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GGNSC Louisville St. Matthews, LLC v. Phillips

United States District Court, W.D. Kentucky, Louisville Division

August 9, 2017

GGNSC LOUISVILLE ST. MATTHEWS, LLC, d/b/a/ GOLDEN LIVING CENTER - ST. MATTHEWS, PLAINTIFFS
v.
ILENE PHILLIPS DEFENDANT

          MEMORANDUM OPINION AND ORDER

          JOSEPH H. McKINLEY, JR., CHIEF JUDGE UNITED STATES DISTRICT COURT.

         This matter is before the Court on the motion by plaintiffs GGNSC Louisville St. Matthews LLC, d/b/a Golden Living Center - St. Matthews; GGNSC Administrative Services, LLC; GGNSC Holdings, LLC; GGNSC Equity Holdings, LLC; GGNSC Equity Holdings II, LLC; Golden Gate National Senior Care, LLC; Golden Gate Ancillary, LLC; GGNSC Clinical Services, LLC; and GPH Louisville St. Matthews, LLC (“plaintiffs”) to expedite consideration of their petition to compel arbitration (DN 4), as well as the motion by defendant Ilene Phillips to dismiss. (DN 7.) These matters are ripe for decision.

         I. Background

         Ilene Phillips was a resident of Golden Living Center - St. Matthews from October 1, 2016, until March 1, 2017. Prior to her admittance, she signed an “Alternative Dispute Resolution Agreement” (“ADR agreement”). (DN 1-3.) This agreement stated that Phillips agreed to resolve “any disputes covered by this Agreement . . . exclusively by an ADR process . . .” (Id. at 2.) Covered disputes included “violation[s] of a right claimed to exist under federal, state, or local law . . . tort . . . consumer protection . . . negligence; gross negligence; malpractice; and any alleged departure from any applicable . . . medical, health care, consumer, or safety standards.” (Id. at 4.) The ADR agreement states on its first page in bold capital letters that “[t]his agreement is not a condition of admission to or continued residence in the facility.” (Id. at 2.) Underneath Phillips' signature, the ADR agreement reads, “By my signature, I acknowledge that I have read this Agreement or had it read to me, that I understand what I am signing, and that I accept its terms.” (Id. at 8.)

         During her residency, Phillips alleges that she suffered physical and emotional injuries due to inadequate care, and her health and physical condition deteriorated beyond that caused by the normal aging process. She filed a civil action in Jefferson Circuit Court against all of the named plaintiffs in this case, as well as two other corporate entities, Redwood Holdings, LLC and Providence Healthcare Management, Inc.; a named administrator of the facility, Joshua Lee Schindler; and three unnamed defendants who provided care for Phillips while she was a resident. (DN 1-2.) The plaintiffs in this case then filed the present action, seeking to compel arbitration of Phillips' claims. (DN 1.) The plaintiffs have filed a motion for expedited consideration of their petition. (DN 4.) Phillips did not respond to this motion, but she has filed a separate motion to dismiss that the Court will consider. (DN 7.)

         II. Discussion

         A. Phillips' Motion to Dismiss

         As our sister court recently stated when faced with a similar case seeking to compel arbitration of claims arising from a nursing home stay, “[w]e have been here before.” Richmond Health Facilities-Madison, L.P. v. Shearer, 2017 WL 3273381, at *1 (E.D. Ky. Aug. 1, 2017). The motion to dismiss makes numerous arguments in favor of dismissal, but all of the asserted grounds for dismissal have been raised by defense counsel in other cases before this Court and others, and they have been denied by the courts in those cases. E.g., Owensboro Health Facilities, L.P. v. Henderson, 2016 WL 2853569 (W.D. Ky. May 13, 2016); GGNSC Louisville Hillcreek, LLC v. Watkins, 2016 WL 815295 (W.D. Ky. Feb 29, 2016). Thus, the Court will only briefly address each.

         1. Failure to Join a Necessary Party

         Phillips argues that the action should be dismissed for the failure to join the named administrator who is a defendant in the state court action, as this individual is a necessary and indispensable party under Fed.R.Civ.P. 19. However, “[t]he Court can and will decide the entire controversy without the administrators being named in the suit, ” as the administrators “have the same interest as [the corporate defendants] in this case: to compel arbitration.” Watkins, 2016 WL 815295, at *2-3. Nor will the existing parties “incur inconsistent obligations” if the administrator is not joined. Id. at *3. Therefore, Rule 19 does not apply, and the Court will not dismiss for the failure to join the administrator. Accord Owensboro Health Facilities, L.P. v. Canary, 2017 WL 1015859, at *2 (W.D. Ky. Mar. 15, 2017); Henderson, 2016 WL 2853569, at *2; Preferred Care of Del, Inc. v. Blankenship, 2016 WL 7192127, at *2 (W.D. Ky. Dec. 12, 2016).

         2. Failure to State a Claim

         Phillips makes two arguments in favor of dismissal pursuant to Fed.R.Civ.P. 12(b)(6). First, she argues that the agreement is unenforceable under the Federal Arbitration Act (“FAA”) as it does not evidence a transaction involving interstate commerce. However, “[m]any cases have found that the FAA applies to arbitration agreements involving nursing home residents, ” with these cases recognizing “that it would be impracticable for the nursing home to procure all goods necessary for the daily operations purely through intrastate channels.” Preferred Care of Del., Inc. v. Crocker, 173 F.Supp.3d 505, 514 (W.D. Ky. 2016) (citations omitted). Thus, the Court rejects this argument.

         And second, Phillips argues that arbitration agreement is unconscionable. This argument is “baseless, ” as “[t]here was nothing either procedurally or substantively unconscionable about this arbitration agreement.” Watkins, 2016 WL 815295, at *5-6. Voluminous paperwork and disparate bargaining power alone do not make an arbitration agreement unconscionable, especially one that clearly indicates it is not required for admission. Thus, the Court rejects this argument. Accord Canary, 2017 WL 1015859, at *3; Henderson, 2016 WL 2853569, at *2; Blankenship, 2016 WL 7192127, at *2.

         3. Lack of Subject ...


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