The Commonwealth of Kentucky Court of Appeals (“Kentucky Appellate Court”) rendered its opinion on September 22, 2017 in a Kentucky nursing home wrongful death claim in which the defendant nursing home sought to compel arbitration pursuant to the arbitration agreement that the nursing home resident had signed in 2012, holding: “Had all of the legal beneficiaries of John D. Clemons, Sr., executed the arbitration agreement at issue in this case at the time of his admission or during his residency at the nursing home, then the outcome of this case could be different. However, until the Kentucky Supreme Court directs otherwise, we are duty bound to follow existing Kentucky precedent pursuant to Rules of the Supreme Court 1:030(8), and therefore affirm the Powell Circuit Court’s Order denying appellants’ motion to arbitrate the underlying wrongful death claim in this case.”
In the case the Kentucky Appellate Court was deciding, the nursing home resident had lived at the defendant nursing home since 2007 (he died on January 30, 2013). In 2012, the resident had signed the defendant nursing home’s “Alternative Dispute Resolution Agreement” (arbitration agreement), which the Kentucky Appellate Court stated contained valid arbitration provisions that would apply to any claims asserted for negligence, medical negligence, corporate negligence, and violation of a nursing home resident’s statutory rights.
The Kentucky Appellate Court stated that the issue before it, however, was whether wrongful death claims asserted by the estate of the resident, on behalf of his beneficiaries, are subject to the valid arbitration agreement.
Kentucky Appellate Court Opinion
The Kentucky Supreme Court held in the 2012 case Ping v. Beverly Enterprises, Inc., 376 S.W.3d 581 (Ky. 2012): “the wrongful death claimants would not be bound by the decedent’s arbitration agreement, even if one existed, because their statutorily distinct claim does not derive from any claim on behalf of the decedent, and they therefore do not succeed to the decedent’s dispute resolution agreements. . . .”
Nonetheless, the United States Supreme Court held on May 15, 2017 in another Kentucky nursing home arbitration case (Kindred Nursing Centers Ltd. Partnership v. Clark, ___ U.S. ___, 137 S. Ct. 1421, 197 L. Ed. 2d 806, (2017)) that the Kentucky Supreme Court had erred in finding that the underlying nursing home claims were not subject to arbitration.
The Kentucky Appellate Court reviewed the U.S. Supreme Court’s decision in Clark and decided: “we do not believe it overrules Ping as concerns the derivative claims asserted by wrongful death beneficiaries under Kentucky Revised Statutes (KRS) 411.130 … we do not believe Ping has been preempted by the FAA [Federal Arbitration Act].”
Considering the U.S. Supreme Court’s decision in Clark, the Kentucky Appellate Court, citing a Sixth Circuit Court of Appeals decision, stated that Ping does not categorically prohibit arbitration of wrongful-death claims – it only concludes that wrongful-death beneficiaries are not bound by agreements that are executed by the decedent, and nothing precludes those beneficiaries from entering into arbitration agreements. Furthermore, Ping does not have a “disproportionate impact” on arbitration agreements: Ping does not unfairly single out arbitration agreements in violation of the FAA – wrongful death beneficiaries are no more or less bound by a decedent’s agreement to arbitrate than they are by a decedent’s waiver of certain claims, selection of a forum to litigate disputes, or selection of the law governing an agreement (Ping is thus indifferent to arbitration).
The Kentucky Appellate Court stated that it did not find anything in the U.S. Supreme Court’s decision in Clark that would overturn the analysis set out by the Sixth Circuit Court of Appeals as concerns the viability of Ping, which correctly details the current law in Kentucky that wrongful death beneficiaries are not bound by agreements executed by a decedent.
Preferred Care Partners Management Group, L.P. v. Alexander, No. 2015-CA-000563-MR
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