United States District Court, E.D. Kentucky, Central Division, Lexington
GOLDEN GATE NATIONAL SENIOR CARE, LLC d/b/a GOLDEN LIVING, et al., Plaintiffs,
MELVIN ADDINGTON, as executor of the Estate of Mary Helen Addington, Defendant.
MEMORANDUM OPINION & ORDER
JOSEPH M. HOOD, Senior District Judge.
This matter is before the Court on several motions: Defendant Melvin Addington's Motion to Dismiss [DE 6; Response at DE 7] and his Motion for Extension of Time to File Response to Plaintiffs' Motion to Compel Arbitration [DE 9]. Plaintiffs have filed a Response [DE 10], stating their objection to the Motion for Extension of Time. Finally, the Court will consider Plaintiffs' Motion to Compel Arbitration [DE 8]. These motions are ripe for consideration.
As an initial matter, Defendant seeks dismissal of this matter for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1) and for failure to join a necessary party pursuant to Fed.R.Civ.P. 12(b)(7). Defendant also asks this Court to abstain from exercising any jurisdiction that it might have under the Colorado River abstention doctrine, which permits a federal court to dismiss a cause pending before it in favor of a parallel state court action in certain circumstances. Finally, Defendant asks this Court to dismiss Plaintiffs' claim pursuant to 12(b)(6) for failure to state a claim, on the grounds that the subject ADR Agreement is invalid and unenforceable. By their Motion, Defendant asks this Court to enforce the parties' ADR Agreement and compel the arbitration of Defendant's claims against them. They seek, as well, to have this Court enjoin Defendant's prosecution of those claims against them in a pending state court proceeding. For the reasons set forth below, Defendant's Motions will be denied, and Plaintiffs' Motion shall be granted.
Mary Helen Addington was admitted to Golden Living Center-Stanford ("GLC-Stanford"), a nursing home operated by GGNSC Stanford, LLC, in Stanford, Kentucky, on or about September 4, 2010, where she resided until the date of her death, November 25, 2013. Prior to Ms. Addington's admission, Defendant was named her attorney-in-fact in a Power of Attorney document, executed on October 18, 1999, which vested him with authority to:
[M]ake contracts, lease, sell, or convey any real or personal property that I may now or hereafter own, to receive and receipt for any money for which may now or hereafter be due to me, to retain and release all liens on real or personal property, to draw, make, and sign any and all checks, contracts, or agreements, to invest or reinvest my money for me; to institute or defend suits concerning my property or rights, to take charge of my person in case of sickness or disability of any kind, and to remove and place me in such institutions or places as he may deem best for my personal care, comfort, benefit, and safety; and for said purposes to use and disburse any or all said bank deposit monies or other personal property that I own; and generally to do and perform for me in my name all that I might do if present....
[DE 1-3 at 1, Page ID#: 52.]
As part of Ms. Addington's admissions process at GLC-Stanford and in his capacity as attorney-in-fact for Ms. Addington, Defendant signed an "Alternative Dispute Resolution Agreement." The Agreement requires the arbitration of:
[a]ny and all disputes arising out of or in any way relating to this Agreement or to the Resident's stay the Facility or the Admissions Agreement between the Parties that would constitute a legally cognizable cause of action in a court of law sitting in the state where Facility is located. Covered Disputes include but are not 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; consumer protection; fraud; misrepresentation; negligence; gross negligence; malpractice; and any alleged departure from any applicable federal, state, or local medical, health care, consumer, or safety standards.
[DE 1-2 at 3, Page ID#: 49.] The Agreement further states that it is binding upon Ms. Addington's Estate and Plaintiffs and their successors and assigns. [DE 1-2 at 1, Page ID#: 47.] The Agreement specifically provides that it shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16. [ Id. ]
On July 9, 2014, Defendant filed suit against Plaintiffs in Lincoln Circuit Court, Lincoln County, Kentucky, Division II, Civil Action File No. 14-CI-00228 (the "State Court Action"), asserting claims against Golden Gate National Senior Care, LLC; GGNSC Stanford: GNSC Administrative Services, LLC; GGNSC Holdings, LLC; GGNSC Equity Holdings, LLC; GGNSC Equity Holdings II, LLC; Golden Gate Ancillary, LLC; GGNSC Clinical Services, LLC; GPH Stanford, LLC; Timothy Peek, in his capacity as Administrator of Golden Living Center-Stanford; Jennifer Thomas, in her capacity as Administrator of Golden Living Center-Stanford; Dawn L. Lincoln, in her capacity as Administrator of Golden Living Center-Stanford; William Ralph Watson II, in his capacity as Administrator of Golden Living Center-Stanford; Timothy F. Travis, Jr., in his capacity as Administrator of Golden Living Center-Stanford; Kevin C. McCowan, in his capacity as Administrator of Golden Living Center-Stanford; and John Does 1 through 5 for negligence, medical negligence, corporate negligence, violations of long term care residents' rights, wrongful death and punitive damages arising out of her stay at GLC-Stanford.
