Court Case Could Spell Trouble for Senior Living Arbitration Agreements

Pre-dispute arbitration agreements have already been banned in long-term care—and it looks like they are now tripping up majority private-pay senior housing companies.

A recent court case in Minnesota may encourage residents and their family members to challenge senior living providers’ controversial arbitration clauses, according to the Star Tribune.  

The court case revolves around the 2015 death of 89-year-old resident Gerald Seeger at a New Perspective Senior Living assisted living and memory care community in Columbia Heights, Minnesota.

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A Minnesota judge upheld the right of Seeger’s family to sue Lighthouse of Columbia Heights for wrongful death, despite the family having signed an arbitration agreement when Seeger moved into the community. 

Specifically, the judge said the arbitration agreement signed by Joan Maurer, Seeger’s daughter, was not enforceable because the Seegers were subjected to a “rushed, pressured process” when Gerald was admitted to the senior living community. Reportedly, the Seegers were informed that the agreement needed to be signed that day or the apartment would cease to be available. The family was not afforded time to have the agreement looked over by an attorney, the judge said.

Going forward, senior living providers may have to approach the resident admission process differently, according to Suzanne Scheller, an attorney who represents the Seegers.

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“I think this sets the stage…for greater scrutiny of what is being marketed to residents,” Scheller told the Star Tribune. “This reflects the court’s willingness to examine what was written, what was said, and what was promised at the time of admission.”

New Perspective Senior Living, meanwhile, maintains that arbitration clauses are effective and worthwhile.

“The judge found that the Lighthouse of Columbia Heights’ agreement was reasonable and did not unduly favor one party over the other,” Doug Anderson, the company’s vice president of marketing and communications, told Senior Housing News. “Further, the judge ruled that arbitration agreements including their use in long-term care settings are ‘highly favored as a means of resolving disputes.'”

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Still, the judge determined that two provisions of the arbitration agreement contained conflicting language which, when applied to statements of a family member, led to procedural issues, Anderson said.

“While evidence submitted to the court showed that the family member’s statements were contradicted by a number of witnesses, the judge relying on the ‘unique facts of this matter’ decided this one agreement was not procedurally enforceable in this particular circumstance,” Anderson added.

In September 2016, the Centers for Medicare & Medicaid Services (CMS) attempted to ban the use of pre-dispute arbitration agreements in long-term care, but a federal district court in Mississippi granted an injunction just over a month later that prevented the ban from taking effect. 

Written by Mary Kate Nelson

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