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Golden Gate National Senior Care, LLC v. Hudson

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

September 26, 2017

RAY HUDSON, individually and as administrator of the Estate of Evelyn Hudson RESPONDENT


          Joseph H. McKinley, Jr., Chief Judge United States District Court.

         This matter is before the Court on the motion by petitioners Golden Gate National Senior Care, LLC; GGNSC Administrative Services, LLC; GGNSC Clinical Services, LLC; GGNSC Holdings, LLC; GGNSC Equity Holdings, LLC; GGNSC Equity Holdings II, LLC; Golden Gate Ancillary, LLC; and GPH Louisville St. Matthews, LLC (“petitioners”) to expedite consideration of their petition to compel arbitration (DN 3), as well as the motion to dismiss by respondent Ray Hudson (“Ray”). (DN 12.) Fully briefed, these matters are ripe for decision.

         I. Background

         Evelyn Hudson (“Evelyn”) was a resident of Golden Living Center - St. Matthews (“the facility”) from October 10, 2016, until January 4, 2017. On September 12, 2012, well before her admittance to the facility, Evelyn signed a form entitled “Durable Power of Attorney, ” in which she named Ray, her cousin, as her attorney-in-fact and agent. (DN 1-4.) This power of attorney invested in Ray the “power and authority to do in my name and on my behalf any and all acts which I might do if personally present and acting on my own behalf, ” including but not limited to the authority to “demand, receive and receipt for all monies and property, tangible or intangible, of whatever kind, to which I may be or may hereafter become entitled”; to “enter into contracts of any kind or description whatsoever, and to exercise any right, option or election which I may have or acquire under any contract”; to “compromise, settle or renew any claim of or against me, or any right which I may be entitled to asset and which may be asserted against me”; and “to assert by litigation or otherwise any claim of mine, and to defend any claim that may be asserted against me with full right to employ counsel and agents which, in the discretion of said attorney-in-fact, may be necessary in connection therewith[.]” (Id. at ¶¶ 1, 4-6.)

         Prior to Evelyn's admittance to the facility, Ray signed an “Alternative Dispute Resolution Agreement” (“ADR agreement”) as Evelyn's legal representative. (DN 1-3.) This agreement stated that Evelyn agreed to resolve “any disputes covered by this Agreement . . . exclusively by an ADR process . . .” (Id. at 1.) 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 3.) 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 1.) Underneath Ray's signature, the ADR agreement reads, “By my signature, I represent that I am a person duly authorized by Resident or by law to execute this Agreement and that I accept its terms.” (Id. at 7.)

         During Evelyn's stay at the facility, it is alleged she suffered injuries and ultimately died due to inadequate care, as her health and physical condition deteriorated beyond that caused by the normal aging process. Ray filed a civil action[1] in Jefferson Circuit Court against all of the named petitioners in this case, as well as against the following defendants: (1) three other corporate entities, St. Matthews Leasing, LLC; Redwood Holdings, LLC; and Providence Healthcare Management, Inc.; (2) a named administrator of the facility, Joshua Lee Schindler; (3) and three unnamed defendants who provided care for Evelyn while she was a resident. (DN 1-2.) The state court complaint asserts claims of negligence, medical negligence, and corporate negligence against various defendants, as well as a claim of wrongful death against all defendants. The petitioners in this case then filed the present action, seeking to compel arbitration of Evelyn's claims. (DN 1.) The petitioners have filed a motion for expedited consideration of their petition. (DN 3.) Ray responded to the motion for expedited consideration (DN 11), and he has filed a separate motion to dismiss (DN 12), to which the petitioners have responded. (DN 13.)

         II. Discussion

         A. Motion to Dismiss

         The Court begins with the motion to dismiss. The motion 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

         Ray Hudson 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

         Ray Hudson makes three arguments in favor of dismissal pursuant to Fed.R.Civ.P. 12(b)(6). First, he 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.

         Second, he 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 ...

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