Davis v. GGNSC Admin. Servs. LLC
| Decision Date | 22 November 2017 |
| Docket Number | Civil Action No. 7:17–CV–107 (HL) |
| Citation | 290 F.Supp.3d 1332 |
| Parties | Ange DAVIS, individually and as Administrator of The Estate of Janie Mae Washington, deceased, Plaintiffs, v. GGNSC ADMINISTRATIVE SERVICES LLC d/b/a Golden Living Center Tifton, Defendants. |
| Court | U.S. District Court — Middle District of Georgia |
Robert Lewis Schenk, II, Atlanta, GA, for Plaintiffs.
David Cavender Marshall, Debra E. LeVorse, Atlanta, GA, for Defendants.
Before the Court is Defendant's Motion to Dismiss and Compel Arbitration. (Doc. 3). For the reasons discussed below, the motion is denied.
On January 5, 2011, Janie Mae Washington was admitted to Golden Living Center in Tifton, Georgia. Golden Living Center is a long-term care skilled nursing facility. Prior to Washington's admittance, her daughter, Plaintiff Ange Davis, met with a staff member of Golden Living Center ("the Facility") on January 4, 2011. On that day, Davis signed an admissions package entitled "Admission and Alternative Dispute Resolution Agreements" that contained two separate agreements. (Doc. 9–1, p. 2). One agreement was a contract for the general terms of admission. The other was an arbitration agreement naming her mother and the nursing home as parties. Ange Davis signed the agreement on the line designated for the signature of the Resident's Legal Representative. Immediately below Davis's signature is an acknowledgment that states: "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." (Doc. 3–4, p. 6). The agreement required the signatory to "Specify Capacity of Legal Representative (e.g. Power of Attorney, Agent, Next of Kin)," but Davis left that line blank. Washington was not present when her daughter signed the arbitration agreement or other admissions paperwork, nor was it discussed with her by either her daughter or a representative of the Facility.
On or about February 24, 2011, Ms. Washington executed a general power of attorney appointing Ms. Davis as her attorney-in-fact. Ms. Washington continued to reside at the Facility until December 2015. On January 15, 2016, Ms. Washington passed away.
Davis filed this action in Tift County on April 26, 2017, alleging that the negligence and professional negligence of Defendants "in failing to prevent the injuries that Janie Mae Washington sustained while a resident at the Facility" resulted in her death. (Doc. 9–1, p. 3–4). Defendants removed the complaint to this Court and on June 9, 2017, filed a Motion to Dismiss and Compel Arbitration. (Doc. 3).
Defendants allege that the arbitration agreement must be enforced because by signing the document Davis created an enforceable arbitration agreement between her mother and the Facility.
Defendants argue that the federal law governing the arbitration agreement mandates the parties submit to arbitration. Specifically, Defendants contend that because the arbitration agreement is part of a contract involving interstate commerce, it must be governed by the Federal Arbitration Act ("FAA").1 9 U.S.C. §§ 1 – 16. Defendants state that under the application of the FAA, its "liberal policy favoring arbitration" requires that the parties submit to arbitration. (Doc. 3–1, p. 5). Additionally, Defendants contend that the FAA supersedes and preempts state law that may require a result contrary to arbitration.
The FAA provides that agreements to arbitrate in contracts involving commerce are "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. Courts must conduct a two-step inquiry when deciding whether to compel arbitration. Klay v. All Defendants, 389 F.3d 1191, 1200 (11th Cir. 2004). First, the Court must determine whether the parties agreed to arbitrate the dispute. Id. The Court must make that determination "by applying the federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the [FAA]." Id. (alteration in original) (quoting Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614, 626, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985) ). The United States Court of Appeals for the Eleventh Circuit, however, has cautioned that "arbitration is a matter of contract [and] the FAA's strong proarbitration policy only applies to disputes that the parties have agreed to arbitrate." Id. Second, the court must determine "whether ‘legal constraints external to the parties' agreement foreclosed arbitration." Klay, 389 F.3d at 1200 (quoting Mitsubishi Motors Corp., 473 U.S. at 628, 105 S.Ct. 3346 ).
