Breaking the Chains: Getting Out of Alabama Nursing Home Arbitration Agreements

Most nursing homes require a new patient (or their family member) to sign an arbitration agreement at admission. These agreements waive the right to a jury trial in the event the nursing home negligently causes the patient to suffer injury or death. As injury attorneys, we would prefer to have juries decide our nursing home cases as opposed to an arbitrator. Juries are more likely to impose significant damages, more likely to be affected by visual evidence, and more likely to inject human emotion into their verdict. So how do we get out of these arbitration agreements?

There are a few avenues you can take depending on the arbitration agreement and the competency (or "capacity") of the nursing home patient at the time of admission:

1) Contractual Incapacity of Patient at Time of Signing the Agreement

If the patient was clearly incapacitated and signed the agreement, then you should easily wiggle out. Incapacity voids a contract. The more tricky situation is when the patient was incapacitated but a family member signed the agreement on their behalf. When this is the case, you must then determine whether that family member had legal authority to act on their behalf.

If the patient was incapacitated and the family member who signed the agreement had no "express grant of legal authority," you win -- the arbitration agreement is unenforceable. Stephan v. Millenium, 279 So. 3d 532 (Ala. 2018). If the patient was incompetent but the family member did have a grant of legal authority, you lose -- the arbitration agreement will be enforceable. The most common grants of legal authority are powers of attorney and guardianship. It should also be noted that if the patient was competent and the family member signed the agreement instead of the patient, the family member's signature will likely bind the patient on the theory of "apparent authority." Diversicare v. Hubbard, 189 So. 3d 24 (Ala. 2015).

The burden will be on the injury attorney to show incapacity. Hester v. Hester 474 So. 2d 734 (Ala. Civ. App. 1996). In addition, the court in Stephan clarified that there are two types of incapacity: (1) permanent incapacity; and (2) incapacity at time of contracting. Alabama appellate decisions show that the courts will focus on the patient's medical records and affidavits of family members and experts in determining incapacity. Proving incapacity at time of contracting apparently will be the easier route for injury attorneys.

2) Terms of the Arbitration Agreement

It's possible that you can get out of an arbitration agreement by arguing the terms of the agreement don't apply to your case. For example, I had a nursing home case where the agreement stated "this agreement remains in effect until the patient is discharged." My client was indeed discharged to a hospital but returned to the nursing home three days later. Shortly thereafter, she suffered a fall which caused an intracranial hemorrhage.

Importantly, when she returned to the nursing home from the hospital, no new arbitration agreement was signed. The judge ruled that the previous arbitration agreement was not enforceable since it was terminated by its own terms when my client went to the hospital. Always carefully study the agreement language to see if the facts of your case allow for an argument that the agreement does not apply to your lawsuit.

I hope this helps you!

Bart Siniard is an Alabama personal injury attorney at Siniard, Timberlake & League, P.C. He specializes in representing the victims of nursing home negligence and is a graduate of the AAJ Nursing Home Advocacy College in Washington, D.C. To see more about Bart and his law firm, visit: