GGNSC Admin. Servs., LLC v. Schrader

Decision Date27 February 2020
Docket NumberSJC-12714
Citation140 N.E.3d 397,484 Mass. 181
Parties GGNSC ADMINISTRATIVE SERVICES, LLC, & others v. Jackalyn M. SCHRADER, personal representative.
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

John Vail, of the District of Columbia (David J. Hoey also present) for the defendant.

Joseph M. Desmond (Alex Harrington also present), Boston, for the plaintiffs.

The following submitted briefs for amici curiae:

Jennifer A. Creedon, for Massachusetts Defense Lawyers Association.

Meryl D. Grenadier, William Avarado Rivera, & Kelly Bagby, of the District of Columbia, Eric M. Carlson of California, Steven Schwartz, & Rebecca J. Benson, Boston, for AARP & others.

John J. Barter, Boston, for Professional Liability Foundation, Ltd.

Robert E. Curtis, Jr., for Massachusetts Advocates for Nursing Home Reform, Inc.

Present: Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, & Kafker, JJ.

LOWY, J.

After the decedent died in the care of a nursing home, her daughter commenced a wrongful death action against the nursing home notwithstanding the existence of an arbitration agreement between the decedent and the nursing home. The United States Court of Appeals for the First Circuit (First Circuit) certified two questions to this court.3 The first question, whether our wrongful death statute, G. L. c. 229, § 2, provides rights to statutory beneficiaries derivative of or independent from what would have been the decedent's own cause of action for the injuries causing her death (decedent's action), informs the underlying dispute about whether the decedent's arbitration agreement binds the decedent's statutory beneficiaries of the wrongful death action. The language of G. L. c. 229, § 2, and our interpretation of the statute through its various iterations convince us that the Legislature intended wrongful death actions to be derivative of the decedent's action. To the extent that the statute's derivative character does not answer the second certified question, whether the arbitration agreement is otherwise enforceable, we conclude that, in the circumstances of this case, the arbitration agreement does, indeed, control the beneficiaries.4

1. Factual and procedural background. We recite the undisputed facts as established by the United States District Court judge in his decision granting the plaintiffs' motion to compel arbitration under the Federal Arbitration Act.

Jackalyn Schrader brought the decedent, her mother, Emma Schrader, to the Golden Living Center Heathwood (Heathwood) in February 2013.5 Heathwood is part of a larger corporate structure known as GGNSC. When Jackalyn brought the decedent to Heathwood, an administrator handed Jackalyn a stack of paperwork. Heathwood did not condition admission of the decedent or caring for her upon the completion of all of the documents, some of which, including an arbitration agreement, were voluntary and clearly labeled as such.

The arbitration agreement pertained to Heathwood and the "Resident." The agreement defined "Resident" as including "all persons whose claim is or may be derived through or on behalf of the Resident [the decedent], including any next of kin, guardian, executor, administrator, legal representative, or heir of the Resident, and any person who has executed this Agreement on the Resident's behalf." Jackalyn is both the decedent's next of kin and her personal representative as executor of her estate. Following the decedent's admission to Heathwood, Jackalyn signed the arbitration agreement. Jackalyn acted only as power of attorney for the decedent and did not sign any documents in her individual capacity.6

On December 3, 2013, the decedent died in Heathwood's care. On February 4, 2016, Jackalyn brought a wrongful death action pursuant to G. L. c. 229, § 2, in the Superior Court in her capacity as the decedent's personal representative, alleging that GGNSC negligently caused the decedent's death. The complaint further alleged that the decedent's injuries were ones "for which [the decedent] would have been entitled to bring an action had she survived, and the right to bring such action survives her."7

On March 15, 2016, GGNSC sued Jackalyn in the United States District Court for the District of Massachusetts to compel arbitration. Jackalyn opposed arbitration on two grounds. First, she contended that the arbitration agreement was both procedurally and substantively unconscionable. The Federal District Court judge held that the arbitration agreement was valid and not unconscionable.8

In the alternative, Jackalyn argued that the arbitration agreement could not bind the decedent's beneficiaries because they were not its signatories. In other words, Jackalyn claimed that the arbitration agreement could not control the wrongful death claim because the beneficiaries' claim under the wrongful death statute was independent of the decedent's action and the decedent was the only legal party to sign the arbitration agreement. The Federal District Court judge concluded that the cause of action was derivative, and thus the arbitration agreement bound the estate on behalf of the wrongful death beneficiaries.9 The judge then granted the motion to compel arbitration, but declined to stay Jackalyn's Superior Court action pending the outcome of the arbitration. Instead, the parties agreed to do so. Jackalyn then asked the judge to certify questions to this court, but he declined to do so at the "thirteenth hour." Jackalyn appealed from this decision to the First Circuit.

