Illinois Nursing Home’s Motion to Compel Arbitration Denied by IL Trial Court – Marilee Curto v. Illini Manors, Inc. and Pekin Manors

The Illinois Appellate Court, Third District has affirmed a ruling by an Illinois circuit court judge denying the defendant nursing home’s motion to dismiss and to compel arbitration in an Illinois nursing home abuse lawsuit. That ruling opened the way for the plaintiff to pursue the lawsuit against the nursing home in the courtroom and with a jury to weigh the facts of the case, rather than a closed arbitration setting.

In August 2007, the plaintiff, Marilee Curto, signed an agreement with the defendant Pekin Manors, a residential nursing home, to admit and care for her husband, Charles Curto. The contract named Charles as the resident and Marilee as the “guardian/responsible party”. Marilee signed the form as the “legal representative”. Charles did not sign the document.

In a separate agreement, the nursing home asked Marilee, and she agreed to sign an arbitration agreement providing that “any and all disputes arising hereunder shall be submitted to binding arbitration and not to a court for determination.” In the arbitration agreement, the parties waived their rights to a jury trial.

In August 2009, Marilee filed a nursing home abuse complaint against Pekin Manors pursuant to the Illinois Nursing Home Care Act for Charles’ injuries that he suffered while he was a resident. The complaint also sought damages by Charles’ estate under the Illinois Wrongful Death Act and the Illinois Survival Act.

In response, Pekin Manors filed a motion to dismiss the Illinois nursing home abuse lawsuit and compel arbitration arguing that the estate was bound by the arbitration agreement that Marilee had signed when Charles was admitted in 2007. The trial court denied Pekin Manors’ motion finding that “the spouse is not agent for the other spouse for purposes of an agreement to arbitrate.” The trial court further found that there was no indication that Marilee had the authority to bind Charles to the mandatory arbitration terms of the contract.

Pekin Manors took an appeal to the Illinois Appellate Court arguing that Marilee was the decedent’s agent and therefore the arbitration agreement should have been enforced. Pekin Manors also argued that the evidence permitted a finding of agency based on actual authority and apparent authority.

The appellate court rejected Pekin Manors’ argument saying that Marilee’s signature did not confer, express or imply authority on her.

There was nothing in the record that showed that Charles had given Marilee express authority to make legal decisions on his behalf. That could have been in a form of a power of attorney, but none was executed by Charles granting Marilee that power. In addition, the appellate court said that Pekin Manors did not show any implied authority granted to Marilee.

The appeals court said that the issue before it was one of first impression in Illinois, but other jurisdictions have addressed the same issue of authority of a spouse to bind a nursing home resident to an arbitration agreement. “The majority of jurisdictions have . . . concluded that a spouse or other family member did not have actual authority to sign an arbitration agreement on the resident’s behalf,” the appeal court said. In conclusion, in the absence of evidence that the resident gave the spouse authority to sign the agreement to arbitrate on his behalf, the resident is not bound by its terms. The court went on to state that by this decision, it had joined the majority of states reviewing this type of issue.
Marilee Curto v. Illini Manors, Inc. and Pekin Manors, No. 3-10-0260.

Kreisman Law Offices has been handling Illinois nursing home and elder abuse cases for more than 35 years in Chicago, Cook County and surrounding areas including Midlothian, New Lenox, Glenview, and Niles, Illinois. All consultations are free.