Nursing home arbitration agreements relying on the National Arbitration Forum code are unenforceable because the NAF can no longer accept arbitration cases, the state Supreme Court has ruled in a case attorneys said could have a widespread effect on consumer-oriented form contracts.
A deeply divided court on Oct. 27 held that neither a severability clause nor the Federal Arbitration Act were enough to salvage an agreement that said arbitration should be conducted “exclusively” in accordance with the NAF code. Because the NAF no longer handles arbitration disputes following a consent decree it entered into with the Minnesota Attorney General’s Office in 2009, the court held the agreement unenforceable, affirming the Superior Court and remanding the matter to the trial court.
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