Can Oregon Courts Mandate Arbitration of Wrongful Death Claims?

Arbitration is a form of alternative dispute resolution commonly used in place of traditional courtroom litigation. Essentially, an arbitrator–or sometimes a panel of arbitrators–hears the dispute and issues a ruling. An arbitration ruling, called an award, is then legally binding on all parties involved, often with only a very limited right of appeal.

Oregon law actually mandates arbitration of certain civil lawsuits, including personal injury claims, where the plaintiff seeks $50,000 or less in damages. Additionally, some contracts between parties may require arbitration of any disputes arising under that contract, including claims alleging personal injury or even wrongful death. Other contracts can also give the parties the option of either filing a lawsuit or instituting binding arbitration.  In some cases, these contracts may even compel a third-party beneficiary to submit to arbitration.

Oregon Courts Decline to Extend Arbitration Agreement to Third-Party Contractor

One area of Oregon personal injury law where the use of so-called binding arbitration agreements remains hotly contested is with respect to nursing homes. Many nursing homes and rehabilitation facilities demand their residents sign arbitration agreements as part of their admissions contract. If the resident subsequently dies due to the negligent acts of the nursing home staff, the nursing home’s owner–and potentially third parties associated with the facility–may then try to enforce these arbitration agreements against the victim’s estate in a wrongful death lawsuit.

The Oregon Court of Appeals recently addressed one such attempt. The case, Cornelio v. Premere Rehab, LLC, involved a woman admitted to a rehab center while recovering from an ankle fracture. The woman signed a mandatory arbitration agreement at the time of her admission. She later died after several wounds on her hips became infected.

The victim’s estate subsequently sued the rehab center, which successfully moved to compel arbitration pursuant to the agreement. The estate then filed a second lawsuit against a third-party company that provided therapy services to the victim under contract with the rehab center. This third-party company also moved to compel arbitration, in effect arguing it was an intended beneficiary of the arbitration agreement. Both the trial court and the Court of Appeals rejected this claim and held the estate could proceed with its lawsuit.

As an initial matter, the Court of Appeals had to address whether it was even allowed to determine whether the arbitration agreement was enforceable. As silly as that may sound, arbitration agreements often contain clauses requiring any disputes over “arbitrability” be decided by the arbitrator. Here, the Court of Appeals held it could decide arbitrability because the language of the agreement only covered disputes against the rehab center and its own affiliates, not any “third-party contractors.” Nor was there any evidence that the victim and the rehab center ever agreed to extend the provisions of their arbitration agreement to such third parties. As such, the estate could proceed with its wrongful death lawsuit against the contractor in state court.

Contact a Portland Wrongful Death Lawyer Today

If you have recently lost a family member due to the reckless or criminal actions of another person or company, you have the right to demand justice. Our Portland wrongful death lawyers can advise you of your rights. Contact Rosenbaum Law Group, PC, today at 503-288-8000 to schedule a free consultation.

Source:

scholar.google.com/scholar_case?case=12420886747476025647