July 10, 2013

Is wrongful death lawsuit subject to arbitration?

By Sarah Cole

Over at health law prof blog, Katharine Van Tassel reports about a cert petition filed at the Supreme Court. I hope the Court takes the case! See http://lawprofessors.typepad.com/healthlawprof_blog/ (July 7th post)

“In early 2013, a nursing home operator filed a writ of certiorari asking the U.S. Supreme Court to determine whether state courts can refuse to enforce an arbitration agreement signed by the now deceased resident in a wrongful death action brought by the resident’s survivors under the Federal Arbitration Act (FAA).[1] In its petition, SSC Odin Operating Co. asserted that there is a conflict among the highest state courts over whether wrongful death plaintiffs are bound by arbitration agreements signed by their decedents.

In the case involving Odin Operating Company, the Illinois Supreme Court refused to enforce an arbitration agreement between a nursing home and a deceased resident that allegedly required arbitration of wrongful death claims asserted by the resident’s heirs, personal representative and estate administrator.[2] The Illinois Court explained that the wrongful death claim was not an “asset” of the estate that could have been encumbered by the decedent, the derivative nature of the claim did not require arbitration and basic contract principles barred the enforcement of the arbitration agreement against the administrator.

The Kentucky Supreme Court [3] also held that wrongful death plaintiffs cannot be compelled to arbitrate claims. According to the Kentucky Court, under Kentucky law, wrongful death claims are not derivative, but accrue separately to the beneficiaries and are meant to compensate them for their loss. Courts in four other states, Missouri, Utah, Ohio, and Washington, have ruled similarly.[4]

In contrast, the Texas Supreme Court held that the FAA preempts a state rule of law treating arbitration agreements signed by decedents differently than other types of contracts signed by decedents.[5] The Court held that contracts signed by decedents generally are enforceable against their estates. To hold otherwise would create an anomaly as the estate would be bound by a contract in which the decedent completely disposed of the claim, but would then not be bound by an agreement that changed the forum in which the claim would be resolved.

The Florida Supreme Court recently used similar reasoning to declare an arbitration agreement enforceable against wrongful death plaintiffs.[6] The Court found that a survivors’ right to recover damages under the state’s wrongful death act is predicated on the decedent’s right to recover in a personal injury action. As a result, survivors cannot recover in actions where the decedent previously won damages or settled an action based on the same injuries that caused his or her death, or signed a document releasing the tortfeasor from liability.”

Last 5 posts by Sarah Cole

| Permalink

Comments

Post a comment

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>