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Md. court: Patients cannot agree to arbitrate wrongful-death claims

Patients cannot sign away their family members’ right to sue a health care facility for wrongful death should such a claim arise, Maryland’s second highest court ruled Thursday in a case addressing arbitration clauses in hospital admissions documents.

Wrongful-death claims – by their very nature – belong not to the patient but to his or her surviving family members, the Court of Special Appeals said. Thus, patients cannot bind their kin to arbitrate, rather than litigate, the wrongful-death claims, the court added in its reported, unanimous decision.

The ruling enables Valerie Peeler to pursue in circuit court her claim that a Baltimore County nursing facility’s negligence caused her mother’s death.

FutureCare NorthPoint LLC had argued that Peeler was bound by an arbitration clause in documents her mother, Phyllis Butz, had signed upon admission to the facility.

But the Court of Special Appeals said the provision went too far in stating that “any action, dispute, claim or controversy of any kind” — including wrongful death — would be resolved by an arbitrator.

“When Ms. Peeler asserted her wrongful-death claim against FutureCare, she was not a representative of her mother’s estate seeking recovery for her mother’s injuries; she was acting on her own behalf to recover for her own losses,” Judge Kevin F. Arthur wrote for the appellate court.

“The wrongful-death action is, both in form and substance, a controversy between Ms. Peeler and FutureCare; it is not a continuation of any controversy between Mrs. Butz and FutureCare,” Arthur added. “Furthermore, Mrs. Butz never owned the right to recover damages under [Maryland law] for her own wrongful death, and hence she had no power to bind the person who has that right – Peeler – to an agreement to arbitrate. In short, notwithstanding that the agreement purports to require Peeler to arbitrate her wrongful-death claims [against] FutureCare, basic contract principles support the conclusion that she has no such obligation.”

The court distinguished a wrongful-death claim from a “survival” action, in which a personal representative of the patient brings the claim he or she could have brought had death not occurred. Unlike wrongful death, a survival claim on behalf of the estate would be subject to the arbitration clause because the representative essentially “steps into the shoes” of the deceased, who had signed the admissions documents, the court said.

Peeler’s attorney, Justin P. Zuber, called the court’s decision a “victory” for family members seeking civil justice in the death of a loved one, which he said generally cannot be achieved through arbitration.

“Arbitration is a method of removing the case from the plaintiffs’ constitutional right to have the case heard by a jury,” said Zuber, of Miller & Zois LLC in Baltimore.

FutureCare’s attorney, John J. Murphy III, did not immediately return telephone and email messages seeking comment Friday on the decision and potential plans to seek review by the Court of Appeals. Murphy is with Walker, Murphy & Nelson LLP in Rockville.

In pre-litigation discussions, FutureCare told Peeler of the arbitration clause her mother had signed and requested that any wrongful death claim go before an arbitrator, according to the court’s opinion.

But Peeler rejected the request and sued FutureCare in August 2014, claiming medical malpractice had caused Butz’ death on March 24, 2012. Peeler seeks compensation for the mental and emotional anguish, as well as the loss of society, comfort, advice and guidance that resulted from her mother’s death.

FutureCare sought dismissal of the lawsuit, arguing it was barred by the “enforceable binding arbitration agreement” Butz had signed upon her admission to the facility.

Baltimore County Circuit Judge Mickey J. Norman disagreed and ordered the lawsuit to proceed, saying Peeler was not bound by her mother’s signature.

The lawsuit was stayed as FutureCare sought review by the Court of Special Appeals.

Arthur was joined in the opinion by Judges Deborah S. Eyler and Alan M. Wilner, a retired judge sitting by special assignment.

The Court of Special Appeals rendered its decision in FutureCare NorthPoint LLC v. Valerie Peeler, No. 2602, September Term 2014.