Iowa family pursues new legal strategy in wrongful-death case

By: - July 15, 2021 12:02 pm

The family of James Asmus surround him in the intensive care unit of an Iowa hospital in the days leading up to his death. Standing from left to right are his wife, Vicki, son Jeff, son Joel, and daughter Morgan. (Photo courtesy of Morgan Dutler.)

If a nursing home company can sue residents to collect payment, residents should be able to sue the same company for wrongful death even if they’ve signed an arbitration agreement, an Iowa family is claiming.

The family of the late James Asmus is suing the Southern Hills Specialty Care nursing home in Osceola and its parent corporation, Care Initiatives. But like many other Iowa families that have tried to sue a nursing home, they have run into legal obstacles.

When Asmus was admitted to the home in 2018, one of the documents his wife signed stipulated that any disputes with the home would be settled through arbitration, not through litigation. State records indicate that within hours of being admitted, Asmus sustained a broken hip. He then developed pressure sores and within a few weeks, his testicles had turned black and green and were emitting a foul odor.

He was eventually taken by ambulance to a local hospital, where the staff diagnosed gangrene. Asmus died, and state inspectors later reported that several nurse aides had been “begging” to have him sent to the hospital after he first showed signs of gangrene.

Care Initiatives has contested the Asmus family’s lawsuit, arguing the matter must go before arbitrators. But their attorney, Roxanne Conlin, has argued that because Care Initiatives routinely takes residents and their families to court when there’s a billing dispute, the company’s arbitration agreements are “one-sided and unconscionable,” and thus legally unenforceable.

In recent arguments to the court, Conlin pointed out that Care Initiatives has told the court its arbitration agreements are broad in scope and intended to address “any controversy, dispute, claim or disagreement arising out of or related to the care and services” provided by the company.

James Asmus. (Photo courtesy of the Asmus family.)

“Time after time,” Conlin argued in court filings, “Care Initiatives enforces its arbitration agreement only when it is defending its own conduct, but ignores those same arbitration agreements when collecting its alleged unpaid debts. Surely, it violates all sense of justice, equality under the law, and unconscionable legal standards to allow defendant Care Initiatives to selectively decide when, and when not, its arbitration agreement is binding … Care Initiatives has created a de facto one-sided arbitration agreement, which it uses solely to shield itself from Iowans’  constitutionally protected rights to a jury trial, yet conveniently ignores when turning to the same courts it has barred its residents from seeking help from.”

In response, Care Initiatives argued its lawsuits against residents and their families are irrelevant and inadmissible in the Asmus case, and that even if the company did breach arbitration agreements in the past, that would not void other agreements such as the one with Asmus.

Judge finds arbitration agreement ‘unconscionable’

Last month, District Court Judge Samantha Gronewald ruled in the Asmus family’s favor, while stating that the only real question before her was whether the arbitration agreement was substantively unfair.

Noting that an agreement can be considered unconscionable if “no person in his or her senses” would agree to it and “no honest and fair person” would offer it, Gronewald said the Care Initiatives agreement was both unconscionable and unenforceable. By ruling in that fashion, Gronewald found there was no need to address the specific arguments put forth by Conlin about Care Initiatives suing its own residents.

A trial is now scheduled for September 2023, although Care Initiatives has asked Gronewald to reconsider her decision on the enforceability of the agreement. If that request is granted, it could reopen the issue of whether the company’s lawsuits against residents are a factor in deciding whether residents can sue.

Currently, Care Initiatives, which is Iowa’s largest nursing home chain, is being sued by nine Iowa families, each alleging negligence or wrongful death. In most of those cases, the company has successfully had the court proceedings halted, at least in part, by citing arbitration agreements such as the one Asmus signed.

According to plaintiffs’ lawyers, arbitration agreements are often structured to favor the companies that draft them, but have been signed by close to 70% of all nursing home residents nationally.

A 2019 report by the American Association for Justice says consumers generally have a better chance of being hit by lightning than winning any monetary award through the arbitration process.

A spokeswoman for Care Initiatives has declined to say why the company uses arbitration agreements or how consumers benefit from them. However, the nursing home industry has long claimed the arbitration process benefits everyone involved.

A 2015 study commissioned by the industry’s main lobbyist, the American Health Care Association, and Aon Global Risk Consulting found claims involving arbitration were generally finalized three months earlier than courtroom litigation, with the nursing home’s expenses reduced by about 7%.

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Clark Kauffman
Clark Kauffman

Deputy Editor Clark Kauffman has worked during the past 30 years as both an investigative reporter and editorial writer at two of Iowa’s largest newspapers, the Des Moines Register and the Quad-City Times. He has won numerous state and national awards for reporting and editorial writing. His 2004 series on prosecutorial misconduct in Iowa was named a finalist for the Pulitzer Prize for Investigative Reporting. From October 2018 through November 2019, Kauffman was an assistant ombudsman for the Iowa Office of Ombudsman, an agency that investigates citizens’ complaints of wrongdoing within state and local government agencies.