Florida Court Compels Arbitration Against Nursing Home Despite Flawed Agreement

A South Florida court of appeal compelled arbitration against a nursing home in a negligence lawsuit after upholding a severability clause despite an unenforceable cap on non-economic damages and prohibition on punitive damages. Obolensky v. Chatsworth at Wellington Green, LLC, No. 4D16-3143 (Fla. 4th DCA Feb. 28, 2018). Relying upon two recent Florida Supreme Court decisions, the plaintiff argued that the trial court should not have enforced the agreement because the limitation of liability provisions violate public policy and because they go to the essence of the parties’ agreement. Gessa v. Manor Care of Fla., Inc., 86 So. 3d 484 (Fla. 2011); Shotts v. OP Winter Haven, Inc., 86 So. 3d 456 (Fla. 2011).

The court of appeal distinguished Gassa and Shotts. The court determined that Shotts is distinguishable because that arbitration agreement lacked a severability clause. About Gassa, the court of appeal determined that the Florida Supreme Court’s decision not to enforce the severability clause was dependent upon the agreement’s resort to the then-American Health Lawyers Association (AHLA) rules which altered the plaintiff’s burden of proof, besides prohibiting punitive damages. The court of appeal ruled that the “essence” of the arbitration provision in this case would survive severance because there would be no need to create substitute procedures. Instead, Florida statutes concerning arbitration would supply the procedure. § 682.08(2), Fla. Stat. The court of appeal decided that the “true essence” of the Admission and Alternative Dispute Resolution Agreements in front of it was arbitration and the financial heart was the accompanying reduced costs and time-saving benefits.