Court Says If you Signed It Then You are Presumed to Have Read It!
Spring Lake, LLC v. Tony Holloway, Florida Second District Court of Appeal, February 1, 2013.
Spring Lake operates a rehabilitation center. This case arose from a wrongful death action involving Jessie V. Holloway, who was a 92 year old resident at the rehabilitation center. She was in the Spring Lake Rehabilitation Center from August 20, 2010 to January 4, 2011. When she entered the facility she signed Spring Lake’s standard admission agreement and a separate arbitration agreement.
According to the trial court Ms. Holloway had a 4th grade education, could not spell well and had to sound out words while reading. She also had memory problems. There was no evidence Spring Lake’s management and staff used improper methods to obtain Ms. Holloway’s signature on any of the admission and financial contracts including the arbitration agreement.
The trial court ruled that Ms. Holloway was not incompetent at the time she entered into the contracts, but did hold that the contracts “were so complex that she could not possibly have understood what she was signing.” The trial judge then ruled that the arbitration clause was unenforceable.
ON APPEAL: The Second District Court of Appeal reversed the trial Court and upheld the arbitration agreement.
REASONING: The appeals court upheld the arbitration agreement because under well established Florida law: “There is a presumption that the parties signing legal documents are competent, that they mean what they say, and that they are bound by their covenants” – - this means if you sign a contract you are presumed to have read and understood it.
SOME TAKE AWAYS:
(1) There is a presumption that if a patient signs a legal document they have to read it.
(2) The only way to overcome this presumption is to show the party was prevented from reading the document before they signed it.
(3) This Court did recognize that “As a practical matter, a significant percentage of the people who enter nursing homes and rehabilitation centers have mental or physical limitations that make it difficult for them to understand the agreements signed at admittance.”
(4) The Court’s opinion seemed to suggest that legislative changes to this area of the law may be appropriate, but declined to overturn the longstanding rule of contract law that holds that if you sign an agreement you are presumed to have read it.
(5) Health care managers and nursing home administrators should be aware of the fact that many admissions contracts are complex and not understandable for even able-bodied adults.
Contracts signed by patients and health care providers can be complex. Contract review by an experienced health care attorney may be of benefit to you or your organization.
If you have received a complaint against your license from AHCA or DOH it is important to seek experienced legal advice before moving forward. I represent licensed health care professionals and providers throughout Florida. More information can be found at www.floridahealthcareattorney.com or contact me directly at 850-877-7776. The initial consultation is free an there is no obligation.