Anyone familiar with long term care litigation knows that the number of disputes regarding the use and enforcement of arbitration agreements in the context of assisted living/nursing home admissions has risen sharply over the last several years. Attorneys for residents and their families often want to invalidate a signed arbitration agreement once the dispute has arisen, preferring to make a negligence case to a jury. Facilities generally want to enforce the agreement, for obvious reasons (reduced litigation costs, preference for a neutral arbitrator, the possibility of limited discovery and/or a confidential verdict, etc.).
Over the last decade, the Kentucky Supreme Court has repeatedly declined to enforce arbitration agreements signed by the power of attorney (“POA”) for a nursing home resident where the written POA did not specifically mention authority to bind the principal to an arbitration agreement as one of the agent’s enumerated powers. Even where the POA granted the agent broad authority to do “anything and everything” the agent might do on his or her own behalf, the Kentucky Supreme Court held that this did not give the agent power to bind the principal to an arbitration agreement. Extendicare Homes, Inc. v. Whisman, 478 S.W.3d 306, 312 (Ky. 2015) and Kindred Nursing Centers Limited Partnership v. Clark, 2016 Ky. LEXIS 76 (Ky. 2016).
Kentucky federal district courts were quick to conclude that the Whisman/Clark rule ran afoul of the Federal Arbitration Act (“FAA”), which requires courts to treat arbitration agreements just like any other contract. See e.g., Preferred Care of Del., Inc. v. Crocker, 173 F. Supp. 3d 505 (W.D. Ky. Mar. 24, 2016) (holding that the FAA preempts Whisman because it...
