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In enforcing a nursing home arbitration agreement, a Nebraska federal court ruled that nursing home residency involved interstate commerce and thus came within the scope of the Federal Arbitration Act (FAA) and that wrongful death claims are derivative under Nebraska law and thus subject to the decedent's arbitration agreement.
In Bales v. Arbor Manor, No. 4:08CV3072, 2008 WL 2660366 (D. Neb. Jul. 03, 2008), Diane Bales sued Arbor Manor, alleging that it had negligently caused the death of her father, Edward Fredenburg. Arbor Manor moved to compel arbitration in accordance with the nursing home residency agreement.
After determining that the arbitration agreement was binding on Bales as an heir and assign of Fredenburg, the Court found that the nursing home residency agreement involved interstate commerce and thus came within the scope of the FAA.
The agreement specified that it involved interstate commerce based on the existence of many interstate contracts and the fact that the facility accepted federal money. Moreover, most of the supplies and equipment, as well as many of the residents, were from out of state.
The Court also determined that because wrongful death claims are derivative under Nebraska law, Bales' wrongful death claim was subject to Fredenburg's arbitration agreement with Arbor Manor.
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