Kindred Nursing Centers Ltd. Partnership v. Cox
486 S.W.3d 892
Ky. Ct. App.2015Background
- In 2010 John R. Cox III signed an admission agreement for his mother, Elizabeth Cox, to a Kindred nursing facility; the agreement contained an arbitration clause.
- After Elizabeth Cox died, Cox (as executor) sued Kindred asserting multiple claims, including a wrongful death claim brought by wrongful-death beneficiaries.
- Kindred moved to compel arbitration of all claims; the trial court compelled arbitration for all claims except the wrongful death claim, relying on Ping v. Beverly Enterprises, Inc.
- Kindred appealed, arguing federal law (FAA/Supremacy Clause) and precedent require arbitration of wrongful-death claims and that Ping improperly singles out arbitration agreements.
- The Kentucky Court of Appeals reviewed legal questions de novo and affirmed the trial court, holding wrongful-death claims are not subject to arbitration under Kentucky law as interpreted in Ping.
Issues
| Issue | Plaintiff's Argument (Cox) | Defendant's Argument (Kindred) | Held |
|---|---|---|---|
| Whether FAA preempts Kentucky rule barring arbitration of wrongful-death claims | Ping and state-law limits are valid; wrongful-death beneficiaries not parties to arbitration agreement | FAA (and Supreme Court precedent) preempts state rules that categorically prohibit arbitration of certain claims | Court: No preemption — Ping is consistent with FAA because it applies state contract principles to determine who is bound by the arbitration agreement |
| Whether Kentucky treats arbitration clauses differently from other contracts re: wrongful-death beneficiaries | Kentucky law distinguishes wrongful-death claims as nonderivative; beneficiaries didn’t agree to arbitrate | Kindred cites cases enforcing exculpatory/release provisions against nonparties and argues Ping singles out arbitration | Court: Distinguishes cited cases (they concern property/exculpatory releases or different facts); Ping does not unfairly single out arbitration |
| Whether Ping forces impermissible splitting of causes of action (conflict with KRS 411.133 and common law) | Cox: Wrongful-death claims accrue separately and are not derivative; no impermissible splitting | Kindred: Splitting would occur if decedent’s claims arbitrated but beneficiaries’ wrongful-death claims litigated | Court: Bound by Kentucky Supreme Court precedent in Ping; no improper splitting issue that overturns precedent |
| Whether Ping departs from longstanding wrongful-death law such that contractual rights were improperly altered | Cox: Ping follows state contract and wrongful-death principles; beneficiaries’ rights protected | Kindred: Ping changed long-standing law and altered enforceability of arbitration clauses | Court: Court is bound to follow Ping; Ping is controlling and does not warrant reversal |
Key Cases Cited
- Ping v. Beverly Enters., 376 S.W.3d 581 (Ky. 2012) (holds wrongful-death claims are distinct and wrongful-death beneficiaries are not bound by admission’s arbitration clause)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009) (state contract law governs whether parties are bound under the FAA)
- Marmet Health Care Ctr., Inc. v. Brown, 132 S. Ct. 1201 (2012) (per curiam) (FAA contains no exception for personal-injury or wrongful-death claims; state rules that categorically prohibit arbitration are preempted)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state rules that invalidate arbitration agreements categorically)
- Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213 (1985) (FAA requires enforcement of arbitration bargains)
- Preston v. Ferrer, 552 U.S. 346 (2008) (FAA preempts state-law provisions assigning exclusive jurisdiction to administrative tribunals when parties agreed to arbitrate)
- Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (1995) (FAA can preempt state law affecting arbitration remedies such as punitive damages questions)
- Perry v. Thomas, 482 U.S. 483 (1987) (FAA preempts state-law rules requiring judicial forum for certain claims)
- Southland Corp. v. Keating, 465 U.S. 1 (1984) (FAA preempts state laws that treat arbitration agreements differently)