The First Circuit certified two questions to us:

"1. Is the wrongful death claim of [the decedent's] statutory heirs derivative or independent of [the decedent's] own cause of action?
"2. If the answer to the first question does not resolve the issue presented to the federal court, is Jackalyn['s] wrongful death claim nonetheless subject to [the decedent's] Agreement that her ‘next of kin, guardian, executor, administrator, legal representative, or heir’ would arbitrate claims against GGNSC?"

Although we have addressed the first question in cases involving past iterations of our wrongful death statute, our law today is clearly unsettled on the matter and, although the parties raised the issue in Johnson v. Kindred Healthcare, Inc., 466 Mass. 779, 2 N.E.3d 849 (2014), we did not address it because we decided the case on different grounds. See id. at 788 n.14, 2 N.E.3d 849 (health care agent's decision to arbitrate disputes does not bind patient under health care proxy statute). Based on a plain reading of the wrongful death statute and our interpretation of common-law wrongful death actions over time, and in light of persuasive authority from other States, we determine that a wrongful death claim of a statutory beneficiary is derivative of the decedent's action and that the arbitration clause in question is enforceable.

2. Discussion. a. Characterization of wrongful death claims as derivative or independent. i. Under wrongful death statute. The issue in this case cannot be understood without an explanation of the two approaches to an action for wrongful death, derivative and independent.

If we characterize claims of beneficiaries under a wrongful death statute as "derivative," then the "wrongful death liability is but an extension of the decedent's personal injury claim." Willis & Peverall, The "Vanishing Trial": Arbitrating Wrongful Death, 53 U. Rich. L. Rev. 1339, 1352 (2019) (Willis & Peverall). This means that "the beneficiaries of the death action can sue only if the decedent would still be in a position to sue." Ellis v. Ford Motor Co., 628 F. Supp. 849, 858 (D. Mass. 1986), quoting Restatement (Second) of Judgments § 46 comment c (1982) (Restatement). Courts that follow this interpretation emphasize "that the same tortious ‘conduct’ which caused the decedent's personal injury also undergirds the wrongful death action." Willis & Peverall, supra at 1353. Under this view, because the wrongful death action is derivative of the decedent's rights, the decedent "enjoys [exclusive] rights over the wrongful death action such that he or she can agree to arbitrate that claim entirely." Id.

On the other hand, if claims under a wrongful death statute are "independent," then "the decedent's disposition of his personal injury claim would have no effect on the wrongful death claim. The situation would be as though the injured person and his beneficiary each had a separate legal interest in his life, assertable by separate action." Ellis, 628 F. Supp. at 858, quoting Restatement, supra. Courts following this interpretation have held that "wrongful death liability does not concern recovery for personal injury at all or ... any other claim that the decedent may have had against the tortfeasor." Willis & Peverall, supra at 1354. The action "deals only with the economic effect the decedent's death had upon specific family members." Id. Thus, the decedent would be without authority to bind beneficiaries like Jackalyn to arbitration for her wrongful death claims. See id.

Unlike with statutes giving rise to derivative claims, then, statutes giving rise to independent claims could have an inefficient application; if a nursing home resident signed an arbitration agreement and her nursing home injured her, she could bring only her negligence claim through arbitration. If she later died from those injuries, a statute giving rise to independent wrongful death claims would permit her executor to commence a wrongful death action in court based on the same conduct even if she had resolved her negligence claims against the nursing home through arbitration. See Ellis, 628 F. Supp. at 857-858.

ii. Common-law basis for wrongful death claims. Jackalyn argues that our wrongful death statute, G. L. c. 229, § 2, does not negate an independent common-law right to bring a wrongful death claim. Like most jurisdictions, we previously held that "there [was] no common law right to civil recovery for death, and that any right to such...

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