Court Opinion

ID: 4371407
Source: CourtListenerOpinion
Date Created: 2019-02-26 21:00:12.205267+00
Date Added: 2024-06-11T11:59:15.062055
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 18-1779

 GGNSC ADMINISTRATIVE SERVICES, LLC; GOLDEN GATE NATIONAL SENIOR
 CARE, LLC; GGNSC HOLDINGS, LLC; GGNSC CHESTNUT HILL, LLC, d/b/a
                Golden Living Center - Heathwood,

                     Plaintiffs, Appellees,

                               v.

   JACKALYN M. SCHRADER, as the personal representative of the
                   estate of Emma J. Schrader,

                      Defendant, Appellant.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

         [Hon. Douglas P. Woodlock, U.S. District Judge]

                             Before

                      Howard, Chief Judge,
                Lynch and Lipez, Circuit Judges.

     John Vail, with whom John Vail Law, PLLC, Daniel T. Landry,
David J. Hoey, and Law Offices of David J. Hoey, P.C. were on
brief, for appellant.
     William Alvarado Rivera, Meryl D. Grenadier, and Kelly R.
Bagby on brief for AARP and AARP Foundation, amici curiae.
     Robert E. Curtis, Jr. on brief for Massachusetts Advocates
for Nursing Home Reform, amicus curiae.
     Joseph M. Desmond, with whom Justin L. Amos and Morrison
Mahoney LLP were on brief, for appellees.
February 26, 2019
           LYNCH, Circuit Judge.         This case is about arbitration

agreements,   nursing     homes,   and   wrongful      death    claims    under

Massachusetts law.      A set of organizations (collectively, GGNSC)

that oversees the Golden Living Center Heathwood (Heathwood) in

Chestnut Hill sued in federal court to compel arbitration of an

underlying state wrongful death action brought by the personal

representative of a deceased former Heathwood resident.                    The

federal court compelled arbitration and declined to issue a stay

of the state wrongful death action.           GGNSC Chestnut Hill LLC v.

Schrader, No. CV 16-10525-DPW, 2018 WL 1582555, at *9-10 (D. Mass.

Mar. 31, 2018).      Whether arbitration was required turns on how

state law characterizes wrongful death actions.

           The personal representative appeals.          She argues that as

the plaintiff in the wrongful death suit, under state law, she is

not bound by the decedent's agreement to arbitrate with GGNSC

because her wrongful death right of recovery is independent of the

decedent's wrongful death claim.         GGNSC argues, to the contrary,

that   Massachusetts    beneficiaries'      wrongful    death    claims    are

derivative of the decedent's wrongful death claim, and so the

arbitration agreement is binding.          Because that dispute turns on

the    characterization     of     wrongful    death     actions     by     the

Commonwealth, we certify questions to the Massachusetts Supreme

Judicial Court (SJC) under its Rule 1:03.              See Bos. Gas Co. v.

Century Indem. Co., 529 F.3d 8, 15 (1st Cir. 2008).

                                   - 3 -
                                     I.

            The parties do not dispute the relevant facts, which we

take largely from the district court opinion.          Emma Schrader was

brought by ambulance to Heathwood in February 2013.         After Emma's

admission and treatment, Jackalyn M. Schrader (Schrader), Emma's

daughter and appellant here, signed several documents for her

mother,   including   a   standard    (undated)    "Alternative    Dispute

Resolution Agreement" (Agreement).        Schrader had authority to sign

these documents on her mother's behalf -- on September 11, 2011,

Emma had executed a document granting Schrader her power of

attorney.

            The Agreement states in bold letters that a signature on

the Agreement is not a condition of admission to or continued

residence in the facility.      It also says that the resident may

revoke "the Agreement by sending written notice to [Heathwood]

within thirty (30) days of signing it."           The Agreement form has

two signature lines: one to accept and one to decline.            Schrader

signed the accept line.

