Background
Terri Loomis suffered strokes in 2013 and 2016 and was admitted to a long-term care facility in Middleburg Heights in 2018. In March 2021, after returning from a hospitalization, Terri was presented with a Facility Admission Agreement and a separate Arbitration Agreement. A facility staff member filled in Terri’s printed name and the date of execution on both documents. Terri allegedly signed the agreements, but no witness was present for the signing of the arbitration agreement despite a blank witness-signature line on the form.
In January 2024, Terri fell at the facility, suffering fractures, and passed away a week later. Her husband, Jeffrey Loomis, filed suit asserting wrongful death and other claims. The defendants moved to compel arbitration. The trial court denied the motion, finding the arbitration agreement lacked an authentic signature and was both procedurally and substantively unconscionable.
The Court’s Holding
The Eighth District affirmed the trial court’s denial of arbitration. The court found the arbitration agreement procedurally unconscionable because of the significant disparity in bargaining power between an elderly, stroke-impaired patient and the nursing facility. The agreement was presented on a take-it-or-leave-it basis during a stressful readmission. Substantive unconscionability was found in the one-sided terms that effectively required the resident to waive her right to a jury trial while providing no meaningful benefit in return.
In a notable concurrence in judgment only, Judge Gallagher argued that the court should have addressed the threshold issue of contractual capacity before reaching unconscionability. The concurrence criticized the common judicial practice of conflating lack of capacity with unconscionability analysis, urging courts to first determine whether a valid contract exists before examining whether it should be revoked.
Key Takeaways
- Nursing home arbitration agreements presented during stressful hospital-to-facility transfers may be procedurally unconscionable due to the disparity in bargaining power.
- An absent witness signature, while not per se invalidating, contributes to evidentiary problems with proving contract formation.
- The concurrence raises an important doctrinal point: courts should analyze contractual capacity as a threshold matter before addressing unconscionability, rather than conflating the two analyses.
Why It Matters
This decision, paired with the same-day Murman opinion, represents a significant development in Ohio nursing home arbitration law. The concurrence is particularly noteworthy for Ohio practitioners because it articulates a clear analytical framework that separates capacity from unconscionability. Defense counsel should be prepared to address capacity as a distinct threshold issue when challenging arbitration agreements signed by elderly or cognitively impaired residents. Plaintiffs’ counsel now have a roadmap to argue capacity as a complete defense to contract formation.