MARY E. ROTH and MICHAEL A. ROTH, Individually and as Coexecutors of the Estate of Cletus Roth, ANNA M. ROTH, Individually, and BRADLEY E. ROTH, Individually, Plaintiffs, vs. THE EVANGELICAL LUTHERAN GOOD SAMARITAN SOCIETY d/b/a GOOD SAMARITAN SOCIETY - GEORGE, Defendant.
No. 15-2095
IN THE SUPREME COURT OF IOWA
Filed October 21, 2016 Amended December 30, 2016
Certified questions of law from the United States District Court for the Northern District of Iowa, Mark W. Bennett, United States District Court Judge.
Pressley Henningsen and Benjamin P. Long of RSH Legal, P.C., Cedar Rapids, for plaintiffs.
Christopher P. Jannes and Kendall R. Watkins of Davis, Brown, Koehn, Shors & Roberts, Des Moines, for defendant.
We have been asked to answer two certified questions of Iowa law in a tort case brought by the adult children of a former nursing home resident against the nursing home. The questions are as follows:
- Does
Iowa Code section 613.15 require that adult children‘s loss-of-parental-consortium claims be arbitrated when the deceased parent‘s estate‘s claims are otherwise subject to arbitration? - Does the fact that a deceased parent‘s estate‘s claims are subject to arbitration establish that it is impossible, impracticable, or not in the best interest of the decedent‘s adult children for the decedent‘s estate to maintain their claims for loss of parental consortium, such that the loss-of-consortium claims can be maintained separately in court, notwithstanding that the estate‘s claims must be arbitrated?
For the reasons discussed herein, we answer these questions as follows:
- No.
- It is not necessary to answer this question.
I. Background Facts and Proceedings.
On November 27, 2013, seventy-nine-year-old Cletus Roth was admitted to a forty-five-bed nursing facility operated by The Evangelical Lutheran Good Samaritan Society (Good Samaritan) in Lyon County. Approximately two weeks later, on December 12, Cletus‘s son Michael signed a detailed admission agreement with Good Samaritan relating to Cletus‘s stay. At that time, Michael had general healthcare powers of attorney for Cletus. Cletus‘s daughter Mary also had the same powers of attorney.
Part of the admission documentation was a separate two-page document entitled “RESOLUTION OF LEGAL DISPUTES.” This item
A. Resident‘s Rights. Any legal controversy, dispute, disagreement or claim arising between the Parties hereto after the execution of this Admission Agreement in which Resident, or a person acting on his or her behalf, alleges a violation of any right granted Resident under law or contract shall be settled exclusively by binding arbitration as set forth in Section C. below. This provision shall not limit in any way the Resident‘s right to file formal or informal grievances with the Facility or the state or federal government.
B. All Other Disputes. Any legal controversy, dispute, disagreement or claim of any kind arising out of or related to this Admission Agreement, or the breach thereof, or, related to the care of stay at the Facility, shall be settled exclusively by binding arbitration as set forth in Section C. below. This arbitration clause is meant to apply to all controversies, disputes, disagreements or claims including, but not limited to, all breach of contract claims, all negligence and malpractice claims, all tort claims and all allegations of fraud concerning entering into or canceling this Admission Agreement. This arbitration provision binds all parties whose claims may arise out of or relate to treatment or service provided by the center including any spouse or heirs of the Resident.
C. Conduct of Arbitration. The Resident understands that agreeing to arbitrate legal disputes means that he/she is waiving his/her right to sue in a court of law and to a trial by jury and that arbitration is not a limitation of liability but merely shifts the Parties’ dispute(s) to an alternate forum. The Resident shall indicate his/her willingness to arbitrate by informing the Facility by marking the YES or NO box below and signing and dating where indicated. . . .
D. Governing Law. The Parties acknowledge that the Facility regularly conducts transactions involving interstate commerce and that services provided by the Facility to the Resident involve interstate commerce. The Parties therefore agree that this Admission Agreement is a transaction involving interstate commerce. The Parties agree that this Resolution of Legal Disputes provision and all proceedings relating to the arbitration of any claim shall be governed by and interpreted under the Federal
Arbitration Act (FAA), 9 U.S.C. Sections 1-16 (or as amended or superseded).
