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Supreme Court of Arkansas Finds State-Appointed Custodian Does Not Have Authority To Enter into a Binding Nursing Home Arbitration Agreement

In June of last year, the Supreme Court of Arkansas issued a written opinion in a wrongful death case brought by the estate of a woman who died while in the care of the defendant nursing home. In the case, Courtyard Gardens Health and Rehabilitation v. Sheffield, the court was tasked with determining if an arbitration clause contained in a nursing home admission contract was valid when it was signed by an emergency temporary custodian with Adult Protective Services (APS). The court determined that the custodian lacked the authority to consent to arbitration on behalf of the nursing home resident.

Signing a ContractThe Facts of the Case

The plaintiff in the case, Sheffield, is the administrator of the estate of an elderly woman, Holliman, who died while in the care of the defendant nursing home. Prior to her death, Holliman lived by herself. One day, APS received a complaint about the conditions that Holliman was living in, and an APS worker was sent out to Holliman’s home to check on her well-being.

The APS worker noticed several deficiencies in Holliman’s living situation and petitioned the court to take temporary custody of Holliman in order to find her a better living situation. The petition was granted, and the APS worker was named as Holliman’s custodian. He eventually placed Holliman in the defendant nursing home after signing an admission contract containing an arbitration clause.

Holliman died while in the care of the defendant nursing home, and the administrator of her estate filed a wrongful death lawsuit. In response, the nursing home asked the court to order the plaintiff to submit the case to arbitration and cited the admission contract signed by the APS worker. The trial court determined that the arbitration clause was not valid because the APS worker did not have legal authority to sign the arbitration contract on Holliman’s behalf. The defendant appealed.

On appeal, the lower court’s decision was affirmed. The appellate court explained that the APS worker was a “custodian” rather than a “guardian,” and the two do not have the same level of authority over a ward’s affairs. Specifically, guardians have “the duty to exercise due care and to preserve, invest, apply, and account for the estate.” However, custodians are limited to making sure that the ward is “safe and cared for appropriately and that the ward’s assets are secure.” Importantly, a custodian is limited to “obtaining or viewing” financial information and retains no control of the assets themselves. Thus, because the APS worker was appointed as a custodian he lacked the authority to enter into an arbitration agreement on behalf of Holliman. As a result of the court’s decision, the plaintiff will be permitted to proceed towards a trial or settlement negotiations.

Do You Have a Loved One in an Arkansas Nursing Home?

If you have a loved one in an Arkansas nursing home, and you believe that they have experienced nursing home abuse or neglect, they may be entitled to monetary compensation from the negligent or abusive parties. After ensuring that your loved one is safe, you should immediately contact a dedicated personal injury attorney at the Pfeifer Law Firm, a preeminent Arkansas personal injury and wrongful death law firm. An attorney at the Pfeifer Law Firm can help you understand your case and what you may be entitled to receive. Call 501-374-4440 to set up a free consultation today. Calling is free, and we will not bill you for our time or efforts unless we are able to successfully help you obtain the compensation you deserve.

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Do Driverless Cars Decrease Car Accidents?, Arkansas Injury Lawyer Blog, July 13, 2016.