Court Hands Big Win to Florida Nursing Home Residents

Two recent Florida Supreme Court decisions have resulted in major gains for nursing home residents and their families. Both Shotts v. OP Winter Haven and Gessa v. Manor Care of Florida struck down a segment of nursing home arbitration clauses that put in place damage caps that fell below what is legally recoverable in state court. Legal experts say that the rulings may help deter nursing homes in other states from imposing similar damage caps on residents and their families.

Agreements Limited Residents’ Rights

In 1977, Edward Henry Clark was seriously injured in an auto accident and suffered permanent brain damage. For years, his niece, Gayle Shotts, provided him with in-home care. Eventually, he was admitted to a nursing home in Winter Haven, Fla. He remained there until his death in 2003, at which time Shotts filed a complaint against the home alleging negligence and breach of fiduciary duty.

The nursing home took steps to move the case to arbitration, which Shotts herself had signed off on when she initially admitted Clark. What Shotts didn’t realize was that this arbitration agreement had a provision that stated the arbitrators had no authority to award punitive damages, which are damages that are awarded to punish wrongdoers.

Scott Nelson

In the other case, nursing home resident Angela Gessa filed suit against Manor Care of Florida alleging negligence, violation of resident’s rights and breach of fiduciary duty. At the time of her admission, Gessa’s daughter signed the documentation that included an arbitration agreement.

When Gessa attempted to take the matter to court, Manor Care of Florida exercised its right in the contract to move the case to arbitration. However, what Gessa didn’t realize was that provisions in the arbitration agreement capped noneconomic damages at $250,000 and waived punitive damages altogether.

Both Shotts and Gessa took their respective nursing homes companies to court to argue the enforceability of these questionable provisions.

“What these cases are really about is whether it is permissible as part of your arbitration agreement to say you don’t get in arbitration what you would be entitled to under the law,” says Scott Nelson, senior attorney at Public Citizen, a consumer watchdog group.

State Supreme Court Sides with the Consumer

After hearing both cases separately, the Florida Supreme Court came down on the side of the plaintiffs, striking down the arbitration agreements’ damage caps.

“The Florida Supreme Court is on pretty conventional ground in saying that arbitration agreements can’t be used to limit people’s rights to recover for injuries,” Nelson says. “The U.S. Supreme Court says they regard arbitration clauses as a device to remove a case to a different forum, but not to change your substantive rights.”

Now, nursing home arbitration agreements in Florida will not be able to contain provisions that place limits on the amount of damages a resident or family member can recover if those limits are below what the state allows an individual to recover in court.

Attorney John Perconti, a senior partner at Levin & Perconti in Chicago and an experienced nursing home abuse lawyer, says that the Florida decisions may have an impact that stretches beyond the state’s borders.

“The Florida Supreme Court has helped the consumer by holding the caps are in violation of the public policy of the State of Florida,” he says. “These opinions should deter nursing homes in other states from imposing damage caps in their agreements.”

Things You Should Know about Nursing Home Agreements

Although the Florida cases may have a wide reach, the fact is that few nursing homes actually use arbitration clauses in their contracts. Despite handling a significant number of nursing home negligence cases, Perconti says he has only seen a handful of these types of clauses. And even when these clauses do arise, none parallel those in the Florida cases.

“We have not seen any clauses imposing damage caps in any of the nursing home contracts as they would violate Illinois public policy and undermine the remedies set forth in the Illinois Nursing Home Care Act,” he says.

John J. Perconti

If you are admitting yourself or a family member into a nursing home, it is important to thoroughly read the contract. Oftentimes, individuals and families fail to do this because of the stress of admitting a loved one into a home, which frequently occurs after hospitalization.

“It is analogous to patients admitted to the emergency room or hospital who sign without fully understanding the legalities involved,” Perconti says.

Residents who sign such agreements that contain arbitration clauses should be aware that they are waiving their right to a jury trial, fees may be excessive, limitations may be imposed on collecting evidence for the case, they may be waiving the right to an appeal and the resolution will likely remain confidential, allowing the nursing home to avoid scrutiny.

“We recommend that a nursing home contract should not be signed if it contains an arbitration provision, and [consumers should] ask that it be stricken from the agreement or they will go elsewhere,” Perconti says. “Nursing homes want to fill their beds and may be [more] willing to strike the provision than lose the revenue.”

Keith Ecker is a news reporter for Lawyers.com.

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