            The Agreement provides that any dispute covered by the

Agreement "shall be resolved exclusively by an ADR process that

shall include mediation and, where mediation is not successful,

binding arbitration."     The Agreement applies to "the Resident," a

term that the Agreement defines to include "all persons whose claim

is or may be derived through or on behalf of the Resident,

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including any next of kin, guardian, executor, administrator,

legal representative, or heir of the Resident, and any person who

has executed this Agreement on the Resident's behalf."1

          Emma died on December 3, 2013.       Schrader brought a

wrongful death action against GGNSC in Massachusetts state court

on February 4, 2016.2    The state complaint alleges that Schrader

brought the action as the personal representative of Emma's estate

"on behalf of the heirs of the decedent."      And it alleges that

Emma's injuries were "injuries for which she would have been

entitled to bring an action had she survived, and the right to

bring such action survives her."       The injuries alleged were a

"preventable sacral decubitus" and resulting pain and suffering,

which eventually required surgery and transfer to a special care

facility, and from which Emma never recovered.

          GGNSC then brought this federal court action on March

15, 2016, under the Federal Arbitration Act to compel Schrader to

arbitrate the dispute.    The district court granted the motion to

compel.   Schrader, 2018 WL 1582555, at *10.     The district court

     1    GGNSC has never argued that Jackalyn's wrongful death
claims are subject to the Agreement's mandatory arbitration
provision because she is the "person who has executed th[e]
Agreement on the Resident's behalf."
     2    Jackalyn says she also brought a negligence claim. The
district court treated this case as only concerning wrongful death,
finding the two claims to be equivalent for these purposes. The
parties have done the same on appeal, so we do too.

                               - 5 -
first found that there was a valid contractual agreement to

arbitrate,    id.   at   *4,   and   that    the   agreement     was   neither

procedurally nor substantively unconscionable under Massachusetts

law, id. at *5.     Schrader has not appealed those conclusions, so

we take them as established fact.

             The district court next considered whether Schrader's

wrongful death claims, which she brought in her capacity as

personal representative of her mother's estate, were derivative of

claims that Emma could have brought such that the claims were

subject to arbitration.        Id. at *6.    Schrader contended that her

wrongful death claims were not subject to the Agreement because a

wrongful death beneficiary's claims are independent of any claims

falling within the scope of the Agreement.           Id.

             Both   parties    argued    that      the   issue    turned    on

Massachusetts state law.       As no state opinion clearly decided the

issue, the district court made an informed prediction that the SJC

would hold that "a wrongful death claim is a derivative claim as

to which the decedent's representatives and beneficiaries would be

bound by [the decedent's] agreement to arbitrate."                Id. at *8.

The district court highlighted several reasons for its conclusion:

First, claimants "can only recover if the decedent died under such

circumstances that the deceased could have recovered damages for

personal injuries if his death had not resulted."                  Id. at *7

(internal quotation marks omitted).           Second, "the elements in a

                                     - 6 -
wrongful   death    claim    mirror    the    elements   necessary   to    prove

negligence had the decedent survived," so, "effectively," "there

would be no cause of action unless the decedent could have sued."

Id. at *7 n.3.      And third, under Massachusetts law, one can only

bring a "wrongful death claim as the executor or administrator of

the decedent's estate." Id. at *7. The district court added that,

though the issue was one that might yield a different outcome from

state to state, "the weight of persuasive authority treats wrongful

death claims as derivative."          Id. at *8.

           After this, Schrader, for the first time, asked the

district court for certification to the SJC.             GGNSC Chestnut Hill

LLC v. Schrader, No. CV 16-10525-DPW, 2018 WL 3405339, at *1 (D.

Mass. July 12, 2018).        The district court declined to certify any

question at the "thirteenth-hour."            Id.

                                       II.

           This court may, on its own motion, certify questions to

the SJC when those questions may be determinative of the pending

cause of action and when there is no controlling precedent that

answers them.      Hundley v. Marsh (In re Hundley), 603 F.3d 95, 98

(1st Cir. 2010); Mass. S.J.C. R. 1:03.               This case meets both

conditions.        Because    the     Agreement's   enforceability        as   to

Schrader's claims turns on important issues of state law, including

statutory interpretation, common law, and matters of policy, we

think it best to certify questions to the SJC.

