OTLA Trial Lawyer Fall 2021

43 Trial Lawyer • Fall 2021 ing a fewmore hours on it pro bono , DHS went in and told that facility it can’t use that admission agreement anymore. It triggered a review that changed the legal landscape for every resident in the facil- ity. Could we have defeated this agree- ment if granddaughter had signed it and grandma was later injured? I think the answer is likely, Yes. But that is a bunch of hard work with an uncertain outcome for something that should never have been put in front of the family to begin with. Arbitration agreements tilt the playing field toward the facilities and against the resident in basically every case. These kind of arbitration agree- ments are subject to the same rules as any other contract and can be defeated on that basis. Never approved by DHS After the situation above, I am now reviewing admission agreements against the agreement that was presented to DHS at the time of initial licensure. If there have been substantial changes to the detriment of the resident and the facility did not seek DHS approval of the new form, I argue it is an illegal, unap- proved agreement. Lack of authority Quite frequently facilities allow the resident to sign the agreement themselves or a family member who does not have authority to bind the resident. 1 Even if there is a power of attorney, review the date such a POA was signed — if the person was incapacitated when it was signed and the facility should have known that, it cannot rely on such a POA. Also look at the circumstances of the admission — if the resident signed, were they being released from the hospi- tal? On serious medications? Still in a significant medical scenario? Waiver Almost uniformly before filing a mo- tion to compel arbitration, licensed care facilities find something they just desper- ately need the judge to rule on. They also almost immediately send out discovery requests. Waiver is the intentional relin- quishment of a known right, manifested by clear and unequivocal action by the waiving party. When the care facility begins actively litigating this case, it knows it had an arbitration clause in its admission agreement. Yet it chose to participate in litigation — by requesting a protective order, filing motions and demanding discovery. All of these are actions submitting to the jurisdiction of the court, and the facility did that before attempting to institute arbitration. That is a clear, decisive, unequivocal waiver of its arbitration clause. Oregon regulations & public policy The validity of the agreement to arbi- trate is the first analysis the court must make before considering compelling ar- bitration under the FAA or Oregon law. A contract is not valid if it is contrary to law or against public policy. Such law and public policy can be found in legislative enactments, administrative regulations, even in the constitution. DHS is the state agency in Oregon with authority to promulgate rules, regulations and standards for licensed care facilities, in- cluding defendants. DHS’s regulations bar contracts between licensed care fa- cilities and their residents that waive the residents’ rights. See OAR 411-054- 0027(o). Because this OAR bars all such contracts waiving resident rights gener- ally, rather than specifically referring only to arbitration clauses, the OAR does not run afoul of the FAA or ORS 36.620(1). Because of that the OAR is not pre- empted by the FAA and is enforceable. Unconscionable Procedural unconscionability focuses on the circumstances or conditions of contract formation. Hallmarks include unequal bargaining power, no opportu- nity for negotiation, ambiguous terms and fine print. Substantive unconsciona- bility focuses on the contract’s substan- tive terms and if they contravene the public interest or public policy. Oregon courts consider whether a term or contract is unconscionable in the light of its setting, purpose and effect. That means you get to argue the context of the admission. If this is a memory care facility admission due to dementia; why the facility is asking for such a clause in See Defeating Arbitration Clauses p 44 Arbitration agreements tilt the playing field toward the facilities and against the resident in basically every case. These kind of arbitration agreements are subject to the same rules as any other contract and can be defeated on that basis.