NM Judge Bans Arbitration in Nursing Home Wrongful Death
New Mexico’s Supreme court denied a nursing home its bid to pursue arbitration in a wrongful death suit on Monday, April 6, 2020. The high court justices unanimously upheld a trial court’s previous decision to deny Rehabilitation Center of Albuquerque, LLC’s bid for arbitration. This ruling was based on the decision that the arbitration agreement was “facially” one-sided and therefore deemed unconscionable by the court.
Jeff Pittman, a lawyer for the plaintiff, stated that both he and his client are pleased with the ruling. Pitman called it a victory for all current and future nursing home residents and consumers in New Mexico.
What Makes An Arbitration Agreement Unconscionable?
Following the New Mexico supreme court’s ruling, and the facility’s unsuccessful attempt to argue against that decision, the justices defined the two-step analysis that was applied in determining that Rehabiliation Center, LLC’s agreement was unconscionable:
- Step One – Analyze and challenge the agreement against the legal statute.
- Step Two – If an agreement is found to be significantly one-sided, then the author, or drafting party, must be allowed to present evidence that establishes why the agreement is fair, in spite of its apparent one-sided appearance.
Addressing the court, Justice C. Shannon Bacon clarified, “”The evidence need not show that the agreement is not one-sided, but rather must justify that the agreement’s exceptions are fair and reasonable.”
The decision by the justices was due to lack of evidence by Kathy Correa, The Rehabilitation Center, LLC’s administrator, to present sufficient evidence supporting why the arbitration agreement’s apparent one-sided appearance was fair.
Wrongful Death Case Analysis And Ruling
In 2012, widower, Keith Peavy filed a wrongful death lawsuit against the facility on behalf of his wife, Beverly Peavy, citing nursing home negligence as the cause of her 2010 death while a resident there. The reason for Monday’s court appearance was to rule on whether the facility’s mandatory arbitration agreement, which Peavy was required to sign prior to admitting his wife, was significantly unconscionable.
In the Rehabilitation Center, LLC agreement, the nursing home requires all potential claims against the facility, which would most commonly be for acts of negligence, to be resolved in arbitration. However, the ability for the nursing home to make claims against the patient, such as for billing or collection purposes, were not exempted from litigation in this agreement.
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