Illinois Nursing Home Arbitration Clause Subject of Recent Illinois Appellate Court Decision

An Illinois nursing home abuse lawsuit was recently the subject of a review by the Illinois Appellate Court; Peterson v. Residential Alternatives of Illinois, Inc., No. 3-09-0743. The court reviewed whether the Illinois nursing home had the right to demand the decedent’s estate arbitrate its two-count complaint claiming a wrongful death count and a survival action count under the Illinois Nursing Home Care Act.

The trial court upheld the defendant’s right to arbitrate and denied plaintiff’s request for a jury trial. This arbitration clause issue was recently ruled on by the Illinois Supreme Court in Carter v. SSC Odin Operating Co., LLC, No. 106511 (4/15/10), where the Court upheld the nursing home’s right to arbitrate in Illinois nursing home abuse cases.

The main issue in both Peterson and Carter revolves around the signed arbitration agreement. However, while in Carter the arbitration language was included in the nursing home care contract, in Peterson the arbitration agreement was a separate document. It seems that this seemingly small difference has in fact resulted in a very different legal outcome in Peterson.

The Appellate Court held that even though the two documents were signed on the same date that there was no evidence that they should be taken as one unified document. The language used in the arbitration agreement was very vague and never specifically referred to the nursing home care contract, nor did the nursing home care contract ever refer to the arbitration agreement. Specifically, the arbitration agreement stated, “Notwithstanding the parties intent to submit any controversy or claim arising out of or relating to this agreement or any other document signed or initialed in connection with this agreement to arbitration.”
While the court noted that prior case law has supported the connection between two separate documents signed at the same time, the law requires that “an enforceable contract must be premised on language that is definite and certain as to all essential terms.” Academy Chicago Publishers v. Cheever, 144 Ill. 2d1224, 30 (1991). The court found that the language included in the arbitration agreement did not satisfy this requirement.

Therefore, even though the Illinois Supreme Court has ruled that Illinois nursing homes are able to enforce arbitration agreements for any violations arising out of the Illinois Nursing Home Care Act, Peterson demonstrates that in order for this to be the case the arbitration agreement needs to clearly reference that it is meant to govern any disputes arising out of Illinois nursing home abuse.

The Nursing Home Care Act prohibits the resolution of negligence and abuse disputes by any means other than a jury trial. Therefore, the court is not motivated to overturn this provision without a strong reason. It was unable to find that reason in Peterson due to the absence of specific language in the arbitration agreement connecting it to the nursing home care contract, and thereby the Illinois Nursing Home Care Act. Therefore, the arbitration agreement did not create a separate and independent contractual obligation to arbitrate all controversy arising from the nursing-home care. The case was remanded to the trial court for further handling.

Kreisman Law Offices has been handling Illinois nursing home abuse cases for over 30 years, serving those areas in and around Cook County, including Arlington Heights, Naperville, Blue Island, and Downers Grove.