The nursing home admission agreements were not valid and therefore the third-party beneficiary doctrine does not apply
Baltimore, Maryland (PRWEB) November 20, 2014
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Today's blog posting discusses the November 19, 2014 decision of the Arkansas Court of Appeals (“Appeals Court”) that affirmed the trial court’s denial of a nursing home’s motion to compel arbitration of medical negligence and wrongful death claims filed by the deceased resident’s wife on behalf of her husband's estate regarding the care that her husband had received at the defendant nursing home.
The Appeals Court affirmed that the wife was not a third-party beneficiary of the admission contract between her husband and the nursing home, which the wife purportedly signed on behalf of her husband and which contained a requirement to arbitrate disputes between the parties.
The Appeals Court stated that there are two elements that are necessary in order to apply the third-party-beneficiary doctrine under Arkansas law: 1) there must be an underlying valid agreement between two parties and 2) there must be evidence of a clear intention to benefit a third party.
The Appeals Court stated that the resident’s wife signed the admission documents that contained the arbitration agreement in her representative capacity and not in her individual capacity. The trial court had determined that the wife did not have actual or apparent authority to sign the arbitration agreement and she was not authorized to sign the documents as her husband’s representative, which findings were not challenged on appeal. The Appeals Court therefore held that the underlying agreements were not valid and the third-party beneficiary doctrine does not apply.
The Underlying Facts
The Appeals Court’s opinion sets forth the following underlying facts: on July 7, 2010, the wife’s husband became a resident of the defendant nursing home. The husband was incapacitated and confused at the time of admission and therefore did not have the capacity to sign the admission documents on his own behalf. At the time of admission, the wife signed all of the required admission documents, including an arbitration agreement, even though she did not have a power of attorney or any court or legal document authorizing her to serve as her husband’s agent or to sign the admission documents on his behalf. The arbitration agreement was signed by the wife on a line under which was printed “Patient or Legal Representative.”
Source Progressive Eldercare Services – Chicot, Inc., D/B/A Lake Village Rehabilitation And Care Center And Chicot Operations, LLC D/B/A Lake Village Rehabilitation And Care Center v. Sue Long, As The Administrator For The Estate Of Marion L. “Sugar” Long, Deceased, Division I No. CV-14-401, 2014 Ark. App. 661.
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