Wednesday, September 24, 2008

Sennett v. National Healthcare Corporation[1]

Opinion handed down, Missouri Court of Appeals, Southern District, September 24, 2008
Link to Mo. App. Ct. Opinion

Mike Sennett, the son of deceased nursing home patient Edith D. Schmeets, brought a wrongful death action against National Healthcare Corporation, the company that owned the nursing home where his mother died. National Healthcare Corporation sought to compel arbitration against Sennett because his mother had signed an agreement to arbitrate all claims. The Missouri Court of Appeals, Southern District, held that because Sennett’s wrongful death action was not derivative of Schmeets’s injury, the arbitration agreement could not bind Sennett. This holding clarified the prior Missouri Supreme Court case of State ex rel. Burns v. Whittington which seemed to imply that a wrongful death action is derivative of the deceased estate’s underlying tort action.

I. Facts and Holding[2]

National Healthcare Corporation (“National Healthcare”) admitted Schmeets to its assisted living community on September 3, 2004. As part of the agreement for long-term care, Schmeets’ son Sennett acted as her “legal representative” and executed a written agreement to arbitrate all claims “including, but not limited to, those arising from contract, tort, or statutory law.”[3]

Schmeets died and Sennett brought a wrongful death cause of action against National Health Care Corporation. The defendant corporation filed an action to compel arbitration, but the trial court held that the agreement could not bind Sennett.[4] National Healthcare then filed an interlocutory appeal with the Southern District.

The organization argued that recent precedent from the Missouri Supreme Court made wrongful death actions derivative of the underlying tort claim. Sennett was bound by Schmeets’s agreement to arbitrate, National Healthcare reasoned, because Sennett’s cause of action arose out of Schmeets’s tort claim. The Southern District rejected National Healthcare’s interpretation and held that Sennett was not bound by the agreement.

II. Legal Background

Missouri courts have recognized wrongful death as a cause of action since 1891.[5] The cause of action, derived from statute, allows the relatives of a decedent to sue a party for tortious acts that result in the decedent’s death.[6] Wrongful death actions follow different procedural rules than common law torts.[7] The statute of limitations is different, standing is determined by the statute, and until recently, the cause of action was independent of the tort itself. This allowed relatives of the plaintiff an escape hatch to bring causes of action procedurally deficient under common law.

One area that wrongful death plaintiffs found particularly helpful was avoiding contracts where the defendant and the decedent agreed to arbitrate or waive actions in tort.[8] Since the cause of action emerged at the time of death, it was an action that lay solely in the relative. If the relative was not a party to the agreement to arbitrate, the agreement could not bind the relative. The wrongful death plaintiff could avoid such agreements that the decedent entered into.

In 2007, this right became uncertain in State ex rel. Burns v. Whittington.[9] In that case, plaintiff Burns brought a tort action for injuries sustained from benzene exposure.[10] While litigation was ongoing, the Missouri General Assembly amended the tort venue statute so that any subsequent tort action would have to be brought in the county where the plaintiff was first injured.[11] Burns died a few months later, and his relatives amended the petition to allege wrongful death.[12] The trial court then attempted to change venue, arguing that the wrongful death action was a new cause of action and had to be brought in the proper venue according to the revised statute.[13] The Missouri Supreme Court held that because the wrongful death action was “derivative of the underlying tortious acts that caused the fatal injury,” the wrongful death theory was not a new cause of action, and as a result, the new venue statute was inapplicable.[14]

It was unclear whether Burns stood for the proposition that wrongful death actions were no longer distinct from the tortious act toward the decedent. If so, it would seem that the procedural advantages of a wrongful death action would be inapplicable.

The Western District dealt with the issue earlier this year in Lawrence v. Manor.[15] In a fact pattern similar to Sennett, a plaintiff brought a wrongful death action against a nursing home for negligent care of his mother.[16] Decedent’s child, acting as an agent, had signed an arbitration agreement.[17] The nursing home sought to compel arbitration against the decedent’s child, claiming that Burns stood for the proposition that the son’s wrongful death claim and decedent’s negligence action were one in the same.[18] Lawrence was heard by a three-judge panel, and produced three different opinions all holding that the wrongful death action was not covered by the arbitration agreement.

Judge Spinden held that Burns applied to the situation, but the son was acting only as an agent and was not bound to the agreement.[19] Judge Holliger would have held that Burns was inapplicable and only stood for the proposition that an amended action was not a new cause of action in regard to filing the lawsuit.[20] Judge Howard concurred with Judge Spinden but dismissed the language of Burns as dicta.[21]

III. Commentary

Burns, if read liberally, could overrule more than 100 years of wrongful death precedents. As Judge Barney opined in Sennett, it would be curious that the Missouri Supreme Court intended to abrogate a century of precedent with such a small case, and it is a stretch to extend it to abolishing the procedural distinction of wrongful death and the underlying tort claim. What is most interesting is the speed at which practitioners brought Burns to the appellate court level. Burns was handed down in 2007 and by 2008 both the Western and Southern districts have had to interpret the case. The zeal and speed of bringing the broad reading argument should underscore just how much of a change to Missouri case law such a reading would entail.

Burns was a special case of a venue statute being amended while litigation was ongoing. Burns was a mandamus case. All of the clues point to Burns as an aberration, simply a case that fell into a gap created by the new statute, thus requiring an extraordinary writ. To hold otherwise would place plaintiffs in a bad position. The Missouri General Assembly has recognized that death is an especially grave harm by passing the wrongful death statute. This special recognition shows a policy view that some procedural bars should be relaxed for the relatives of the decedent. The Missouri Supreme Court should continue to observe the General Assembly’s signals of the importance of wrongful death and narrowly interpret Burns.

- Brian T. Bear

[1] No. 28825, (Mo. App. S.D. 2008). The West reporter citation is Sennett v. Nat'l Healthcare Corp., 272 S.W.3d 237 (Mo. App. S.D. 2008).
[2] Id. at **1-2.
[3] The court noted that Sennett was never legally appointed his mother’s legal representative by filing papers with a court. Id. at *1.
[4] The trial court did, however, allow arbitration for the plaintiff’s theory of “loss of chance,” which is not an applicable theory to bring under the wrongful death statute. Id. at *2. See also Wollen v. DePaul Health Ctr., 828 S.W.2d 681, 685-86 (Mo. 1992) (en banc).
[5] Gray v. McDonald, 16 S.W. 398 (Mo. 1891).
[6] Mo. Rev. Stat. § 537.080 (2000).
[7] See 2 Mo. Practice § 5.28.
[8] See e.g., Finney v. Nat’l Healthcare Corp., 193 S.W.3d 393 (Mo. App. 2006).
[9] 219 S.W.3d 224 (Mo. 2007) (en banc).
[10] Id. at 224-25.
[11] Id. at 225.
[12] Id.; See also Mo. Rev. Stat. § 538.305 (Supp. 2008).
[13] The proper venue was St. Louis County. Burns, 219 S.W.3d at 225.
[14] Id.
[15] 2008 WL 731561 (Mo. App. 2008).
[16] Id. at *1.
[17] Id.
[18] Id.
[19] Id. at **1-6.
[20] Id. at *6.
[21] Id.