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A Hypothetical Situation:

An individual lives in an assisted living / nursing facility and dies on January 4. The monthly fee has already been paid, as it is due by that day. The individual's family wishes to get a refund, pro-rated, for the remaining three weeks of January.

The individual's family signed a contract at the beginning of the individual's stay there that is called "Refund Policy" and states that no refund will be given unless 30 days notice is given to the facility when that individual is "leaving." Other words used in the same sentence included

The facility also now has a separate form that speaks specifically to what would happen in the event of the death of an individual staying in the facility. This form is called "No Refund Policy in Case of Death." It states there is no refund in the event of death, no matter what day of the month / no matter how much is paid for but will obviously not be used by that individual due to that individual's death. This form was never signed nor was the information it contains ever discussed with the individual or family.

Question:

Can the family get a pro-rated amount of money back for the time that the individual did not stay in the facility?

Note: I understand that in contract situations, the contract governs. That said, is there a way to use the second form and its specific mention of "death" to show that the first form did not sufficiently explain its terms and/or was ambiguous at the time it was signed?

If not, it sounds like "one party relied on a statement of the other about a material fact that the second party knew or should have known was mistaken by the first party."

And the existence of the second form would show that the second party knew or should have known that a form simply referencing "leaving" was insufficient for these purposes.

Thoughts?

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  • What am I missing? There's absolutely nothing in anything you've said that would suggest that the family might be entitled to a refund. The contract says to no refund will be given unless 30 days notice is given when the individual is leaving. That certainly wasn't done in this case, so the contract says no refunds. The contract would only be ambiguous in case where 30 days notice was given but there it is not clear whether what the individual did constitutes "leaving". That is not this case since there's no 30 days.
    – David Schwartz
    Commented Feb 5, 2018 at 19:57
  • Well, the part where the facility gets 3/4 of a monthly fee for one week of occupancy would be a key part of that.
    – A.fm.
    Commented Feb 5, 2018 at 19:59
  • Even if notice was given right at the time of death (arguably implied unless the contract specified only specific forms of notice), the notice couldn't be effective until a month later (per the contract). So any dispute would have to be over February. There's no 30 days notice for January, hence no refunds per the contract.
    – David Schwartz
    Commented Feb 5, 2018 at 20:01
  • The ambiguousness relates to the fact that leaving somewhere actually implies moving one's self to a different location. Nobody says "leaving" when they mean death unless, on occasion, they are trying to speak about a sensitive topic around a 5 year old .
    – A.fm.
    Commented Feb 5, 2018 at 20:01
  • 1
    How is it insufficient? It says no refund unless 30 days notice before leaving. Here there was no 30 days notice before leaving. So no refunds. The contract states only one way to get a refund, and that way clearly wasn't accomplished here. It doesn't say you can get a refund any other way and is clear that this is the only way.
    – David Schwartz
    Commented Feb 5, 2018 at 20:03

2 Answers 2

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Under the terms of the contract you (or whoever) signed, there is no basis for demanding a refund. It explicitly says there will be no refund in the case of a client "leaving", and says nothing that would imply that a refund is owed in case of death. Of course, without seeing the actual wording of the contract, we can only guess, but the burden would be on you to show that there is a refund provision that is applicable in case of death. It is reasonable to presume that this issue has come up before and others have attempted to get a refund, which resulted in a more explicit denial that a refund is owed in case of death.

In case there is an actual ambiguity in the wording, an argument might be made that the ambiguity should be resolved in favor of the client. If the matter hinges on the word "leave", for example "if the client leaves without giving 30 days prior notice", you would have to argue that "leave" means something like "walks out under their own power". But looking at the ordinary meaning of words, if a person is removed (dead or incapacitated), they have left – "leave" doesn't mean "go under your own power". It is immaterial that we ordinarily circumlocute when talking about bodies.

There is a unilateral mistake here, on the part of the client, which is that they are entitled to a refund. Without the full contract, it is hard to see how they might believe that they were entitled to a refund. The facility could have said "in case a client is removed dead or incapacitated, they shall be entitled to a refund for the unused portion of that month". But they didn't, so it is not reasonable to think that that was what they meant.

The reason for the amplified refund statement is to expressly deny that a refund is owed, for public relations reasons -- to avoid or at least reduce such claims in the future.

