In its decision filed on January 29, 2016, the Court of Appeal of the State of California First Appellate District Division One (“Appellate Court”) held that the wrongful death beneficiaries in an assisted living facility wrongful death and elder abuse lawsuit were not bound by the agreement with the assisted living facility to arbitrate all claims because the wrongful death beneficiaries, who were the children of the assisted living facility resident who died allegedly as a result of assisted living negligence, were not parties to the arbitration agreement.
The plaintiff, acting as power of attorney for her mother, executed a residency agreement allowing the defendant assisted living facility to provide core living services for her mother. The residency agreement contained an arbitration clause that stated in relevant part: “[Y]ou agree that any and all claims and disputes arising from or related to this Agreement or to your residency, care or services at Timber Ridge shall be resolved by submission to neutral, binding arbitration . . . . This arbitration clause binds all parties to this Agreement and their spouse, heirs, representatives, executors, administrators, successors, and assigns, as applicable.”
In April 2014, the plaintiff, as personal representative of her mother’s estate, filed a complaint for elder abuse and wrongful death against the defendant assisted living facility, alleging that on the evening of September 28, 2013, her mother was allowed to exit an exterior door of the defendant’s facility without supervision, where she lingered outside the facility unattended and fell, causing her to suffer displacement of her right wrist, a subarachnoid hemorrhage, a downward displaced fracture of the tip of her nasal bone, an intravicular hematoma, and multiple facial bruises, from which she died two weeks later.
The defendant assisted living facility moved to compel arbitration of the wrongful death claim, which the trial court denied because of the possibility of conflicting rulings if the action was split between claims that can be forced into arbitration and those that cannot.
The defendant assisted living facility appealed, arguing that the wrongful death claim is subject to arbitration because the plaintiff agreed to submit the wrongful death claim to arbitration when she executed the residency agreement and its arbitration clause as her mother’s power of attorney.
The Appellate Court stated that the strong public policy in favor of arbitration does not extend to those who are not parties to an arbitration agreement, and a party cannot be compelled to arbitrate a dispute that he has not agreed to resolve by arbitration, with three exceptions: (1) an agent can bind a principal, (2) spouses can bind each other, and (3) a parent can bind a minor child. The Appellate Court held that none of the exceptions applied in this case, and that recovery in a wrongful death action belongs to the heirs, not to the decedent or the estate (“Defendant’s contention that a personal representative in a wrongful death action is the alter ego of the decedent also runs contrary to well-established law. Regardless of who files suit, recovery in a wrongful death action belongs to the heirs, not to the decedent or the estate. “).
The Appellate Court further held that while the plaintiff signed the residency agreement, she did so as her mother’s power of attorney, not in her personal capacity (“As the residency agreement cannot bind third parties, the pertinent question is whether plaintiff is a party to that agreement. We conclude she is not.”).
Source: Monschke v. Timber Ridge Assisted Living, LLC, A144289.
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