BLC Lexington SNF, LLC v. Craig

• Decision Date: 13 August 2020
• Docket Number: No. 5:19-CV-376-REW-MAS,5:19-CV-376-REW-MAS
• Parties: BLC LEXINGTON SNF, LLC d/b/a BROOKDALE RICHMOND PLACE SNF, et al., Plaintiffs, v. JIM CRAIG, as Administrator of the Estate of Dennis Ray Craig, Defendant.
• Court: U.S. District Court — Eastern District of Kentucky

BLC LEXINGTON SNF, LLC d/b/a BROOKDALE RICHMOND PLACE SNF, et al., Plaintiffs, v. JIM CRAIG, as Administrator of the Estate of Dennis Ray Craig, Defendant.

No. 5:19-CV-376-REW-MAS

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF KENTUCKY CENTRAL DIVISION LEXINGTON

August 13, 2020

OPINION & ORDER*** *** *** ***

This case centers on the late Dennis Craig's stays at a Lexington skilled nursing facility. Before the Court are Defendant's motion to dismiss, Plaintiffs' motion to compel arbitration and enjoin Defendant from continuing his state action against them, and Defendant's motion to strike the motion to compel. For the following reasons, the Court rejects the dismissal effort, denies the motion to strike, compels arbitration, and enjoins Defendant from litigating in the underlying state court proceeding.

I. BACKGROUND

On August 16, 2019, Dennis Ray Craig¹ filed an action in the Fayette Circuit Court complaining of the care he received at Brookdale Richmond Place SNF. DE 1-2. Craig sued the facility where he was a resident, numerous entities involved "in the ownership, operation, management, control, licensing and/or service provided for the facility during [Craig's]residency," and the alleged alter ego(s) of the facility. See id. ¶¶ 5-19, 25. Craig also joined several individual managers or officers of the named entities and several facility administrators. See id. ¶¶ 20-24, 26-28. The complaint charged all targets with negligence and violations of both the long-term care residents' rights and the Consumer Protection Act, and further sought punitive damages. See id. ¶¶ 53-55.²

The state court defendants answered and asserted that Craig's claims were subject to a binding arbitration agreement. DE 15-3 at 2. Several days later, four of the entity defendants (collectively, Brookdale) in the state court matter initiated this action as federal plaintiffs. See DE 1; DE 7.³ The complaint alleged that, in order to be admitted to Brookdale Richmond Place SNF, Craig had signed an admission agreement and that the agreement included an arbitration clause. DE 7 ¶¶ 6, 17. The clause states, in relevant part:

Any and all claims or controversies arising out of, or in any way relating to, this Agreement or any of your stays at the Provider, excluding any action for involuntary transfer or discharge or eviction, and including disputes regarding interpretation, scope, enforceability, unconscionability, waiver, preemption and/or violability of this Agreement, whether arising out of State or Federal law, whether existing or arising in the future, whether for statutory, compensatory or punitive damages and whether sounding in breach of contract, tort or breach of statutory duties, irrespective of the basis for the duty or the legal theories upon which the claim is asserted, shall be submitted to binding arbitration, as provided below, and shall not be filed in a court of law. The parties to this Agreement further understand that a judge and/or jury will not decide their case.

DE 1-1 at 11-12 (emphasis in original). Relying on this clause, Brookdale sought to compel arbitration and enjoin Defendant from pursuing his claims in state court. See DE 7 ¶¶ 28-36. Brookdale asked the Court to stay this matter until the arbitration concludes. See id. ¶ 6.

Defendant moved to dismiss the federal action, citing Rules 12(b)(1) and 12(b)(6) and arguing that the admission agreement is ineffective and unenforceable. See DE 15 at 3-4. The dismissal motion also requested that the Court abstain from exercising jurisdiction and dismiss the federal action in favor of the underlying state case. See id. at 8. Brookdale then moved to compel arbitration and enjoin Defendant from continuing to litigate the claims. See DE 19. Defendant responded and separately asked the Court to strike Brookdale's motion to compel. See DE 20; DE 21. The matter is (more than) fully briefed and ripe for consideration. See DE 17; DE 18; DE 21; DE 23; DE 24; DE 25.

* * * * *

First, some housekeeping. The Court begins by addressing Defendant's motion to strike (DE 20). In Defendant's view, Brookdale's motion to compel arbitration and enjoin Defendant is not a motion at all; rather, the filing is an untimely supplemental response to the motion to dismiss. See DE 20 at 2. Defendant notes the similarity between Brookdale's response (that is, the one styled as a response) and Brookdale's motion to compel. See id. at 3-4 ("In fact, many of the arguments in Plaintiff's Motion to Compel are directly lifted, word-for-word, from their own Response to Defendant's Motion to Dismiss [DN 17]."). For support, Defendant cites LR 7.1(c) (imposing a twenty-one-day response deadline) and attaches authority standing for the proposition that the Court may strike untimely responses. See DE 20 at 2-3; DE 20-1; DE 20-2; DE 20-3; DE 20-4; DE 20-5.

