Indiana Supreme Court Considering the Role of Arbitration in Nursing Home Lawsuits

Senior Justice Law Firm Arbitration Agreements in Nursing Homes

The Role of Arbitration in Nursing Homes

The Indiana Supreme Court is currently considering the role of arbitration in nursing home lawsuits; this decision could have a widespread impact on how elder abuse lawsuits are handled in the future. The case in question, Jane Doe I, as Legal Guardian of the Person and Estate, and Jane Doe II, an Incapacitated Adult v. Carmel Operator, LLC d/b/a Carmel Senior Living, Spectrum Retirement Communities, LLC, Michael Damon Sullivan, and Certiphi Screening, Inc., 19A-CT-2191, brings into light the contract used by the nursing home, which states that a resident must utilize arbitration for any and all claims involving the community.


The plaintiff-appellants are an elderly woman who transitioned into the Carmel Senior Living (CSL) facility in 2018 and her guardian. The resident, known as Jane Doe, filed a suit against CSL and its employee Michael Sullivan after she alleged that he raped her in August 2018. She later included Certiphi—the background check company used by CSL—among her claims, citing its failure to note that Sullivan was previously convicted for the rape and murder of a six-year-old girl. This failing to properly vet staff who later sexually abuse residents is not uncommon in nursing homes.

The case brings to light the challenges of contract law; Doe alleges that the agreement she signed upon moving into the facility is “unconscionable.” The agreement mandated that all grievances against the nursing home be handled via arbitration—thus preventing escalation into litigation. In addition, Jane Doe and her representative, Ashley Hadler, note three critical but one-sided provisions in the agreement: a waiver of judicial review, a separate waiver for punitive damages, and a requirement that information be kept confidential.

Agreement Provisions

The failure to allow litigation is itself problematic, but the agreement’s other provisions also pose problems. The waiver for punitive damages presents as a one-sided benefit; CSL would never bring a claim against Jane Doe that would result in punitive damages (e.g., a small claims action to secure unpaid rent would not generate punitive damages), but the waiver does prevent Jane Doe, by contrast, from pursuing such damages from CSL.

Similarly, CSL benefits significantly from the confidentiality stipulation of the agreement. While Jane Doe’s personal information would be protected regardless of the agreement due to other laws relating to sexual abuse victims, CSL typically would not be shielded in this case. However, due to the agreement requiring confidentiality, CSL benefits from an inability to track its behavior across multiple cases. Hiding the identity of CSL in legal proceedings conceals the pattern of abuse and prevents the discovery of critical information. Other CSL cases involving other abusive injuries such as bedsores or unexplained fractures cannot be adequately tracked given the confidentiality stipulation.

Arbitration Mandates

In recent years, a growing number of organizations have spoken out against nursing home arbitration agreements because they have not been demonstrated to operate with the best interests of residents in mind. AARP and the American Bar Association have most recently joined the voices criticizing this practice, and the Centers for Medicare and Medicaid Services have recently implemented a rule that prohibits the use of pre-dispute binding arbitration—such as when signing such an agreement is a requirement to enter and live in a facility.

Residents often find themselves confused about their legal rights, assuming that any nursing home will require signing a similar contract. However, the Indiana Trial Lawyers Association argued in an amicus brief that more should be done to protect vulnerable older individuals from signing away their right to access and benefit from a jury trial and the court system.

The Supreme Court of Indiana must now decide if it will rule in this dispute, and the decision reached in this case may provide precedent for similar cases in the future. CSL continues to oppose the policy argument presented by Doe and her representative, claiming that CSL is “not a long-term care facility, but an assisted living facility where each resident signs a month-to-month agreement.”

Signing Arbitration Agreements Before Entering a Facility

it is vital you and your family understand the admissions process and how to avoid arbitration agreements. It is common practice for nursing homes and assisted living facilities to include arbitration clauses inside of the admission paperwork upon entering a facility. Nursing homes and assisted living facilities use arbitration agreements to shield them from liability when they neglect or negligently kill residents. By signing an arbitration agreement, the consequence can be severe. Your claim will be kept out of court and instead, you may only be allowed to seek justice before a closed door arbitration panel. This is why it is imperative to know your rights, read admission paperwork closely and avoid signing any arbitration agreements before entering a facility

If you or a family member have questions about arbitration agreements or the legal process, please contact our nursing home abuse attorneys at Senior Justice Law Firm at 888-375-9998

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