Northern Health Facilities v. Batz ex rel. Estate of Batz, 993 F. Supp. 2d 485

In Jan 2012 John Batz was admitted to Tremont Health & Rehabilitation; his wife Faith signed an Alternative Dispute Resolution (ADR) agreement at admission as his "Legal Representative."
The ADR agreement required mediation and, if unsuccessful, binding arbitration of most claims arising from the resident’s stay and included an explicit waiver of trial and appeal rights.
John Batz subsequently developed severe infections and died in March 2012; Faith Batz sued in state court individually and as administratrix of the estate asserting wrongful death and survival claims.
Tremont filed this federal action to stay the state case and compel arbitration under the ADR agreement; the parties disputed (1) whether Faith validly signed as John’s agent and (2) whether wrongful death claims can be compelled to arbitrate under Pennsylvania law (post-Pisano).
The court found undisputed evidence (nurse affidavit and counsel concessions) that Faith signed with John’s express authority and thus the ADR agreement was validly executed by an agent.
The court held that, under Pennsylvania law as interpreted in Pisano, wrongful death claims are not derivative of the decedent’s rights and therefore cannot be compelled to arbitration; survival claims are arbitrable. The court compelled arbitration only for the survival claims and stayed the state action as to those claims.

Issue	Plaintiff's Argument (Batz/Tremont)	Defendant's Argument (Batz)	Held
Validity of Faith's signature / agency	Faith signed as John’s legal representative with his authority; agency valid so contract binding	Signature invalid because decedent did not personally sign	Held: Faith had express authority to sign; agency valid; signature does not invalidate agreement
Whether ADR requires initial state-court finding under PUAA before invoking FAA	ADR references PUAA but incorporates FAA if PUAA cannot support enforcement; FAA governs and preempts any requirement to litigate first	ADR’s PUAA reference requires a Pennsylvania court finding before FAA applies	Held: FAA preempts any contractual requirement to submit to state-court first; agreement enforceable under FAA/PUAA as written
Applicability of Pisano to wrongful death claims	Pisano inapplicable because agent (wife) signed, not decedent	Pisano bars arbitration of wrongful death claims even when decedent/agent signed; wrongful death belongs to beneficiaries, not decedent	Held: Pisano applies; wrongful death claims are not derivative and cannot be compelled to arbitration; agent signature irrelevant to Pisano rule
Whether claims must be bifurcated between arbitration and court	Arbitration should resolve all related claims for efficiency	All claims must be kept together in litigation for efficiency	Held: FAA requires piecemeal resolution; survival claims sent to arbitration while wrongful death claims remain in court (bifurcation required)

Pisano v. Extendicare Homes, Inc., 77 A.3d 651 (Pa. Super. Ct. 2013) (holds wrongful death claims are not derivative of decedent and cannot be compelled to arbitration by decedent's agreement)
Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (FAA permits piecemeal enforcement of arbitration agreements; separate forums may be required)
Volt Info. Sciences, Inc. v. Bd. of Trustees of Leland Stanford Junior Univ., 489 U.S. 468 (1989) (FAA preempts state rules that require judicial forum contrary to arbitration agreement; parties may adopt state arbitration rules)
Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985) (strong federal policy favoring enforcement of arbitration agreements)
Ario v. Underwriting Members of Syndicate 53, 618 F.3d 277 (3d Cir. 2010) (parties may adopt state arbitration procedures while FAA still enforces arbitration agreements)
Grbac v. Reading Fair Co., 688 F.2d 215 (3d Cir. 1982) (contrasting Third Circuit decision treating wrongful death as derivative for purposes of pre-mortem releases; discussed and distinguished by the court)