The Kentucky Court of Appeals determines that a wrongful death lawsuit is allowed because the claimants are not bound by the defendant’s arbitration agreement. In BLC Lexington v. Townsend (Ky. Ct. App. No. 2023-CA-0960-MR, February 21, 2025).
Linda Elam became a resident of a nursing home owned by BLC Lexington SNF, LLC (BLC) in June 2020. On July 8, 2020, Ms. Elam was admitted to hospice care at the University of Kentucky, where she died a few days later.
When Ms. Elam began her residency at BLC, her sister, Bonnie Townsend, acting as her representative, signed an arbitration agreement with BLC.
As executrix of Ms. Elam’s estate, Ms. Townsend filed a tort suit in circuit court (State Action). An amended complaint was filed nine months later asserting a wrongful death claim on behalf of Ms. Elam’s grandchildren. Soon after the initial complaint was filed, BLC filed a petition with the U.S. District Court for the Eastern District of Kentucky against Ms. Townsend to compel arbitration (Federal Action).
The two cases proceeded simultaneously until the BLC’s motion to compel arbitration was granted by the district court. As a result, Ms. Townsend was enjoined from further litigating the State Action. The grandchildren’s wrongful death claim was permitted to proceed.
A stay order was issued in the State Action but subsequently lifted. BLC filed two separate motions to dismiss based on the federal order compelling arbitration. The circuit court denied the second motion to dismiss. BLC appeals that order, raising multiple issues, including whether the wrongful death claim Ms. Townsend is asserting on behalf of the grandchildren belongs to Ms. Elam’s estate, pursuant to Kentucky’s wrongful death statute, thus subjecting that claim to arbitration.
The issue here is the statutory distribution of a decedent’s estate and if the grandchildren’s claim belongs to Ms. Elam’s estate. The applicable statute is a distributive provision, not a restraint on potential claimants; as such, the statute is not a legislative directive barring this class of individuals as beneficiaries of a wrongful death claim.
The court determines that the claim on behalf of the grandchildren is separate from Ms. Elam’s estate; therefore, BLC is incorrect in its assertion that the grandchildren are subject to arbitration under the order filed by the district court. Additionally, the grandchildren did not sign the arbitration agreement; therefore, they are not bound to it.
The court affirms the circuit court’s order denying BLC’s second motion to dismiss.
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