Evangelical Lutheran Good Samaritan Soc'y v. Moreno

• Decision Date: 29 September 2017
• Docket Number: No. CIV 16–1355 JB/KS,CIV 16–1355 JB/KS
• Citation: 277 F.Supp.3d 1191
• Parties: The EVANGELICAL LUTHERAN GOOD SAMARITAN SOCIETY, a North Dakota Corporation d/b/a Good Samaritan Society–Betty Dare, Plaintiff, v. Beatrice MORENO, Deceased, By the Personal Representative of the Wrongful Death Estate, Monica Cruz Hatton, Defendant.
• Court: U.S. District Court — District of New Mexico

277 F.Supp.3d 1191

The EVANGELICAL LUTHERAN GOOD SAMARITAN SOCIETY, a North Dakota Corporation d/b/a Good Samaritan Society–Betty Dare, Plaintiff,

v.Beatrice MORENO, Deceased, By the Personal Representative of the Wrongful Death Estate, Monica Cruz Hatton, Defendant.

No. CIV 16–1355 JB/KS

United States District Court, D. New Mexico.

Signed September 29, 2017

Martha G. Brown, Deana M. Bennett, Jeremy K. Harrison, Zoe E. Lees, Modrall, Sperling, Roehl, Harris & Sisk, PA, Albuquerque New Mexico, Attorneys for the Plaintiff

Mary Ellen Spiece, Melanie Bossie, Wilkes & McHugh PA, Phoenix, Arizona, Attorneys for the Defendant

MEMORANDUM OPINION AND ORDER

James O. Browning, UNITED STATES DISTRICT JUDGE

THIS MATTER comes before the Court on Plaintiff Evangelical Lutheran Good Samaritan Society, a North Dakota Company D/B/A Good Samaritan Society–Betty Dare's ("Good Samaritan") Motion to Compel Arbitration and Petition for Appointment of Arbitrator, filed December 13, 2016 (Doc. 3) and its incorporated Memorandum of Law in Support of Plaintiff's Motion to Compel Arbitration and Petition for Appointment of Arbitrator, filed December 13, 2016 (Doc. 4)("Motion to Compel"). The Court held a hearing on May 2, 2017. The primary issues are: (i) whether, pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1 – 16, the Court should grant a motion to compel arbitration where a temporary legal guardian signed a nursing home admission agreement ("Admission Agreement") on behalf of a potential nursing home resident—Beatrice Moreno ("Moreno")—that contained a "Resolution of Legal Disputes' " ("Arbitration Agreement") provision delegating to the arbitrator the "exclusive authority to resolve any disputes related to the existence and/or enforceability" of the Arbitration Agreement; (ii) whether the Court should compel discovery regarding the temporary legal guardian's authority to bind the Moreno to the Arbitration Agreement; and (iii) whether Defendant Monica Cruz Hatton, the personal representative of the wrongful death estate of Beatrice Moreno ("Hatton") is bound to arbitrate her claims. The Court concludes that: (i) it will compel arbitration, because Defendant Monica Cruz Hatton, the personal representative of the wrongful death estate of Beatrice Moreno ("Hatton") never specifically challenged the temporary legal guardian's authority to agree to the delegation clause or the delegation clause's unconscionability; (ii) it will, consequently, not compel discovery, because the temporary legal guardian's authority is an issue for the arbitrator; and (iii) if it could consider whether Hatton is bound to the entire Arbitration Agreement, it would determine that she is. Accordingly, the Court grants the Good Samaritan's Motion to Compel.

FACTUAL BACKGROUND

Good Samaritan owns and operates a nursing home in Alamogordo, New Mexico. See Complaint to Compel Arbitration and Petition for Appointment of Arbitrator ¶ 1 at 1, filed December 13, 2016 (Doc. 1)("Complaint"). On February 27, 2014, Good Samaritan admitted Moreno into that nursing home, and she lived there until her death on August 26, 2015. See Complaint ¶¶ 8, 19, at 2, 5; Motion to Compel at 1. Also on February 27, 2014, the Twelfth Judicial District, County Court of Otero of the State of New Mexico, appointed SM Gantz OT Services, Inc. ("SM Gantz") Moreno's temporary guardian. See Complaint ¶ 6, at 2. As temporary guardian, SM Gantz received a Letter of Temporary Guardianship that authorized SM Gantz to make decisions regarding Moreno's "medical and psychiatric care, residential placement, safety, and supervision." See Complaint ¶ 7, at 2. When Moreno entered the nursing home, SM Gantz, acting as her legal temporary guardian, reviewed and signed the Good Samaritan Admission Agreement on Moreno's behalf. See Complaint ¶ 8, at 2–3; Good Samaritan Society Admission Agreement at 14–15 [at 22–23 on CM/ECF](dated February 27, 2014), filed December 13, 2016 (Doc. 1–1)("Admission Agreement"). The Admission Agreement contains an Arbitration Agreement that gives the resident or his or her legal representative the option to agree to arbitrate disputes or to elect not to arbitrate disputes. See Admission Agreement at 13–14 [at 21–22 on CM/ECF]; Complaint ¶¶ 10–11, at 3. If a resident or legal representative elects to arbitrate, the Admission Agreement explains that the resident is electing to waive his or her right to sue in a court of law and to a trial by jury. See Complaint ¶ 15, at 4; Admission Agreement at 13 [at 21 on CM/ECF]. SM Gantz elected to arbitrate disputes on Moreno's behalf. See Complaint ¶ 18, at 5; Admission Agreement at 14 [at 22 on CM/ECF].