Defendants are correct in their assertions that the FAA governs the arbitration agreement and that federal law favors the enforceability of arbitration. However, courts only apply the presumption of arbitration "to the interpretation of contracts if we have already determined that, under [s]tate law, the parties formed a valid agreement to arbitrate." Bickerstaff v. SunTrust Bank, 332 Ga. App. 121, 128, 770 S.E.2d 903 (2015). In order "[t]o satisfy itself that such agreement exists," courts must undertake to resolve any issues relating to the formation of the arbitration agreement. Granite Rock Company v. International Brotherhood of Teamsters, 561 U.S. 287, 297, 130 S.Ct. 2847, 177 L.Ed.2d 567 (2010) ; Larsen v. Citibank FSB, 871 F.3d 1295, 1302–03 (11th Cir. 2017). Thus, even though the FAA applies, the threshold issue is whether, as a matter of contract formation, there was consent by the parties to enter into the agreement. See Hogsett v. Parkwood Nursing & Rehabilitation Center, Inc., 997 F.Supp.2d 1318, 1323 (2014) ().
The Supreme Court has made clear that this inquiry is a matter of state contract law. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). ("[C]ourts generally ... should apply ordinary state-law principles that govern the formation of contracts" in determining whether the parties have agreed to arbitrate.); See also Burch v. P.J. Cheese, Inc., 861 F.3d 1338, 1346 (11th Cir. 2017) (); Dasher v. RBC Bank (USA), 745 F.3d 1111, 1116 (11th Cir. 2014) (same).
Defendants, "as the parties seeking arbitration, bear the burden of proving the existence of a valid and enforceable agreement to arbitrate."2 United Health Services of Georgia v. Alexander, 342 Ga. App. 1, 2, 802 S.E.2d 314 (2017) (citing McKean v. GGNSC Atlanta, 329 Ga. App. 507, 509, 765 S.E.2d 681 (2014) (internal citations omitted) ). Therefore, the Court must first determine if the Defendants have met their burden of proving that the arbitration agreement is valid.
Washington never signed the arbitration agreement, and her daughter's signature on that agreement can only bind Washington and her estate if Davis is deemed to have been an agent of her mother for this purpose. Here, Davis argues that "[b]ecause [she] had no authority to execute the Arbitration Agreement on Janie Mae Washington's behalf, the Plaintiffs have not waived their rights to have the claims set forth in the Complaint for Damages heard by a jury before this Court." (Doc. 9–1, p. 4). In support of this argument, Davis states that at the time she signed the admissions paperwork, she had no legal authority to sign on behalf of her mother for admission into the Facility or otherwise. Further, Davis states that Defendants do not contend that either express or apparent authority existed, and their reliance on her status as Washington's daughter is insufficient evidence of any contractual relationship. Thus, Davis ultimately argues that Defendants have not met their burden in proving "all the essential elements of the contract, including the assent to the contractual terms." See TranSouth Fin. Corp. v. Rooks, 269 Ga. App. 321, 324, 604 S.E.2d 562 (2004) (citation omitted).
Defendants contend, in addition to their argument that the FAA mandates arbitration, that Georgia case law supports a decision in favor of arbitration. Defendants rely on Triad Health Management of Georgia, III, LLC v. Johnson, where, as in this case, a child signed an arbitration agreement on behalf of a parent upon admission to a nursing facility. 298 Ga. App. 204, 679 S.E.2d 785 (2009). However, Triad is readily distinguishable. In Triad , a general power of attorney was in effect at the time the arbitration agreement was signed by the son. Id. at 207, 679 S.E.2d 785 (). Thus, the court found that the son was his father's express agent and by acting as his fiduciary upon signing the admissions document the parties were bound to the arbitration agreement. Id. at 206–07, 679 S.E.2d 785. Those same facts are not present here.
Washington did not execute a power of attorney until after the signing of the admission documents. Defendants argue that "Ange Davis' Agreement is valid, enforceable and binding since she signed it." (Doc. 3–1, p. 13). Davis' signature alone, however, is not enough to support the contention that she had the authority to create a valid and binding agreement between her mother and the Facility. See McKean, 329 Ga. App. at 510, 765 S.E.2d 681 ().
Under Georgia law, "[t]he relation[ship] of principal and agent arises wherever one person, expressly or by implication, authorizes another to act for him or subsequently...
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