Lawrence v. Beverly Manor

Issue Presented

Does an arbitration agreement signed by or on behalf of a nursing home resident bind the plaintiffs in a wrongful death action against the nursing home for the resident’s death?

The circuit court held that wrongful death claimants were not bound by the agreement and could bring a court action for their relative’s wrongful death. The circuit court’s judgment is affirmed.

Facts

Dorothy Lawrence took up residence at Beverly Manor in March 2003. Phyllis Skoglund, Dorothy Lawrence’s daughter, signed an arbitration agreement stating:

It is understood and agreed by [Beverly Manor] and [Dorothy Lawrence] that any and all claims, disputes and controversies ... arising out of, or in connection with, or relating in any way to the Admission Agreement or any service or health care provided by [Beverly Manor] to [Dorothy Lawrence] shall be resolved exclusively by binding arbitration[.]

It is the intention of the parties to this Arbitration Agreement that it shall inure to the benefit of and bind the parties, their successors, and assigns, including without limitation the agents, employees and servants of [Beverly Manor], and all persons whose claim is derived through or on behalf of [Dorothy Lawrence], including any parent, spouse, sibling, child, guardian, executor, legal representative, administrator or hems of [Dorothy Lawrence]. The parties further intend that this agreement is to survive the lives or existence of the parties hereto.

The agreement compels arbitration for any claims Dorothy Lawrence may have against Beverly Manor and any claim “derived through” her claims. Skoglund signed the arbitration agreement on behalf of her mother, acting in her capacity as her mother’s agent under a power of attorney made in 1992.

Shortly after being admitted to Beverly Manor, Dorothy Lawrence died. Her son, Dale Lawrence, filed a petition against Beverly Manor under the wrongful death statute, section 537.080.1 Lawrence claimed that his mother died as a result of injuries incurred when Beverly Manor employees dropped her. Beverly Manor filed a motion in the circuit court to compel arbitration. The circuit court overruled Beverly Manor’s motion, reasoning that “the decedent’s daughter was an agent for *527the purpose of securing residential treatment for the decedent during her lifetime, [and] nothing in the arbitration agreement can be construed to extend to new and independent causes of action....” The circuit court held, therefore, that Ms. Lawrence “could not bind or limit any person who had a right of action arising by reason of her death at some point in the future.”

Beverly Manor appealed.2 After opinion in the court of appeals, this Court granted transfer. Mo. Const, art. V, sec. 10.

Does the arbitration agreement signed by the decedent bind the parties in a wrongful death suit?

An appellate court’s review of a trial court’s denial of a motion to compel arbitration is de novo. Dunn Indus. Group, Inc. v. City of Sugar Creek, 112 S.W.3d 421, 428 (Mo. banc 2003). Before compelling parties to arbitrate, the circuit court must determine whether the arbitration agreement bound the parties to the wrongful death suit. Finney v. Nat’l Healthcare Corp., 193 S.W.3d 393, 395 (Mo.App.2006). The parties do not dispute the fact that if Dorothy Lawrence were alive, she would be bound by the arbitration agreement. They also do not dispute that if Dale Lawrence’s claim is derived through his mother’s claim, he too would be bound by the agreement. The relevant question, then, becomes whether a suit for wrongful death can be considered derivative of any underlying tort claims that could have been brought by the deceased.

The wrongful death statute under which Lawrence brings his claim, section 537.080, provides that:

Whenever the death of a person results from any act, conduct, occurrence, transaction, or circumstance which, if death had not ensued, would have entitled such person to recover damages in respect thereof, the person or party who, or the corporation which, would have been liable if death had not ensued shall be liable in an action for damages, notwithstanding the death of the person injured[.]

“The wrongful death act creates a new cause of action where none existed at common law and did not revive a cause of action belonging to the deceased,” this Court held in O’Grady v. Brown, 654 S.W.2d 904, 910 (Mo. banc 1983) (emphasis added). “The right of action thus created is neither a transmitted right nor a survival right.” Id.

This Court upheld the view that wrongful death is a cause of action distinct from any underlying tort claims in both Sullivan v. Carlisle, 851 S.W.2d 510, 514-15 (Mo. banc 1993), and American Family Mutual Insurance Company v. Ward, 774 S.W.2d 135, 136-37 (Mo. banc 1989).3 In Finney, the court of appeals followed O’Grady, holding that “[t]he wrongful death claim does not belong to the deceased or even to a decedent’s estate.” 193 S.W.3d at 395.

*528Finney was factually similar to the present case. Jane Franano was admitted to a nursing home, and her granddaughter signed an arbitration agreement on behalf of Franano. Id. at 394. After Franano died, her daughter, Jan Finney, brought a wrongful death claim against the nursing home. Id. The nursing home moved to compel arbitration, and the court of appeals held that because the wrongful death claim was a separate claim that could not have been brought by the decedent, the arbitration agreement did not apply to the daughter’s wrongful death suit. Id. at 395. Finney’s reasoning is both consistent with this Court’s precedent and applicable to the present case. The wrongful death statute and the precedent cases clearly consider wrongful death to be a cause of action separate and distinct from the underlying tort.

