In Duenas v. Life Care Centers of America, Inc., the Arizona Court of Appeals addressed the enforceability of arbitration agreements in litigation involving wrongful death claims and claims brought under the Adult Protective Services Act ("APSA").
The case presented two questions of first impression in Arizona. The first was whether a decedent’s arbitration agreement requires the statutory heirs to arbitrate their wrongful death claims. The court held that a decedent’s agreement to arbitrate cannot limit the heirs’ right to litigate their own personal claims. The second question was whether, when parties engage in multiple transactions, each with its own agreement to arbitrate, a court may examine the terms of the agreements to determine whether a dispute arising from a specific transaction is subject to arbitration. The court answered this question in the affirmative.
On four occasions in 2011, Maria Aspeitia was admitted to Glendale Care Center as a respite-care resident. Her daughter, Maria Duenas, signed arbitration agreements with the Center before the first two admissions. In 2012, Aspeitia died, and Duenas, as special administrator of Aspeitia’s estate and on behalf of the statutory beneficiaries, sued the Center for wrongful death and for abuse, neglect, and exploitation under the APSA. The Center moved to dismiss, arguing that the claims were subject to arbitration based on the two agreements Duenas had signed. The superior court granted the motion.
On appeal, the court first considered and rejected Duenas’s argument that the arbitration agreements were unconscionable and unreasonable and determined that the agreements were enforceable. Duenas was able to review each agreement before signing it, the arbitration provisions were not inconspicuously placed among the other contract terms, and signing them was not a precondition to care. Ultimately, however, the court held that neither the wrongful death claim nor the APSA claims were subject to arbitration.
Generally, a party is only required to arbitrate those disputes which it has contractually agreed to arbitrate. Because wrongful death claims are distinct claims belonging to a decedent’s statutory beneficiaries and not derived from a claim made on behalf of a decedent, the court held that Aspeitia’s statutory beneficiaries were not bound by the arbitration agreements for those claims. As for their APSA claims, the court held that the arbitration agreements were enforceable as to the claims that arose from Aspeitia’s first two visits to the Center but unenforceable as to the claims that arose from Aspeitia’s third and fourth visits – for which no arbitration agreement had been signed. In reaching this conclusion, the court determined that the court, and not an arbitrator, had jurisdiction to determine whether the APSA claims were subject to arbitration. Although the Arizona Revised Uniform Arbitration Act directs the court to decide both the existence and scope of arbitration agreements, it also allows the parties to agree otherwise. The arbitration agreements at issue provided that a dispute as to the scope of the agreement would be subject to arbitration. They did not, however, delegate the duty to determine the existence or enforceability of the agreement. Thus, the court could properly decide the issue.
For these reasons, the court reversed the dismissal of the wrongful death claims and the portion of the APSA claims that arose from Aspeitia’s third and fourth Center visits and remanded the case to the superior court.
To read the full opinion, visit http://www.azcourts.gov/Portals/0/OpinionFiles/Div1/2014/1CA-CV13-0477.pdf.
Cassidy was born and raised in Ashland, Ohio. She received a B.S. summa cum laude in 2009 and a J.D. cum laude in 2013 from Arizona State University, where she was a Willard H. Pedrick Scholar and an associate editor of the Arizona State Law Journal.