Missouri
Supreme Court issues decision in Dale Lawrence v. Beverly Manor:

 

The Missouri Supreme Court recently affirmed an opinion that is important in two areas.  First, it affirms the trial court’s judgment that an arbitration agreement signed by a resident’s POA does not bind the plaintiffs in a later wrongful death action brought for the resident’s death.  Secondly, it implies that a wrongful death action would not be barred even where the decedent did not have the right to recover against the defendants.  The facts of

Lawrence
have been summarized in a previous post (See “Dale Lawrence v. Beverly Manor”, posted on 12/23/2008 by Dan Moriarty).  In brief, the plaintiff’s mother was a resident at a long term care facility.  The resident’s power of attorney, her daughter, signed admission papers, including an agreement to arbitrate any claims “arising out of, or in connection with, or relating in any way to the Admission Agreement or any service or health care provided by [Beverly Manor].”  2009 WL 77897, *1.  The language included that it would be binding on “all persons whose claim is derived from or on behalf of [the resident].” 

Id.
   The plaintiff, decedent’s son, claimed his mother died due to negligence on the facility’s part when its employees dropped her.

Id.
[1] 


 

Arbitration Agreement did not bar family’s wrongful death claim:


 

Beverly Manor filed a motion in the circuit court to compel arbitration.  The circuit court overruled the motion, holding that the arbitration agreement did not apply. 

Id.
at *1.  The Supreme Court discussed an earlier, factually similar appellate decision which held that a decedent’s daughter was not barred from bringing a wrongful death claim against a nursing home, even though the decedent’s granddaughter had signed an arbitration agreement on decedent’s behalf. 

Id.
at *2 [citing Finney v. Nat’l. Healthcare Corp., 193 S.W.3d 393, 395 (

Mo.
App. 2006)].  The Missouri Supreme Court held that, in a wrongful death action, the parties and the measure of damages were both different from the underlying claim.  *3.  As such, a claim for wrongful death is not derivative from any claims the decedent might have had while alive, and the parties to the wrongful death suit were not bound by the arbitration agreement. 

Id.
at *3.  The Court also noted that the daughter who signed the agreement on behalf of decedent was not signing in her individual capacity.  Nor did she sign in her capacity as a representative of the class of potential wrongful death beneficiaries.  Thus, her act of signing the agreement for the resident did not bind the daughter or the potential class of wrongful death beneficiaries. 

Id.
at *3. 


 

The concurring and dissenting opinions are of interest also for the strong language in the same that such arbitration clauses, even as applied to the facility resident, should not be enforced as, in the justices’ opinion, they are “procedurally and substantively unconscionable.” 

Id.
at *4-7 (Judge Norton, concurring op).

 

Interestingly, the Supreme Court distinguished its own recent en banc opinion, Burns v. Whittington, 219 S.W.3d 224 (Mo. banc 2007), which implied that a wrongful death action is indeed derivative of the underlying personal injury action (Beverly Manor had argued that the Burns decision was supportive of its argument that the wrongful death action was derivative of the decedent’s claims and as such subject to the arbitration agreement).  2009 WL 77897 at * 3 The Missouri Supreme Court in this venue decision held the pre-tort reform venue statutes (which arguably were more favorable to plaintiffs) applied to an action which was amended from a personal injury claim to one for wrongful death.  This was so even though the wrongful death claim was filed after August 2005, because the wrongful death claim was derivative of the decedent’s original claim (and as such, the wrongful death claim was not a new cause of action).  According to the

Lawrence
majority opinion, "[a]lthough the language of Burns may seem to create ambiguity as to whether wrongful death should be considered a derivative cause of action, the Burns holding is limited to the issue of venue."  One of the conclusions that might be implied from such language is that

Missouri
’s current Supreme Court appears to be a friendlier venue for plaintiffs. 


 

Other appellate courts in

Missouri
had recently held that similar arbitration provisions in the long term care context, but this is the first time that the Missouri Supreme Court addressed the specific issue in the context of wrongful death claims.  For example, in Sennett v. National Healthcare Corp., — S.W.3d–, 2008 WL 4334615 (Mo. App. S.D.), the court held that a nursing home patient’s son could bring a wrongful death action and was not bound by a nursing home contract’s arbitration provision.  The court’s opinion was based on the premise that the son was not a party to the contract and had only signed in his capacity as the resident’s legal representative.  He did not sign in his individual capacity, and was not the patient’s legal guardian.  Thus, there was no valid, enforceable contract between the son (in his individual capacity) and the facility. 

Id.
at *7-8.