In the middle of the second page were two boxes:
YES I DO wish to arbitrate disputes and I received a copy of this Resolution of Legal Disputes.
NO I DO NOT wish to arbitrate disputes.
Michael indicated that he wished to arbitrate disputes by approving the checking of the first box and then signing and dating the arbitration agreement.1
Following Cletus‘s death, on August 14, 2015, Mary and Michael as coexecutors of his estate—as well as Mary, Michael, and their siblings Anna and Bradley individually—filed an action against Good Samaritan. The petition alleged that the defendant had “negligently cared for Cletus . . . and violated numerous regulations, laws, rights, and industry standards, causing Cletus . . . personal injury, illness, harm, and eventual death . . . .” Five counts were set forth in the petition: “wrongful death, negligence, gross negligence, and/or recklessness,” “breach of contract,” “dependent adult abuse,” “loss of consortium for [Mary, Michael, Anna, and Bradley],” and “punitive damages.” Good Samaritan removed the case to federal court based on diversity of citizenship then moved to compel arbitration.
II. Standard Applicable to Certified Questions.
We have said before,
It is within our discretion to answer certified questions from a United States district court. We may answer a question certified to us when (1) a proper court certified the question, (2) the question involves a matter of Iowa law, (3) the question “may be determinative of the cause . . . pending in the certifying court,” and (4) it appears to the certifying court that there is no controlling Iowa precedent.
Life Inv‘rs Ins. Co. of Am. v. Estate of Corrado, 838 N.W.2d 640, 643 (Iowa 2013) (citation omitted) (quoting
Here we elect to answer the certified questions. They arrive to us from a proper court, they involve matters of Iowa law, they may be determinative of the cause, and there is no controlling Iowa precedent. See Oyens Feed & Supply, Inc. v. Primebank, 879 N.W.2d 853, 858 (Iowa 2016). Additionally, both parties urge us to answer the questions. See id.
III. Analysis.
A. First Certified Question: Does Iowa Code Section 613.15 Require Adult Children‘s Loss-of-Consortium Claims to Be Arbitrated When the Estate‘s Claims Are Otherwise Subject to Arbitration?
When a person dies due to the wrongful or negligent act of another, Iowa law authorizes the personal representative to commence a wrongful death action on behalf of the estate. As we have explained,
Iowa recognizes no common law action for wrongful death. Power to maintain such actions is entirely statutory. Our
first statute was enacted in 1851 as Code § 2501 . That section is today§ 611.20 , a survival statute, which keeps alive for the benefit of his estate the cause of action which the deceased prior to his death could have brought had he survived the injury, with recovery enlarged to include the wrongful death.
Egan v. Naylor, 208 N.W.2d 915, 917 (Iowa 1973).
In addition, Iowa recognizes a cause of action for loss of consortium. When a minor child suffers injury or death,
In any action for damages because of the wrongful or negligent injury or death of a woman, there shall be no disabilities or restrictions, and recovery may be had on account thereof in the same manner as in cases of damage because of the wrongful or negligent injury or death of a man. In addition she, or her administrator for her estate, may recover for physician‘s services, nursing and hospital expense, and in the case of both women and men, such person, or the appropriate administrator, may recover the value of services and support as spouse or parent, or both, as the case may be, in such sum as the jury deems proper; provided, however, recovery for these elements of damage may not be had by the spouse and children, as such, of any person who, or whose administrator, is entitled to recover same.
But although the personal representative normally files both claims, there is a critical difference between the wrongful death cause of action and the consortium cause of action. In the latter instance, damages “are to be distributed by the trial court [to the children] under section 633.336.” Id. at 151-52.
