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Golden Gate National Senior Care, LLC v. Brown

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

April 5, 2018

PAT BROWN and GARY BROWN, Defendants.



         This matter is before the Court on Plaintiff's Motion for Expedited Consideration of Complaint to Enforce the Alternative Resolution Agreement and to Compel Defendants to Submit Their Claims to Arbitration [DE 4] and Defendants Motion to Dismiss [DE 8], both of which have been fully briefed by the parties.[1]Defendants ask this Court to determine that it lacks jurisdiction in this matter or, in the alternative, abstain from exercising jurisdiction and to dismiss the Plaintiffs' Complaint under the Colorado River abstention doctrine in favor of a parallel state court action pending in the Lincoln Circuit Court. They further assert that, in any event, that any injunctive relief would be inappropriate under the Anti- Injunction Act. As explained below, the Court disagrees. Rather, Plaintiffs' Motion to Enforce the Alternative Resolution Agreement and to Compel Defendants to Submit Their Claims to Arbitration [DE 4] is well-received, at least in part. For the reasons which follow, relief will be afforded both parties, but Defendants will be enjoined from pursuing a subset of all but Gary Brown's loss of spousal consortium claim before the Lincoln Circuit Court.


         On September 27, 2016, Defendant Pat Brown was admitted to Golden LivingCenter - Stanford (“GLC - Stanford” or the “facility) in Stanford, Kentucky. During the admission process, Pat Brown signed a document titled “ALTERNATIVE DISPUTE RESOLUTION AGREEMENT, ” which provided for,

[a]ny and all disputes arising out of or in any way relating to this Agreement or the Resident's stay at 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 the 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.

         It further provides that it “shall be governed by and interpreted under the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq.” and that “[a]ll claims based in whole or in part on the same incident, transaction, or related course of care or services provided by the Facility to the Resident shall be addressed in a single ADR process, which shall adjudicate solely the claims of the Parties named in this Agreement....” The Agreement provides that it is binding upon Pat Brown and “all persons whose claim is or may be derived through or on behalf of [her], including any next of kin, guardian, executor, administrator, legal representative or heir” and the facility and “its employees, agents, officers, directors, affiliates and any parent or subsidiary of the Facility and its medical director acting in his or her capacity as medical director.” The Agreement is to “inure to the benefit of, bind, and survive” the parties, “their successors, and assigns.”

         The Agreement also provides that it “GOVERNS IMPORTANT LEGAL RIGHTS” and that one should “PLEASE READ IT CAREFULLY AND IN ITS ENTIRETY BEFORE SIGNING.” It further advises that one has a right “to seek advice of legal counsel concerning this Agreement” and that signing it was “not a condition to admission to or residence in the [f]acility.” The Agreement was also, by its terms, revocable “by sending written notice to the Facility within 30 days of signing it.”

         There is no dispute that Pat Brown signed the agreement or that she never revoked the Agreement. Just under her signature, the Agreement reads, “[b ]y 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.” Gary Brown did not sign the Agreement.

         On March 9, 2017, Pat and Gary Brown filed an action in Lincoln Circuit Court, Civil Action No. 17-CI-00104, asserting negligence, medical negligence, corporate negligence, violations of long term care resident's rights under KRS 216.510, et seq., and loss of spousal consortium against Plaintiffs as a result of the care that Pat Brown received at the facility. The Browns also brought a claim of negligence against Barbara Woods and Lisa Davis, both of whom are citizens of Kentucky and served as administrators of the facility during Pat Brown's residence, in the state court action. No. substantive rulings related to the enforceability of the Agreement have been made in the Lincoln Circuit Court. Neither Woods nor Davis are named as plaintiffs in the matter at bar before this Court.

         By virtue of their Complaint in this action, Plaintiffs ask this Court to enforce an arbitration agreement entered into by Pat Brown, and GLC - Stanford, and to stay the pursuit of the action in Lincoln Circuit Court in order that any arbitration ordered may proceed.


         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. Defendants argue 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.[2] For the same reasons announced in Preferred Care, Inc. v. Belcher, No. 14-CV-107-JMH, 2015 WL 1481537, at *1-3 (E.D. Ky. Mar. 31, 2015), the Court disagrees.

         A Rule 12(b)(1) motion can either attack the claim of jurisdiction on its face, in which case all allegations of the plaintiff must be considered as true, or it can attack the factual basis for jurisdiction, in which case the trial court must weigh the evidence and the plaintiff bears the burden of proving that jurisdiction exists. See RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1133-35 (6th Cir.1996); United States v. Ritchie, 15 F.3d 592, 598 (6th Cir.1994); Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir.1990).

         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 Plaintiffs contend 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 Defendants are residents of Kentucky and that each of the named Plaintiffs in this action is a citizen of another state. However, Woods and Davis, nursing home administrators named as defendants in the state complaint but not as a party in the present matter, are citizens of Kentucky. Defendants claim that complete diversity of citizenship among the parties in this case cannot be maintained because, while Woods and Davis are not named as plaintiffs in this action, they are indispensable parties under Fed.R.Civ.P. 19 and their joinder would destroy the complete diversity among parties required by 28 U.S.C. 1332(a)(1).

         If lack of subject-matter jurisdiction is raised in a motion to dismiss, the plaintiff “bears the burden of proving jurisdiction ... to survive the motion.” Mich. S. R.R. Co. v. Branch & St. Joseph Counties Rail Users Ass'n, 287 F.3d 568, 573 (6th Cir .2002). However, the plaintiff will “survive [a] motion to dismiss by showing ‘any arguable basis in law' for the claims set forth in the complaint.” Id. (quoting Musson Theatrical, Inc. v. Fed. Express Corp., 89 F.3d 1244, 1248 (6th Cir.1996)).


         Defendants argue that Woods and Davis are necessary and indispensable parties to this action and that, since their joinder would destroy diversity in this action, subject matter jurisdiction is lacking and the matter must be dismissed.

         The existence of a non-diverse party in the related state court action does not, on its own, destroy diversity:

Rule 19 deals with what were historically known as “necessary” and “indispensable” parties. The terms “necessary” and “indispensable” are terms of art in jurisprudence concerning Rule 19, and “necessary” refers to a party who should be joined if feasible, while “indispensable” refers to a party whose participation is so important to the resolution of the case that, if the joinder of the party is not feasible, the suit must be dismissed. If a necessary party cannot be joined without divesting the court of subject-matter jurisdiction, the Rule provides additional criteria for determining whether that party is indispensable, but if the court finds that the party is anything less than ...

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