                                      - 7 -
             We begin with background.       "[A]rbitration is a matter of

contract."        Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 67

(2010).   State contract law controls "who is bound by [arbitration

agreements]."       Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630

(2009).      We    look   to   Massachusetts   law    to   determine   whether

Schrader, in bringing the wrongful death action, is bound by her

mother's Agreement to arbitrate claims against GGNSC.3            Resolution

of this state law issue will resolve this federal case.

             The parties argue that wrongful death claims are either

"independent" (Schrader) or "derivative" (GGNSC) of the claim

concerning        the   decedent's   death.          Schrader   argues    that

Massachusetts segregates the rights of claimants and gives five

independent bases on which a claimant may bring a wrongful death

claim.    See Mass. Gen. Laws ch. 229, § 2.

             GGNSC responds that, in a case, like this one, that is

based on Section 2(1) or 2(2) of the wrongful death statute, the

plaintiff must prove that the defendant negligently caused the

decedent's death. GGNSC argues that because proving wrongful death

     3    We reject Schrader's general argument that she, a non-
signatory to the Agreement (only having signed it using her
mother's power of attorney), cannot be compelled to arbitrate her
wrongful death beneficiary claims. Schrader waived this argument
by not raising it before the district court.     See Vineberg v.
Bissonnette, 548 F.3d 50, 57 (1st Cir. 2008). Even absent waiver,
the argument lacks merit: There are exceptions to the "general
proposition" that "a contract cannot bind a non-party."     Grand
Wireless, Inc. v. Verizon Wireless, Inc., 748 F.3d 1, 9 (1st Cir.
2014); see id. at 9-10.

                                     - 8 -
is   contingent     on     proving    underlying       negligence     against     the

decedent, the beneficiaries' right of recovery must be viewed as

derived from the decedent's wrongful death claim. GGNSC highlights

that Massachusetts requires that all wrongful death actions be

brought by a personal representative of the decedent.                      And GGNSC

adds that its view is consistent with how the SJC has treated

analogous claims, and that good policy reasons support its reading.

             Schrader      responds    that,        although   only    a    personal

representative may bring the suit, "it is the [beneficiary's] cause

of action."     Gaudette v. Webb, 284 N.E.2d 222, 230 (Mass. 1972).

Schrader     adds   that,    under     the    Massachusetts       wrongful     death

statute, beneficiaries may receive different damages from those

that would have been available to a decedent or her estate.

             Schrader    also   argues       that    Massachusetts    law    is   not

unsettled and that it has resolved this question.                     She says the

SJC has consistently viewed wrongful death claims as independent.

GGNSC responds that, although Massachusetts may once have viewed

its wrongful death action as independent, see, e.g., McCarthy v.

Wood Lumber Co., 107 N.E. 439, 440 (1914), later amendments to the

wrongful death statute have invalidated that classification.                      In

1958, the legislature limited recovery under the statute to "such

circumstances that the deceased could have recovered damages for

personal injury if his death had not resulted."                   1958 Mass. Acts

122,   ch.   238    § 1.      And     the    SJC    has   since   held     that   the

                                       - 9 -
Commonwealth's   "wrongful     death   statutes   w[ould]   no    longer   be

regarded as 'creating the right' to recovery for wrongful death" --

the law had "evolved to the point where it may now be held that

the right to recovery for wrongful death is of common law origin."

Gaudette, 284 N.E.2d at 229.

           We hold that Massachusetts law does not clearly decide

the independent/derivative or other relevant questions about the

status of wrongful death actions in relation to the decedent.              The

parties have provided us with no citation to a dispositive case.

Our own research reveals that the SJC has most recently reserved

the   question   this   case   presents.     See    Johnson      v.   Kindred

Healthcare, Inc., 2 N.E.3d 849, 856 n.14 (Mass. 2014) (declining

to address whether "a decedent's agreement to arbitrate future

disputes" binds "the statutory beneficiaries of a wrongful death

claim").

           Even absent controlling precedent, certification may be

inappropriate when "the course the state court would take is

reasonably clear."      Ropes & Gray LLP v. Jalbert (In re Engage,

Inc.), 544 F.3d 50, 53 (1st Cir. 2008) (internal quotation marks

and alterations omitted).      This is not such a case.