Beverly Manor argues, however, that this Court’s decision in a venue case, State ex rel. Burns v. Whittington, 219 S.W.3d 224 (Mo. banc 2007), undercuts the cases that hold wrongful death to be a separate cause of action. In Burns, the original plaintiff filed a negligence suit in St. Louis City, claiming that exposure in St. Louis County to benzene products had given him leukemia. After the negligence suit was filed, the legislature amended the venue statutes, providing that venue was located where the “injury first occurred.” See section 538.305, RSMo Supp.2007. The new venue statute applied only to cases filed after the date of the amendment. Id. After the venue statute was amended, the original Burns plaintiff died. His son then filed an amended petition alleging wrongful death. The defendants moved for transfer to St. Louis County, arguing that the wrongful death petition constituted a new cause of action falling under the new venue statute. Construing the venue statute, this Court held that for purposes of establishing venue, the “[wrongful death] cause of action is derivative of the underlying tortious acts that caused the fatal injury,” and that therefore, the wrongful death suit did not constitute a new cause of action. Burns, 219 S.W.3d at 225.

This Court’s decision in Burns is consistent with the venue statutes, which, as construed, prevent venue from being manipulated by the parties away from the place for trial designated in the appropriate venue statute. Although the language of Burns may seem to create ambiguity as to whether wrongful death should be considered a derivative cause of action, the Burns holding is limited to the issue of venue.

There is nothing in the venue statute that purports to amend the wrongful death statute or to overturn this Court’s precedents construing the wrongful death statute. Similarly, Burns does not overturn this Court’s precedent holding that, substantively, wrongful death is a cause of action separate from underlying torts. In Burns, because the defendant’s treatment of the deceased was the basis for both the original negligence suit and the wrongful death suit, for purposes of venue there was no difference, as both had the same connection to the original venue. Burns dealt with whether the subsequent wrongful death suit has a sufficient tie to the original venue, whereas in the present case, the question is whether one is bound by another’s agreement to which one was not a party. The different issues necessitate different analyses.

As the court noted in Finney, not only are the parties who may bring wrongful death distinct from those who may bring a suit for an underlying tort, but the measure of damages is also different. See Finney v. Nat’l Healthcare Corp., 193 S.W.3d at 395. (“The damages under section 537.080 are different than the dam*529ages Decedent would have been entitled to in a personal injury action against Appellants. Under Missouri’s wrongful death statute, the party or parties may receive ‘pecuniary losses suffered by reason of the death, funeral expenses, and the reasonable value of the services, consortium, companionship, comfort, instruction, guidance, counsel, training, and support of which those on whose behalf suit may be brought have been deprived by reason of such death.’ Section 5S7.090.”).4 Wrongful death, therefore, is a cause of action separate from the underlying torts, although it is treated differently for the purposes of venue.

The arbitration agreement applies only to “all persons whose claim is derived through or on behalf of [Dorothy Lawrence].” Dorothy Lawrence could not be a party to the wrongful death suit resulting from her death. A claim for wrongful death is not derivative from any claims Dorothy Lawrence might have had, and the damages are not awarded to the wrongful death plaintiffs on Dorothy Lawrence’s behalf.

The arbitration agreement, therefore, cannot bind parties to the wrongful death suit. Dale Lawrence, as the plaintiff in the wrongful death action, is not bound by the arbitration agreement signed by Dorothy Lawrence.

Did the agreement bind Phyllis Sko-glund in her individual capacity or in her capacity as a member of the class of wrongful death plaintiffs?

In the alternative, Beverly Manor argues that pursuant to the mandate of section 5B7.080.2 that “[o]nly one [wrongful death] action may be brought under this section against any one defendant for the death of any one person,” Phyllis Skoglund and Dale Lawrence are in the class of persons who may bring a single wrongful death action. Beverly Manor asserts that because Skoglund signed the arbitration agreement on behalf of Dorothy Lawrence, and because Skoglund and Dale Lawrence could bring only one wrongful death suit, Dale Lawrence must be bound by Sko-glund’s agreement to arbitrate the claim.

This reasoning requires this Court to find that by signing on behalf of her mother, Skoglund also was signing on her own behalf and on behalf of the wrongful death plaintiffs. Skoglund, however, signed pursuant to the power of attorney she had been given. See section 404.705. She did not sign the agreement in her individual capacity. Nor did she purport to sign as a representative of the class of potential wrongful death beneficiaries, even assuming she could have done so. But see, Mullane v. Central Hanover Bank & Trust, 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950). Skoglund’s only signature to the agreement is in her capacity as her mother’s agent. The arbitration agreement does not bind Skoglund and does not bind the class of wrongful death plaintiffs. See Nitro Distrib., Inc. v. Dunn, 194 S.W.3d 339, 345 (Mo. banc 2006) (“To be bound as a third-party beneficiary, the terms of the contract must clearly express intent to benefit that party or an identifiable class of which the party is a member.”).

*530Neither Phyllis Skoglund nor Dale Lawrence, in their capacity as members of the class of wrongful death plaintiffs, is bound by the arbitration agreement.

This Court affirms the judgment of the trial court.