- Enforceability of an Arbitration Clause After Death
- September 10, 2013 | Author: Kevin C. Susman
- Law Firm: Weltman, Weinberg & Reis Co., L.P.A. - Cleveland Office
Arbitration clauses were first used in business contracts between sophisticated business persons and are now being used in transactions between large corporations and ordinary consumers, as most healthcare facilities use them.1 A big question left somewhat unanswered is the enforceability of this provision if a claim is made against a facility after the resident is deceased. Depending on the type of claim involved, the arbitration provision may or may not be enforceable as to an estate.
For example, in Ohio, public policy favoring arbitration is found in R.C. Chapter 2711.2 Under R.C. 2711.01(A), "a written arbitration clause shall be valid, irrevocable, and enforceable, except upon grounds that exist at law or in equity for the revocation of any contract."3 This language follows Section 2 of the Federal Arbitration Act, which provides that "a contract evidencing a transaction to settle by arbitration of a controversy thereafter arising out of such contract shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."4 Under R.C. 2711.02(B), if there is an arbitration clause and suit is filed in court, the court has the right to and may stay a trial pending arbitration.5
Many times when a resident enters a healthcare facility he or she is unable to sign the Admission Agreement or the separate Arbitration Agreement. In those cases, a third party typically signs as a power of attorney, attorney-in-fact, spouse or authorized representative. The question becomes whether when the resident passes away, if a family member or other person with a claim brings legal action, the Arbitration Agreement is still valid.
The answer hinges on what type of claim is being sought, whether it is a Survival Action or a Wrongful Death Claim. A Survival Action is brought to recover for a decedent's own injuries before his or her death.6 A Wrongful Death Claim belongs to the decedent's beneficiaries. The trier of fact may award damages for the injury and loss resulting to the beneficiaries by reason of the wrongful death.7 Survival Actions and Wrongful Death actions are not the same, even though they both relate to a facility's alleged negligence. Thus, the fact that a representative of an estate fully litigates a survival action against a facility does not prevent the representative from also bringing a wrongful death action against the same facility.8 Wrongful-death claims are independent actions belonging to a decedent's next of kin, and therefore an administrator's actions in pursuing damages for injuries to the decedent do not release a facility from liability for wrongful-death claims.9
A survival action brought to recover for a decedent's own injuries before his or her death is independent from a wrongful-death action seeking damages for the injuries that the decedent's beneficiaries suffer as a result of the death, even though the same nominal party prosecutes both actions.10 Although there is no common-law action for wrongful death, R.C. 2125.01 establishes such a claim in Ohio.11 Many other states have specific Wrongful Death Acts or Statutes; such as, Florida, Illinois, Indiana, Kentucky, Michigan and Pennsylvania.12 These state statutes or acts state that an action may be brought, under procedures prescribed by the individual statutes or acts, to recover damages for the death of an individual caused by the wrongful act, neglect, unlawful violence or negligence of another.13
Since a survival action is brought to recover for injuries prior to the decedent's death, any arbitration clause which was signed at the time of admission, or prior to the alleged injuries, is still in effect. Any person seeking to make a claim against the facility would have to arbitrate.
However, since a wrongful death action is for a claim injury or loss resulting by a wrongful death and the claim belongs to the beneficiaries, the arbitration clause is not valid and the action can be filed in the Courts; unless, the beneficiaries were originally part of the arbitration agreement or signed one on their own accord. The basic fact is a decedent cannot bind his or her beneficiaries to arbitrate their wrongful death claims.
The answer to whether a Healthcare Arbitration Clause signed by a third party survives the resident's death lies plainly in two longstanding general principals of law: 1) only signatories to an arbitration agreement are bound by its terms; and 2) a survival action brought to recover for a decedent's own injuries before his or her death is independent from a wrongful death action seeking damages for the injuries that the decedent's beneficiaries suffer as a result of the death, even though the same nominal party prosecutes both actions.14 Therefore, if the claim is a survival action, the arbitration clause is still in effect after the resident's death. If the claim is for a wrongful death action, the beneficiaries are not bound by the arbitration clause.
1 Manley v. Personacare of Ohio, 2007 Ohio 343
2 R.C. §2711.01(A) - A provision in any written contract, except as provided in division (B) of this section, to settle by arbitration a controversy that subsequently arises out of the contract, or out of the refusal to perform the whole or any part of the contract, or any agreement in writing between two or more persons to submit to arbitration any controversy existing between them at the time of the agreement to submit, or arising after the agreement to submit, from a relationship then existing between them or that they simultaneously create, shall be valid, irrevocable, and enforceable, except upon grounds that exist at law or in equity for the revocation of any contract.
3 See footnote #2
4 Westerfield v. Three Rivers Nursing & Rehab Ctr., LLC, 2013 Ohio 512
5 R.C. §2711.02(B) - If any action is brought upon any issue referable to arbitration under an agreement in writing for arbitration, the court in which the action is pending, upon being satisfied that the issue involved in the action can be referred to arbitration under an agreement in writing for arbitration, shall on application of one of the parties stay the trial of the action until the arbitration of the issue has been had in accordance with the agreement, provided the applicant for the stay is not in default in proceeding with arbitration.
6 Peters, ADMR v. Columbus Steel Castings Co.; 2007, Supreme Court of Ohio, 115 Ohio St. 3d. 134, 2007 Ohio 4787
7 See footnote #3
8 See footnote #3
9 See footnote #3
10 See footnote #3
11 R.C. §2125.01 - When the death of a person is caused by wrongful act, neglect, or default which would have entitled the party injured to maintain an action and recover damages if death had not ensued, the person who would have been liable if death had not ensued, or the administrator or executor of the estate of such person, as such administrator or executor, shall be liable to an action for damages, notwithstanding the death of the person injured and although the death was caused under circumstances which make it aggravated murder, murder, or manslaughter. When the action is against such administrator or executor, the damages recovered shall be a valid claim against the estate of such deceased person. No action for the wrongful death of a person may be maintained against the owner or lessee of the real property upon which the death occurred if the cause of the death was the violent unprovoked act of a party other than the owner, lessee, or a person under the control of the owner or lessee, unless the acts or omissions of the owner, lessee, or person under the control of the owner or lessee constitute gross negligence.
When death is caused by a wrongful act, neglect, or default in another state or foreign country, for which a right to maintain an action and recover damages is given by a statute of such other state or foreign country, such right of action may be enforced in this state. Every such action shall be commenced within the time prescribed for the commencement of such actions by the statute of such other state or foreign country.
The same remedy shall apply to any such cause of action now existing and to any such action commenced before January 1, 1932, or attempted to be commenced in proper time and now appearing on the files of any court within this state, and no prior law of this state shall prevent the maintenance of such cause of action.
12 See state statutes; Florida- Fla Stat. §768.16, Illinois- 740 ILCS 180/0.01, Indiana-Burns Ind. Code Ann §34-23-1-1, Kentucky-Ky. Const. §241, Michigan-MCLS §600.2922, Pennsylvania-42 PA. Cons.\ Stat. Ann §8301.
13 See footnote #12
14 See footnote #3