Waiver Of Attorney Fees Contained In Residency Agreement Is Contrary To Public Policy

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In Bickel v. Sunrise Assisted Living, 206 Cal.App.4th 1 (2012), the California Court of Appeal for the Fifth Appellate District decided a fee case under the Elder Abuse Statute contained in Welfare and Institutions Code Section 15600 et seq. 

The case dealt with the propriety of an arbitration clause, contained in an elderly plaintiff’s residency agreement that stated each party would bear its own costs and attorney fees concerning any dispute under the residency agreement. That clause conflicted with the attorney fee provision contained in Welfare and Institutions Code Section 15600 et seq.

The trial court affirmed the arbitrator’s award of compensatory and punitive damages. The award also contained sums for attorney fees and costs to the plaintiff.

The facility’s residency agreement contained an arbitration clause that was potentially at odds with the Welfare and Institutions Code. It stated that “each party” would “bear its own costs and fees” in connection with any arbitration. The trial court granted the facility’s petition to compel arbitration of the elder abuse claims but severed, as against public policy, the provision regarding attorney fees and costs. The assisted living facility filed an appeal of the trial court’s decision.

The court of appeal affirmed the decision of the trial court. The court of appeal held that the clause requiring a waiver of fees and costs was contrary to public policy and was thus unenforceable, citing California Code of Civil Procedure Sections 1281, 1281.2

The court of appeal noted that the right to fees and costs reflects legislative intent to protect vulnerable elders and dependent adults by creating an incentive for attorneys to represent victims of alleged neglect. The court of appeal noted that the trial court therefore correctly severed the waiver provision from the residency agreement.

 

Published In: Alternative Dispute Resolution (ADR) Updates, Civil Remedies Updates, General Business Updates, Residential Real Estate Updates

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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