United States District Court, E.D. Kentucky, Central Division, Lexington
PREFERRED CARE, INC., et al. Plaintiff,
JESSE ROBERTS, as administrator of Kenneth Roberts' estate, Defendant.
OPINION AND ORDER
K. CALDWELL, CHIEF JUDGE UNITED STATES DISTRICT COURT.
matter is before the Court on the plaintiffs' motion to
reconsider (DE 19) this Court's ruling that certain
claims against non-parties to an arbitration agreement do not
have to be arbitrated. For the following reasons, the motion
will be denied.
Roberts died while a resident of the Stanton Nursing and
Rehabilitation Center located in Stanton, Kentucky. The
administrator of his estate, Jesse Roberts (the
“Estate”), filed suit in Powell Circuit Court
against the nursing center and several other companies that
the Estate alleged owned or operated the center. The Estate
also named the center administrator and two nurses and a
doctor employed there. (DE 1-2, State Court Action.)
center and three of the companies named as defendants in the
state-court action (collectively, the “Center”)
then filed a claim in this Court asking for an order
compelling the Estate to arbitrate the claims filed in the
state court action and also for an order enjoining the Estate
from pursing the state-court action. There is no dispute that
the only plaintiff who was a party to the arbitration
agreement was Stanton Health Facilities, LP d/b/a Stanton
Nursing and Rehabilitation Center.
motion to dismiss, the Estate argued that the nonsignatory
plaintiffs could not compel arbitration of the claims against
them. In its response to that motion, the Center appeared to
make two arguments: the nonsignatories are third-party
beneficiaries of the arbitration agreement and the Estate
should be judicially estopped from asserting that its claims
against the nonsignatories are not subject to the arbitration
agreement. The Court found that neither theory was applicable
here. The Center had pointed to no evidence that the parties
to the arbitration agreement intended for the nonsignatories
to receive the benefits of the arbitration agreement. As to
judicial estoppel, the Court noted that the Estate had not
alleged under oath in the state-court action that the
nonsignatories were parties to the arbitration agreement.
Further, the Center had not alleged that any such allegation
was accepted by the state court.
Center now moves the Court to reconsider that ruling.
59(e) motions are aimed at reconsideration, not initial
consideration. Thus, parties should not use them to raise
arguments which could, and should, have been made before
judgment issued. Motions under Rule 59(e) must either clearly
establish a manifest error of law or must present newly
discovered evidence.@ Sault Ste. Marie Tribe of Chippewa
Indians v. Engler, 146 F.3d 367, 374 (6th
Cir. 1998) (quoting FDIC v. World Univ. Inc., 978
F.2d 10, 16 (1st Cir.1992)).
motion to compel arbitration, the Center did not specifically
mention the claims against the nonsignatories to the
arbitration agreement. It argued that the Court should compel
the Estate to arbitrate all of its claims but it did not
explain why the claims against the nonsignatories were also
governed by the arbitration agreement.
response to the Estate's argument that the claims against
the nonsignatories were not subject to the arbitration
agreement, the Center did specifically address the claims
against the nonsignatories to the arbitration agreement. The
Court will again carefully parse through the arguments that
the Center made in its response. (DE 11, Response at 38-41.)
Center first very clearly argued that the nonsignatories
could enforce the arbitration agreement because they were
“third-party beneficiaries of the ADR Agreement at
issue.” (DE 11, Response at 39.)
support of that proposition, the Center cited Olshan
Found. Repair & Waterproofing v. Otto, 276 S.W.3d
827 (Ky. App. 2009). In that case, the Kentucky Court of
Appeals determined that the nonsignatory plaintiff homeowners
were “third party direct beneficiaries” of
certain warranty agreements containing an arbitration clause.
Id. at 831. This is because the homeowners had
produced evidence that “the signatories intended to
benefit future third party owners of the residence.”
Id. at 831.
ruling on the motion to compel arbitration, this Court
explained that, in order for the Court to find the
nonsignatories in this case were third-party beneficiaries of
the arbitration agreement, the Center must produce evidence
that the two parties to the arbitration agreement intended
that the nonsignatories would benefit from it. The Center had
pointed to no such evidence and, thus, the Court could not