Can Illinois Nursing Homes Enforce “Unconscionable” Arbitration Agreements?
Illinois courts may refuse to enforce nursing home arbitration agreements when the circumstances surrounding the agreement or its terms make it unconscionable.
As nursing home abuse and neglect claims continue to rise in Illinois, more and more facilities attempt to avoid the traditional legal process by forcing their residents—and oftentimes, their family members—to agree to “binding arbitration” as a condition of admission. Arbitration basically means a resident and their family forfeit their right to sue a nursing home and instead are required to submit their claims to arbitration.
The problem is that arbitration can contain fewer legal and procedural safeguards for plaintiffs than the Illinois court system, which can make arbitration agreements an important issue when a nursing home resident is seriously injured or killed.
Quick Take
Signing an arbitration agreement does not necessarily end a nursing home abuse or neglect claim. Under Illinois law, a court may refuse to enforce an arbitration agreement if the agreement is found to be procedurally or substantively unconscionable.
What Is a Nursing Home Arbitration Agreement?
Arbitration is an alternative dispute resolution process in which a dispute is submitted to an arbitrator rather than decided through a traditional lawsuit in court. Nursing home admission paperwork may contain arbitration provisions requiring residents to arbitrate certain disputes arising from their care.
Traditional Lawsuit
A dispute is brought in court and proceeds through the judicial system, subject to applicable rules of civil procedure and evidence.
Arbitration
A dispute is submitted to an arbitrator for resolution instead of proceeding through a traditional courtroom trial.
Arbitration provisions can also contain additional terms concerning damages, attorney fees, punitive damages, and other aspects of a potential claim. Those terms may become important if a resident is later injured and seeks compensation.
Illinois Judge Refuses to Enforce “Agreement” Limiting Deceased Nursing Home Resident’s Estate to Just $250,000 in Damages
Fortunately, even if a nursing home resident was compelled to sign an arbitration agreement, an Illinois judge can invalidate the contract if the terms are deemed “unconscionable.” This actually happened in a recent Illinois case, Turner v. Concord Nursing and Rehabilitation Center, LLC.
In this case, a state appeals court agreed with a trial judge’s refusal to enforce an arbitration agreement against the estate of a now-deceased nursing home resident.
Turner v. Concord Nursing and Rehabilitation Center, LLC
The case involved a nursing home resident who was presented with a lengthy re-admission packet containing an arbitration agreement after returning to the facility following a partial leg amputation.
The Circumstances Surrounding the Arbitration Agreement
The deceased resided at the defendant’s nursing home for just over four years. During this time, the deceased was also hospitalized on numerous occasions.
After returning to the nursing home following the partial amputation of his leg, the deceased was “presented” with a 120-page re-admission form, which included a 3-page arbitration agreement.
Years at the nursing home
Pages in the re-admission packet
Pages devoted to arbitration
Damages limitation
Among other terms, the agreement limited the deceased’s potential recovery in any claim to $250,000 and barred him from seeking legal fees or punitive damages.
Terms at Issue
- The agreement limited the potential recovery to $250,000.
- The agreement barred an award of attorney fees.
- The agreement barred an award of punitive damages.
The Nursing Home Abuse Lawsuit
Three days later, the deceased’s niece, acting under her uncle’s power of attorney, sued the defendant for nursing home abuse and neglect under Illinois law. The lawsuit alleged that it was the nursing home’s negligence that had led to the amputation of her uncle’s leg in the first place.
A few weeks later, the deceased passed away. The niece, now the administrator of her uncle’s estate, amended her lawsuit to include a wrongful death claim.
The Court’s Review of the Arbitration Agreement
The defendant moved promptly to enforce its purported arbitration agreement. As previously mentioned, the trial court refused to do so.
On appeal, the First District agreed with the lower court that the arbitration agreement was both procedurally and substantively unconscionable under Illinois law.
Re-Admission to the Facility
The nursing home resident returned to the facility following a partial amputation of his leg and was presented with a lengthy re-admission packet.
Arbitration Agreement Presented
The 120-page packet included a 3-page arbitration agreement containing significant limitations on a potential legal claim.
Lawsuit Filed
The resident’s niece filed a nursing home abuse and neglect lawsuit three days after the agreement was presented.
Resident Passed Away
The resident died a few weeks later, and his niece amended the lawsuit to include a wrongful death claim.
Courts Refused to Enforce the Agreement
The trial court refused to compel arbitration, and the First District affirmed after finding the agreement procedurally and substantively unconscionable.
What Is Procedural Unconscionability?
Procedural unconscionability concerns the circumstances surrounding the formation of a contract, including issues involving the parties’ relative bargaining positions, the manner in which the agreement was presented, and whether a party had a meaningful opportunity to understand or negotiate its terms.
In Turner
The First District found procedural unconscionability based in part on the circumstances in which the deceased resident was presented with the 120-page packet while in a substantially weakened state and told that he needed to sign it without first speaking with an attorney.
What Is Substantive Unconscionability?
Substantive unconscionability focuses on the actual terms of a contract and whether those terms are overly harsh, one-sided, or otherwise unfair under the circumstances.
In Turner
The First District determined that limiting the victim’s potential damages to $250,000 and forbidding an award of attorney fees if he prevailed were substantively unconscionable provisions.
Procedural
Concerns how the agreement was presented and whether the circumstances surrounding its formation were unfair or deprived a person of a meaningful choice.
Substantive
Concerns the actual provisions of the agreement and whether its terms are excessively harsh or one-sided under the circumstances.
Why the Turner Decision Matters
The Turner case demonstrates that the existence of a signed arbitration agreement does not necessarily mean that a nursing home can automatically compel arbitration of an abuse, neglect, or wrongful death claim.
Courts may examine both the circumstances under which an agreement was presented and the substance of the agreement itself. In Turner, the First District agreed with the trial court that both aspects of the arbitration agreement were unconscionable.
Important Point
If a nursing home presents a resident or family member with an arbitration agreement, the specific language of that agreement and the circumstances surrounding its signing may both be important in determining whether the agreement can be enforced.
Common Questions About Nursing Home Arbitration Agreements
Nursing Home Abuse and Neglect Claims Can Involve Complicated Legal Issues
Arbitration agreements are only one potential issue in a nursing home abuse or neglect case. The circumstances surrounding a resident’s care, the agreement itself, the resident’s medical condition, and the actions of the nursing home may all need to be carefully examined.
Contact Illinois Nursing Home and Abuse Attorney Baku N. Patel Today
Nursing homes may use arbitration agreements and other legal defenses when a resident is seriously injured or killed due to alleged facility negligence. You do not have to navigate these issues alone. If you, or someone in your family, needs legal advice from an experienced Champaign nursing home abuse lawyer, contact Patel Law, PC, today to schedule a free case evaluation.
Speak With Patel Law, PC
If you or a family member has suffered nursing home abuse or neglect, our team can review the circumstances and discuss your legal options.
