However, that doesn’t mean a court will automatically dismiss a case that involves an arbitration clause in favor of that alternative dispute resolution. This is increasingly true in nursing home abuse cases, in which Florida judges are carefully scrutinizing arbitration clauses. 

One of the elements they consider is whether the party has relinquished rights to arbitrate.

This was the issue in the recent case of Johnson v. Heritage Healthcare, before the South Carolina Supreme Court. Court records show decedent, within six months of being admitted as a patient at defendant nursing home facility, she suffered severe pressure ulcers and a leg amputation that ultimately led to her death. The legal process to hold the facility accountable has been an arduous one, and like so many nursing home abuse cases, involved an arbitration agreement. The question before the state supreme court was whether defendant waived its right to arbitrate. 

Court records show decedent was admitted to the facility in 2007 with the assistance of her daughter, who held general power of attorney for her. It was the daughter who signed the arbitration agreement with defendant on her mother’s behalf upon her mother’s admission to the facility. At the time, decedent was 85-years-old but in good health. But within six months, she suffered serious and painful injuries that resulted in her 2009 death.

In August 2008, after patient’s injuries became known but before her death, her daughter requested the nursing home grant her access to her mother’s medical records. However, the facility refused, citing privacy concerns under the Health Insurance Portability and Accountability Act (HIPPA). Daughter filed a motion for a temporary restraining order, seeking a copy of the records and an order that would prevent the nursing home from changing, altering or destroying the records. Circuit court granted this order, which defendant moved to dissolve, again citing HIPPA.

Later, at daughter’s request, she as appointed as her mother’s guardian ad litem in order to pacify the HIPPA concerns. However, the nursing home still would not turn these records over. The court again ordered the agency to produce the records and it appealed. Pending that appeal, the patient died. Her daughter was appointed personal representative of her estate, at which point the nursing home finally turned over the records and the appeal was voluntarily dismissed.

Several months later, plaintiff filed a notice of intent for wrongful death and survival action against the nursing home.

Defendant responded and asserted arbitration as one of its defenses – but did not move to compel arbitration at that time. Instead, defendant filed arbitration related discovery requests on plaintiff.

Plaintiff argued that the nursing home had waived its right to enforce the arbitration agreement because, although the temporary restraining order proceedings fell within the scope of arbitration, as did the guardian ad litem proceedings and the subsequent appeal, the nursing home had never moved to compel arbitration in any of those actions. Further, the nursing home had been an active participant in those proceedings, availing itself of the authority of the court.

Trial court ruled defendant did waive its right to enforce arbitration by waiting to file its motion to compel until after its participation in discovery and multiple court appearances. The court ruled that plaintiff was prejudiced by these moves because they forced her to waste significant time and money – which was totally within the nursing home’s power to avoid.

Defense appealed, and in an unpublished opinion, the appellate court reversed. But on review, the state supreme court reversed.

Although defense argued the delay was insignificant because plaintiff was on notice that it intended to arbitrate (as it had been asserted as one of its initial defenses to the notice of intent), the supreme court noted defendants waited a full eight months to file their notice to compel arbitration.

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Additional Resources:

Johnson v. Heritage Healthcare, May 25, 2016, South Carolina Supreme Court

More Blog Entries:

Jurors Award $5.5M to Nursing Home Abuse Plaintiff in Wrongful Death Lawsuit, May 29, 2016, Orlando Nursing Home Abuse Agreement

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