Schultz v. GGNSC St. Paul Lake Ridge LLC
Schultz v. GGNSC St. Paul Lake Ridge LLC
Opinion of the Court
GGNSC St. Paul Lake Ridge LLC ("Lake Ridge"), brought this Motion to Compel Arbitration and Stay Proceedings in a wrongful death action brought by Robert Schultz ("Plaintiff"), trustee for the next of kin of Rosemary Schultz, decedent. Lake Ridge alleges that Plaintiff's wrongful death action is subject to arbitration pursuant to a mutual, binding Arbitration Agreement signed by the decedent's power of attorney when the decedent was admitted to Lake Ridge's nursing home facility. Because the Court will find that Plaintiff's claim is derivative and therefore bound by the Arbitration Agreement, the Court will grant Lake Ridge's Motion to Compel Arbitration and Stay Proceedings.
BACKGROUND
I. FACTUAL BACKGROUND
On July 19, 2007, Jeanne Kassim admitted her mother, Rosemary Schultz, to Lake Ridge, a skilled nursing facility in Roseville, Minnesota. (Def.'s Mem. in Supp. of its Mot. to Compel Arb. at 1-2, July 14, 2017, Docket No. 6.) When she admitted her mother, Kassim held a limited power of attorney and signed two documents on behalf of her mother: (1) the Admission Agreement and (2) the Resident and Facility Arbitration Agreement ("the Arbitration Agreement"). (Id. at 2.)
A. The Arbitration Agreement
The Arbitration Agreement is titled "RESIDENT AND FACILITY ARBITRATION AGREEMENT (NOT A CONDITION OF ADMISSION-READ CAREFULLY) ." (Aff. of Jennifer L. Bullard ¶ 3, Ex. B ("Arbitration Agreement"), July 14, 2017, Docket No. 7 (emphasis in original).) It reads in part:
The parties to this Arbitration Agreement acknowledge and agree that upon execution, this Arbitration Agreement becomes part of the Admission Agreement, and that the Admission Agreement evidences a transaction involving interstate commerce governed by the *987Federal Arbitration Act. It is understood and agreed by Facility and Resident that any and all claims, disputes, and controversies (hereafter collectively referred to as a "claim" or collectively as "claims") arising out of, or in connection with, or relating in any way to the Admission Agreement or any service or health care provided by the Facility to the Resident shall be resolved exclusively by binding arbitration to be conducted at a place agreed upon by the Parties, or in the absence of such an agreement, at the Facility, in accordance with the National Arbitration Forum Code of Procedure, which is hereby incorporated into this Agreement\1, and not by a lawsuit or resort to court process. This agreement shall be governed by and interpreted under the Federal Arbitration Act, 9 U.S.C. Sections 1 - 16.
(Id. ) The Arbitration Agreement purports to cover claims of "negligence, gross negligence, malpractice, or claims based on any departure from accepted medical or health care or safety standards, as well as any and all claims for equitable relief or claims based on ... negligence." (Id. ) It purports to bind not only the parties but also "their successors, and assigns,...and all persons whose claim is derived through or on behalf of the Resident, including any parent, spouse, sibling, child, guardian, executor, legal representative, administrator, or heir of the Resident." (Id. ) It also purports to "survive the lives or existence of the parties hereto." (Id. )
The Arbitration Agreement specifically states that the parties "ARE GIVING UP AND WAIVING THEIR CONSTITUTIONAL RIGHT TO HAVE ANY CLAIM DECIDED IN A COURT OF LAW BEFORE A JUDGE AND A JURY, AS WELL AS ANY APPEAL FROM A DECISION OR AWARD OF DAMAGES." (Id. (emphasis in original) ). Finally, the Arbitration Agreement states again that it "is not a precondition to the admission or to the furnishing of services to the Resident by the Facility." (Id. )
B. Schultz's Death
Schultz remained at Lake Ridge until August 22, 2016, when she was taken to the hospital. (Def.'s Notice of Removal ¶ 1, Ex. 1 ("Compl.") ¶ 18, July 11, 2017, Docket No. 1.) Schultz died in the hospital on September 1, 2016. (Compl. ¶ 21.) Plaintiff alleges that Schultz's death, due to complications resulting from an extremity fracture, was the result of negligence by Lake Ridge and its staff. (Id. ¶¶ 16-33.)
II. PROCEDURAL BACKGROUND
Plaintiff filed a Complaint against Lake Ridge for the wrongful death of Rosemary Schultz in state court on June 20, 2017. (Id. ) Lake Ridge removed the case on July 11, 2017, alleging diversity jurisdiction. (Def.'s Notice of Removal.) On July 14, 2017, Lake Ridge filed this Motion to Compel Arbitration and Stay Proceedings. (Def.'s Mot. to Compel Arb., July 14, 2017, Docket No. 4.)
DISCUSSION
I. STANDARD OF REVIEW
A party who believes that a dispute is subject to arbitration may move for an order compelling arbitration and staying the proceedings.