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  • You assume a refund must be explicitly stated. It doesn't. It is absolutely not immaterial that we ordinarily use much different terminology when speaking about death/bodies. That actually is the point. Plain meaning of words. Reasonable person standard. "We had to go to the funeral because Grandpa left," said nobody, ever. It is totally reasonable to expect a refund for services not provided.
    – A.fm.
    Commented Feb 5, 2018 at 22:24
  • @A.fm. It is not reasonable to expect a refund for services not provided when the contract says "no refunds unless" and you don't meet the requirements after the "unless". When the contract sets out one and only one way to get a refund, makes it clear that's the only method, and you don't meet the terms of that method, it is not reasonable to expect a refund.
    – David Schwartz
    Commented Feb 6, 2018 at 11:04
  • It's totally reasonable. You don't get to keep people's money when you do not provide them a service.
    – A.fm.
    Commented Feb 6, 2018 at 11:15
  • @A.fm. The business has costs associated with being ready to provide a service whether it provides that service or not. They can't fill a room overnight. They can't hire and fire staff overnight. There's no issue of unjust enrichment here -- that's why the contract has a "no refunds except" clause.
    – David Schwartz
    Commented Feb 6, 2018 at 17:55
  • Simply stating something does not make it true, @DavidSchwartz. The customer does not indemnify the business because the business has "expenses." Unjust enrichment occurs when a party unfairly receives a benefit by chance, mistake, or another's misfortune and the enriched party has not paid or worked to receive the benefit. The unjustly enriched party is to return such benefit.
    – A.fm.
    Commented Feb 6, 2018 at 18:30
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First of all, the initial "Refund Policy" cannot be a contract, as a contract requires mutual benefit. It can be part of a larger document that constitutes a contract, but it cannot be a contract in and of itself. So the question of just what the overarching contract is is a central question.

I don't see much ambiguity in the term "leaving". A plain reading would include death. And if death were not included, then that would mean that the policy would not be applicable, and whatever refund would be due based on the rest of the contract would be controlling.

If the company later used a more specific contract, this might be evidence that was confusion, but it would be weak, especially is used towards showing that the company knew that there was confusion prior to it instituting the modified contract.

Moreover, in this case, it appears that the new contract is presenting less favorable terms for the case of death, meaning that you are saying that since the old contract gave condition A for leaving, and you want condition B for the case of death, the new contract giving condition C for the case of death somehow supports you, which doesn't make much sense.

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5
  • Re: cannot be a contract, I tend to agree. Re: ambiguity, wholly disagree. A plain reading of "when the resident leaves" would never be interpreted by a reasonable person to also mean death. Re: 2nd form being evidence of confusion, I agree that it isn't a rock solid argument. And I don't say that condition C in the new form supports that there should be a refund, I'm saying it supports the argument that the original one they were using was inadequate to properly convey that there are no refunds even in the case of death. Hardly think they woke up one day and just felt like making a new form
    – A.fm.
    Commented Feb 5, 2018 at 22:28
  • I'd also suggest that, as business owners who run a facility such as this, they would be in a far superior position to have known or ought to have known precisely what they meant as opposed to the resident and family who may or may not have ever dealt with a situation like this, where as the business deals with this situation however often someone dies while in their care.
    – A.fm.
    Commented Feb 5, 2018 at 22:30
  • @A.fm. If leaving does not include death, then there's definitely no refund. The contract clearly states that a refund is only possible under two conditions: 1) The resident leaves. 2) The resident provides 30 days notice. Your own admission is that these requirements were not met. So the "no refunds unless" clause controls.
    – David Schwartz
    Commented Feb 10, 2018 at 23:06
  • The plain language of the contract, which is the standard by which a court would proceed in consideration of a case like this, means that if you leave without giving 30 days notice, you do not get a refund. If you don’t leave, the policy never applies. Therefore, the policy, i.e. the “no refund” provision, does not apply in circumstances in which you die. Because you haven’t left. The existence of the second, separate form sheet which speaks directly to the situation in which a resident of the facility dies, argues in favor of this.
    – A.fm.
    Commented Feb 10, 2018 at 23:23
  • By the way, answers in this Stack usually get voted down for putting forth statements without substantiation, so if you, Acccumulation, or @user6726, would like to link to any case or article or anything, really, other than opinion, I'd certainly be appreciative!
    – A.fm.
    Commented Feb 10, 2018 at 23:25

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