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Illinois Supreme Court Rules That Arbitration Agreements in Nursing Home Contracts Are Not Valid as to Wrongful Death Claims

By Christopher D. Galanos

In recent years a number of cases have been decided that call into question when, if at all, circuit courts will enforce binding arbitration clauses in nursing home resident contracts. On September 20, 2012 the Illinois Supreme Court issued its opinion in Carter v. SSC Odin Operating Company, LLC, which provides a seemingly clear, but unwelcome, answer to the controversy.

Plaintiff Sue Carter, acting as the Administrator of the Estate of Joyce Gott, brought a complaint in circuit court alleging violations of the Illinois Nursing Home Care Act as well a claim for wrongful death. The Nursing Home filed a Motion to Compel Arbitration based on an Arbitration Agreement executed at the time of Gott’s admission to the nursing home. At the time of Gott’s admission to the nursing home, both Gott and Carter as Gott’s legal representative had executed the agreement.

In objecting to the Motion to Compel Arbitration, the Plaintiff argued that because wrongful death actions belong to the heirs of a decedent, and the heirs were not parties to the Arbitration Agreement, they could not be bound by the Agreement to arbitrate. The Supreme Court agreed and held that despite the fact that the Agreement was signed by the both the resident and her legal representative, and despite express language in the executed Agreement which stated that the Agreement bound the heirs of the decedent, the heirs were nonetheless entitled to bring their wrongful death action in Illinois state court. The Supreme Court did find that the arbitration clause was binding as to the Nursing Home Care Act count, brought by Gott’s Estate. The end result was to split the Plaintiff’s claims: the Wrongful Death claim was allowed to proceed in the Circuit Court, and the action for the resident’s injuries sustained while still alive was referred to arbitration!

In short, based upon the Court’s ruling, unless a nursing home is able to secure a signed arbitration agreement from every potential heir of a resident, a highly unrealistic scenario, there is simply no mechanism to limit such actions from being brought in circuit court. In many cases against nursing facilities, and as in Carter, plaintiff’s complaints will consist of wrongful death and survival actions. Facilities facing such complaints will now be forced to make the inefficient and costly choice of litigating the wrongful death action in state court and submitting the survival action to binding arbitration, thus fighting the claim on two fronts, or the unfair choice of waiving the negotiated right to arbitrate ths survival action and simply allow both claims to move forward in state court. Regardless of the choice made, the Court’s decision is clearly a blow to judicial economy.

Originally published in the Fall 2011 edition of Quinn Quarterly.

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