Can a nursing home arbitration agreement compel wrongful death beneficiaries to arbitrate?

FutureCare Northpoint, LLC v. Peeler, 229 Md. App. 108; 143 A.3d 191(2016)

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Contract Law, Arbitration agreement: In a wrongful death action brought by the daughter of a woman who died while residing in a nursing facility, the circuit court properly denied the nursing facility’s motion to compel arbitration, which was based on an arbitration agreement entered into by the decedent, because a decedent’s arbitration agreement ordinarily does not bind the decedent’s family members to arbitrate a claim under the Maryland wrongful death statute.

“While certainly based on the death of another person, [a wrongful death action] is not brought in a derivative or representative capacity to recover for a loss or injury suffered by that person but, rather, is brought by a spouse, parent, or child, or a secondary beneficiary who was wholly dependent on the decedent, to recover damages for his or her own loss accruing from the decedent’s death.” Eagan v. Calhoun, 347 Md. 72, 82, 698 A.2d 1097 (1997).

The wrongful death action is, both in form and substance, a controversy between Ms. Peeler and FutureCare; it is not a continuation of any controversy between Mrs. Butz and FutureCare. Furthermore, Mrs. Butz never owned the right to recover damages under CJP § 3-904 for her own wrongful death, and hence she had no power to bind the person who has that right — Peeler — to an agreement to arbitrate.

In sum, Melitch stands for the proposition that, under some circumstances, the pre-death release of a personal injury claim effectively prevents statutory beneficiaries from establishing an element of a wrongful death claim arising from the same injury.10

An injured party’s agreement to arbitrate a personal in-jury claim, by contrast, does not negate the ability “to maintain an action and recover damages.” In particular, an arbitration agreement does not destroy the viability of the underlying claim “from the outset[,]” (id.), nor does it “affirmatively and purposefully . . . extinguish the underlying claim” as does a pre-death release.

Therefore, we hold that under Maryland law a decedent ordinarily cannot bind his or her wrongful death beneficiaries to arbitrate their wrongful death claims.

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