A recent Missouri Supreme Court case ruled that a nursing home cannot enforce a mandatory arbitration clause against a former resident’s children even if an arbitration agreement with the nursing home had been signed. The court found that “the plaintiff in a wrongful death action is not bound by an arbitration agreement signed” by a sister on the mother’s behalf in Lawrence v. Beverly Manor, 2009 WL 77897 (Mo. Jan 13, 2009).
In 2003, the resident, Dorothy Lawrence, began living at Beverly Manor Nursing Home in St. Joseph, Missouri. At the time Lawrence’s daughter, Phyllis Skoglund, had power of attorney for her mother and signed the contract with the nursing home on behalf of the resident.
This contract included an arbitration clause that stated that “any and all claims, disputes and controversies [regarding the nursing home’s care and treatment of Lawrence] shall be resolved exclusively by binding arbitration”.
Shortly after her admittance to the nursing home, and the signing of the contract, Lawrence died. Her family filed a wrongful death lawsuit against Beverly Manor Nursing Home alleging that she died as a result of the nursing home’s negligence when she was dropped by the nursing home staff.
A trial court ruled that the wrongful death claim could go forward despite the contract including the arbitration language. This decision was affirmed by the Missouri appellate court, at which point Beverly Manor Nursing Home appealed to the Missouri Supreme Court.
The Missouri Supreme Court found that the wrongful death claim was not derivative from any claims the resident might have had. Further, that the arbitration agreement cannot prevent parties from filing a wrongful death suit. The Supreme Court’s reasoning for this was that “the only signature to the agreement is in her capacity as her mother’s agent”.
The defendant nursing home had argued that because the resident and her daughter could only bring one wrongful death suit they were both bound by that contract. However, the Supreme Court disagreed with this line of reasoning because it “require[d] this court to find that by signing on behalf of her mother, Skoglund also is signing on her own behalf and on behalf of the wrongful death plaintiffs.” Yet the court felt that Skoglund was only signing in the capacity of her mother’s power of attorney and not on her own behalf, or did she sign it as a representative of the potential wrongful death beneficiaries. Therefore, the wrongful death claim was not barred because of the signed contract.
A similar issue has been taken up on a national level. The United States Congress has proposed The Fairness In Nursing Home Arbitration Act of 2009, which would prevent nursing homes from deliberately hiding an arbitration clause in its contracts with the elderly in the attempt to unfairly deny seniors the right to bring an action if aggrieved. If this bill is passed, it would effectively prevent nursing homes from attempting to conceal arbitration clauses in its contracts in an effort to bar civil lawsuits.
Robert D. Kreisman has been a member of the Missouri bar since 1976. Kreisman Law Offices has been handling wrongful death lawsuits and medical malpractice cases for over 30 years, serving areas in and around Cook County, including Oak Lawn, Bolingbrook, River Forest, and Schaumburg.