Illinois Appellate Court Affirms Denial of Arbitration in Nursing Home Lawsuit

The Illinois Appellate Court for the First District ruled that Nancy Clanton, as administrator of her mother Laurel Jansen’s estate, does not have to arbitrate Survival Act and Nursing Home Care Act claims against Oakbrook Healthcare Centre.

Clanton’s sister, Debbie Kotalik, used her authority under a power of attorney to sign a contract with Oakbrook Healthcare when their mother was admitted to its facility.

Section E of the contract called for arbitrating disputes and Section F said: “If the resident is compelled by a change in physical or mental health to leave the facility, this contract shall terminate on 7 days’ notice or immediately upon the resident’s death.”

Jansen was hospitalized after staying in the nursing home for a few months.  She died on Sept. 30, 2019.

Clanton blamed Oakbrook and sued in the Circuit Court of Cook County. When the company demanded arbitration, the trial judge ruled that Section E is “unconscionable.”

As part of its response to Oakbrook’s appeal, Clanton added a new argument – that Jansen’s death immediately terminated the entire agreement, including the arbitration provision.

Acknowledging that its conclusion “conflicts with Mason v. St. Vincent’s Home, 2022 IL App (4th) 210458,” the 1st District concluded, “The agreement was no longer enforceable, given the contract’s explicit language that it terminated upon decedent’s death.”

The appellate court opinion stated, “We find (and defendants do not dispute) that this language is clear and unambiguous. Thus, we must apply the provision’s plain meaning. That is, the entire contract terminated upon decedent’s death in 2019.”

The appeals panel members stated that they agreed with the plaintiff that there was no longer any enforceable arbitration agreement when the instant action was commenced. Defendants argued, “It is clear that there is no intention for the entire contract to terminate upon death of a resident.”

“The best indication of the parties’ intent is found in the plain and ordinary meaning of the language of the contract.” St. Paul Mercury Insurance v. Aargus Securities Systems, 2013 IL App (1st) 120784. The termination provision states, without limitation, that “this contract” terminates upon a resident’s death. Thus, it indicates the resident’s death applies to terminate all contractual provisions.

The appeals panel added that by urging that it should not read the termination provision so broadly, defendants essentially are asking the appellate court to assume or read into the agreement limitations or exceptions that are simply not present. However, the court stated, it will not “alter, change, or modify existing terms of a contract, or add new terms or conditions to which the parties do not appear to have assented.”  Thompson v. Gordon, 241 Ill.2d 428 (2011).

Moreover, the court stated, “There is a presumption against provisions that easily could have been included in a contract but were not.” Thompson at 449. In this case, the drafters of the contract could quite easily have used other language to indicate the more limited interpretation of the termination provision that defendants now seek.

The court did recognize another Illinois Appellate Court in the 4th District in Mason v. St. Vincent’s Home, 2022 IL App (4th) 210458, which appears to be the only appellate court precedent addressing such a situation as in this case. However, the appellate court in Clanton said that they are not bound to follow the 4th District’s decision. See O’Casek v. Children’s Home & Aid Society of Illinois, 229 Ill.2d 421 (2008) (“The opinion of one district, division, or panel of the appellate court is not binding on other districts, divisions, or panels.”)

In another case relied on by the defendants, Carter v. SSC Odin Operating Co., 2012 IL 113204, to argue that “the arbitration agreement applies to plaintiff’s claims brought pursuant to the Survival Act.” The 4th District in Mason agreed with defendants that Carter supported enforcement of the arbitration agreement to claims that accrued before the decedent’s death. Mason explained that our Supreme Court in Carter addressed whether a plaintiff could be compelled to arbitrate a wrongful death claim pursuant to an arbitration agreement between the plaintiff’s decedent and a defendant nursing home.

The Illinois Supreme Court explained, “While the Wrongful Death Act created a new cause of action that did not accrue until death, the Survival Act allowed the decedent’s representative to maintain those statutory or common law actions that had already accrued prior to the decedent’s death.” Id. (citing Carter Par. 34).

Thus, the Carter plaintiff was not obligated to arbitrate a wrongful death claim but was bound to arbitrate the Nursing Home Care Act claim brought under the Survival Act, as that claim had “already accrued to the decedent prior to death.”

In the Clanton case, the appellate court disagreed with the Mason conclusion.

Accordingly, the Illinois Appellate Court affirmed the decision denying arbitration. The appeals panel stated that in their view, the Mason court’s approach did not give effect to the clear and unequivocal language of the termination provision. Thus, the appellate court here declined to follow the Mason decision.

Clanton v. Oakbrook Healthcare Centre, 2022 IL App (1st) 210984 (July 18, 2022).

Kreisman Law Offices has been handling nursing home abuse cases, nursing home negligence cases, wrongful death lawsuits, medical malpractice cases for individuals, families and loved ones who have been harmed, injured or died as a result of the carelessness or negligence of a medical provider for more than 45 years in and around Chicago, Cook County and its surrounding areas, including Berwyn, Oakbrook Terrace, Glendale Heights, Addison, Bensenville, Schiller Park, Park Ridge, Morton Grove, LaGrange, Crestwood, Orland Park, Burr Ridge, Chicago (Chatham, Grand Crossing, Englewood, West Woodlawn, Washington Park, Canaryville, Back of the Yards, Archer Heights, Little Italy, South Loop, West Garfield Park, Noble Square, Humboldt Park), Oak Park, Cicero, Melrose Park and Schaumburg, Ill.

Robert D. Kreisman has been an active member of the Illinois and Missouri bars since 1976.

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