N.D. of Mississippi Rules Nursing Home Resident is Third-Party Beneficiary of Agreement to Arbitrate

Earlier this month, an interesting arbitration case was decided in the Northern District of Mississippi. In Cook v. GGNSC Ripley, LLC, No. 3:10CV018 (N.D. Miss., Apr. 14, 2011), the court held a nursing home resident was bound to an arbitration agreement as a third-party beneficiary. The American Health Lawyers Association reported,

A federal trial court in Mississippi ruled April 14 that a negligence action against a nursing home by a deceased resident’s estate was arbitrable pursuant to an agreement that her daughter signed as part of the admissions process.

Although the daughter did not have a power of attorney and the arbitration agreement was not a healthcare decision under state law, the U.S. District Court for the Northern District of Mississippi found, the resident was a third-party beneficiary to the agreement under Mississippi contract law.

According to the court, the arbitration agreement became part of the admissions agreement under its express terms. The resident did not sign the admissions agreement, but she was a third-party beneficiary of the agreement given that her care was its essential purpose.

“As such, [the resident] is bound by the terms of the contract, including the arbitration agreement,” the court said.

You may read the entire American Health Lawyers Association article here.

What are your thoughts on the court’s ruling?

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