Judges: Contract clause is unequal

A three-judge panel of the Arkansas Court of Appeals on Wednesday upheld a lower court’s order to reject arbitration in a dispute over the treatment of a patient at a nursing home.

The patient, an 85-yearold woman, was subjected to sexual assault and abuse at the Hickory Heights Health and Rehab Center in Little Rock, according to her son’s lawsuit. The suit also stated the patient suffered from bedsores and pneumonia.

In 2017, the son sued the facility; Central Arkansas Nursing Centers Inc.; the company’s president, Michael Morton; and Nursing Consultants Inc. The suit alleged negligence, malpractice and violations of the Arkansas Deceptive Trade Practices Act.

Attorneys for Morton and the other defendants sought to have the case decided by arbitration, citing a clause in the nursing home’s admission contract requiring all disputes over an amount of more than $30,000 be settled by an arbiter.

The patient’s son, however, argued the arbitration clause in the contract fell short of standards set by Arkansas law and the courts, namely it wasn’t binding to both sides.

The family’s attorneys argued the only likely claim Hickory Heights would have against its residents would be for a failure to pay bills. Because the admission agreement stated the nursing home can discharge a resident after 30 days for failure to pay his bill, the family argued residents were unlikely to ever incur a debt greater than $9,400.

In court filings, attorneys for the defendants claimed the $9,400 figure was “nothing more than an argument” not supported by evidence. It was feasible, they said, for a resident to rack up higher debts.

In January, Pulaski County Circuit Judge Timothy Fox sided with the resident and her son and declined the request by Hickory Heights and the others to compel arbitration.

The Court of Appeals, in an opinion written by Judge Raymond Abramson, affirmed that decision Wednesday.

“Even though the arbitration agreement did not explicitly exclude a type of claim from its scope or require only one party to forgo its right to the court system, the arbitration provision was

obviously drafted to shield Hickory Heights from defending itself in the court system against the majority of residents’ potential claims while maintaining its right to utilize the court system for its likely claims against residents,” the opinion read.

Appeals Court Judges Bart Virden and Kenneth Hixson joined Abramson in the decision.

Matt DeCample, a spokesman for Morton, said Wednesday the nursing home owner would be reviewing the decision to determine whether to appeal to the Arkansas Supreme Court.

“The circumstances of this case were especially unique,” DeCample said.

The family’s attorney, Robert Francis, said Wednesday he wasn’t surprised by the appellate judges’ decision, pointing to the precedent set in a 2014 case involving a Jacksonville nursing home, in which the nursing home attempted to exclude billing disputes from its arbitration agreement.

The court’s decision was “an accurate adoption of existing arbitration law,” Francis said.

Morton has donated to judicial campaigns over the years, and his companies have backed efforts to enact tort caps for malpractice claims.