Since passage of the Federal Arbitration Act of 1925, arbitration clauses have become a commonplace, if not boilerplate, provision utilized in contracts executed in the United States. However, given the ubiquity of adhesion contracts, many people are often unaware they are waiving the right to have their grievances decided in court and, more importantly, many of the procedural safeguards that exist in the judicial setting. However, even when parties have agreed to arbitrate, one can occasionally avoid compelled arbitration. Avoidance of mandatory arbitration is at the core of today’s case, Sunbridge Retirement Care Associates, LLC v. Smith (PDF-embedded link).
Sunbridge concerns an arbitration agreement between Cartersville Heights Care and Rehabilitation Center (“Cartersville”), a skilled nursing and rehabilitation center and the plaintiff in this action, and the daughter of a now-deceased resident of the facility. The agreement was executed on November 24, 2009, when the resident was in the admission process. The daughter had the power of attorney to enter into agreements on behalf of the resident, and she signed the arbitration agreement, which provided that “any and all claim or controversies arising out of or in any way relating to this agreement, the admission agreement or any of the resident’s stays at the Facility … shall be submitted to binding arbitration.” The agreement further provided that “the arbitrator shall apply the [National Arbitration Forum (“NAF”)] Code of Procedure,” which in turn provides that the Code governs the arbitration proceedings, unless the parties agreed otherwise. The Code further provided that in the event the parties are denied an opportunity to arbitrate, they retain the right to seek legal or other remedies.