A recent decision in South Carolina called Weaver v. Brookdale Senior Living Inc.. discussed equitable estoppel and arbitration. McKnight’s reported on the Court of Appeal’s arbitration decision in the assisted living case with tragic facts.
Basically the facts are these:
A resident at a Brookdale facility suffered from dementia. One night, the resident left the facility without supervision or assistance. Brookdale failed to supervise the resident. An alligator pond was located on the premises. Brookdale failed to warn of the existence of the alligators in the pond. The granddaughter went to the pond. She discovered her grandmother’s arm floating in the pond. An alligator ate the resident. Authorities caught the alligator. The autopsy revealed the remains of her grandmother, along with her pacemaker, in the alligator’s belly.
The family understandably filed a claim against Brookdale for negligent and intentional infliction of mental distress. The facility moved to dismiss the case and compel arbitration. Brookdale argued that because the resident received services while a resident, the family was forced to arbitrate the claim. Brookdale erroneously claimed the arbitration agreement defined Brookdale’s responsibilities. This is a ridiculous argument.
Trial court denied Brookdale’s motion to dismiss and to compel arbitration. Brookdale then filed a frivolous appeal. Brookdale maintained the arbitration agreement applied to the family. The South Carolina Court of Appeals disagreed. The Court issued a well-reasoned opinion.
The key highlights include:
Equitable estoppel is designed to prevent injustice and it should be used sparingly.
State law controls when an arbitration agreement is enforceable against a non-signatory.
The direct benefits equitable estoppel defense raised by defendant does not apply when claims rely on general tort duties owed by ALF to everyone, not any provision of the residency agreement.
A presumption against arbitration arises when the party resisting arbitration is a non-signatory.
The presumption in favor of arbitration applies only as to the scope of an agreement.
The above presumption does not apply to the existence of an agreement.
The above presumption does not apply to the identity of the parties who may be bound to such and agreement.
Equitable estoppel does not apply simply because a claim relates to or allegedly would not have arisen “but for” a contract’s existence.
The family has not “exploited” or otherwise sought to enforce or benefit from the residency agreement, any more than a pedestrian run over by a truck has benefited from the contract for the purchase of the truck.
This decision will make it harder for long term care facilities to force families to arbitrate claims based on equitable estoppel. If you or your loved one have questions, please give us a call. We can help.