Illinois Court Refuses to Enforce Nursing Home Arbitration Clause at the End of 120-Page Admission Form

Marvin Turner resided at the Aperion Care Oak Lawn (Aperion) from 2016 until his death in 2020.  He was hospitalized for an amputation in December 2019, and upon his return, he was given a 120-page admission form, which included an arbitration provision, a $250,000 limitation on damages, and an exclusion of statutory attorneys’ fees and punitive damages.  Having Mr. Turner sign the form in twenty different places was apparently necessary because Aperion could not find his original admissions paperwork.  The Aperion employee who presented the form to Mr. Turner testified that he understood the form, had no questions, and joked with her as he usually did.  

Mr. Turner’s niece, who had her uncle’s power of attorney testified that Mr. Marvin was confused at the time and could not sign his own name.  His signature, it appears, was secured through electronic means.

Three days after Mr. Turner was re-admitted, his niece filed suit alleging that negligent care had caused the injuries that led to Mr. Turner’s hospitalization and cost him a leg.  More hospitalizations followed, and in April, 2020, Mr. Turner returned to Aperion for hospice care.  He died days later.  His niece, now acting as administrator of his estate, sought to bring a lawsuit, alleging negligent care and treatment and seeking recovery under two Illinois statues.  Aperion moved to dismiss and compel arbitration on the Nursing Home Care Act claim.  The trial court denied the motion, finding the entire 120-page agreement to be both procedurally and substantively unconscionable.

In Turner v. Concord Nursing and Rehabilitation Center, LLC, an Illinois appellate court affirmed the trial court’s ruling, noting that severing the unconscionable parts of the agreement from the rest was not an available remedy in this case.  Under Illinois law a contract is procedurally unconscionable due to unequal bargaining power when “after considering all of the circumstances, a court determines disputed contract terms were ‘so difficult to find, read, or understand that the plaintiff cannot fairly be said to have been aware [he or she] was agreeing to [them].’” 

Here, Aperion’s witness testified that she spent an hour going through the forms with Mr. Turner and that he seemed cogent and indicated that he understood what he was signing.  The form itself specified that agreeing to arbitration was not a precondition to admission to the facility.  Nonetheless, the trial court found, and the appellate court affirmed the finding, that the conditions under which Mr. Turner agreed to arbitration were procedurally unconscionable.  Aperion could not satisfy the court that Mr. Turner was advised or understood that he did not have to sign, nor could it show that its employee made clear to Mr. Turner his right to consult an attorney before signing.

An agreement is substantively unconscionable when “the contract terms are so one-sided that they oppress or unfairly surprise an innocent party and create an overall imbalance in the obligations and rights imposed by the bargain and a significant cost-price disparity.”  Applying this test, the court found the agreement’s provision on attorneys’ fees and limitation on damages substantively unconscionable.  

One might think that the court could eliminate those substantively unconscionable provision sand yet otherwise retain the arbitration clause, as requiring both parties to arbitrate is not one-sided, oppressive, or surprising.  The court did not have to reach that issue, because it was not raised at trial.  Nonetheless, the court concluded,

Aperion, the drafting party, structured the rider to make a claim against it expensive to bring and bar a full recovery of attorney’s fees and costs. Under these circumstances, the modifications to render the agreement enforceable cannot be viewed as minor.

And so, the parties will proceed to litigation — or settle.  It is not entirely clear to me, given that the court has eliminated the unconscionable elements of the agreement and Ms. Turner does not seem to have raised any substantive objections to the arbitral forum, why a plaintiff would have a strong preference for litigation over arbitration in this context.  I would be most interested in hear in the comments if people have views on the relative advantages or disadvantages of arbitration in cases like this one.