In the Courts: Court Upholds Arbitration Agreement Naming Defunct Arbitrator and Agreed to by Guardian

April 22, 2016 | Aging Services Risk, Quality, & Safety Guidance

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​In a case originally brought as a class action lawsuit against an owner and operator of nursing homes and related entities, the Supreme Court of Arkansas has found that although the agreement referenced an arbitrator that had since become defunct, it was not impossible to perform. It also found that the guardian of one resident, who had signed the agreement on the resident's behalf, had authority to enter the resident into a binding agreement to arbitrate. The court remanded the case for entry of an order compelling arbitration.

After a group of former residents, special administrators, guardians, and attorneys-in-fact filed a class action suit, the defendants moved to compel arbitration of claims brought by or on behalf of five residents. One resident had signed the arbitration agreement himself during the admission process. For the other four residents, an individual other than the resident had signed the agreement on the resident's behalf. The agreement stated, in relevant part, that disputes would be resolved only by binding arbitration "in accordance with the National Arbitration Forum Code of Procedure ('NAF'), which is hereby incorporated into this Agreement." NAF had...

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