Arbitration agreements can be enforced in wrongful death cases, says NM Court of Appeals

When a personal representative files a wrongful death case, is he or she bound by an arbitration agreement signed by the deceased person (or someone holding a power of attorney for the deceased)? Yesterday, the Court of Appeals answered that question “yes” in Krahmer v. Laurel Healthcare Providers, LLC.

This situation arises often in a nursing home context. On admission, the resident, or someone holding a power of attorney for the resident, signs an agreement stating that all disputes between the resident and the nursing home will be resolved by arbitration.

If the resident dies, and the personal representative of the resident’s estate files a wrongful death lawsuit against the nursing home, the personal representative will argue that the arbitration agreement should not be enforced. Sometimes the personal representative will be in a position to argue that he or she did not sign the agreement, and thus should not be bound by it. And if the personal representative did sign it, then it should not be enforced because the other Wrongful Death Act beneficiaries did not sign it.

Although perhaps superficially appealing, this argument does not withstand scrutiny, as Chief Judge Kennedy explained in the Court’s unanimous opinion. The opinion offers three principal reasons:

First, the Wrongful Death Act specifically creates a cause of action only for any “act, or neglect, or default” that causes death “such as would, if death had not ensued, have entitled the party injured to maintain an action and recover damages….” NMSA 1978, § 41-2-1. Because the Act is in derogation of the common law, it is construed strictly, and therefore this language means that “the same cause of action exactly as it would have been possessed by the decedent is what is transmitted to the personal representative, and any limitations on the decedent’s personal right to maintain an action will survive as well.”

Second, Chief Judge Kennedy points out that previous New Mexico cases have consistently treated the personal representative’s rights in a wrongful death action as derivative of the decedent’s, and distinguishes the non-New Mexico cases that plaintiffs typically rely on.

Third, the opinion notes New Mexico’s strong public policy in favor of arbitration.

I believe this is a case that is likely to be appealed to the New Mexico Supreme Court, and it is to be hoped that the justices will affirm the Court of Appeals’ opinion here.

 

 

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