Boler v. Sec. Health Care, L. L.C.

• Decision Date: 30 September 2014
• Docket Number: 111,775.
• Citation: 2014 OK 80,336 P.3d 468
• Parties: Johnnie BOLER, Personal Representative of the Estate of Cleo Boler, Deceased, Plaintiff/Appellee, v. SECURITY HEALTH CARE, L.L.C., d/b/a Grace Living Center—Norman; Norman Properties LLC; Amity Care, LLC; Mike Dimond; and Don Greiner, individually and d/b/a Don Greiner Trustee, Kenneth D. Greiner III Revocable Trust, Beneficiary/Trustee, Defendants/Appellants.
• Court: Oklahoma Supreme Court

336 P.3d 468

2014 OK 80

Johnnie BOLER, Personal Representative of the Estate of Cleo Boler, Deceased, Plaintiff/Appellee

v.SECURITY HEALTH CARE, L.L.C., d/b/a Grace Living Center—Norman; Norman Properties LLC; Amity Care, LLC; Mike Dimond; and Don Greiner, individually and d/b/a Don Greiner Trustee, Kenneth D. Greiner III Revocable Trust, Beneficiary/Trustee, Defendants/Appellants.

111,775.

Supreme Court of Oklahoma.

Sept. 30, 2014.

Patrick M. Ryan, Phillip G. Whaley and Grant M. Lucky, Ryan Whaley Coldiron Shandy PLLC, Oklahoma City, Oklahoma, and J. Michael DeYong, Gina K. Cheatham, Deyong & Cheatham, P.A., Oklahoma City, Oklahoma, for the Appellants.

L. Ray Maples, II, Travis Dunn, Nicole R. Snapp–Holloway, Maples Law Firm, Edmond, Oklahoma, and David W. Crowe, Bailey, Crowe, Kugler & Arnold, LLP, Dallas, Texas, for the Appellee.

Opinion

EDMONDSON, J.

¶ 1 The issue is whether the trial court erred in denying the nursing home's motion to compel arbitration. The trial judge held that the wrongful death claim belonging to Cleo Boler's statutory beneficiaries pursuant to 12 O.S.2011 § 1053 is not subject to an agreement to arbitrate contained in her nursing home's admission contract. We agree with the trial court and hold that the personal representative and the next of kin are not bound by the arbitration agreement in the contract signed on Cleo Boler's behalf. They did not sign the nursing home contract in their personal capacities and their claim is not wholly derivative of Cleo Boler's claim.

¶ 2 Cleo Boler was admitted to Grace Living Center—Norman (Grace), a long-term care facility in January 2010 and was a resident there until January 2012. Judy Little (also known as Julie Little), as Cleo Boler's attorney in fact, signed the admission documents which included a three-page Dispute Resolution Provision (arbitration agreement). The arbitration agreement provided that any claim, controversy, dispute or disagreement arising out of or in connection with the care rendered to Cleo Boler would be determined by submission to neutral, binding arbitration. It purported to bind not only Cleo Boler, but any future legal representatives, heirs, successors, etc., who might assert a claim against Grace.¹

¶ 3 On October 28, 2011, Cleo Boler, individually, and Judy Little and Johnnie Boler as attorneys in fact, sued Grace and others for negligence, violation of the Nursing Home Care Act and breach of contract regarding the care and treatment of Cleo Boler. Grace filed a Motion to Compel Arbitration, asserting that the contract was one involving interstate commerce and was valid and enforceable under the Federal Arbitration Act (FAA), which preempts contrary state law.

¶ 4 Cleo Boler died on June 17, 2012, before a response to the motion to compel arbitration was filed. Johnnie Boler (Boler), as personal representative of Cleo's estate, filed a motion for substitution of parties and sought to amend the petition to add survivor claims pursuant to 12 O.S. § 1051 and wrongful death claims pursuant to 12 O.S. § 1053.² By order filed March 7, 2013, the trial judge granted both motions. Johnnie Boler, as personal representative of Cleo Boler's estate, filed a second amended petition which brought survival claims on behalf of Cleo Boler's estate pursuant to 12 O.S. § 1051, and a wrongful death claim on behalf of Cleo Boler's beneficiaries, pursuant to 12 O.S. § 1053.³

¶ 5 Boler filed a response to Grace's Motion to Compel Arbitration arguing that Grace could not compel his sister and himself to arbitrate their wrongful death claim because their claim is independent and did not arise until the death of Cleo Boler; further, that they did not sign the arbitration agreement in their personal capacities and were not bound by Cleo Boler's arbitration agreement. This is so, they maintain, even if Cleo Boler's claims must be arbitrated.

