San Antonio Court Upholds Nursing Home Arbitration Agreement

By Carla Cox

The San Antonio Court of Appeals in In re: Dan Ledet and Living Centers of Texas, Inc. d/b/a Retama Manor Nursing Center Laredo South issued a decision recently upholding the enforceability of an arbitration agreement contained in a nursing home's admission packet. The arbitration agreement was not signed by the resident but by her son who signed the admission papers as the resident's "responsible party" and signed the arbitration agreement as the resident's "legal representative." Even though the son was not the resident's court-appointed legal guardian, the Court found that he had actual authority to act on behalf of the resident who was incapacitated. Further, the Court found that the arbitration agreement was binding on the nursing home's and the resident's successors, assigns, agents, attorneys, insurers, heirs, trustees and representatives.

Many of our nursing home and assisted living facility clients have incorporated arbitration agreements into their admission packets. Even with the advent of the Texas tort reform, arbitration is a preferable option for many health care providers. The Ledet decision is the first by a Texas appellate court specifically upholding an arbitration clause in a nursing home admission packet. Importantly, the Ledet decision also emphasizes the importance of including a provision in the arbitration agreement applying the Federal Arbitration Act. It is desirable that the Federal Arbitration Act provisions apply to health care provider arbitration agreements. While Texas law provides for arbitration agreements, compliance with the Texas requirements that must be met in order for an arbitration clause to be enforceable, is more difficult than compliance with the requirements of the Federal Arbitration Act.

Questions concerning arbitration clauses in admission agreements may be addressed to Carla J. Cox at cjcox@jw.com/512.236.2040 or Monte James at mjames@jw.com/ 512.236.2066.

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