United States District Court, E.D. Kentucky, Northern Division
DIVERSICARE LEASING CORP. d/b/a ELLIOT NURSING & REHABILITATION CENTER; OMEGA HEALTHCARE INVESTORS, INC.; DIVERSICARE HEALTHCARE SERVICES, INC.; and ADVOCAT FINANCE, INC., PLAINTIFFS,
BARBARA HAMILTON, Administratrix of the Estate of VONNIE MARIE WAGONER, DEFENDANT.
MEMORANDUM OPINION AND ORDER
R. WILHOIT, JR. DISTRICT JUDGE.
matter is before the Court upon Defendant's Motion to
Dismiss [Docket No. 8] and Plaintiffs' Motion to Enforce
Arbitration Agreement and Enjoin Defendant [Docket No. 10].
The motions have been fully briefed by the parties and for
the reasons set forth herein, the Court Finds that dismissal
is not warranted and that the arbitration agreement which
forms the basis of this lawsuit must be honored.
20, 2007, Vonnie Wagoner was admitted to the Elliot Nursing
& Rehabilitation Center, a nursing home located in
Greenup, Kentucky. [Docket No. 1, ¶ 14]. As part of the
admissions process, her attorney-in-fact, Barbara Hamilton,
signed an Arbitration Agreement, a copy of which is attached
to the Complaint as "Exhibit A."
Arbitration Agreement, by its own terms, expressly provides,
in pertinent part that it "shall include, but is not
limited to, any claim for payment, non-payment, or refund for
services rendered to the Resident by the Facility, breach of
contract, breach of fiduciary duty, fraud or
misrepresentation, common law or statutory negligence, gross
negligence, malpractice or any other claim based on any
departure from accepted standards of medical or nursing care
(collectively "Disputes")." [Docket No. 1-1,
p.1] Furthermore, the Agreement states that it "shall be
binding upon, and shall include any claims brought by or
against, the Parties' representatives, agents, heirs,
assigns, employees, managers, directors, shareholders or
related or affiliated business entities." Id.
Hamilton executed the Arbitration Agreement pursuant to two
Powers of Attorney separately executed in Ohio. [Docket No.
10-2], A Power of Attorney related to financial issues was
executed on August 20, 1993, and gave to Barbara Hamilton the
power to "convert into cash, or otherwise deal with all
of my personal property, whether tangible or
intangible..." Id. at p. 1. A subsequent
"Durable Power of Attorney for Health Care," was
executed by Vonnie Wagoner on June 21, 1999, while she was a
resident in Ohio, and granted her agent the power to
"select and contract with any medical or health care
facility on [her] behalf, including, but not limited to
hospitals, nursing homes, assisted residence facilities and
the like." Id. at ¶ 3(g). This second
power of attorney did not revoke the 1993 POA. Some marginal
notes on the 1993 POA indicate that the 1999 POA changed or
expanded the healthcare decision-making powers, but the other
provisions remained unchanged. Id. Plaintiff Barbara
Hamilton is listed as an alternate on the 1999 Power of
Attorney (after her two sisters who then resided nearby to
Ms. Wagoner in Ohio), and is granted the power to exercise
the powers granted therein when the other agents listed are
"not readily available or .. .unwilling or unable to
serve or to continue to serve." Id. at p. 2.
allege that while she resided at the facility, Mrs. Wagoner
suffered physical and emotional injuries due to inadequate
care, and her health and physical condition deteriorated
beyond that caused by the normal aging process resulting in
death. On March 8, 2017, Defendant filed in the Circuit Court
of Elliott County, Kentucky, No. 17-CI-0022, a negligence,
medical negligence, corporate negligence, and wrongful death
action against Diversicare Leasing Corp. d/b/a Elliott
Nursing and Rehabilitation Center; Diversicare Healthcare
Services, Inc. f/k/a Advocat, Inc.; Diversicare Management
Services, Advocat Finance Inc.; Omega Healthcare Investors,
Inc.; Benita Adkins, in her capacity as Administrator of
Elliott Nursing and Rehabilitation Center; Eva Rachelle
Stevens, in her capacity as Administrator of Elliott Nursing
and Rehabilitation Center; Adam Wesley Rucker, in his
capacity as Administrator of Elliott Nursing and
Rehabilitation Center; and John Does 1 through 3.
