Illinois Supreme Court Overrules Good Defense Law On Nursing Facility Arbitrations
By Melinda S. Kollross
On September 22, 2023, the Illinois Supreme Court overruled Mason v. St. Vincent’s Home, Inc., 2022 IL App (4th) 210458 to the extent Mason held that all claims brought pursuant to the Survival Act, but brought after the decedent’s death, are subject to arbitration despite a termination-on-death clause in the subject contract. Clanton v. Oakbrook Healthcare Centre, Ltd., 2023 IL 129067.
The Court found that the clear and unambiguous language of the contract dictated that the termination-on-death clause terminated the entire agreement, including the arbitration provision, when the decedent died. When this action was brought after the decedent’s death, arbitration as a contractual forum was no longer an available option, even for alleged negligent conduct that occurred prior to the decedent’s death. Without an enforceable arbitration provision, according to the Court, the defendants had no grounds to demand the arbitration forum.
Learning Point: This means that the defense and insurance industry must revise all their arbitration agreements to avoid the ruling in Clanton. Quoting the Clanton appellate opinion, the Supreme Court gave the defense and insurance industry some examples of how these arbitration agreements can be revised to make clear that arbitration does not terminate upon the decedent’s death:
[T]he contract could have stated that the death of a resident extinguished obligations for future performance of services, but did not extinguish the parties’ agreement to arbitrate claims that accrued during a resident’s lifetime. Or the termination provision could have simply included a carve-out to preserve the arbitration provision” by stating that the contract except for the arbitration provision terminates upon death.
Melinda S. Kollross