Faiaipau v. THC-Orange County, LLC

The Short:

In Faiaipau v. THC-Orange County, LLC (117 Cal. App. 5th 292 (Dec. 19, 2025)), the California Court of Appeals addressed the enforceability of arbitration agreements in litigation involving alleged elder neglect and professional negligence arising from care at a long-term acute care hospital.

For insurers and long-term care operators, the decision provides important guidance on two recurring issues: (1) when wrongful death claims may be compelled to arbitration, and (2) how courts distinguish between claims arising from professional medical services and independent statutory or individual claims brought by heirs.

Case Background

The decedent, an elderly patient recovering from cardiac surgery, was admitted to a long-term acute care hospital. An arbitration agreement had been executed by the decedent’s legal representative at the time of admission. The decedent’s daughters filed suit individually and as successors in interest, asserting causes of action for negligence, elder neglect, fraud, violations of the Unfair Competition Law (UCL), and wrongful death.

Her heirs alleged deficiencies in care, including failures related to dialysis management, nutrition, hygiene, and ventilator monitoring, resulting in respiratory compromise, anoxic injury, and ultimately her death.

Trial Court Proceedings

The Alameda County Superior Court compelled arbitration of the survivor claims brought on behalf of the decedent, including negligence, elder neglect, fraud, and UCL causes of action.

However, the court denied arbitration as to the daughters’ individual claims for wrongful death, fraud, and UCL violations, concluding that they were not personally bound by the agreement. The litigation of those individual claims was stayed pending arbitration of the survivor claims.

The Court of Appeal’s Holding

On appeal, the Court of Appeal modified the order in part.

Relying on Holland v. Silverscreen Healthcare, Inc., the court concluded that the wrongful death claim was subject to arbitration because it arose from alleged failures in the provision of professional medical services, specifically, the monitoring and management of life-sustaining equipment.

In characterizing the wrongful death claim as derivative of professional negligence, the court held that it fell within the scope of the arbitration agreement executed on the Resident’s behalf.

At the same time, the court affirmed the denial of arbitration as to the daughters’ individual claims for fraud and UCL violations, finding that the agreement did not bind them in their personal capacities. The order was modified to compel arbitration of the wrongful death claim and affirmed as modified.

Risk Management Implications for Operators and Insurers

Wrongful Death Claims May Be Arbitrable When Rooted in Professional Services

Faiaipau reinforces that wrongful death claims may be compelled to arbitration when the alleged injury arises from the rendering, or failure to render, professional medical services.

For long-term care operators and their insurers, the operative question is not simply how a claim is labeled, but whether it is substantively grounded in professional negligence.

The characterization analysis remains central to enforceability.

Representative Authority and Agreement Scope Remain Critical

The decision underscores the continued importance of:

• Ensuring arbitration agreements are properly executed
• Confirming representative authority at admission
• Drafting agreements with clear scope language addressing claims arising from professional services.

Admission practices remain a frontline risk management function, not merely a contractual formality.

Heirs’ Individual Statutory Claims May Proceed Outside Arbitration

Faiaipau also illustrates the limits of arbitration enforcement. Independent claims asserted by heirs, such as fraud or UCL claims, may not be automatically bound by an agreement executed on the decedent’s behalf.

This creates the potential for parallel proceedings: arbitration of survival and wrongful death claims alongside court litigation of individual statutory claims.

For insurers, that dynamic may affect, exposure evaluation, reserve setting, and settlement strategy.

Strategic Claim Differentiation Remains Essential

The opinion highlights a recurring structural issue in healthcare litigation: claims often travel together procedurally but differ materially in legal character.

Survival claims, wrongful death claims, and individual statutory claims must be analyzed independently for arbitration enforceability.

Effective defense strategy requires early claim differentiation rather than categorical treatment.

Broader Takeaways

Faiaipau does not expand arbitration law so much as it reinforces existing principles:

• Courts will look to the substance of alleged misconduct.
• Claims arising from professional medical services may fall within arbitration agreements executed by authorized representatives.
• Independent statutory claims of heirs may remain outside the agreement’s reach.

For long-term care operators and insurers, the decision underscores that arbitration enforceability begins well before litigation, with admission protocols, representative documentation, and carefully drafted agreements.

In a regulatory and litigation environment where claim characterization can materially affect forum and exposure, Faiaipau provides a reminder that contract execution, scope clarity, and early issue framing remain foundational components of risk management.