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Nursing home entitled to arbitrate wrongful death suit

wrongful-deathA wrongful death suit against a nursing home fell within the scope of an arbitration agreement signed by a family member under a power of attorney shortly after the decedent’s admission to the facility, a U.S. District Court judge has determined.

The personal representative of the decedent’s estate argued that claims of wrongful death beneficiaries are independent of claims of the estate and, therefore, not subject to an arbitration agreement executed on behalf of the decedent.

But Judge Douglas P. Woodlock concluded that, under Massachusetts law, the claims of wrongful death beneficiaries are “derivative” of the decedent’s claims.

“I am persuaded that the Supreme Judicial Court of Massachusetts, if presented directly with the question, would conclude that a wrongful death claim is a derivative claim as to which the decedent’s representatives and beneficiaries would be bound by an agreement to arbitrate,” Woodlock wrote.

The 28-page decision is GGNSC Chestnut Hill LLC, et al. v. Schrader.

Common sense and plain meaning?

Newton Center attorney Krzysztof G. Sobczak argued the arbitration issue in U.S. District Court in Massachusetts on behalf of the estate. Sobczak has since withdrawn from the case and the estate is now represented by David J. Hoey of North Reading, who also originally filed the underlying personal injury action in Middlesex Superior Court.

In an email, Hoey wrote that the estate is filing a motion to amend, alter or set-aside Woodlock’s order. Hoey said the SJC has already made clear that wrongful death claims are not derivative of a decedent’s claims, citing the SJC’s 1995 decision in Thibert v. Milka, as well as a 1972 case, Gaudette v. Webb.

But Boston attorney Joseph M. Desmond, who represented the nursing home, maintained that Woodlock’s decision was consistent with the language of Massachusetts’ wrongful death statute, which limits beneficiary recovery to what the decedent could have recovered for personal injuries had death not resulted.

“Applying common sense and the English language, they are claims derived from the decedent’s claim. There’s not an independent claim,” Desmond said.

Desmond successfully argued in favor of the general validity of arbitration agreements executed in the context of nursing home admissions in the 2007 SJC case Miller v. Cotter.

“It’s functionally the same arbitration agreement 11 years later,” Desmond said. “We have legal authority that, in the absence of fraud, duress or unconscionability, you have a binding, enforceable agreement.”

Quincy personal injury attorney Kathryn J. Wickenheiser took issue with Woodlock’s ruling that wrongful death claims are derivative. She said Woodlock should have followed the reasoning of U.S. District Court Judge Rya W. Zobel in her 2011 decision Chung v. StudentCity.com. In Chung, Zobel held that statutory wrongful death beneficiaries are not bound by a decedent’s decision to sign an arbitration agreement.

“The Chung case hit the nail on the head,” Wickenheiser said. “It’s impossible to have the meeting of the minds that’s needed to enforce a contract. A signature beneficiary to an arbitration clause cannot possibly predict the future. The [decision to take] legal action should be left to those still alive.”

Charlestown personal injury attorney Susan M. Bourque questioned the application of traditional contract principles in determining the enforceability of arbitration clauses in the nursing home context. According to Bourque, such an approach fails to take into account the climate in which families typically place a loved one in a nursing home.

“People assume they have to sign all the forms in order to get their loved one in,” she said. “They’re usually not told they don’t have to sign the arbitration agreement. They’re signing not knowing the implications of what they’re signing, not knowing that they’re waiving a pretty important right.”

Motion to compel

According to Woodlock’s findings of fact, on Feb. 4, 2013, Emma Schrader was transferred by ambulance and admitted to Golden Living Center Heathwood, a nursing facility operated by the plaintiff. Although defendant Jackalyn Schrader did not sign admission documents for her mother at that time, within several weeks the defendant signed a number of admission documents under a power of attorney, including an arbitration agreement.

