It is almost hard to imagine a decision which is good for the party compelling arbitration but also may hamper enforcement of arbitration in future cases. We appear to have one in the 4th DCA’s September 13 decision in Alterra Healthcare Corp. v. Bryant.

This case involves an arbitration clause in an assisted living facility (ALF) admission agreement. Although inclusion of an arbitration term in ALF admission agreements is not uncommon, this may be the first Florida appellate decision of its kind. Readers interested in the enforcement of arbitration in long term care settings should pay careful attention to the reasoning and holdings of this case.

In this case, the agreement apparently echoes the agreement found in Lacey v. Health Care and Romano v. Health Care in terms of capping non-economic damages, prohibiting punitive damages, and eliminating the right to appeal.

The 4th DCA severed these provisions in light of a severability clause (which was not present in Lacey or Romano) because they violated public policy and otherwise enforced arbitration. The enforcement itself is likely viewed as a positive outcome by the appealing ALF however it is clear that the severance and other rulings by the court are not.

1. The 4th DCA held that the ALF portion of Chapter 400 is a remedial statute. While not a groundbreaking determination, this is the first time such a finding has been made.

2. The complete waiver of a right to appeal was deemed unenforceable as against public policy. It’s interesting as this issue existed and was briefed in Lacey and Romano but the 4th DCA declined to squarely address before. Also, contrast this decision to the 11th Circuit’s handling of this issue in Rollins v. Black where the term limiting the right of appeal was deemed to be more benign (discussed here).

3. The 4th DCA held that it could decide the enforceability of the remedial limitations because the 2nd DCA’s Rollins v. Lighthouse Bay decision was distinguishable because, in Rollins, the 2nd DCA interpreted the limitations to be "outside" of the arbitration agreement whereas herein the 4th DCA interpreted the limitations clauses to be part of the arbitration agreement. The 4th DCA also made reference to the fact that Rollins involved a challenge based upon unconscionability (evidently trying to distinguish the 4th DCA’s public policy analysis in this case).

4. The 4th DCA distinguished Buckeye Check Cashing on the grounds that the plaintiff was challenging the arbitration agreement, and not the entire agreement, thus the court had jurisdiction.

5. The 4th DCA also distinguished the 2nd DCA’s decision in Bland v. Healthcare on the grounds that Bland court purportedly was "permissive" about having the arbitrator decide limitation terms. Moreover, the 4th DCA again notes that the 2nd DCA was not deciding issues of public policy but rather unconscionability.

6. The 4th DCA did appear to specifically approve the authority of the power of attorney based upon the wording of the POA.

7. The 4th DCA specifically distinguished the argument based upon Unicare Health Facilities v. Mort, 553 So.2d 159 (Fla.1989). This was previously briefed to the 4th DCA in Romano and Lacey but never addressed by the court (see also Perils of Enforcing Favored Arbitration, p 400, fn 144). The court held that Unicare involved a waiver of statutory rights in an offer of judgment which occurred after a dispute arose and felt it was distinguishable.

Significance?

The 4th DCA has been quite vocal on arbitration enforcement in the long term care setting (either skilled nursing or ALF) and its disfavor for any terms which might limit statutory recovery. The 2nd DCA and the federal courts, meanwhile, have shown a distinct trend of allowing the interpretation of remedial limitations to be left to the arbitrator. There has been a brewing conflicts between these two lines of reasoning and this case appears to be the 4th DCA’s opportunity to try and harmonize its position with the 2nd DCA’s rulings.

We are pulling the briefs and will re-address in more detail in the future. If there is a rehearing or further development, we will advise.