Here’s an interesting hypothetical. Say your company requires that, in some relationships — e.g., new employee hires; incoming residents to a care facility — the parties sign a multi-page arbitration agreement.1As we’ve discussed before, arbitration agreements can definitely be a sensible measure. And say your company policy is to only keep the signature page in the files. Now assume the employee or resident later files a lawsuit against your company. You want to compel arbitration. You can’t say, for sure, what the terms of that agreement were (maybe the terms have changed over time), but you can say, for sure, that an agreement-to-arbitrate was signed in this case. So, is the case sent to arbitration? According to Florida’s Second District Court of Appeals, the answer is “no.” Last week, in Davis v. Hearthstone Senior Communities, Inc., the Second DCA reversed a trial court order compelling arbitration of the claim made by a deceased resident’s estate against a nursing home for alleged violations of the late-resident’s statutory rights (like those rights found in Fla. Stat. § 400.022). In the hearing to compel arbitration, the nursing home presented testimony confirming that the deceased resident signed the last page of the arbitration agreement, and that it was the nursing home’s practice to only retain the signature page. But that sole witness couldn’t confirm what version of the agreement the late-resident signed, and couldn’t otherwise verify the agreement’s terms. The trial court still granted the motion to compel arbitration, as there was no doubt the resident signed an arbitration agreement.2Clearly, though, the Judge was frustrated by the shortcomings in the nursing home’s evidentiary submissions: “I don’t know why defense counsel didn’t just bring somebody to say[,] ‘These were [the six pages] we were using that would have been attached [to page seven] on this particular date.” The Second DCA was unwilling, on this scant evidence, to force the parties to arbitrate:
Our record does not include any of the terms of the alleged arbitration agreement. It therefore fails to indicate whether the arbitration is binding or nonbinding, how many arbitrators are to be used, how the arbitrator will be selected, or what issues are to be included. Although these details may be included in the missing six pages and may become available as part of the record on remand, as of the time the trial court granted the motion to compel arbitration, the record was devoid of these details, and thus the nursing home failed to meet the first requirement to enforce the agreement. See id. Based on the evidence of record, there is no way the trial court could determine the intent of the parties at the time they entered the agreement. Accordingly, under Greenbrook, the trial court erred in granting the motion to compel. We therefore reverse the order compelling arbitration and remand for further proceedings consistent with this opinion.
Now, to be fair, all this might get cleaned-up on remand, if the nursing home makes a new evidentiary submission (which confirms which agreement was used in this case). And in many circumstances, the counterparty — for instance, an employee or resident — will have their copy of the agreement, so there won’t be confusion about what the parties agreed to. But obviously, it’s best to avoid this problem. The better practice, therefore, is for a company to keep complete copies of its fully-executed arbitration agreements.
References [ + ]
|1.||↑||As we’ve discussed before, arbitration agreements can definitely be a sensible measure.|
|2.||↑||Clearly, though, the Judge was frustrated by the shortcomings in the nursing home’s evidentiary submissions: “I don’t know why defense counsel didn’t just bring somebody to say[,] ‘These were [the six pages] we were using that would have been attached [to page seven] on this particular date.”|