When a wrongful act produces death, damages recovered as a result of the wrongful act shall be disposed of as personal property belonging to the estate of the deceased; however, if the damages include damages for loss of services and support of a deceased spouse, parent, or child, the damages shall be apportioned by the court among the surviving spouse, children, and parents of the decedent in a manner as the court may deem equitable consistent with the loss of services and support sustained by the surviving spouse, children, and parents respectively.
In our caselaw, we have reiterated these points:
Authority to sue for lost services and the recovery belonged to the injured person rather than the deprived spouse or child in the action under section 613.15. If the person died, the only further recovery could be made under . . . section 613.15 in the case of death of a spouse or parent. Authority to sue under section 613.15 passed to the administrator but, under section 633.336, the recovery was to be apportioned to the spouse and children of the decedent in accordance with their loss.
Madison v. Colby, 348 N.W.2d 202, 207 (Iowa 1984). The cause of action for parental consortium is “to be commenced by . . . the parent‘s estate”
[A] child has a cause of action for loss of parental consortium and support for the death or injury of a parent by a third party. . . . Yet, such a claim is required to be brought by . . . the administrator of the estate under
Iowa Code section 613.15 .
Clark v. Estate of Rice ex rel. Rice, 653 N.W.2d 166, 174 (Iowa 2002) (citations omitted); see also Nichols v. Schweitzer, 472 N.W.2d 266, 271 (Iowa 1991) (“[S]ection 613.15 designates the personal representative of the deceased as the proper party to bring a suit for the loss of consortium of the deprived spouse. The independent claim of the deprived spouse thus passes to the administrator on death of the injured spouse.“).
Yet there is an exception to the rule that either the parent or—in the case of the death—the administrator or executor of the parent‘s estate must commence an action to recover damages for loss of consortium. See Nelson v. Ludovissy, 368 N.W.2d 141, 146 (Iowa 1985). In Nelson, Hans Nelson was injured when his farm tractor collided with a truck. Id. at 143. He and his wife sued the owner and the operator of the truck seeking damages for Hans‘s injuries and lost services and support to their minor children. Id. However, they made no claim for lost services and support on behalf of their adult children. Id. The adult children brought separate actions, which the district court dismissed. Id. We reversed. Id. at 146.
We explained that while child-parent consortium claims are “subject to the mandates of [
[W]e must reject appellants’ claim that adult children may pursue consortium and loss of support claims under section 613.15 in their own names as a matter of right. The statute expressly provides that “recovery for these elements of damage may not be had by the . . . children, as such, of any person who . . . is entitled to recover same.” In order for either a minor or adult child to avoid this statutory proscription, we deem it necessary that the child must first establish to the court‘s satisfaction that it is impossible, impracticable or not in the child‘s best interest for the parent to maintain the action.
Id. (quoting
The required showing may be inferred from the circumstances. Where, as in the present case, the statutory plaintiff has already commenced an action omitting the claims of a child, it may be inferred that the statutory plaintiff has elected against representing the child‘s interests. Such circumstance will justify maintaining the action in the child‘s own name subject, however, to joinder with the parent‘s claim to the extent required by Madison. Because the issue is involved in the present actions, we conclude that for this purpose consolidation of pending actions is the equivalent of joinder.
Similarly, and again subject to the requirement of joinder with the parent‘s claim, we recognize that the rights of adult children to manage and control their own affairs requires that where disagreement arises over who shall control the course of the litigation, this circumstance alone should permit an adult child to maintain a claim under section 613.15 in the child‘s own name.
Id. In short, we recognized an exception to
We agree with the district court that when a personal representative brings a wrongful-death action against a party with whom the decedent entered into a binding arbitration agreement, the case is subject to arbitration. This is due to the nature of the wrongful-death action in Iowa:
Unlike the wrongful death statutes in many states, Iowa‘s death statutes have always been of the “survival” type. Such a statute does not create a new cause of action in a decedent‘s survivors; rather, it preserves whatever rights and liabilities a decedent had with respect to a cause of action at the time of his death. The cause of action thus preserved is deemed to accrue to the decedent‘s estate representative “at the time it would have accrued to the deceased if he had survived.”
