The Illinois Supreme Court has ruled a nursing home can’t avoid a personal injury lawsuit from the family of a former resident by invoking an arbitration agreement the court agreed was unenforceable, because the justices agreed the arbitration agreement applied only to claims brought by the deceased resident and ended when she died.
Nancy Clanton, representing the estate of the late Laurel Jansen, sued Oakbrook Healthcare Center, Lancaster Ltd. and a registered nurse who worked at the center. Clanton alleged negligent care while Jansen lived at the Oak Brook skilled nursing facility resulted in several falls that caused ultimately fatal injuries. The defendants, citing a provision in the facility’s admissions paperwork, sought to compel arbitration. Cook County Judge Patricia O. Sheahan and a three-justice panel from the Illinois First District Appellate Court all sided with Clanton.
Justice Mary K. O’Brien wrote the 6-0 opinion on the defendants’ appeal, published Sept. 21. Justice Lisa Holder White took no part in the decision.
Illinois Supreme Court Justice Mary K. O'Brien
| illinoiscourts.gov
According to court records, Jansen lived at Oak Brook Care from July 19 through Sept. 17, 2019. While exercising power of attorney, Debbie Kotalik signed a contract for Jansen’s admission on Aug. 9, 2019. O’Brien said that in addition to contending the arbitration provision was unenforceable, Clanton also argued the defendants waived their right to mediate or arbitrate by first participating in litigation for almost a year and also that Kotalik lacked the authority to execute an arbitration clause.
The county judge agreed with Clanton concerning only a contractual provision deemed “substantively unconscionable because it waived plaintiff’s entitlement to punitive or treble damages, effectively limiting plaintiff’s ability to recover attorney fees,” according to O’Brien. The appeals panel agreed the defendants engaging in litigation didn’t waive their right to arbitration, while also holding it was allowed to consider Clanton’s argument the arbitration clause terminated when Jansen died, even though Clanton didn’t raise that point in the initial trial.
The appeals panel also held “the termination-on-death provision applied and that the contract, including the arbitration clause, was no longer enforceable at the time the action was commenced,” O’Brien wrote. Before the Supreme Court, the nursing home and other defendants argued Clanton’s negligence and Nursing Home Care Act claims involved incidents that occurred prior to Jansen’s death and should be arbitrated, while Clanton insisted the defendants have no contract to enforce.
The Supreme Court’s analysis started with a review of its 2012 opinion, Carter v. SSC Odin Operating, which also involved a nursing home death and an arbitration clause. O’Brien explained the difference between wrongful death litigation and lawsuits under the Survival Act, which allow a decedent’s representative to maintain actions that had accrued prior to the death.
“We held in Carter that, although the Wrongful Death Act describes a wrongful death action as an ‘asset of the deceased estate,’ it is not a ‘true asset of the deceased’s estate’ that the decedent could limit via an arbitration agreement,” O’Brien wrote. “We agree with plaintiff that Carter is not definitive regarding the current issue before this court. As the appellate court below concluded, Carter decided whether survival and wrongful death actions were arbitrable under the agreement in that case, i.e., the proper party plaintiffs for the different claims and the proper forums under the applicable contract. Carter did not address the application of a termination-on-death clause.”
Although contracts generally survive the death of one signatory party, O’Brien continued, exceptions exist, “such as when the contract requires the continued existence of a particular person or thing for its performance.”
O’Brien explained the “express terms of the contract” stipulated that if a resident died, the contract ceased. The court agreed the defendants, as proponents of the contract, could’ve written the agreement to endorse the position they argue against Clanton. But based on the document’s plain language, it affirmed the circuit and appellate court opinions and remanded the complaint for further proceedings.
Clanton was represented on appeal by attorney Michael W. Rathsack, of Park Ridge. She was also represented by attorneys Steven M. Levin, Michael F. Bonamarte IV and Isabela Bacidore, of the firm of Levin & Perconti, of Chicago.
Oak Brook Care was represented by attorneys Carter A. Korey and Chaniece M. Hill, of the firm of Korey Richardson, of Chicago.