Ohio Court Signals Caution for Nursing Homes Relying on Arbitration Agreements

In a recent Ohio appellate decision, the Ninth District Court of Appeals affirmed a trial court’s order denying a skilled nursing facility’s motion to enforce arbitration where the resident’s guardian of person signed a stand-alone arbitration agreement.[1] The decision underscores that arbitration agreements are treated as contracts separate from resident care agreements.

The arbitration agreement was signed by the resident’s daughter in her capacity as guardian of person. A guardian of person is appointed to manage the daily life decisions of a resident and is authorized by law to make decisions that include where the resident will live and what kind of treatment and care they will receive.[2]

In this case, the resident also had a guardian of estate who signed separate paperwork related to the resident’s admission to the facility but did not sign the arbitration agreement. A guardian of estate is appointed to manage a resident’s assets and has statutory authority to file or defend lawsuits brought against, or on behalf, of the resident.[3]

Although the arbitration agreement broadly covered disputes arising from or related to the resident’s care, the court found that it did not reference the “medical, health, or other professional care, counsel, treatment, or services” that a guardian of person is authorized to approve under R.C. 2111.13. Instead, it was an agreement to “utilize arbitration and/or arbitration to resolve legal claims,” which falls squarely within the duties of a guardian of estate under R.C. 2111.14. 

Providers are encouraged to verify the legal authority of all guardians before executing contracts by reviewing the letters of guardianship to ensure the signatory has the authority to enter into a legally binding agreement. Relatedly, it is in the best interest of a provider to verify the legal authority of an agent acting under the power of attorney agreement before executing contracts.

If you have any questions or need strategic review of your resident care and arbitration agreements, do not hesitate to contact your Dinsmore healthcare attorney.