¶ 6 The hearing on Grace's motion to compel arbitration was held January 31, 2013, at which time the trial court addressed whether, as a matter of law, the wrongful death claim was subject to arbitration. The trial court found that wrongful death is a separate and distinct cause of action and is derivative only in the sense that the decedent must have a viable claim at the time of his death.⁴ The motion to compel arbitration was denied as to the wrongful death claim and the court reserved ruling on all other issues and arguments. The trial judge did not rule on the validity of the contract, but looked solely to whether the arbitration agreement was enforceable.⁵ Grace appealed, arguing that the trial court erred in relying on the Utah case of Bybee v. Abdulla, 189 P.3d 40 (Utah 2008), to hold that non-signatories to the arbitration agreement were not bound by it for their wrongful death claim because the claim was not wholly derivative of Cleo Boler's claim.

¶ 7 An order denying a motion to compel arbitration is an appealable order. 12 O.S. § 1879(A)(1). The existence of an agreement to arbitrate is a question of law to be reviewed de novo. Rogers v. Dell Computer Corp., 2005 OK 51 ¶ 18, 138 P.3d 826, 831.

¶ 8 The Nursing Home Care Act, 63 O.S. § 1–1918, created a statutory tort with a private right of action for nursing home residents or their guardians to redress a violation of rights conferred therein. Morgan v. Galilean Health Enterprises, Inc., 1998 OK 130, 977 P.2d 357, 361–62. Liability for a statutory tort is incurred when it can be shown that the plaintiff's injury resulted from a statutory violation and that the plaintiff falls into a class of persons whom the legislature intended to protect. The Nursing Home Care Act is not the patient's exclusive remedy. Estate of Hicks v. Urban East, 2004 OK 36, 92 P.3d 88. The Act provides that the plaintiff may seek any recovery permitted by law. 63 O.S. § 1–1939(B),(C).

¶ 9 Wrongful death claims were not cognizable at common law; the right of action for personal injury stood extinguished by the death of the injured party. This rule was abrogated by Oklahoma's wrongful death statute. A cause of action for injury to the person is now survivable and a new and independent wrongful death claim has been created. Ouellette v. State Farm Ins. Co., 1994 OK 79, 918 P.2d 1363, 1366. On appeal, the issue is whether claims brought by non-signatory wrongful death claimants must be arbitrated. Title 12 O.S. § 1053 provides that wrongful death claims lie if, at the time of his or her death, the decedent had a right of recovery for the injury in suit. The parties disagree on whether wrongful death claims in Oklahoma are wholly or partially derivative and the effect of that distinction.

¶ 10 Grace argues that wrongful death claims are entirely derivative claims, binding on the next of kin, predicated solely upon the right of action personal to the decedent because the claim must have been one the decedent could have brought if she had lived. Grace directs our attention to cases in which the decedent's execution of a release and satisfaction of the claim meant there was no action surviving the death. See Haws v. Luethje, 1972 OK 146, 503 P.2d 871. Grace argues that Cleo Boler's personal representative can maintain only an action that Cleo Boler could have maintained if she had survived; otherwise, her rights are “enlarged” by Oklahoma's wrongful death statute. Thus, because she contracted to arbitrate her claims against Grace, her personal representative must arbitrate the wrongful death claim. Grace points to Riley v. Brown and Root, Inc., 1992 OK 114, 836 P.2d 1298, 1300, 1301, for the proposition that such claims are wholly derivative of rights held by the decedent and the heirs are bound by the decedent's contractual agreement to arbitrate:

“The action for wrongful death is not a separate and distinct tort, but is an action which derives from the rights of the decedent (citation omitted). Whatever rights the decedent might have had in his life accrue to the personal representative at death, thus overcoming the common law barrier of death.”

¶ 11 Boler, in opposition, argues that the wrongful death claim is not wholly derivative because the statute only requires that the decedent must have had a right to sue while alive. The claim is derivative only in the sense that it must not have been extinguished before death. Boler relies on Ouellette v. State Farm Ins. Co., 1994 OK 79, 918 P.2d 1363, 1366, which states that Oklahoma's Wrongful Death Act created a new cause of action for pecuniary losses suffered by the deceased's spouse and next of kin by reason of his or her death and recovery under the Act does not go to the estate of the deceased, but inures to the exclusive benefit of the surviving spouse and children or next of kin. Thus, Boler argues, a wrongful death claim is new and independent of the claim belonging to the deceased, a conclusion bolstered by Art. 23, § 7 of the Oklahoma Constitution which provides that the right of action to recover damages for injuries resulting in death shall never be abrogated. Boler argues that basic rules of contract law prevent the arbitration agreement from being enforceable against parties who did not sign the agreement in their personal capacities.

¶ 12 The first task of a court asked to compel arbitration of a dispute is to determine whether the parties agreed to arbitrate that dispute. Wilkinson v. Dean Witter Reynolds, Inc., 1997 OK 20, ¶ 9, 933 P.2d 878, 880 (citing Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614, 626, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985) ). The existence of an arbitration agreement is governed by principles of state law. Id.

¶ 13 Courts in other states have differed when considering whether the decedent's heirs are bound by an arbitration agreement signed by or on behalf of the decedent. Courts in other states have based their rulings on whether the wrongful death claims are deemed wholly or only partially derivative. If wrongful death actions are considered independent and separate causes of...