Illinois Nursing Home Arbitration Clause Shot Down

The Illinois Appellate Court recently handed down an important opinion that will have important ramifications in nursing home litigation. In Parker v. Symphony of Evanston, Cheryl Parker as the independent administrator of the Estate of Mae Jefferson, filed suit against Symphony Evanston Healthcare(“Symphony”) alleging that Symphony had been negligent in their care and treatment of Jefferson, and that Symphony had violated certain aspects of the Illinois Nursing Home Care Act. Symphony moved to dismiss and compel arbitration, asserting that Mae’s daughter, Kathy Jefferson (“Jefferson”) had signed a binding arbitration agreement, as Mae’s agent, pursuant to a health care power of attorney.

The arbitration agreement in question provided that in the event of any claim arising out of a dispute relating to injuries suffered by Mae, or Mae’s death, those claims would be submitted to arbitration. Additionally, the Agreement provided that “in consideration for the execution of the Agreement, Facility(Symphony) agrees to pay up to $5,000 of the resident’s arbitration costs, attorney fees and out of pocket expenses” – language no doubt inserted to counter any argument that the arbitration agreement was not supported by consideration.

Symphony moved to dismiss the lawsuit and compel arbitration. The trial court granted the motion, dismissed the case, and entered an order compelling arbitration. Parker then appealed.

Parker argued that Kathy lacked authority to bind Mae to arbitration because arbitration was optional and signing the agreement was not a condition of admission. Additionally, plaintiff argued that the agreement was unconscionable because Kathy was not properly informed about the content of the agreement and had no role in the creation of it. Plaintiff also argued that key terms of the agreement were buried in fine print. Finally, Parker argued that the agreement was unconscionable as it required residents to waive statutory attorney fees under the Nursing Home Care Act and that Mae was not a party to the agreement.

The Appellate Court, after a thorough discussion of the relevant caselaw, noted that where an arbitration provision is optional or otherwise not necessary to gain admission to a nursing home, an agent acting pursuant to a health care power of attorney is NOT authorized to sign the arbitration agreement and the patient is not bound by the agent doing so.

The Court went on to note that the agreement Kathy signed was separate from the admission agreement. The Appellate Court also noted that while the Symphony Admission Agreement and Arbitration Agreement were both presented at the same time, they were separately paginated and separately signed. And, importantly, the Arbitration Agreement explicitly stated that signature was not a condition of treatment.

On appeal Symphony argued that the Arbitration Agreement was part of the admission contract because Section G of the Admission contract incorporated the Arbitration Agreement. The Appellate Court however, wasn’t moved and noted that since Kathy was not required to sign arbitration agreement for Mae to be admitted, it was not necessary for Kathy to sign the arbitration agreement to make health decisions for Mae.

The Appellate Court ruled the arbitration agreement was not enforceable and remanded the case back to the trial court for further proceedings.

Justice Pucinski’s short concurring opinion is not to be missed. While only one paragraph, it packs a punch. Justice Pucinski noted that arbitration is not about health care, but about money. Additionally, she noted that arbitration “is just the worst kind of illusion for the providers to try to jam the authority to agree to arbitrate into a HCPOA.”

Kudos to the talented group of lawyers advocating for Parker, which included Michael Rathsack and Steven M. Levin and Paul J. Connery of Levin & Perconti.

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