Some but not all of the defendants in the Lincoln County suit, Golden Gate National Senior Care, LLC; GGNSC Stanford; GGNSC Administrative Services, LLC; GGNSC Holdings, LLC; GGNSC Equity Holdings, LLC; Golden Gate Ancillary, LLC; GPH Stanford, LLC; and GGNSC Clinical Services, LLC, filed suit in this Court asking that this Court enforce the parties' Agreement, compel Defendant to arbitrate his claims, and enjoin Defendant from proceeding against them in the Lincoln County suit. Notably, the individuals who serve as administrators at GLC-Stanford and who are named as defendants in the Lincoln County lawsuit are not plaintiffs in this matter. Plaintiffs claim that the parties' Agreement precludes the assertion of these claims in a civil action and, instead, requires that they be resolved in arbitration under the Agreement and the FAA.
To date, no substantive rulings relating to the enforceability of the Agreement have been made in the State Court Action, nor are any motions currently pending in the State Court Action relating to enforceability of the Agreement. Thus, the State Court Action has not significantly progressed in considering the enforceability of the Agreement or, indeed, with any aspect of the Action.
This issues presented in Defendant's Motion to Dismiss are familiar to the undersigned, see Preferred Care, Inc. v. Belcher, 5:14-cv-107, Memorandum Opinion and Order, DE 9 (E.D.Ky. March 31, 2015), and to others in this district. See Richmond Health Facilities - Kenwood, L.P., et al. v. Nichols, 5:14-cv-00141-DCR, 2014 WL 4063823 (E.D.Ky. Aug. 13, 2014); GGNSC Vanceburg, LLC, d/b/a Golden Living Center-Vanceburg et al. v. Hanley, Civil Action No. 0:13-106-HRW, 2014 WL 1333204 (E.D.Ky. Mar. 28, 2014); GGNSC Vanceburg, LLC et al. v. Taulbee, Civil Action No. 5:13-cv-71-KSF, 2013 WL 4041174 (E.D.Ky. Dec. 19, 2013); GGNSC Frankfort, LLC v. Hunter, 3:11-CV-000333-WOB Report and Recommendation [DE 16] (E.D. Ky. October 18, 2011). Having considered the arguments presented by the parties and the facts in this matter, this matter is not so different, and Defendant's Motion to Dismiss shall be denied.
As an initial matter and in the face of Defendant's Motion to Dismiss Plaintiffs' claims pursuant to Fed.R.Civ.P. 12(b)(1) and (7), the Court concludes that it has jurisdiction to consider this matter. Defendant argues that there is no jurisdiction because Plaintiffs have failed to join a necessary party under Rule 19 and, once the citizenship of that necessary party is taken into account, there is a lack of subject-matter jurisdiction under 28 U.S.C. § 1332 because (1) the parties will not be of diverse citizenship and (2) the Federal Arbitration Act will not, alone, create a federal question which would confer jurisdiction under 28 U.S.C. § 1331 in this matter upon this Court. As explained below, the Court disagrees with this analysis.
At issue in a Rule 12(b)(1) motion is the trial court's jurisdiction-its very power to hear the case. In this context, the trial court may proceed as it never could under 12(b)(6)-no presumptive truthfulness attaches to either party's allegations and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims. If lack of subject-matter jurisdiction is raised in a motion to dismiss, the plaintiff "has the burden of proving jurisdiction in order to survive the motion." Mich. S. R.R. Co. v. Branch & St. Joseph Cntys. Rail Users Ass'n, 287 F.3d 568, 573 (6th Cir. 2002) (citing Moir v. Greater Cleveland Reg'l Transit Auth., 895 F.2d 266, 269 (6th Cir. 1990)); RMI Titanium Co. v. Westinghouse Electric Corp., 78 F.3d 1125, 1134 (6th Cir. 1996)(citations omitted).
28 U.S.C. § 1332 provides that "district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between... citizens of different States, " and Plaintiff contends that this Court has jurisdiction based on the diversity of the parties. In the instant action, there is no dispute that the amount in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs. Further, there is no dispute that Defendant is a resident of Kentucky and that each of the named Plaintiffs in this action is a citizen of another state.
Defendant states that, upon information and belief, the individuals, all of whom serve as nursing home administrators and who Defendant has sued along with the plaintiffs in this case in his Lincoln County lawsuit but who are not parties in the present matter, are citizens of Kentucky. Plaintiffs do not deny this. Thus, Defendant claims that complete diversity of citizenship among the parties cannot be maintained because, while the administrators are not named as plaintiffs in this action, they are indispensable ...