Weitl v. Moes, 311 N.W.2d 259, 270 (Iowa 1981) (plurality opinion) (citations omitted) (quoting
The right to recover wrongful-death damages in Iowa is vested exclusively in the estate representative, and the recovery belongs to the
Notably, in other jurisdictions where wrongful-death actions are brought by a personal representative who stands in the shoes of the decedent, courts regularly hold that the personal representative must abide by any arbitration agreement of the decedent. See Briarcliff Nursing Home, Inc. v. Turcotte, 894 So. 2d 661, 664-65 (Ala. 2004) (holding in two actions against a nursing home that the personal representatives were “bound by the arbitration provisions contained in the admission contracts“); Laizure v. Avante at Leesburg, Inc., 109 So. 3d 752, 754 (Fla. 2013) (concluding that the survivors of a nursing home patient were obligated to arbitrate wrongful-death claims against the nursing home because such claims are “derivative“); Sanford v. Castleton Health Care Ctr., LLC, 813 N.E.2d 411, 422 (Ind. Ct. App. 2004) (holding that wrongful-death claims must be arbitrated based upon an arbitration clause in the decedent‘s admission agreement because under Indiana law “a personal representative may maintain a cause of action against an alleged wrongdoer only if the decedent, if alive, might have maintained such a cause of action“); Estate of Krahmer ex rel. Peck v. Laurel Healthcare Providers, LLC, 315 P.3d 298, 300-01 (N.M. Ct. App. 2013)
By contrast, in jurisdictions where wrongful death is regarded as an independent claim for the direct benefit of the estate‘s beneficiaries, i.e., the “many states” referenced in Weitl, 311 N.W.2d at 270, courts generally do not find the decedent‘s arbitration agreement to be binding. See Estate of Decamacho ex rel. Guthrie v. La Solana Care & Rehab, Inc., 316 P.3d 607, 614 (Ariz. Ct. App. 2014) (holding a wrongful-death claim against a nursing home not arbitrable because in Arizona “a wrongful death claim is independently held by the decedent‘s statutory beneficiaries“); Norton v. United Health Servs. of Ga., Inc., 783 S.E.2d 437, 440-41 (Ga. Ct. App. 2016) (determining that an arbitration agreement executed by the decedent‘s authorized representative during the decedent‘s lifetime was not binding in a wrongful-death action because such a claim belongs to the survivors); Carter v. SSC Odin Operating Co., LLC, 976 N.E.2d 344, 355-58 (Ill. 2012) (rejecting the argument that a wrongful-death action is “a true asset of the decedent‘s estate” and can therefore be limited by the decedent‘s agreement to arbitrate); Ping v. Beverly Enters., Inc., 376 S.W.3d 581, 600 (Ky. 2012) (“[T]he wrongful death claimants would not be bound by their 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
At the outset, we are not persuaded by the Roth children‘s argument that
Additionally, the presence of the words “any action for damages” at the beginning of section 613.15 to some extent undercuts the Roth children‘s position that the phrase “in such sum as the jury deems proper” later in the statute establishes a nonwaivable right to a jury trial on parental consortium claims. Clearly, “any action for damages” must include a nonjury proceeding. So, if the Roth children were right, section 613.15 would allow wrongful-death claims to be heard by the court but require consortium claims brought by the same administrator in the same case to be heard by a jury. That would be incongruous. See
Also noteworthy are the circumstances surrounding the enactment of
This would not be the only instance where the Iowa Code literally refers to a jury determination but, in context, the reference means a determination by the factfinder. For example,
If
However, to this point we have only determined that a jury trial may be waived in favor of a bench trial in a consortium action under section 613.15. This leaves open the larger question whether a consortium action must be arbitrated if the decedent (or as here his attorney in fact) entered into a binding arbitration agreement. We are
Moreover, we are guided by the principle that we construe statutes to avoid constitutional infirmities. See Iowa Dep‘t of Human Servs. v. Cmty. Care, Inc., 861 N.W.2d 868, 869 (Iowa 2015) (referring to “the principle that we avoid interpreting ambiguous statutes in a manner that leads to constitutional difficulties“); Simmons v. State Pub. Def., 791 N.W.2d 69, 73-74, 88 (Iowa 2010) (“Ordinarily, we construe statutes to avoid potential constitutional infirmity if we may reasonably do so.“); see also
If
Because of its subject matter, Marmet Health Care Center, Inc. v. Brown, 565 U.S. 530, 132 S. Ct. 1201, 182 L. Ed. 2d 42 (2012) (per curiam) is pertinent in this regard. There the United States Supreme Court considered three consolidated negligence cases filed against West Virginia nursing homes. In each case, a family member of the resident had sued the nursing home in state court following the resident‘s death, even though a clause in the nursing home admission agreement required
as a matter of public policy under West Virginia law, an arbitration clause in a nursing home admission agreement adopted prior to an occurrence of negligence that results in a personal injury or wrongful death, shall not be enforced to compel arbitration of a dispute concerning the negligence.
