In a case of first impression, the Pennsylvania Superior Court has ruled that a nursing home arbitration agreement does not bind a resident's heirs because a wrongful death lawsuit is an independent cause of action.
Westmoreland County defendant Extendicare Homes, operating under the "fictitious name" Belair Health and Rehabilitation Center, had argued that the wrongful death suit by the administrator of Vincent F. Pisano's estate was controlled by an alternative dispute resolution agreement signed by 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 on Monday, 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.
"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 torts law, legal rights are derivative of decedents' injuries but are not derivative of decedents' rights, Shogan said.
Further, 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.
Plaintiffs' attorney Robert F. Daley of Robert Peirce & Associates in Pittsburgh said that pre-injury agreements, especially those entered into before nursing home residents are injured, are unfair.
"It seems as if though nursing homes are always seeking arbitration and plaintiffs and their attorneys are seeking to avoid arbitration," Daley said.
But there are times that arbitration is appropriate, Daley said, and it would be different if residents and their families agreed to arbitration after injures have occurred.
"I would never say arbitration would not be good," Daley said.
Thomas Thorne Frampton, the attorney for Extendicare Homes and of Goehring, Rutter & Boehm in Pittsburgh, was not in the office Monday and could not be reached immediately.
Orders denying preliminary objections are typically interlocutory, but there is an exception in cases in which the appeal is taken from an order denying a petition to compel arbitration, Shogan said.
The Pennsylvania Defense Institute submitted an amicus brief in favor of the defendant's position.
The Pennsylvania Association for Justice trial lawyers group also submitted an amicus brief.
(Copies of the 25-page opinion in Pisano v. Extendicare Homes, PICS No. 13-2349, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •