Cole v. Granite Nursing

UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ILLINOIS

SONYA COLE, as Independent Administrator of

the Estate of Curtis Cole, Deceased,

Plaintiff,

Case No. 22-cv-312-JPG

v.

GRANITE NURSING & REHABILITATION

CENTER, LLC and AURORA CARES, LLC,

d/b/a Tara Cares, LLC,

Defendants.

MEMORANDUM AND ORDER

This matter comes before the Court on the motion of defendants Granite Nursing &

Rehabilitation Center, LLC (“Granite Nursing”) and Aurora Cares, LLC d/b/a Tara Cares, LLC

(“Aurora”) to compel arbitration and stay these proceedings (Doc. 7). The defendants point to an

arbitration clause contained in admission papers signed by plaintiff Sonya Cole’s (“Cole”)

deceased husband, Curtis Cole, when he was admitted to Granite Nursing. Cole has responded

to the motion (Doc. 14).

I. Background

This matter arose following the January 2020 death of Curtis Cole, a resident of a long-

term care facility owned and operated by Granite Nursing. Aurora was involved in managing

Granite Nursing’s facility. Curtis Cole was admitted to Granite Nursing’s facility in March 2018

and remained there until shortly before his death, when he was discharged to hospice care.

In this case, Cole asserts that the defendants engaged in abuse or neglect because they did

not act reasonably when they knew or should have known Curtis Cole was at high risk for

developing pressure sores and kidney problems. Specifically, she alleges Granite Nursing failed

to provide appropriate personal or medical care, including ensuring that Curtis Cole was turned

and repositioned to prevent the development and deterioration of pressure sores. Specifically

with respect to Aurora, Cole asserts that it was negligent in managing Granite Nursing’s facility

in that the facility was understaffed with unqualified staff and that the policies and procedures

were not enforced. All of these failures, Cole alleges, caused Curtis Cole to develop health

problems which caused or contributed to pain and suffering and, ultimately, to his death.

In her representative capacity, Cole brings claims on behalf of the decedent’s estate under

the Illinois Survival Act, 755 ILCS 5/27-6, for violation of the Illinois Nursing Home Care Act,

210 ILCS 45/1-101 et seq. (Count I), and for common law negligence (Counts II & V). She also

brings claims for the benefit of Curtis Cole’s surviving kin under the Illinois Wrongful Death

Act (“WDA”), 740 ILCS 180/1 et seq., for common law negligence (Counts III and IV).

The defendants now ask the Court to compel Cole to arbitrate all of her claims in this

case based on an arbitration clause signed by Granite Nursing and Curtis Cole when he entered

the facility in March 2018. The agreement was part of the admissions packet and was captioned

“Jury Trial Waiver and Arbitration Agreement” (“Agreement”). It purports to bind Curtis Cole

as well as his “parents, spouse, children, grandchildren, guardian, executor, executrix,

administrator, administratrix, personal representative, successor, assigns, agents, attorneys, third-

party beneficiaries, insurers, trustees, next friends, legal representatives, heirs and any other

person(s) whose claim is derived through [Curtis Cole].” Agreement ¶ 1. The Agreement

further provides that the parties agree, as their exclusive remedy, to submit to binding arbitration

“all claims, disputes, and controversies of any kind between the parties arising out of or relating

in any way to . . . any service or health care provided by [Granite Nursing] to [Curtis Cole],”

including “any other claim based on any departure from accepted standards of medical, nursing,

or health care.” Agreement ¶ 2.

The defendants believe the Agreement contractually binds Cole to arbitrate her claims

because they derive from Curtis Cole’s claims. Cole does not really dispute that her claims

under the Survival Act must be arbitrated because those are really claims of Curtis Cole that

survived his death, but she argues that her wrongful death claims never belonged to her husband

such that he could have agreed to arbitrate them, and that she herself never agreed to arbitrate

them.

II. Analysis

All parties agree that this case is governed by the Federal Arbitration Act (“FAA”). The

FAA “is a congressional declaration of a liberal federal policy favoring arbitration agreements,

notwithstanding any state substantive or procedural policies to the contrary. The effect of the

section is to create a body of federal substantive law of arbitrability, applicable to any arbitration

agreement within the coverage of the Act.” Moses H. Cone Mem. Hosp. v. Mercury Constr.

Corp., 460 U.S. 1, 24 (1983); accord Perry v. Thomas, 482 U.S. 483, 488 (1987). The FAA

provides that “[a] written provision in . . . a contract evidencing a transaction involving

commerce to settle by arbitration a controversy thereafter arising out of such contract or

transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at

law or in equity for the revocation of any contract.” 9 U.S.C. § 2; see Buckeye Check Cashing,

Inc. v. Cardegna, 546 U.S. 440, 443-44 (2006); Matthews v. Rollins Hudig Hall Co., 72 F.3d 50,

53 (7th Cir. 1995). “This saving clause permits agreements to arbitrate to be invalidated by

‘generally applicable contract defenses, such as fraud, duress, or unconscionability,’ but not by

defenses that apply only to arbitration or that derive their meaning from the fact that an

agreement to arbitrate is at issue.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339

(2011).

“Under the [FAA], arbitration may be compelled if the following three elements are

shown: a written agreement to arbitrate, a dispute within the scope of the arbitration agreement,

and a refusal to arbitrate.” Zurich Am. Ins. Co. v. Watts Indus., Inc., 417 F.3d 682, 687 (7th Cir.

2005) (citing 9 U.S.C. § 4). “[A]ny doubts concerning the scope of arbitrable issues should be

resolved in favor of arbitration, whether the problem at hand is the construction of the contract

language itself or an allegation of waiver, delay, or a like defense to arbitrability.” Moses H.

Cone, 460 U.S. at 24-25; accord Cty. of McHenry v. Ins. Co. of the W., 438 F.3d 813, 823 (7th

Cir. 2006). Nevertheless, arbitration is a matter of contract, and a party cannot be forced to

arbitrate if they did not agree to do so. Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 67

(2010); see EEOC v. Waffle House, Inc., 534 U.S. 279, 293-94 (2002) (EEOC not bound by

employee’s arbitration agreement with employer).

In invoking the arbitration clause, the defendants argue that Cole is bound by the

Agreement Curtis Cole signed. They concede that under Illinois law WDA claims are not

strictly derivative of the decedent’s claims. However, they note that Illinois law allows a

decedent to release his claims before his death and thereby release claims his surviving kin have

for wrongful death. The defendants argue that giving effect to a pre-death release and not a pre-

death agreement to arbitrate impermissibly discriminates against arbitration agreements where

the FAA is very clear that arbitration agreements are to be treated on equal footing with any

other agreement.

Cole concedes that Curtis Cole had the authority to agree to arbitrate his own claims and

the Survival Act claims that derive from them. Accordingly, she does not object to compelled

arbitration of Counts I, II, and V, all brought under the Survival Act. However, she asserts that

Curtis Cole could not bind his surviving kin to also arbitrate their claims under the WDA and

that she herself never agreed to arbitrate. Without her agreement to arbitrate, she maintains, she

cannot be forced to do so.

The parties’ arguments center on an Illinois Supreme Court decision directly on point,

and a later United States Supreme Court decision that calls into question whether the FAA

preempts the rule established in that Illinois decision.

A. Carter

The Illinois Supreme Court case is Carter v. SSC Odin Operating Co., 976 N.E.2d 344

(Ill. 2012). That case involved similar arbitration agreements signed by the legal representative

of a nursing home resident and the resident herself when she entered the nursing home. Id. at

348. The legal representative was also the personal representative of the resident’s estate after

the resident died, in which capacity she brought claims against the nursing home under the

Survival Act and the WDA. Id.

In Carter, the Illinois Supreme Court thoroughly explained the nature of a wrongful death

claim. Id. at 353-58. It is a cause of action created by statute for pecuniary losses suffered by a

decedent’s spouse and next of kin because of the decedent’s death. Id. at 354. A wrongful death

claim must be brought, if at all, by the decedent’s personal representative not as a party in

interest but as a statutory trustee for the benefit of the real parties in interest—the deceased’s

surviving kin. Id. A wrongful death claim does not ever belong to the decedent and only comes

into being upon the decedent’s death, so it is not part of the decedent’s estate such that the

decedent may limit the claim. Id. at 356-57, 360. This is in contrast to a claim under the

Survival Act, which allows a cause of action the decedent had before his death to become part of

the decedent’s estate and to be maintained or continued by the estate’s representative. Id. at 354.

Nevertheless, a wrongful death claim is in a sense derivative of the decedent’s claims in

that the WDA itself conditions the claim on the decedent’s ability “to maintain an action and

recover damages” for his injury from the same person had he not died. Id. at 358; 740 ILCS

180/1 (wrongful death claim may be brought “[w]henever the death of a person shall be caused

by wrongful act . . . and the act. . . is such as would, if death had not ensued, have entitled the

party injured to maintain an action and recover damages. . . .”). The Carter court noted that

where the decedent’s claim would have been barred had she lived, there could be no WDA claim

following her death. Carter, 976 N.E.2d at 358 (citing Mooney v. City of Chi., 88 N.E. 194 (Ill.

1909) (pre-death release of claims); Varelis v. Nw. Mem’l Hosp., 657 N.E.2d 997, 1000 (Ill.

1995) (pre-death personal injury judgment)); Biddy v. Blue Bird Air Service, 30 N.E.2d 14, 18

(Ill. 1940) (election of inconsistent remedy).

However, the Carter court rejected the argument that a decedent’s agreement to arbitrate

disputes bars litigation of any dependent wrongful death claims of her spouse or next of kin.

Carter, 976 N.E.2d at 359. The court reasoned that limitations a decedent places on his own

cause of action cannot overcome the fundamental common law contract law principle that parties

are not bound to arbitrate where they have not agreed to do so. Id. “The FAA’s policy favoring

arbitration does not alter these principles.” Id. In Carter, the only signatories to the arbitration

agreement were the decedent and the defendant nursing home. Id. at 359-60. Consequently, the

estate’s Survival Act claims were subject to arbitration pursuant to the arbitration clause, but the

wrongful death claims were not. Id. at 360. The upshot of Carter is that, as a matter of state

law, the WDA’s requirement that the decedent “would, if death had not ensued, [have been able]

to maintain an action and recover damages” is satisfied even where the decedent agreed to

arbitrate his own personal injury claim. See id. So long as the decedent still has a live claim that

might entitle her to recover damages, the WDA act is satisfied, even if the decedent had

committed those claims to arbitration.

All parties essentially agree that under the Carter rule, Cole’s Survival Act claims must

be sent to arbitration, but her WDA claims on behalf of herself and Curtis Cole’s next of kin may

be litigated despite the arbitration agreement. But the defendants claim Carter’s rule cannot

stand in light of a later United States Supreme Court opinion.

B. Kindred

More recently, the United States Supreme Court decided Kindred Nursing Centers Ltd.

Partnership v. Clark, 137 S. Ct. 1421 (2017), involving a similar dispute between two plaintiffs

suing Kindred, a nursing home in Kentucky, over the death of residents in its care. There, agents

with general, comprehensive powers of attorney signed identical arbitration agreements on

behalf of the residents when they were admitted into the nursing home. Kindred, 137 S. Ct. at

1425. The powers of attorney did not expressly grant authority for their respective agents to

waive the right to a trial by jury by agreeing to arbitrate. When the residents died, their estates

sued Kindred for causing the deaths, and Kindred moved to enforce the arbitration agreements.

Id. at 1425. A Kentucky court held that because the powers of attorney did not specifically

authorize the agents to waive the fundamental right to trial granted by the Kentucky Constitution,

the arbitration agreements violated Kentucky’s public policy and were unenforceable. Id. at

1426.

The United States Supreme Court overruled this conclusion. It held that the special

“clear-statement” rule of Kentucky law—the requirement of an express delegation of authority in

a power of attorney to agree to arbitration—unlawfully singled out arbitration agreements for

different treatment from other agreements, and that this different treatment violated the FAA. Id.

at 1426-27. Accordingly, Kentucky’s requirement—or any other state rule that relies on the

uniqueness of an arbitration agreement as its basis—could not invalidate an otherwise

enforceable arbitration agreement. Id. at 1426.

C. Application

The defendants claim the Carter rule cannot stand in light of Kindred. The Court

disagrees. Carter relied on a fundamental principle of contract law that in no way depended on

the nature of the decedent’s agreement as an arbitration clause. That fundamental principle—

that a party to an agreement cannot bind a non-party—applies to all sorts of agreements. Indeed,

had the decedent’s agreement been about choice of law, judicial forum, allocation of costs and

fees, confidentiality, or any number of standard contract provisions, the results would have been

the same. Curtis Cole could not have bound his personal representative to those agreements for

her wrongful death claims. The application of this rule did not depend in any way on the

agreement being one for arbitration, as it did in Kindred. See also Marmet Health Care Ctr. v.

Brown, 565 U.S. 530, 532-33 (2012) (finding FAA preempts state policy prohibiting pre-dispute

arbitration agreements for personal injury or wrongful death claims against nursing homes).

Furthermore, the Carter rule does not impermissibly treat contracts to release claims

differently from contracts to arbitrate claims. It is true the WDA requires that a decedent have

had the ability “to maintain an action and recover damages” for his injury from the same person

he had not died. See 740 ILCS 180/1. But Carter implicitly interpreted this requirement simply

to mean that the decedent had some underlying claim against the defendant for damages when he

died, not that the claim was able to be litigated in a court. See Carter, 976 N.E.2d at 359.

Under this interpretation, a decedent’s pre-death release of his claims leaves the decedent

with no viable claims whatsoever—whether able to be litigated or compelled to be arbitrated—so

the WDA requirement is not satisfied, and the surviving kin can have no wrongful death claim.

See Mooney v. City of Chi., 88 N.E. 194 (Ill. 1909). Similarly, a pre-death personal injury

judgment awarding relief to the decedent resolves his claims, and he has no claim left at his

death to support a wrongful death claim. See Varelis v. Nw. Mem’l Hosp., 657 N.E.2d 997, 1000

(Ill. 1995). However, where the decedent has not done something to resolve—and extinguish—

his claims before his death, they can still support a wrongful death action under 740 ILCS 180/1.

So while it is true that the Carter rule results in a different outcome depending on

whether the decedent has a claim for damages when he dies, the outcome is not dependent on

whether that claim is able to be litigated or must be arbitrated. The distinction is whether a pre-

death claim exists, not the forum in which it must be resolved. It is simply because the decedent

no longer satisfies the WDA’s condition precedent when he has no claims, but he has some claim

even after an agreement committing it to arbitration.

III. Conclusion

As explained above, Cole’s claims under the Survival Act are subject to Curtis Cole’s

arbitration agreement but her claims under the WDA are not. This conclusion does not

impermissibly treat an agreement to arbitrate differently than other contracts because of its

nature as an arbitration agreement. Therefore, enforcement of Illinois law in this regard does not

violate the FAA.

For the foregoing reasons, the Court:

• GRANTS in part and DENIES in part the defendants’ motion to compel arbitration

(Doc. 7);

• COMPELS, pursuant to 9 U.S.C. § 4, Cole to arbitrate her claims brought under the

Survival Act (Counts I, II, & V) pursuant to the Agreement;

• STAYS Counts I, II, & V until arbitration has been had in accordance with the terms of

the Agreement. All other claims in this case (Counts III & IV) shall proceed as

scheduled; and

• ORDERS Cole to file a status report in September 2022, and every March and

September thereafter until the arbitration is complete, and to file a final status report

within 30 days of the completion of the arbitration.

IT IS SO ORDERED.

DATED: May 2, 2022

s/ J. Phil Gilbert

J. PHIL GILBERT

DISTRICT JUDGE