 

Effect of decision on future Wrongful Death Claims:


 

An equally concerning issue is that the Missouri Supreme Court’s opinion in Lawrence strongly suggests the state’s high court would agree with the recent opinion from the Western District Court of Appeals as to whether a decedent’s pre-death settlement/release prohibits a subsequent wrongful death claim.   Although this issue appears to be settled in many other states, in

Missouri
until recently, it appears there was a split between the appellate courts. 
In Smith v. Brown & Williamson Tobacco Corp., — S.W.3d —-, 2008 WL 5211857 (2008), Missouri’s Western District Court of Appeals held that a prior adjudication of a decedent’s earlier personal injury action did not serve as a bar to a later wrongful death claim by family members.  The court observed that whether a right of action under R.S. Mo. § 537.080 is a transmitted right, a survival right or a new right is an issue that may have popped up multiple times in the past, but that there was never an easy answer to the question. 

Id.
(citing numerous opinions, including the Lawrence v. Beverly Manor appellate opinion at WD 67920, 3/18/2008 slip op.) 
The Smith court held that the family of the deceased smoker was not barred from pursuing a wrongful death claim, even though the smoker had previously brought a federal court personal injury claim against the tobacco company before she died.  The federal claims were adjudicated against the decedent on the merits (a summary judgment was granted for the tobacco company).  In reaching its decision, the Western District court implicitly questioned the validity of existing cases that hold families of decedents who settled before death are prohibited from bringing a wrongful death action.  Under this decision, it would appear that if a client were to settle with a resident for his/her personal injury claims, and that person subsequently dies, the family would still be able to bring a wrongful death claim, regardless of any release executed and payment received by the decedent. 


 

Previously, Missouri’s Eastern District Court of Appeals held in Campbell v. Tenet Healthsystem, 224 S.W.3d 632 (2007) that a patient’s estate was barred from bringing a wrongful death action where a settlement of the patient’s personal injury action was previously reached with a hospital.  The Eastern District Court of Appeals affirmed the trial judge’s decision dismissing the family’s wrongful death claim.  In discussing the effect of
Missouri’s Wrongful Death statute [R.S. Mo. § 537.080], the

Campbell
court observed that:  “[h]ere, we find no ambiguity.  Section 537.080.1 is clear on its face.  Only when death results from an act, which if death had not ensued, would have entitled a person to recover damages, may a plaintiff recover for wrongful death.”  224 S.W.3d at 631-632.  The E.D. Ct. of Appeals went on to hold that “the gist and foundation of the right in all cases is the wrongful act, and that for such wrongful act but one recovery should be had, and that if the deceased had received satisfaction in his lifetime, either by settlement and adjustment or by adjudication in the courts no further right of action existed.”  224 S.W.3d at 632 [citing an earlier 8th Circuit decision to the same effect, Stern v. Internal Medicine Consultants, II, L.LC., 452 F.3d 1015, 1016-19 (8th Cir. 2006) (written release and settlement by son who died of cancer barred mother’s later wrongful death suit as the mother “could not satisfy the requirement under Missouri law that she plead and prove that her son could have maintained a cause of action for personal injuries had he survived.”]


 

 The

Lawrence Court
, in holding that the arbitration agreement signed by the decedent’s representative did not apply to the subsequent wrongful death claim, explained that the wrongful death claim is entirely separate from the decedent’s personal injury claim.  In other words, wrongful death claims are not derivative of the decedent’s personal injury claim.   This opinion thus would imply, contrary to the language in the Stern and Campbell decisions, that the settlement and release of liability for the decedent’s claim may not bar a later wrongful death action.


 

In another interesting aspect of the opinion, the Court noted in footnote 4 that the plaintiff family members would not be recovering for the pre-death pain and suffering damages on the decedent’s behalf.   It may be the Court was anticipating future arguments that these specific damages were excluded from a wrongful death claim if the decedent did not have the right to recover her own damages.  As such, it appears the Court has arguably left open a possible argument in the future in the settlement context, where a wrongful death claim is brought after the decedent settled that any damages specific to the decedent cannot be recovered and also potentially the named plaintiff if a loss of consortium claim was part of the settlement.

 

Authors:  J. Hennelly, K. Moske, D. Ponder, Hazelwood & Weber LLC


 

Submitted by:  J. Hennelly




[1] The Missouri Supreme Court on the same day handed down an opinion in Ward v. NHC, 2009 WL 77981 (Jan. 13, 2009), sustaining the trial court’s order overruling a nursing home facility’s motion to enforce arbitration under similar facts.  The only relevant factual distinction was that the decedent had also signed the arbitration clause.

Id.
at *1.  (Affirming for the same reasons set forth in

Lawrence
). 

Author: N/A from Missouri Supreme Court

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