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Preferred Care Partners Management Group, L.P. v. Alexander

Court of Appeals of Kentucky

September 22, 2017

PREFERRED CARE PARTNERS MANAGEMENT GROUP, L.P.; PREFERRED CARE OF DELAWARE, INC. D/B/A PREFERRED CARE, INC.; STANTON HEALTH FACILITIES, LP D/B/A STANTON NURSING & REHABILITATION CENTER; AND THOMAS B. DAVIS, IN HIS CAPACITY AS ADMINISTRATOR OF STANTON NURSING & REHABILITATION CENTER APPELLANTS
v.
TAFFY ALEXANDER, AS ADMINISTRATRIX OF THE ESTATE OF JOHN D. CLEMONS, SR., DECEASED APPELLEE

         APPEAL FROM POWELL CIRCUIT COURT HONORABLE FRANK ALLEN FLETCHER, JUDGE ACTION NO. 13-CI-00111

          BRIEFS FOR APPELLANTS: Donald L. Miller, II J. Peter Cassidy, III Kristin M. Lomond Louisville, Kentucky

          BRIEF FOR APPELLEE: Tyler Koch Forsythe Robert E. Salyer Lexington, Kentucky

          BEFORE: KRAMER, CHIEF JUDGE; TAYLOR AND THOMPSON, JUDGES.

          OPINION

          TAYLOR, JUDGE.

         Preferred Care Partners Management Group, L.P., Preferred Care of Delaware, Inc. d/b/a Preferred Care, Inc., Stanton Health Facilities, LP, d/b/a Stanton Nursing & Rehabilitation Center, and Thomas B. Davis, in his capacity as Administrator of Stanton Nursing & Rehabilitation Center (collectively referred to as appellants or Stanton Nursing Center) bring this appeal from an Order entered March 24, 2015, by the Powell Circuit Court denying in part their motion to compel arbitration as concerns a wrongful death claim. The sole issue in this appeal looks to whether a wrongful death claim can be litigated by the Estate of John D. Clemons, Sr. and Taffy Alexander Administratrix, on behalf of beneficiaries of the decedent, against a nursing home where the decedent entered into a valid arbitration agreement during his residency. For the reasons stated, we affirm.

         BACKGROUND

         The circuit court, in denying appellant's motion to compel arbitration, followed the Kentucky Supreme Court's holding in Ping v. Beverly Enterprises, Inc., 376 S.W.3d 581 (Ky. 2012). In Ping, the Kentucky Supreme Court squarely confronted whether a decedent could, either directly or through an attorney-in-fact, enter into an arbitration contract that would bind the decedent's beneficiaries in asserting wrongful death claims upon the decedent's death. Id. The Court held:

Finally, the wrongful death claimants would not be bound by the decedent's arbitration agreement, even if one existed, because their statutorily distinct claim does not derive from any claim on behalf of the decedent, and they therefore do not succeed to the decedent's dispute resolution agreements. . . .

Id. at 600.

         In 2015, in Extendicare Homes, Inc. v. Whisman, 478 S.W.3d 306 (Ky. 2015), the Supreme Court confirmed its holding in Ping, 376 S.W.3d 581, with an even more thorough analysis on the issue as follows:

Under Kentucky law, a wrongful death claim is a distinct interest in a property right that belongs only to the statutorily-designated beneficiaries. Decedents, having no cognizable legal rights in the wrongful death claims arising upon their demise, have no authority to make contracts disposing of, encumbering, settling, or otherwise affecting claims that belong to others. The rightful owners of a wrongful death claim, the beneficiaries identified in KRS 411.130(2), cannot be bound to the contractual arrangements purportedly made by the decedent with respect to those claims. A decedent has no more authority to bind the wrongful death beneficiaries to an arbitration agreement than he has to bind them to a settlement agreement fixing or limiting the damages to be recovered from the wrongful death action, limiting the persons against whom a claim could be pursued, or an agreement on how and to whom to allocate the damages recovered in a wrongful death claim. Our analysis in Ping was thorough, complete, correct, and unanimous. . . . and we have no reason to retreat from it now.

Id. at 314 (citations omitted).[1]

         In Extendicare Homes, Inc., the Kentucky Supreme Court actually heard three cases involving similar arbitration issues in regard to nursing homes. In addition to Extendicare Homes, Inc. v. Whisman (2013-SC-000426-I), the companion cases were Kindred Nursing Centers v. Clark (2013-SC-000430-I) and Kindred Nursing Centers v. Wellner (2013-SC-000431-I). Kindred Nursing Centers filed a writ of certiorari with the United States Supreme Court in both of its cases, which was granted on October 28, 2016. However, ...


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