According to Brookdale, another rule controls: Rule 7(b), which provides that "[a] request for a court order must be made by motion." Fed. R. Civ. P. 7(b)(1). See DE 24 at 1-2. Brookdale observes that a ruling on Defendant's motion to dismiss would maintain the case but not result in an order compelling arbitration. Id. Additionally, this same sequence—a motion to dismiss a complaint seeking to enforce an arbitration agreement followed by a motion to compelarbitration—has occurred in other cases. See id. at 2 (citing BLC Lexington SNF, LLC v. Oatis, Civil Action No. 5:19-284-DCR, 2019 WL 6221006 (E.D. Ky., November 20, 2019); Brookdale Senior Living, Inc. v. Caudill, Civil Action No. 5:14-098-DCR, 2014 WL 3420783 (E.D. Ky., July 20, 2014)).

At bottom, the parties' skirmishing relates to one central issue: whether this dispute is arbitrable. Ruling on Defendant's motion to dismiss alone would have prompted the Court to answer that question. In a sense, Defendant's and Brookdale's motions are opposite sides of a coin, turning on the Court's resolution of the arbitrability question. But, perhaps Brookdale is correct to point out that such a ruling would not necessarily have yielded the sought compulsion and injunctive relief. In any event, there is nothing procedurally improper about Brookdale requesting, by motion, an order that naturally flows from a ruling on the validity of the agreement.⁴ Repeating substantial portions of one's arguments in various filings—motions and responses—does not make for the most economical litigation or pleasurable reading experience,⁵ but nor does it here provide justification to strike Brookdale's filing as untimely. Accordingly, the Court denies Defendant's motion to strike and below considers (and ultimately grants) Brookdale's motion to compel.

II. STANDARDS

A. Rule 12(b)(1)

"Where subject matter jurisdiction is challenged pursuant to Rule 12(b)(1), the plaintiff has the burden of proving jurisdiction in order to survive the motion." Moir v. Greater Cleveland Reg'l Transit Auth., 895 F.2d 266, 269 (6th Cir. 1990). "A facial attack on the subject-matter jurisdiction alleged in the complaint questions merely the sufficiency of the pleading. When reviewing a facial attack, a district court takes the allegations in the complaint as true, which is a similar safeguard employed under 12(b)(6) motions to dismiss." Gentek Bldg. Prods. v. Sherwin-Williams Co., 491 F.3d 320, 330 (6th Cir. 2007).

B. Colorado River Abstention

"Generally, as between state and federal courts, the rule is that 'the pendency of an action in the state court is no bar to proceedings concerning the same matter in the Federal court having jurisdiction[.]'" Colo. River Water Conservation Dist. v. United States, 96 S. Ct. 1236, 1244 (1976). But, "[c]onsiderations of judicial economy and federal-state comity may justify abstention in situations involving the contemporaneous exercise of jurisdiction by state and federal courts." Romine v. Compuserve Corp., 160 F.3d 337, 339 (6th Cir. 1998) (internal citation omitted). "[A] federal court should rarely refrain from exercising its lawful jurisdiction: only in 'exceptional circumstances' where a 'careful balancing' of important factors, 'heavily weighted in favor of the exercise of jurisdiction,' yields the 'clearest of justifications.'" Atkins v. CGI Techs. & Sols., Inc., 724 F. App'x 383, 388 (6th Cir. 2018) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 103 S. Ct. 927, 937 (1983)).

[I]n deciding whether to defer to the concurrent jurisdiction of a state court, a district court must consider such factors as (1) whether the state court has assumed jurisdiction over any res or property; (2) whether the federal forum is lessconvenient to the parties; (3) avoidance of piecemeal litigation; and (4) the order in which jurisdiction was obtained.

Romine, 160 F.3d at 340-41. Also relevant are "whether the source of governing law is state or federal, . . . the adequacy of the state court action to protect the federal plaintiff's rights, . . . the relative progress of the state and federal proceedings, . . . [and] the presence or absence of concurrent jurisdiction." Id. (internal citations omitted).

C. Rule 12(b)(6)

To survive a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1974 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. However, "a formulaic recitation of a cause of action's elements will not do." Twombly, 127 S. Ct. at 1965. Courts "must construe the complaint in the light most favorable to the plaintiff and accept all allegations as true." Keys v. Humana, Inc., 684 F.3d 605, 608 (6th Cir. 2012). Yet, courts need not accept "legal conclusion[s] couched as [] factual allegation[s]." Papasan v. Allain, 106 S. Ct. 2932, 2944 (1986). The Court evaluates and tests...