Diversicare Leasing Corp. d/b/a Elliot Nursing &
Rehabilitation Center; Omega Healthcare Investors, Inc.;
Diversicare Healthcare Services, Inc.; and Advocat Finance,
Inc.. filed the instant action, as Plaintiffs, alleging
federal subject matter jurisdiction by virtue of diversity
and seeking a declaration that the Arbitration ADR Agreement
to be valid and enforceable, to compel Defendant to arbitrate
her claims and to enter an order enjoining the Defendant from
pursuing her claims in the Elliot Circuit Court.
seeks a dismissal of the instant lawsuit. She contends that
this Court lacks subject-matter jurisdiction; that it should
abstain from hearing this action in light of the pending
state-court matter; that the arbitration agreement at issue
is invalid and unenforceable; and that the Court should not
exercise its power to enjoin her from continuing the
prosecution of the state court action.
seek entry of an Order compelling Defendant to proceed to
arbitration and, in addition, enjoining her from pursing her
claims in state court.
purpose of a motion to dismiss pursuant to Fed. R, Civ. P
12(b)(6), is to allow a defendant to test whether, as a
matter of law, the plaintiff is entitled to legal relief.
See Mayer v. Mylod, 988 F.2d 635, 638
(6th Cir. 1993). This requires a consideration of
and a ruling upon the merits of a claim. In determining
whether dismissal is warranted under Rule 12(b)(6), the
complaint must be construed in the light most favorable to
the nonmoving party and its allegations taken as true.
Miller v. Currie, 50 F.3d 373, 377 (6th
Cir. 1995). If, in doing so, the Court determines that the
case is legally insufficient, it will be dismissed.
procedure under a motion to dismiss for lack of subject
matter jurisdiction pursuant to Fed. R. Civ. P 12(b)(1) is
quite different. At issue in a Rule 12(b)(1) motion is the
trial court's jurisdiction-its very power to hear the
case. In this context, the trial court may proceed as it
never could under 12(b)(6) - no presumptive truthfulness
attaches to either party's allegations and the existence
of disputed material facts will not preclude the trial court
from evaluating for itself the merits of jurisdictional
claims. Moreover the party claiming jurisdiction will have
the burden of proof that jurisdiction does in fact exist.
RMI Titanium Co. v. Westinghouse Electric Corp., 78
F.3d 1125, 1134 (6th Cor. l996)(internal citations
Subject matter jurisdiction exists.
requirement that jurisdiction be established as a threshold
matter 'spring[s] from the nature and limits of the
judicial power of the United States' and is inflexible
and without exception.'" Mansfield, C. &
L.M.R. Co. v. Swan, 111 U.S. 379');">111 U.S. 379, 382, 10');">4 S.Ct. 510, 28
L.Ed. 462 (1884). Federal courts are courts of limited
jurisdiction, and subject matter jurisdiction may be obtained
only with the existence of diverse parties or a federal
question. Heartwood, Inc. v. Agpaoa, 628 F.3d26l,
266 (6th Cir.2010); 28 U.S.C. §§ 1331, 1332.
party asserts the existence of a federal question. Rather,
the disputed question is that of diversity. 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
has not challenged the allegations in Plaintiffs'
Complaint concerning the citizenship of the named Plaintiffs
in this action. Nor has Defendant challenged that the amount
in controversy fails to meet the jurisdictional requirements
of 28 U.S.C. § 1332. Rather, she contends that complete
diversity of citizenship among the parties cannot be
established because Benita Adkins, Eva Rachelle Stevens and
Adam Wesley Rucker, the nursing home administrators and
employees named in her state court complaint, but not in the
instant matter, are Kentucky citizens and indispensable
parties under Fed.R.Civ.P. 19. She maintains that their
joinder would destroy the complete diversity among parties
required by 28 U.S.C. 1332(a)(1).
this Court and other courts within this District have
consistently held that the nursing home administrators are
not indispensable per Rule 19. As the undersigned explained
in GGNCS v. Hanley, 2014 WL 1333204 (E.D. Ky. 2014),
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