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Richmond Health Facilities-Kenwood, Lp v. Nichols

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

December 19, 2014

RICHMOND HEALTH FACILITIES-KENWOOD, LP, et al., Plaintiffs,
v.
ADRIANNE NICHOLS, as Administratrix of the Estate of Charlie Nichols, Defendant.

MEMORANDUM OPINION AND ORDER

DANNY C. REEVES, District Judge.

This matter is pending for consideration of Plaintiffs Richmond Health Facilities - Kenwood, LP's, Preferred Care Partners Management Group, LP's, Preferred Care, Inc.'s, and Kentucky Partners Management Group, LLC's motion to compel arbitration. [Record No. 11] For the reasons outlined below, the motion will be granted, in part, and denied, in part.

I.

Charlie Nichols was admitted to the Kenwood Nursing & Rehabilitation Center in Richmond, Kentucky, on October 14, 2011. [Record No. 1, p. 3] On June 22, 2012, he filed an action in Madison Circuit Court regarding the care and treatment provided by the Center. The plaintiffs took over operations at the Center approximately one week later (July 1, 2012). Charlie Nichols passed away on October 28, 2012. Adrianne Nichols was subsequently named administratrix of Nichols estate. [ Id., p. 5] On February 6, 2014, an Amended Complaint was filed in the state court action, asserting claims of negligence, medical negligence, corporate negligence, violations of long-term-care resident's rights, and wrongful death. [Record No. 1-1]

The state action included claims against the following defendants: Fir Lane Terrace Convalescent Center, Inc. d/b/a Kenwood Health and Rehabilitation Complex; Extendicare, Inc.; Extendicare Health Network, Inc.; Extendicare Homes, Inc.; Extendicare REIT; Extendicare, LP; Extendicare Holdings, Inc.; Extendicare Health Services, Inc.; Extendicare Health Facility Holdings, Inc.; Richmond Health Facilities - Kenwood, LP d/b/a Kenwood Health and Rehabilitation Center; Richmond Health Facilities - Kenwood GP, LLC; Preferred Care Partners Management Group, L.P.; PCPMG, LLC; Preferred Care, Inc. d/b/a Preferred Care of Delaware, Inc.; Kentucky Partners Management Group, LLC; Thomas Scott; Christy King, in her capacity as Administrator of Kenwood Health & Rehabilitation Center; and John Does 1 through 5 Unknown Defendants (collectively, "the state defendants"). [Record No. 1-1, p. 23-25] On April 11, 2014, four of the state defendants (Richmond Health Facilities - Kenwood, LP, Preferred Care Partners Management Group, L.P., Preferred Care, Inc., and Kentucky Partners Management Group, LLC) filed this action to compel arbitration and enjoin Nichols from pursuing her claims against them in state court under the Federal Arbitration Act ("FAA"). The plaintiffs contend that the claims asserted against them are subject to a binding alternative dispute resolution agreement contained in Charlie Nichol's residency agreement. [Record No. 1]

Charlie Nichols signed the residency agreement on October 14, 2011, the date of his admission to the nursing home. [Record No. 1, p. 3 ¶ 12] The arbitration provision states, in relevant part, that:

any and all disputes arising out of or in any way relating to this Agreement or to the Resident's stay at the Center that would constitute a legally cognizable cause of action in a court of law sitting in the Commonwealth of Kentucky and shall include, but not be limited to, all claims in law or equity arising from one Party's failure to satisfy a financial obligation to the other Party; a violation of a right claimed to exist under federal, state, or local law or contractual agreement between the Parties; tort; breach of contract; fraud; misrepresentation; negligence; gross negligence; malpractice; death or wrongful death; and any alleged departure from any applicable federal, state, or local medical, health care, consumer or safety standard. Covered Dispute shall include the determination of the scope of or applicability of this Agreement to mediate/arbitrate.

[Record No. 1-2, p. 2] The agreement further provides that it is binding upon Charlie Nichols and all persons with claims derived through or on behalf of him, including "any personal representative, responsible party, guardian, executor, administrator, legal representative, agent or heir." [ Id., p. 1]

On May 14, 2014, Adrianne Nichols filed a motion to dismiss the Complaint, asserting that the action was not appropriate and that the agreement was invalid for a variety of reasons.[1] [Record No. 4] The Court rejected these arguments and denied the motion to dismiss.[2] [Record No. 7]

II.

The plaintiffs have moved to compel arbitration under the agreement. [Record No. 11] Under the FAA, arbitration clauses "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. This section of the FAA "is a congressional declaration of a liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or procedural policies to the contrary.'" Asplundh Tree Expert Co. v. Bates, 71 F.3d 592, 595 (6th Cir. 1995) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)). When considering a motion to compel arbitration, the Court considers: (i) whether the parties agreed to arbitrate the claims; (ii) the scope of the arbitration agreement; (iii) whether there are any federal statutory claims that are nonarbitrable; and (iv) whether to stay any proceedings not subject to arbitration. Stout v. J.D. Byrider, 228 F.3d 709, 714 (6th Cir. 2000).

Although Kentucky law governs the interpretation of the arbitration agreement, the "liberal federal policy favoring arbitration agreements" must be taken into account even when state-law issues are presented. Moses H. Cone, 460 U.S. at 24. Any doubts regarding the parties' intentions should be resolved in favor of arbitration. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985).

III.

The arbitration agreement states that "any and all disputes arising out of or in any way relating to this Agreement or to the Resident's stay at the Center, " are subject to binding arbitration. This includes violations of "a right claimed to exist under federal, state, or local law or contractual agreement between the Parties; tort; breach of contract; fraud; misrepresentation; negligence; gross negligence; malpractice; death or wrongful death and any alleged departure from any applicable federal, state, or local medical, health care, consumer or safety standards." [Record No. 1-2, p. 2] Charlie Nichols signed the agreement upon being admitted to the Center. The defendant argues that, under the holding of Ping v. Beverly Enterprises, Inc., 376 S.W.3d 581 (Ky. 2012), the wrongful death claim is not subject to arbitration. [Record No. 12, pp. 3-8] Conversely, the plaintiffs contend that all of the defendant's claims are ...


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