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GGNSC Frankfort, LLC v. Moore

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

June 28, 2017

GGNSC FRANKFORT, LLC, et al., Plaintiffs,


          Gregory F. Van Tatenhove United States District Judge.

         GGNSC Frankfort, LLC, a nursing home located in Frankfort, Kentucky, filed suit in this Court to compel arbitration of certain claims brought in Franklin Circuit Court by Defendant Randell Moore, executor of the Estate of Minnie Moore. Moore subsequently moved to dismiss the action. For the reasons that follow, Moore's motion to dismiss will be DENIED, and GGNSC's motion to compel arbitration will be GRANTED IN PART and DENIED IN PART. Only Moore's wrongful death claim will be allowed to proceed in state court.


         Minnie Moore was admitted to Golden LivingCenter - Frankfort, a nursing home operated by GGNSC Frankfort, LLC, for a period of time in 2009 and again in 2014. Being of unsound mind and in need of assistance, Minnie Moore executed a durable Power of Attorney document entitled “Power of Attorney, General” in 2008, authorizing her son Randell Moore to act on her behalf in a variety of ways. [See R. 1-4.] Randell Moore, as Minnie's Power of Attorney, signed the paperwork needed to admit Minnie to the Golden LivingCenter in both 2009 and 2014. Both times, the Golden LivingCenter admissions paperwork included an arbitration agreement. [R. 1-2; R. 1-3.]

         The 2014 agreement, entitled “Alternative Dispute Resolution Agreement, ” is at issue in this case. The arbitration agreement notes at the very beginning that signing the agreement is not a condition of admission to the nursing home, and the agreement goes on to explain that any signatories are “selecting a method of resolving disputes without resorting to lawsuits or the courts, and that by entering into this agreement, they are giving up their constitutional right to have their disputes decided in a court of law . . . .” [R. 1-3 at 2.] The final page of the agreement presents two options: a place to sign to accept the arbitration agreement, or a place to sign if alternative dispute resolution is declined. [Id. at 8.] On August 8, 2014, Randell Moore, acting as Minnie Moore's general Power of Attorney, signed to accept the arbitration agreement. [Id.]

         A number of years later, Randell Moore filed suit in Franklin Circuit Court against GGNSC, this time acting as the executor of Minnie Moore's estate. Moore's complaint sets forth claims for negligence, medical negligence, corporate negligence, and wrongful death, all stemming from Minnie Moore's alleged accelerated health deterioration and eventual death at Golden LivingCenter. [R. 1-1.] GGNSC subsequently filed a lawsuit in this Court, asking the Court to compel arbitration and enjoin the Franklin Circuit Court proceeding in light of the 2014 arbitration agreement entered into by Moore. [R. 1; R. 2.] Moore responded to GGNSC's motion to compel arbitration with a motion to dismiss. [R. 7.] The Court now considers both parties' arguments.



         As a preliminary matter, the Court must resolve a number of jurisdictional issues set forth in Moore's motion to dismiss. See, e.g., Douglas v. E.G. Baldwin & Associates, 150 F.3d 604, 607 (6th Cir. 1998) (“The first and fundamental question presented by every case brought to the federal court is whether it has jurisdiction to hear a case.”). Moore claims the Court does not have adequate diversity jurisdiction over this dispute because certain parties in the underlying state court case are Kentucky citizens. [R. 8 at 4.] Moore argues GGNSC failed to join a number of necessary and indispensable parties to this federal action under Federal Rule of Civil Procedure 19. [Id. at 4-5.] And Moore also contends that, even if the Court does have sufficient diversity jurisdiction, it should abstain in this case pursuant to the Colorado River doctrine. [Id. at 5-6.] All of these arguments have been rejected by other Eastern District of Kentucky courts, and the arguments are similarly meritless in this case.

         First, the Court has adequate subject-matter jurisdiction over the matter. The Federal Arbitration Act (“FAA”) does not provide an independent basis for federal jurisdiction. 9 U.S.C. § 4; Vaden v. Discover Bank, 556 U.S. 49, 59 (2009). Instead, petitioners seeking to compel arbitration under the FAA must assert an independent source of subject matter jurisdiction. GGNSC has invoked the Court's diversity jurisdiction pursuant to 28 U.S.C. § 1332, maintaining all of the plaintiffs are citizens of states besides Kentucky, the defendant is a citizen of Kentucky, and the amount in controversy exceeds $75, 000. [R. 1.] While complete diversity of citizenship exists on the face of GGNSC's federal complaint, Moore contends the action is actually non-diverse, because named defendants in the state court action are Kentucky citizens. But this argument, which asks the Court to “look through” the federal action to the underlying state complaint, has been consistently rejected by the judiciary. See, e.g., GGNSC Stanford, LLC v. Gilliam, 205 F.Supp.3d 884, 888 (E.D. Ky. 2016) (compiling cases); see also Preferred Care, Inc. v. Howell, 187 F.Supp.3d 796, 803-04 (E.D. Ky. 2016). The action is clearly sufficiently diverse under § 1332.

         As for Moore's assertion that the state court, non-corporate defendants from Kentucky are necessary and indispensable parties, a number of federal courts have already explained why that is not the case. Because the non-corporate defendants would destroy diversity, the Court looks to Federal Rule of Civil Procedure 19(b), which requires it to consider whether “in equity and good conscience, the action should proceed among the existing parties or should be dismissed.” Fed.R.Civ.P. 19(b). To make this determination, the Court considers:

(1) the extent to which a judgment rendered in the person's absence might prejudice that person or the existing parties;
(2) the extent to which any prejudice could be lessened or avoided by:
(A) protective provisions in the ...

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