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Florida Second DCA Holds ALF Arbitration Agreement Not Applicable to Nursing Home Admission

On September 9, 2016, the Florida Second District Court of Appeal ruled that an arbitration clause in an assisted living facility (ALF) admission agreement did not apply when the resident was transferred to a skilled nursing facility (SNF) located in the same retirement community.  While the language of the arbitration clause was deemed sufficiently broad, it nonetheless did not extend to the SNF admission since “it was undisputed that the ALF and SNF are separate facilities with separate admissions procedures.”  In the end, the court held that resolution of the claims asserted did not require reference to or construction of the ALF admission agreement and had “no nexus to the ALF Admission Agreement or [the resident’s] stay at the ALF.”

The case is Venita L. Olson as Personal Representative of the Estate of Claire W. Olson v. Florida Living Options; Second Florida Living Options; Vernor J. Zeger (as to Hawthorne Health and Rehabilitation Center of Brandon).  The court described the defendants as the “SNF defendants” in order to distinguish them from the ALF (Hawthorne Inn of Brandon) and the larger retirement community which included both the ALF and SNF.  It should be noted that defendant Zeger is the administrator and Florida Living Options is the sole member of both the SNF and ALF however the ruling did not turn on the parties but the scope of the ALF admission agreement.

The ALF Admission Agreement included a fairly standard arbitration clause which  applied to claims “arising out of or in any way relating to this Agreement, the Admission Agreement, or any of the Resident’s stays at this Facility.”  In a later section, it noted that these terms applied “to this and all future admissions by the Resident to the facility.”

The Court held that “arising out of” is broad, but not the broadest contract language in this context — that said, “relating to” is the broadest wording so the combination of “arising out of” and/or “relating to” (or words to that affect) receive the broadest interpretation under Florida law.  However, the Plaintiff’s allegations related to claimed personal injuries during the later SNF admission and, the Court concluded, did not arise out of or relate to the ALF Admission Agreement or the Resident’s stay at “this” Facility (meaning the ALF).  Even the line regarding re-admissions was still determined to relate to the ALF and not the SNF.  Again, the SNF has a separate admission process and contract.

For the foregoing reasons, the Court held that the scope of the arbitration agreement was not broad enough to include claims arising from the SNF admission.  Of note, the Court dropped a footnote that arbitrability is typically for the arbitrator to resolve but was not raised by the SNF defendants.  The Court did not reach a determination, under the Seifert test, whether the SNF defendants were intended third party beneficiaries but this appears to likely have failed for the foregoing reasons.

Takeaway lessons: As the facility did here, an enforceable arbitration agreement should typically be broad in scope as evidenced by the “arising from and/or relating to” language.  For larger campuses with different levels of care and separate admissions processes, the wording should specifically state it applies to all levels of care and/or each admission process should include an arbitration clause (it was unclear, from the opinion, why an arbitration clause was not enforced relative to the SNF admission).  As there are some issues which are reserved for the arbitrator, counsel should be certain that they are arguing to the proper authority.

Image courtesy of CourthousesOfFlorida.com.

Christopher B. Hopkins

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