The U.S. Supreme Court has declined to hear a dispute from Oklahoma over whether an arbitration agreement between a nursing home and its resident is binding on the resident’s next of kin who claim that the resident died prematurely due to a nursing home’s negligence.
In September of 2014, the Oklahoma Supreme Court held that family members of a deceased nursing home resident cannot be compelled to arbitrate claims against the facility because they did not personally sign the arbitration agreement. According to Oklahoma Court, their claim was not wholly derivative of the decedent’s claim. Consequently, the Court held the arbitration agreement cannot be enforced against those who did not consent to arbitrate their own claims.
This issue has been increasingly litigated across the nation. The results vary by state and primarily depend on each state’s interpretation of its wrongful death statute. In states where a wrongful death action is considered to be derivative, arbitration agreements are binding on family members. In states that hold that a wrongful death action is wholly separate and independent, families cannot be compelled to arbitrate.
A federal district court in Nebraska that has addressed the issue has held that the arbitration agreement executed by a decedent is enforceable against the next of kin. Although the wrongful death recovery in Nebraska is designed to benefit the decedent’s next of kin exclusively, as opposed to the decedent’s estate, the action is considered derivative in nature and the court has held that the arbitration agreement must be enforced against the next of kin to the same extent that it would have been enforced against the decedent, had he lived. A plaintiff may recover damages for the decedent’s loss of society, comfort and companionship in a wrongful death action. With a wrongful death action may be joined a separate action on behalf of the estate for the decedent’s pain and suffering, medical costs and funeral and burial expenses. The next of kin, however, cannot recover damages for their own mental suffering or bereavement.
Similarly, in South Dakota, nursing home arbitration agreements extend to wrongful death claims. A wrongful death action is derivative in nature in South Dakota and can be brought only when the decedent would have been entitled to maintain an action for personal injury if he had survived.
The U.S. Supreme Court’s refusal to hear the Oklahoma appeal does not signal it approves of the Oklahoma Supreme Court’s reasoning. Neither does it affect Nebraska and South Dakota law.
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