Arbitration & Mediation

Having Flu and Not Initialing a Page Does Not Stop Enforcement of Arbitration -- No Obligation to Read Terms

By Christopher B. Hopkins, Esq.

A 69-year old nursing home resident sought to deny enforcement of an arbitration clause in the admission agreement because she didn't initial page 5, she signed on the wrong line at the end of the contract, and because she had the flu. She also complained that the Facility did not explain the contract to her. Trial court accepted these excuses but the intermediate appellate court did not. Case is Community Care Center of Vicksburg d/b/a Heritage House Nursing and Rehabilitation Center and Legacy Home Health Services, Inc. v. Carolyn C. Mason.

We recently noted the unpublished 5th Circuit case of Beverly Enterprises - Mississippi v. Powell where the Resident claimed she was illiterate and should not have arbitration enforced under a contract she signed. Since that case was remanded, we suspect this Mason decision is going to be influential.

The Resident was 69-years old with a number of health problems prior to her admission to the defendant facility. She had fallen at home, gone to the doctor's office, and had requested she be taken to the nursing home. The admission agreement had a "witness acknowledgement" line at the end. Not signed. There was a space to initial the page with the arbitration clause... not signed. The arbitration clause was split between pages 5-6 and she did sign page 6 where it asked her about releasing records. She finally signed the last page (page 7) but both she and the facility representative signed on the wrong lines of th pre-printed contract.

The Resident claimed she was too ill to understand the contract and that it was not explained. She even had her sitter, who was there, sign an affidavit to that effect.

The Court held that the lack of initialing the arbitration clause page was not indicative of a denial of that provision. Indeed, the evidence was the Resident didn't know or didn't read. The Court likewise held the lack of signature under the witness affirmation was of no effect since there was no challenge of fraud or forgery. The mix-up regarding signing on the wrong lines likewise did not mean that the parties did not intend to contract.

The Court also recognized that there were no exigent circumstances surrounding the admission so the "I was sick" claim was insufficient to overcome the signor's obligation.

For lawyers (and parties) who claim that contracts are not enforceable because they weren't signed -- be careful. Here's the one line: "Heritage House did not have the duty to explain every term of the admission agreement to Mrs. Mason."

Note to lawyers who draft contracts: skip the requirement to sign mulitple times. Just put these kind of clauses at the end of the contract, right above the signature line. Unless you have absolute confidence your client will present the contract and get all signatures each time on all pages, leave that out. Also, from the sounds of it, this contract had to be signed in 4-5 different places. Seems overkill and an opportunity for mistakes.

Note to lawyers who litigate: the absence of signatures and initials in this case were deemed inconsequential because the evidence was that the failure to sign did not mean a refusal to assent to the terms. Different testimony ("I didn't initial because I didn't agree") might have gotten a different result.

Full post as published by Florida Arbitration Law on November 29, 2007 (boomark / email).