In conducting this inquiry, the Court applies "ordinary state law contract principles to decide whether parties have agreed to arbitrate a particular matter." Keymer v. Mgmt. Recruiters Int'l, Inc.,
An arbitration agreement should be construed liberally, with any doubts resolved in favor of arbitration. See MedCam, Inc. v. MCNC,
II. VALIDITY OF THE AGREEMENT
Plaintiff does not dispute that Jeanne Kassim signed the Arbitration Agreement or that she had legal authority to sign on Ms. Schultz's behalf. However, Plaintiff alleges in his initial Complaint that the Arbitration Agreement "is void and unenforceable on the grounds of impossibility, illegality, contravention of public policy, fraud in the inducement based on material misrepresentation and omission, and unconscionability based on material misrepresentation and omission." (Compl. ¶ 13.) These generally applicable contract defenses may be applied to invalidate arbitration agreements, see Doctor's Assocs., Inc. ,
III. SCOPE OF THE AGREEMENT
The Court also finds that this wrongful death action falls within the purported scope of the Arbitration Agreement. When interpreting arbitration agreements, courts should construe them liberally and resolve any doubts in favor of arbitration. MedCam, Inc. ,
Nevertheless, the parties dispute whether the Arbitration Agreement's purported scope is legally permissible. Plaintiff argues that, as a matter of contract law, Ms. *989Schultz's heirs cannot be bound by an arbitration agreement they were not party to. Lake Ridge argues that Plaintiff is bound by the Arbitration Agreement because his wrongful death action is a derivative action in which he must step into Ms. Schultz's shoes.
"[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." United Steelworkers of Am. v. Warrior & Gulf Navigation Co. ,
The Court is bound by the decisions of Minnesota's highest court, but because the Supreme Court has not decided this question, the Court must "apply the rule of decision that [it] believe[s] the state's highest court would apply." Cassello v. Allegiant Bank ,
A. Minnesota's Wrongful Death Statute
Minnesota law allows a trustee to bring a wrongful death action "[w]hen death is caused by the wrongful act or omission of any person or corporation... if the decedent might have maintained an action, had the decedent lived, for an injury caused by the wrongful act or omission."
B. Minnesota State Law
Though the Minnesota Supreme Court has not decided the question before this Court, it has articulated that wrongful death actions are derivative of the injury suffered by the decedent. See Hannah v. Chmielewski, Inc. ,
In Bakke v. Rainbow Club, Inc. , the Minnesota Supreme Court held that a jury finding that decedent had assumed the risk of his own injury and death by furnishing intoxicating liquor to the driver was a defense to the trustee's wrongful death claim.
The Minnesota Court of Appeals has followed this interpretation in insurance cases to find that wrongful death actions cannot proceed when the decedent would not have had a claim under the policy in question. In Grise v. State Farm & Casualty Co. , the Minnesota Court of Appeals granted an insurer's summary judgment motion on a mother's claim for the wrongful death of her daughter because the policy excluded recovery for bodily injury to *990an insured person, and the daughter was insured. No. C3-95-448,
In Minnesota Mutual Fire & Casualty Insurance Co. v. Lundman , the Minnesota Court of Appeals found that a claim brought by a father for the wrongful death of his son was derivative, even though it provided recovery for loss of services, because all recovery was predicated on the son's death. No. C1-92-1101,
Plaintiff points to the Minnesota Supreme Court's language in Johnson v. Consolidated Freightways, Inc. , to support his view that he cannot be bound by the Arbitration Agreement because wrongful death claims belong to the surviving beneficiaries, not Ms. Schultz.
Reading Consolidated Freightways, Inc. in conjunction with Chmielewski and Bakke , and in light of the Courts of Appeals' subsequent decisions, the Court concludes that Plaintiff's wrongful death claim is derivative. As such, Plaintiff stands in Ms. Schultz's shoes and is subject to any defenses or contracts that would apply to Ms. Schultz's claim had she lived. Because Ms. Schultz would have to arbitrate the underlying personal injury claim, Minnesota law dictates that Plaintiff must also arbitrate his wrongful death claim.
C. Persuasive Authority
There are cases from other jurisdictions supporting both parties' views. See Roth v. Evangelical Lutheran Good Samaritan Soc'y ,
Texas's wrongful death statute has language comparable to Minnesota's, allowing beneficiaries to bring an action "only if the individual injured would have been entitled to bring an action for the injury if the individual had lived."
The Supreme Court of Florida also found that an arbitration agreement signed by the decedent prior to death was enforceable against survivors. Laizure v. Avante at Leesburg, Inc. ,
Other courts in states with similar statutes have found that wrongful death claims are bound by arbitration agreements signed by the decedent.
But not all state courts have found that wrongful death claims are bound by arbitration agreements signed by the decedent. Some of the conflicting cases are distinguishable because the state's statutes or statutory schemes are different from Minnesota's.
*992Nevertheless, the Court concludes that the Minnesota Supreme Court would find that Plaintiff is bound to arbitrate. Minnesota state court precedent demonstrates that wrongful death claims are derivative in nature. Beneficiaries are therefore bound by decedent's defenses, and by analogy should be bound by decedent's contractual limitations, including arbitration agreements. Furthermore, federal and state public policy favors arbitration. See Piper Jaffray, Inc. ,
IV. RIGHT TO JURY TRIAL
Plaintiff argues that the beneficiaries have a statutory right to a jury trial because Minnesota's wrongful death statute states that recovery "is the amount the jury deems fair and just."
ORDER
Based on the foregoing, and all the files, records, and proceedings herein, IT IS HEREBY ORDERED that Lake Ridge's Motion to Compel and Stay Proceedings [Docket No. 4] is GRANTED .
The standard of review is the same under the Minnesota Uniform Arbitration Act ("MUAA"). See Amdahl v. Green Giant Co. ,
See, e.g., Diversicare Leasing Corp. v. Hubbard ,
See, e.g., Woodall v. Avalon Care Ctr.-Fed. Way, LLC ,
See, e.g., Lawrence v. Beverly Manor ,
Reference
- Full Case Name
- Robert SCHULTZ, Trustee FOR the Next of Kin of Rosemary SCHULTZ, Decedent v. GGNSC ST. PAUL LAKE RIDGE LLC, John Does, and Jane Doe
- Status
- Published