The Pennsylvania Supreme Court will not hear arguments over whether wrongful-death suits can be controlled by decedents’ arbitration agreements.
The state Superior Court ruled in a case of first impression last August that a nursing-home arbitration agreement did not bind a resident’s heirs because a wrongful-death lawsuit is an independent cause of action.
The justices issued a one-page order denying allocatur in the case Tuesday.
In Pisano v. Extendicare Homes, according to court documents, Westmoreland County defendant Extendicare Homes, operating under the “fictitious name” Belair Health and Rehabilitation Center, had argued that the wrongful-death suit by Michael V. Pisano, the administrator of Vincent F. Pisano’s estate, was controlled by an alternative dispute resolution agreement signed by Vincent Pisano’s daughter, who had a power of attorney. Belair further argued that the Pennsylvania Wrongful Death Act creates a cause of action that is solely derivative of the underlying tort.
Superior Court Judge Jacqueline O. Shogan, writing for the unanimous panel of Judge Anne E. Lazarus and Senior Judge John L. Musmanno, said that arbitration could not be compelled for the wrongful-death suit because Pennsylvania’s wrongful-death statute creates an independent action deriving from the decedent’s death but not from the rights of the decedent.
In support of its argument that wrongful-death actions are derivative of the rights of decedents, according to Shogan, Belair cited the state Supreme Court’s 1896 ruling in Hill v. Pennsylvania Railroad, in which the justices held that under the Act of April 15, 1851, as amended by the Act of April 26, 1855, wrongful-death actions were derivative of a decedent’s rights.
But Shogan said the legislature amended the Wrongful Death Act in 1911.
“Unlike its 19th century predecessors, Pennsylvania’s wrongful-death statute, as of 1911, distinguished a wrongful-death action from a survival action, currently providing that ‘the right of action created by this section shall exist only for the benefit of the spouse, children or parents of the deceased,’” Shogan said. “Pennsylvania courts have consistently interpreted this language to mean that two separate and distinct causes of action arise from a single injury, one dependent ‘on the rights of action which the decedent possessed at the time of her death,’ and the other dependent on ‘the rights of action that the [claimants], as named by statute, possess.’”
There are two types of derivative actions, Shogan said. There are derivative actions such as the right of shareholders to bring suit on behalf of a corporation to recover losses for the benefit of the corporation and the right in subrogation insurance law for the subrogee to stand in the shoes of the subrogor to sue a third party. In those types of cases, the right to sue is contingent, Shogan said.
But in derivative actions in tort law, legal rights are derivative of decedents’ injuries but are not derivative of decedents’ rights, Shogan said.
Shogan said this interpretation comported with the Supreme Court’s 1936 ruling in Kaczorowski v. Kalkosinsk, in which the justices stated that a derivative action is one that “‘has as its basis the same tortious act which would have supported the injured party’s own cause of action’” but that is derived “‘from the tortious act, and not from the person of the deceased, so that it comes to the parties named in the statute free from personal disabilities arising from the relationship of the injured party and tortfeasor.’”
In Pisano, Shogan said, Belair had an arbitration agreement with Vincent Pisano, not Michael Pisano.
“Regardless of Belair’s intent, Pennsylvania’s wrongful-death statute, as discussed above, does not characterize appellee and other wrongful-death claimants as third-party beneficiaries,” Shogan said. “It is, therefore, clear under relevant contract law that the trial court herein properly refused to compel arbitration.”
Shogan rejected Belair’s reliance on the Superior Court’s 1983 ruling in DiSerafino v. Bucyrus-Erie, in which the court held that the Pennsylvania Workers’ Compensation Act limited the remedies of an employee and his beneficiaries.
Shogan said that decision merely affirmed that the state legislature could statutorily limit recoveries in wrongful-death suits.
Belair also cited a 1982 decision by the U.S. Court of Appeals for the Third Circuit in Grbac v. Reading Fair, in which the court found that a widow’s wrongful-death claim was bound by a liability release executed by the decedent, according to Shogan.
Shogan, however, noting first that the decision was not binding on the Superior Court anyway, said the Grbac court erroneously based its ruling on Hill, which had been invalidated by the legislature’s 1911 amendments to the act.
In addition to finding that wrongful-death actions are not derivative of decedents’ rights, Shogan also reasoned that denying wrongful-death plaintiffs’ rights to a jury trial, when they did not waive their rights, “would amount to this court placing contract law above that of both the United States and Pennsylvania constitutions.”
Shogan said the court’s ruling “aligns with the analysis of other jurisdictions with similar wrongful-death statutes,” including the Texas Supreme Court, the Utah Supreme Court, the Illinois Supreme Court, the Missouri Supreme Court, the Ohio Supreme Court and the Washington Court of Appeals.
Shogan did note, however, that the Florida Supreme Court was one of the few courts in a state that recognizes wrongful-death suits as separate causes of action to hold that such suits are bound by arbitration agreements.
Thomas Thorne Frampton, the attorney for Extendicare Homes and of Goehring, Rutter & Boehm in Pittsburgh, said he and his client were disappointed the Supreme Court denied allocatur in Pisano, particularly given how many other supreme courts across the country had looked at similar issues.
Counsel for the plaintiffs, Robert F. Daley of Robert Peirce & Associates in Pittsburgh, said he and his clients were “very gratified” that the Supreme Court allowed the Superior Court’s ruling to stand and are looking forward to proceeding with the underlying case in the Westmoreland County Court of Common Pleas.