ADR Case Updates
Courts Refuse to Compel Arbitration Where Contrary Public Policies Apply, 05/29/07
In case you have not seen them, attached are two recent Court of Appeal ADR cases. The first is Fitzhugh v. Granada Healthcare and Rehabilitation, LLC (First District, Div. Three), 2007 DJDAR 6190. Decedent died of complications from a fractured femur while admitted at Defendants nursing home. Her husband and two adult sons sued for elder abuse, violations of the Patients Bill of Rights, and wrongful death. Defendant sought to compel arbitration under the arbitration clauses in the admission agreements signed by the husband as decedents legal representative. The trial court denied Defendants motion to compel arbitration.
Affirmed. The arbitration clauses in the admission agreements specifically excluded any cause of action based upon the Patients Bill of Rights, which survived decedents death. As to the wrongful death cause of action, the adult sons did not sign the agreement, and the husband signed only in his capacity as decedents legal representative/agent, not in his personal capacity. Therefore, none of the Plaintiffs waived their claim to jury trial. Finally, pursuant to CCP Section 1281.2, subdivision (c), the court may, in its discretion, refuse to compel or stay arbitration where there is a possibility of conflicting rulings on a common issue of law or fact. Whether any violations of the Patients Bill of Rights caused decedents injuries or death are potentially such inconsistent rulings in different forums. Therefore, the trial court properly exercised its discretion in refusing to compel arbitration.
The other case is Berg v. Traylor (Second District, Div. Two), 2007 DJDAR 3696 (child actor had statutory right to disaffirm original contract and arbitration award in favor of his personal manager).
Notwithstanding the public policy in favor of arbitration, both of these cases demonstrate that courts will refuse to compel arbitration where contrary public policies come into play. In nursing home cases, the laws against elder abuse and neglect seek to protect infirm and elderly dependent adults, who are a disadvantaged class. On the other end of the spectrum, the law shields minors from their lack of judgment and experience giving them the right to disaffirm their contracts and arbitration awards.
Steve Kruis sends periodic case updates by e-mail that summarize recent developments in the Alternative Dispute Resolution area. If you would like to be included on our distribution list, please send us an e-mail or call 619.233.1323.