Id. at 532, 132 S. Ct. at 1203, 182 L. Ed. 2d at 45 (quoting Brown ex rel. Brown v. Genesis Healthcare Corp., 724 S.E.2d 250, 292 (W. Va. 2011)).
The United States Supreme Court granted the nursing home‘s petition for certiorari and vacated the state supreme court‘s decision in a per curiam opinion. Id. at 534, 132 S. Ct. at 1204, 182 L. Ed. 2d at 46. Specifically, it held that
West Virginia‘s prohibition against predispute agreements to arbitrate personal-injury or wrongful-death claims against nursing homes is a categorical rule prohibiting arbitration of a particular type of claim, and that rule is contrary to the terms and coverage of the FAA.
Id. at 533, 132 S. Ct. at 1203-04, 182 L. Ed. 2d at 45 (citing inter alia Concepcion and Preston); see also Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 56, 115 S. Ct. 1212, 1215-16, 131 L. Ed. 2d 76, 83-84 (1995) (FAA preempts state law requiring judicial resolution of punitive damage claims); Southland Corp. v. Keating, 465 U.S. 1, 10, 104 S. Ct. 852, 858, 79 L. Ed. 2d 1, 12 (1984) (FAA preempts state statute‘s bar on arbitration of claims brought under that statute).
Marmet Health heightens our doubts as to the constitutionality of a construction of
Nonetheless, we do not find the Roth children‘s consortium claims subject to arbitration under the facts certified to us. These claims belong to the adult children, and they never personally agreed to arbitrate. See Order Certifying Questions at 6 (“The Roth children are correct that none of them signed the arbitration agreement in their individual capacities or otherwise agreed to arbitration of their individual claims.“). While loss-of-consortium claims under
We reach this conclusion for several reasons. First, it bears emphasis that the child owns the cause of action and the personal representative is “merely the conduit, the nominal plaintiff,” when bringing the child‘s consortium claim under
The FAA too has been viewed as substantive law. It “rests on the authority of Congress to enact substantive rules under the Commerce Clause.” Southland Corp., 465 U.S. at 11, 104 S. Ct. at 858, 79 L. Ed. 2d at 12. It is “a body of federal substantive law.” Moses H. Cone Mem‘l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S. Ct. 927, 941, 74 L. Ed. 2d 765, 785 (1983). Given the FAA‘s status as substantive law, it seems quite wrong that an adult child could be bound to that body of law absent his or her agreement, simply because the adult child‘s claim is routed procedurally through a different party. This, in our view, confuses substance with procedure. See Mission Residential, LLC v. Triple Net Props., LLC, 654 S.E.2d 888, 891 (Va. 2008) (finding that a claim filed by a member of a limited liability company on behalf of the LLC was not subject to the member‘s arbitration agreement because the member was only a “nominal plaintiff” bringing suit on behalf of the LLC).
