Departing from the majority rule, a federal court in Georgia held that a daughter’s wrongful death claim against her deceased mother’s nursing home was not subject to the mother’s arbitration agreement because the daughter was bringing the claim in her individual capacity.

In Washburn v. Beverly Enterprises-Georgia, Inc., No. CV-106-051, 2006 WL 3404804 (S.D. Ga. Nov. 14, 2006), Genevieve Washburn brought a wrongful death action against her mother’s nursing home. The mother’s contract with the nursing home included an arbitration clause covering “any and all claims, disputes, and controversies…arising out of, or in connection with, or relating in any way” to her medical care.

In his report and recommendation, the magistrate judge determined that (1) Washburn presented enough evidence to raise a “colorable claim of incompetency”; (2) the Court, rather than an arbitrator, should determine Sandra’s mental competency; and (3) if Sandra was competent, all of her claims should be arbitrated. See Washburn v. Beverly Enterprises-Georgia, Inc., No. CV 106-51, 2006 WL 2728627 (S.D. Ga. Aug. 3, 2006). Opposing that recommendation, Washburn argued that the wrongful death claim was not subject to arbitration because she, a non-signatory, was bringing the claim in her individual capacity and not as an administrator of her mother’s estate.

The Court disagreed with the magistrate’s recommendation and ruled in favor of Washburn. A statutory cause of action for wrongful death “is derivative to the decedent’s right of action,” meaning the daughter was in no better position to recover than her mother would have been in, had she survived. Nevertheless, the Court found that Washburn’s wrongful death claim was a separate and distinct claim, partly because it had its own statute of limitations. Accordingly, the claim belonged not to the mother but to her surviving daughter, and as such, it was outside the scope of the arbitration agreement because the daughter could not be an “heir” to her own claim.

Moreover, according to the Court, the wrongful death claim would not be subject to the arbitration agreement even if the mother had intended for wrongful death claims to fall within its scope because she lacked authority to bind Washburn in her capacity as a wrongful death beneficiary.

The Court’s analysis conflicts with the majority rule, which gives a more liberal interpretation to the scope of arbitration agreements in nursing home contracts. See, e.g., Wilkerson ex rel. Estate of Wilerson v. Nelson, 395 F.Supp.2d 281, 288-89 (M.D.N.C. 2005) (applying decedent’s arbitration agreement to surviving family members’ wrongful death claims because they were derivative claims and not independent, “third-party actions,” such as lack of consortium). Under the doctrine of equitable estoppel, many courts find that non-signatory survivors are required to arbitrate since wrongful death claims generally rely on the underlying agreement for recovery or incorporate the agreement by reference. See, e.g., Peltz ex rel. Estate of Peltz v. Sears, Roebuck & Co., 367 F.Supp.2d 711, 718-19 (E.D. Pa. 2005).

Author: NAF from NAF
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