According to the defendant’s state court complaint, her mother died on Dec. 3, 2013, as a result of a severe sepsis infection caused by pressure sores. The defendant was subsequently appointed personal representative of her mother’s estate.

In 2016, the defendant as personal representative sued in Middlesex Superior Court, asserting claims of negligence and wrongful death against the nursing home. The plaintiff responded by filing an action in U.S. District Court to compel arbitration pursuant to the Federal Arbitration Act.

Personal injury attorney Susan M. Bourque questioned the application of traditional contract principles in determining the enforceability of arbitration clauses in the nursing home context. “They’re signing not knowing the implications of what they’re signing, not knowing that they’re waiving a pretty important right.”

Derivative claim

In deciding to grant the plaintiff’s motion to compel arbitration, Woodlock first turned to the question of whether the plaintiff’s arbitration agreement was enforceable against the defendant as a matter of general contract law. The judge found no evidence that the defendant did not assent to the terms of the arbitration agreement she signed and therefore concluded a valid contractual agreement to arbitrate existed.

The judge further found no basis for invalidating the arbitration agreement on the ground of unconscionability. With respect to procedural unconscionability, the judge concluded that the arbitration agreement given to the defendant “clearly indicated” in bold-face capital letters that the agreement was not mandatory for continued care and warned the defendant she should read the entire agreement.

The judge likewise found no substantive unconscionability.

“The agreement here is bilateral because both parties are bound to arbitration,” Woodlock observed. “Jackalyn Schrader had the right to rescind the arbitration agreement within 30 days of signing.”

The defendant argued that her wrongful death claim could not be arbitrated because the wrongful death beneficiaries were not parties to the arbitration agreement.

Woodlock explained that the question of whether non-signatory beneficiaries of an estate are bound by an arbitration agreement entered into by the decedent turned on whether wrongful death claims in Massachusetts are considered “derivative” or “independent.” He found only one other case directly on point.

In Chung, Judge Zobel held that an arbitration agreement signed by a student who died on a tour to Mexico did not bar his parents’ wrongful death claims against the travel company that organized the trip.

But Woodlock “respectfully disagreed” with the holding in Chung, reading the law in Massachusetts as moving toward interpreting wrongful death claims as derivative of the decedent’s cause of action. He found support for that conclusion in the operation of the state’s wrongful death statute.

“Massachusetts law only allows one to bring a wrongful death claim as the executor or administrator of the decedent’s estate, and there is no separate cause of action for surviving family members,” the judge wrote. “In other words, unlike some states in which individuals may bring their own wrongful death claims, Massachusetts does not ‘segregate the right to recover for wrongful death by claimant.’”

Woodlock found further support for compelling the defendant to arbitrate her claims in the SJC’s Miller decision. In that case, the court addressed whether to compel arbitration in a wrongful death suit brought by the son of a man who died in a nursing home.

“While not directly discussing the question of whether the son’s wrongful death claim was subject to the [nursing home’s] arbitration agreement, the court granted the motion to compel arbitration,” Woodlock wrote. “This evidences the SJC’s effective, albeit less than fully articulated acceptance of the proposition that, under Massachusetts law, arbitration with respect to wrongful death actions is not disallowed as a matter of law.”

Woodlock observed that courts in other jurisdictions are split on the issue.

“But I am of the view that the weight of persuasive authority treats wrongful death claims as derivative,” he wrote.

Moreover, Woodlock found giving effect to the plaintiff’s arbitration agreement was consistent with the U.S. Supreme Court’s recognition that the FAA is designed to place arbitration agreements on  an “equal footing” with all other contracts.

“A compelling argument can be made that treating arbitration agreements as without force in the wrongful death context has the indirect but practical effect of singling arbitration agreements out for special treatment,” the judge wrote. “A reading of Massachusetts law that fails to accommodate this firm and current jurisprudence developed by the Supreme Court of the United States runs the risk of being in contravention of the Federal Arbitration Act.”

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