8th Cir. Resists Opportunities to Nix Nursing Home Arbitration

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The plaintiff offered the Eighth Circuit several reasons to rule that he needn’t arbitrate claims against his father’s nursing home.  But, figuratively swimming against the juridical current, the Eighth Circuit rejected all of them.

When Eddie Robinson’s father entered Pine Hills nursing home, he signed an arbitration agreement.  The agreement said that it was governed by the National Arbitration Forum (NAF) Code of Procedure, and it listed five possible forums, including the NAF.  But when the agreement was signed, the NAF had already signed a consent judgment not to participate in any more arbitrations.

Eddie sued the nursing home and several related parties in state court for his father’s injuries and death.  The defendants moved to dismiss and compel arbitration and then removed to federal court, which granted the motion.  Eddie appealed.

The Eighth Circuit ruled that Arkansas state law controlled.  And under Arkansas law the NAF’s unavailability doesn’t affect enforceability.  In fact, even if all five named forums are unavailable, the clause is still enforceable.  The NAF Code says that if the listed forums are unavailable, the parties are to seek remedies “in accord with applicable law.”  The applicable law is the Federal Arbitration Act, which calls for a court to appoint an arbitrator in that event.

The court observed that when the parties signed the agreement, maybe they didn’t regard the choice of arbitrator as important: after all, they didn’t even check to see whether the NAF was available.

Eddie argued that the NAF’s withdrawal from arbitration had cancelled the NAF Code.  But the court ruled that although he argued the point, he hadn’t actually shown that the cancellation occurred.  And the Arkansas Supreme Court had specifically ruled that the NAF’s cessation of arbitration didn’t in itself cancel the Code.

Finally, Eddie argued that most of the numerous defendants in the case hadn’t signed the arbitration agreement.  But the court noted that under Arkansas law, a party closely related to the signatory may enforce the provision based on “agency and related principles.”

So all Eddie’s arguments failed, and the arbitration provision was upheld.

The case is Robinson v. EOR-ARK, LLC, No. 15-3406 (8th Cir., Nov. 14, 2016).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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