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Brookdale Senior Living Inc. v. Hibbard

United States District Court, E.D. Kentucky, Central Division, Lexington

June 4, 2014

BROOKDALE SENIOR LIVING INC. et al., Plaintiffs,
v.
MARILYN O. HIBBARD, Defendant.

OPINION & ORDER

KAREN K. CALDWELL, Chief District Judge.

This matter is before the Court on a motion by the three plaintiff corporations to compel arbitration and enjoin the defendant from pursuing her parallel suit in state court. (DE 6). Defendant Marilyn O. Hibbard objects to the motion and has filed her own motion to dismiss. (DE 4). She contends that this Court should abstain from hearing this action in light of the pending state-court matter; that the arbitration agreement at issue is invalid and unenforceable; and that the Court should not exercise its power to enjoin her from continuing the prosecution of her statecourt action. For the following reasons, the Court will deny the defendant's motion to dismiss, and grant the plaintiffs' motion to compel arbitration and enjoin the defendant.

I.

On July 22, 2013, Defendant Marilyn O. Hibbard filed a negligence suit in Fayette Circuit Court in Fayette County, Kentucky regarding her care and treatment during her residency at Homewood Residence at Richmond Place. See Marilyn O. Hibbard v. Brookdale Senior Living Inc., et al., Civil Action File No. 13-CI-3046 (Circuit Court of Fayette County, Ky., Division 9). The plaintiffs subsequently filed the instant suit on September 4, 2013, alleging that Hibbard's claims in state court are subject to a binding arbitration agreement and she should be enjoined from proceeding any further with her state-court action. The plaintiffs invoke this Court's diversity jurisdiction and seek relief under the Federal Arbitration Act as well as the Anti-Injunction Act. Hibbard, on the other hand, contends that the arbitration agreement is invalid and unenforceable, and that even if this were not the case the Court should abstain from hearing the present action under the doctrine of Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976).

The arbitration agreement at issue in this case was a mandatory component of Hibbard's Residency Agreement for her stay at Homewood Residence. Section V of the Residency Agreement was titled "Arbitration and Limitation of Liability Provision, " which contained three subsections. On its face Section V purports to make severable any provisions the Court might deem unenforceable. It states that if "any of sub-sections A, B or C provided below, or any part thereof, be deemed invalid, the validity of the remaining sub-sections, or parts thereof, will not be affected." (DE 1-1, at 7).

Subsection A outlines the provisions of the arbitration agreement. The first sentence of Subsection A states the follow:

Any and all claims or controversies arising out of, or in any way relating to, this Agreement or your stay at the Community, excluding any action for eviction, and including disputes regarding interpretation of this Agreement, whether arising out of State or Federal law, whether existing or arising in the future, whether for statutory, compensatory or punitive damages and whether sounding in breach of contract, tort or breach of statutory duties, irrespective of the basis for the duty or the legal theories upon which the claim is asserted, shall be submitted to binding arbitration, as provided below, and shall not be filed in a court of law.

(DE 1-1, at 7). The next sentence in Subsection A states in bold text that "[t]he parties to this Agreement further understand that a jury will not decide their case." (DE 1-1, at 7).

Following Subsection A is the "Limitation of Liability Provision, " which purports to limit the amount of damages each party would have to pay in the event of future litigation. This provision, marked as Subsection B, is distinct from the prior provisions outlining the arbitration requirements.

Finally, Subsection C is titled, "Benefits of Arbitration and Limitation of Liability Provisions." This subsection outlines what the parties agree are the benefits of the arbitration agreement and limitation of liability. It states that "[t]he parties' decision to select arbitration is supported by the potential cost-effectiveness and time-savings offered by selecting arbitration, which may avoid the expense and delay of judicial resolution in the court system." (DE 1-1, at 10). Significantly, at the end of Subsection C, and again in bold, emphasized text, the agreement states as follows:

The undersigned acknowledges that he or she has been encouraged to discuss this Agreement with an attorney.
The parties to this Agreement further understand that a jury will not decide their case.

(DE 1-1, at 10).

II.

As a threshold matter, Hibbard asks the Court to abstain from hearing the merits of this action on the basis that there is a parallel suit pending in state court. "In certain exceptional' circumstances, [] a federal district court may abstain from exercising its subject matter jurisdiction due to the existence of a concurrent state court proceeding, based on considerations of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.'" PaineWebber, Inc. v. Cohen, 276 F.3d 197, 206 (6th Cir. 2001) (quoting Colorado River, 424 U.S. at 817). But "[a]bstention from the exercise of federal jurisdiction is the exception, not the rule, " and this "extraordinary and narrow exception" is only justified when it "would clearly serve an important countervailing interest." Colorado River Water, 424 U.S. at 813. As such, "[t]he decision to dismiss a federal action because of a parallel state-court action rests on a careful balancing of the important factors as they apply in a given case, with the balance heavily weighted in favor of the exercise of jurisdiction. " Great Earth Cos., Inc. v. Simons, 288 F.3d 878, 886 (6th Cir. 2002) (emphasis added) (quoting Moses ...


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