The United States Supreme Court refused to review a decision by the Oklahoma Supreme Court denying a nursing home’s request to arbitrate a wrongful death claim with a resident’s family members. Thus, the Oklahoma Supreme Court’s decision will stand: family members of a deceased nursing home resident will not be required to arbitrate because they did not sign the arbitration agreement in their personal capacities and their claim is not wholly derivative of the former resident’s claim. Most nursing home arbitration agreements have language stating that the agreement binds a resident’s spouse and heirs, whether or not any claims are brought on behalf of the resident, and that the agreement covers wrongful death claims. Whether or not a court will enforce a provision that heirs arbitrate claims has been the subject of much litigation.
In Boler v. Security Health Care, LLC, the Oklahoma Supreme Court examined cases from other jurisdictions that considered whether a decedent’s heirs are bound by an arbitration agreement signed by or on behalf of the decedent. The Oklahoma high court noted that in states that consider wrongful death actions to be independent and separate causes of action, courts are more likely to hold that beneficiaries are not bound by the arbitration agreement. In contrast, the Oklahoma Supreme Court noted, beneficiaries are more likely held to be bound by a decedent’s agreement to arbitrate in states where wrongful death actions are wholly derivative of the decedent’s claims. Noting that Oklahoma’s wrongful death act created a new cause of action for the losses of the deceased’s spouse and next of kin and that recovery does not go to the estate of the deceased, the Oklahoma Supreme Court explained that wrongful death claims in Oklahoma are not wholly derivative claims. Thus, the court held that a decedent cannot bind beneficiaries to arbitration.
Colorado has taken a different approach from Oklahoma even though Colorado’s wrongful death act also creates a separate cause of action. Colorado’s Supreme Court did not analyze whether a wrongful death claim is wholly derivative or not in deciding whether a decedent can bind his or her heirs to arbitration. Instead, Colorado’s high court in Allen v. Pacheco turned to contract law. Thus, the court examined whether the parties intended to bind a spouse to arbitrate a wrongful death claim. Examining the plain language of the arbitration agreement, the court concluded that the agreement required a spouse to arbitrate her wrongful death claim.
While there is no way to guarantee that a court will enforce an arbitration agreement, this discussion illuminates the importance of knowing the nuances of arbitration case law in order to draft the strongest arbitration agreement possible. It is also advisable to review arbitration agreements periodically to determine whether they should be modified due to developments in the law, particularly evolving case law.