           It may be that the SJC will conclude that wrongful death

claims have both independent and derivative aspects.          As noted, in

Massachusetts, claims under the first clause of the Massachusetts

wrongful death statute require a personal representative to show

                                  - 10 -
negligence against the decedent resulting in death.               See Mass.

Gen. Laws ch. 229, § 2.           But as the SJC has noted, "[i]n a very

real sense," a wrongful death claim "is the [beneficiary's] cause

of action."        Gaudette, 284 N.E.2d at 230.

              The issue here has yielded "profound conflict" across

the nation.4       Restatement (Second) of Judgments § 46 cmt. b.           GGNSC

asserts that twenty-seven states find wrongful death claims to be

derivative, while fourteen states find them to be independent.

GGNSC       adds   a   wrinkle.     It   says   that   the   answer    to    the

independent/derivative question may possibly require addressing

another state-law issue.            It argues that at least one state,

despite holding that a wrongful death claim is independent, has

held that, depending on the facts, such a claim may still be

subject to the decedent's arbitration agreement.               See Allen v.

Pacheco, 71 P.3d 375, 379 (Colo. 2003) (en banc).

              There are also substantial policy considerations at

stake.      The SJC has observed that "[l]ike all common-law causes of

action, [Massachusetts's] common law of wrongful death evolves to

meet changes in the evolving life of the Commonwealth."               Matsuyama

v. Birnbaum, 890 N.E.2d 819, 837 (Mass. 2008).                 The American

        4 Decisions within the District of Massachusetts under
Massachusetts law are also split.    Compare Schrader, 2018 WL
1582555, with Angelo v. USA Triathlon, No. CIV.A. 13-12177-LTS,
2014 WL 4716195 (D. Mass. Sept. 19, 2014), and Chung v.
StudentCity.com, Inc., No. CIV.A. 10-10943-RWZ, 2011 WL 4074297
(D. Mass. Sept. 9, 2011).

                                     - 11 -
Association of Retired Persons (AARP) and Massachusetts Advocates

for Nursing Home Reform, amici in favor of reversal, ably highlight

numerous issues that may or may not come under the rubric of

"changes in the evolving life of the Commonwealth."5

          Because this case presents an unresolved question of

Massachusetts law whose answer is unclear, and because resolving

that issue may implicate policy judgments best left to the SJC, we

exercise our discretion in favor of certification.        See In re

Engage, 544 F.3d at 53; see also Steinmetz v. Coyle & Caron, Inc.,

862 F.3d 128, 142 (1st Cir. 2017); Showtime Entm't, LLC v. Town of

Mendon, 769 F.3d 61, 82 (1st Cir. 2014).

          We certify these questions to the Massachusetts SJC:

          1.   Is the wrongful death claim of Emma
               Schrader's statutory heirs derivative or
               independent of Emma Schrader's own cause
               of action?
          2.   If the answer to the first question does
               not resolve the issue presented to the
               federal court, is Jackalyn Schrader's
               wrongful death claim nonetheless subject
               to Emma Schrader's Agreement that her
               "next   of   kin,  guardian,   executor,
               administrator, legal representative, or
               heir" would arbitrate claims against
               GGNSC?

     5    AARP argues that nursing facility residents suffer from
high rates of abuse and neglect, that federal and state enforcement
efforts have inadequately protected those residents, and that
arbitration fails to address that culture of abuse and neglect.
Massachusetts Advocates for Nursing Home Reform add that the
Commonwealth has a public policy interest in maintaining
transparency in nursing homes because decisions in litigation are
public and that is not necessarily true of arbitrations.

                              - 12 -
We welcome any additional observations about Massachusetts law

that the SJC may wish to offer.

                               III.

          We direct the Clerk of this court to forward to the

Massachusetts SJC, under this court's official seal, a copy of the

certified questions and our decision here, and a copy of the briefs

and appendix filed by the parties and amici curiae, and a copy of

the record filed in the district court, which set forth all facts

relevant to the issues certified.     We retain jurisdiction pending

that court's determination.

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