Blog

Arbitration + Probate+ Wrongful Death = ?

What do you get when you mix arbitration, probate, and a wrongful death claim in one case? The Court of Appeals in Monschke v. Timber Ridge Assisted Living, LLC confronted this very issue. The Court held a daughter’s arbitration agreement with an assisted living facility did not apply to her wrongful death claim brought in her capacity as a personal representative for the estate of her mother.

Facts

Plaintiff Valerie Monschke was the daughter of the decedent. Plaintiff, acting as power of attorney for decedent, enrolled decedent into one of Defendant Timber Ridge Assisted Living LLC’s facilities. Plaintiff executed a residency agreement with Defendant containing an arbitration clause, which 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.”

Plaintiff, as personal representative of decedent’s estate, later filed a complaint for elder abuse and wrongful death against Defendant. Defendant petitioned the trial court to compel binding arbitration as to all of Plaintiff’s claims. The trial court denied the petition on the grounds Plaintiff’s action was brought on behalf of the decedent’s surviving children by the wrongful death statute (C.C.P. § 377.60), which authorized Plaintiff to bring the surviving children’s claims on their behalf in Plaintiff’s capacity as the decedent’s personal representative.

Ruling

The Court of Appeal reiterated the longstanding rule that generally a nonsignatory to an arbitration clause cannot be bound by it. The Court of Appeal concluded Plaintiff was not a party to the residency agreement as she signed the residency agreement as an agent for decedent. The only parties to the residency agreement were decedent and Defendant; therefore, Plaintiff did not agree to arbitrate her wrongful death claim.

The Court of Appeal rejected Defendant’s argument Plaintiff stepped into the shoes of decedent by filing the action as the personal representative and was therefore bound by decedent’s obligations under the residency agreement. The Court of Appeals stated Plaintiff, as personal representative of the estate, was asserting the wrongful death claim on behalf of decedent’s heirs, not decedent.

Finally, the Court of Appeal rejected Defendant’s argument a personal representative in a wrongful death action is the alter ego of the decedent. The Court of Appeal explained a wrongful death claim belongs solely to the heirs and is distinct from the claims of the decedent or the estate.

Takeaways

There are three exceptions to the rule an arbitration agreement binds only the parties to the contract: (1) an agent can bind a principal; (2) spouses can bind each other; and (3) a parent can bind a minor child. The strong public policy in favor of arbitration does not extend to those who are nonsignatories if none of the three exceptions apply.

A wrongful death claim is distinct from other claims a decedent could have. The wrongful death claim belongs solely to the heirs regardless of who files suit. A personal representative maintains the wrongful death action on behalf of the heirs. If there are no heirs, there is no right of action in the personal representative.