Two cases are currently pending in the Florida Supreme Court regarding whether the arbitration agreements at issue in the cases are enforceable.
Hernandez v. Crespo (No. SC15-67)
In this case, the Court must decide whether an arbitration agreement violates the public policy pronounced by the Florida Legislature in the Medical Malpractice Act, chapter 766, Florida Statutes (2012), when the agreement fails to adopt the necessary statutory provisions. To conclude that the arbitration agreement at issue violated public policy, the Fifth District in its opinion relied on the Supreme Court’s decision in Franks v. Bowers, 116 So. 3d 140 (Fla. 2013), which states: “Because the Legislature explicitly found that the MMA was necessary to lower the costs of medical care in this State, we find that any contract that seeks to enjoy the benefits of the arbitration provisions under the statutory scheme must necessarily adopt all of its provisions.” The Fifth District reversed the order of the trial court compelling binding arbitration per the arbitration agreement at issue, and certified conflict with Santiago v. Baker, 135 So.3d 569 (Fla. 2d DCA 2014).
The parties have finished their briefing and the Florida Supreme Court will decide the case without oral argument.
Mendez v. Hampton Court Nursing Center, LLC (No. SC14-1349)
In this case, the Court must decide whether a nursing home resident is bound by an arbitration clause in a nursing home agreement when the agreement was signed by the resident’s son as the resident’s representative. The Third District found that the resident was bound by the arbitration clause. To view the Third District’s opinion, click here.
The facts are as follows. The day Juan Mendez, Sr. was admitted to a nursing home, a doctor determined that he lacked the capacity to give informed consent or make medical decisions for himself. Consequently, Mr. Mendez’s son, who was not acting under a power of attorney, signed the nursing home agreement as his father’s representative.
Mr. Mendez remained at the nursing home for more than four years, until his death. During his stay, one of his eyes had to be removed due to an infection. The resident’s son brought a suit against the facility on behalf of this father. The facility moved to compel arbitration under the nursing home agreement. The son asserted that the arbitration clause was not binding on his father, who was not a party to the agreement. The trial court compelled arbitration and an appeal followed.
The Third District affirmed the trial court’s decision. It first noted that arbitration is a favored means of dispute resolution and arbitration provisions are generally favored by the courts. It also noted that arbitration clauses are binding on third-party beneficiaries, even when the third-party beneficiary did not sign the contract.
The Third District therefore found that Mr. Mendez was not merely an incidental beneficiary of the agreement; he was the intended and actual third-party beneficiary. As a third-party beneficiary to the agreement, he was bound by the arbitration provision.
The Third District also noted that other district courts have held that nursing home residents who are non-signatories to care agreements are not bound by the arbitration provisions in those agreements. The Third District disagreed with the reasoning in these decisions. It declared that whether a third-party beneficiary is bound by an arbitration provision does not depend on whether the signatory signs only as the “financially responsible” party or has the authority to agree to arbitration, but depends on whether the resident accepted the benefits of the agreement.
This article will be updated once the Florida Supreme Court decides these cases.