Patient Dies During Arbitration Agreement Rescission Period

What happens when a nursing home patient signs an arbitration agreement with a 30-day rescission, or cooling-off, period and then dies before the end of that period?  Is the agreement enforceable because it wasn’t rescinded?  Or is it unenforceable because expiration of the 30-day period was a condition precedent to enforceability?

That was the question facing California’s Court of Appeal when Marlene LaBerge’s family sued the nursing home following her Oct. 5 death.  The home moved to compel arbitration based on the agreement Marlene signed the previous Sept. 25.  The trial court denied the motion, citing a 2009 decision squarely holding that such agreements are not effective until the 30-day period ends, Rodriguez v. Super. Ct., 176 Cal. App. 4th 1461.

On appeal, the nursing home argued that Rodriguez was bad law.  The appellate court agreed and reversed the denial of the motion to compel arbitration.  In reaching its conclusion, the court relied on the plain meaning of the words of the statute requiring the 30-day rescission period: “Once signed, such a contract governsuntil or unless rescinded by written notice within 30 days … [italics added by court].”  The court noted that the Legislature could have said that an agreement doesn’t become enforceable until the 30-day period lapses, but it chose not to.

A related question apparently never came up: what if within the 30-day period the personal representative of Marlene’s estate had undertaken to exercise the right of rescission on her behalf?

 

The case is Baker v. Italian Maple Holdings, D069797 (Cal. Ct. of Apps., 4th App. Dist., Div. 1, July 31, 2017).

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