The Arbitration Agreement contains several other relevant clauses. See Complaint ¶¶ 13–17, at 3–5. Paragraph A provides: "Any legal controversy, dispute, disagreement or claim arising between the Parties hereto ... in which Resident, or a person acting on his or her behalf, alleges a violation of any right granted Resident under law or contract shall be settled exclusively by binding arbitration." Admission Agreement at 13 [at 21 on CM/ECF]; Complaint ¶ 13, at 3. Paragraph B states:

Any legal controversy, dispute or claim of any kind arising out of or related to this Admission agreement, or the breach thereof, or, related to the care of stay at the Facility, shall be settled exclusively by binding arbitration ... This arbitration clause is meant to apply to all controversies, disputes, disagreements or claims including, but not limited to, all breach of contract claims, all negligence and malpractice claims, all tort claims and all allegations of fraud concerning entering into or canceling this Admission Agreement. This arbitration provision binds all parties whose claims may arise out of or relate to treatment or service provided by the center including any spouse or heirs of the Resident.

Admission Agreement at 13 [at 21 on CM/ECF]; Complaint ¶ 14, at 4. Paragraph C contains several clauses, but in relevant part it states:

The Parties shall work together in good faith to select a mutually agreeable individual arbitrator or a national recognized arbitration service provider.... The issue of whether a Party's claim(s) is subject to arbitration under this ... provision shall be decided by the arbitrator.... [T]he Arbitrator shall have exclusive authority to resolve any disputes related to the existence and/or enforceability of this ... provision, including but not limited to any claim that all or any part of this ... provision is void or voidable.

Admission Agreement at 13–14 [at 21–22 on CM/ECF]; Complaint ¶¶ 15–16, at 4–5 (emphasis omitted). The Arbitration Agreement further provides that the nursing home regularly engages in transactions involving interstate commerce, that the services provided to residents involve interstate commerce, and that the FAA governs the Arbitration Agreement. See Admission Agreement at 14 [at 22 on CM/ECF]; Complaint ¶ 17, at 5.

After Moreno died on August 26, 2015, Moreno's daughter, Monica Cruz Hatton, was appointed personal representative of Moreno's estate. Hatton subsequently filed a lawsuit in the Twelfth Judicial District Court against Good Samaritan. See Complaint ¶ 20, at 5–6. On November 21, 2016, Hatton filed an amended complaint in state court against Good Samaritan, among other defendants, alleging causes of action for wrongful death, negligence, negligence per se, negligent or intentional misrepresentation, violation of the Unfair Practices Act, and punitive damages. See Complaint ¶ 20–21, at 5–6; First Amended Complaint for Wrongful Death, Negligence, Negligence Per Se, Misrepresentation, Violation of the Unfair Trade Practices Act, and Punitive Damages at 1–22, filed December 13, 2016 (Doc. 1–2)("State Court Action").

PROCEDURAL BACKGROUND

On December 13, 2016, Good Samaritan filed its Complaint requesting the Court to compel the parties to: (i) arbitrate pursuant to the Admission Agreement's terms; (ii) order Hatton to arbitrate all claims that she brought in the State Court Action against Good Samaritan; (iii) stay the State Court Action pending resolution of the arbitration process; (iv) stay further proceedings in this action pending the arbitration's conclusion or dismiss the matter without prejudice; and (v) order other proper relief. See Complaint, Prayer for Relief, ¶¶ A–E, at 12. Also on December 13, 2016, Good Samaritan filed its Motion to Compel.

1. Good Samaritan's Motion to Compel Arbitration and Petition for Appointment of Arbitrator.

Good Samaritan's Motion to Compel argues that Hatton's State Court claims must be arbitrated pursuant to the arbitration clauses in the Admission Agreement that SM Gantz signed on Moreno's behalf. See Motion to Compel at 6. First, it argues, the Court must either order the parties to select an arbitrator or to appoint an arbitrator. See Motion to Compel at 6. According to Good Samaritan, the Court's job then is concluded, because the arbitrator will then decide whether Hatton's claims are arbitrable and meritorious. See Motion to Compel at 6. Good Samaritan argues that, if, however, the Court concludes that it will not enforce the clauses delegating authority to the arbitrator to determine arbitrability ("Delegation Clauses"), the Court should, nonetheless, conclude that Hatton's claims fall within the Arbitration Agreement's scope and order the parties to select an arbitrator or appoint one. See Motion to Compel at 6.

Good Samaritan contends that the FAA governs the Arbitration Agreement. See Motion to Compel at 7. It argues that the parties agreed within the Admission Agreement to arbitrate "[p]ursuant to the Federal Arbitration Act" and also agreed that the "Admission Agreement is a transaction involving interstate commerce." Motion to Compel at 7. Good Samaritan, thus, argues under the FAA, this writing and agreement is sufficient to demonstrate the FAA controls the agreement, unless there are reasons in law or equity for revoking a contract. See ...