Second, even if we held that consortium claims brought by a personal representative were subject to the decedent‘s arbitration agreement, the children would have an easy way to avoid arbitration. Under Nelson, if “the statutory plaintiff has already commenced an action omitting the claims of a child,” the child may bring the consortium claim directly. 368 N.W.2d at 146. So, in the future, lawyers could sidestep arbitration simply by the expedient of filing a wrongful-death claim
Third, in jurisdictions where the wrongful-death claim belongs to the survivors but is brought by the personal representative, courts regularly hold that the decedent‘s arbitration agreement does not lead to arbitration of the wrongful-death case. Here, the situation is somewhat analogous: Under Iowa law, one party owns the claim, but a different party gets to file it.
For example, Ohio courts hold that a personal representative is not bound to arbitrate a wrongful-death claim despite a decedent‘s arbitration agreement because “[a] decedent cannot bind his or her beneficiaries to arbitrate their wrongful-death claims.” Wolcott, 2016 WL 1178579, at *2 (alteration in original) (quoting Peters v. Columbus Steel Castings Co., 873 N.E.2d 1258, 1259 (Ohio 2007)). In Ohio, the personal representative is just the “nominal party” bringing the claim. Id. So too in Kentucky. See Ping, 376 S.W.3d at 598, 599 (noting that in Kentucky, the wrongful-death cause of action is “prosecuted by the personal representative” but “accrues separately to the wrongful death beneficiaries and is meant to compensate them for their own pecuniary loss“). Likewise in Oklahoma. See Boler, 336 P.3d at 476 (noting that a wrongful-death action is “maintained by the personal representative of the deceased person” but “[t]he amounts recovered are distributed to those designated [survivors] as specified in the statute“). Similarly, in Washington, although the personal representative is “the exclusive statutory agent to bring the wrongful death claims on behalf of the heirs,” no benefits flow to the estate and the decedent‘s arbitration
As the certifying federal district court observed, we have in the past characterized the loss of consortium cause of action as “derived” and not “independent.” Roquet by Roquet, 436 N.W.2d at 47. But it is important to note the context in which these terms were used. We meant that the consortium cause of action is derived from a statute, not that it is derivative of the decedent‘s rights and therefore subject to the decedent‘s litigation-related agreements. See id. (stating that “this cause of action was derived from
B. Second Certified Question: Does the Fact That a Deceased Parent‘s Estate‘s Claims Are Subject to Arbitration Establish That It Is Impossible, Impracticable, or Not in the Best Interest of the Decedent‘s Adult Children for the Decedent‘s Estate to Maintain Their Claims for Loss of Parental Consortium?
In light of our answer to the previous question, this question has become moot.
We have answered the certified questions as set forth above for the reasons stated and return this case to the United States District Court for the Northern District of Iowa for further proceedings consistent with this opinion.
CERTIFIED QUESTIONS ANSWERED.
Notes
Medicare and Medicaid Programs; Reform of Requirements for Long-Term Care Facilities, 81 Fed. Reg. 68,688, 68,867 (Oct. 4, 2016) (to be codified atA facility must not enter into a pre-dispute agreement for binding arbitration with any resident or resident‘s representative nor require that a resident sign an arbitration agreement as a condition of admission to the [long-term care] facility.
A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.
[M]any—if not all—federal and state courts have held that nursing home residency contracts similar to the one at issue here implicate interstate commerce and the FAA. Generally, these holdings center on a common theme: nursing home residency contracts usually entail providing residents with meals and medical supplies that are inevitably shipped across state lines from out-of-state vendors.
Dean v. Heritage Healthcare of Ridgeway, LLC, 759 S.E.2d 727, 732 (S.C. 2014).
Given that the arbitration agreement at issue indisputably involves commerce and that Arbor Brook is subject to federal regulation and control, we conclude that the FAA applies to the arbitration agreement Plaintiff signed as a mandatory condition of nursing home admission.
Strausberg v. Laurel Healthcare Providers, LLC, 304 P.3d 409, 417 (N.M. 2013). In the present case, it is undisputed that Good Samaritan procures medical equipment and supplies from a number of out-of-state sources and receives approximately half its income from the Medicare and Medicaid programs.