Brown Ex Rel. Brown v. Genesis Healthcare
228 W. Va. 646
| W. Va. | 2011Background
- Three nursing home admission cases with arbitration clauses were consolidated for review.
- Residents were ill or incapacitated; a guardian or spouse signed admissions containing arbitration clauses.
- After negligence or wrongful death, the nursing homes sought to compel arbitration and dismiss in favor of arbitration.
- Plaintiffs argued the WV Nursing Home Act §16-5C-15(c) bars waivers and arbitration, and/or that clauses are unconscionable.
- the circuit courts dismissed or certified questions; the WV Supreme Court addressed FAA preemption and unconscionability, and pre-injury arbitration in this context.
- the Court held §15(c) is preempted to extent it voids arbitration clauses in contracts evidencing interstate commerce, and arbitration can be constrained by unconscionability; pre-injury arbitration clauses may be unenforceable for negligence claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| FAA preemption of WV Nursing Home Act §15(c). | 15(c) bars waivers of action; FAA does not preempt. | FAA §2 preempts §15(c) for arbitration clauses. | §15(c) is preempted to the extent it voids arbitration clauses. |
| Unconscionability under WV law. | Arbitration agreements are procedurally and substantively unconscionable. | Arbitration clauses should be enforced if valid contract terms. | Two clauses found unconscionable and unenforceable; remand for Willett on remaining issues. |
| Pre-injury arbitration in nursing home admissions. | Arbitration cannot bar later negligence claims arising from pre-dispute contract. | FAA permits arbitration; pre-injury clauses should be enforced. | Court held pre-injury arbitration clauses cannot compel arbitration of post-negligence claims. |
| Authority of representative to waive rights. | guardian/representative lacked authority to waive rights of resident/estate. | representative had authority under guardianship to sign admissions. | Court reversed on Canoe Hollow, and remanded for Willett guidance; authority issue acknowledged. |
Key Cases Cited
- McGraw v. American Tobacco Co., 224 W.Va. 211 (2009) (de novo review standard for arbitration orders)
- State ex rel. Dunlap v. Berger, 211 W.Va. 549 (2002) (adhesion contracts and unconscionability in WV)
- Kyriazis v. University of West Virginia, 192 W.Va. 60 (1994) (public service exculpation factors; pre-injury context)
- Murphy v. North American River Runners, Inc., 186 W.Va. 310 (1991) (public policy in pre-injury exculpatory agreements)
- Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468 (1989) (FAA preemption framework; severability and mutual consent)
- Rent-A-Center, West, Inc. v. Jackson, 561 U.S. _ (2010) (FAA limits and arbitral enforceability; procedural arbitability)
- AT&T Mobility LLC v. Concepcion, 563 U.S. _ (2011) (FAA preemption and arbitration policy in consumer contracts)
- Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967) (severability and contract defenses under FAA §2)