Golden Gate Nat'l Senior Care, LLC v. Minich

• Decision Date: 16 October 2015
• Docket Number: No. 14-4459,14-4459
• Parties: GOLDEN GATE NATIONAL SENIOR CARE, LLC; GGNSC LANCASTER, LP, d/b/a Golden Living Center- Lancaster; GGNSC LANCASTER GP, LLC; GGNSC EQUITY HOLDING, LLC; GGNSC ADMINISTRATIVE SERVICES LLC; GGNSC CLINICAL SERVICES LLC; GGNSC HOLDINGS, LLC; GOLDEN GATE ANCILLARY, LLC, Appellants v. JAMES D. MINICH, AS ADMINISTRATOR FOR THE ESTATE OF MARY E. SHAFFER, DECEASED
• Court: U.S. Court of Appeals — Third Circuit

GOLDEN GATE NATIONAL SENIOR CARE, LLC; GGNSC LANCASTER, LP, d/b/a
Golden Living Center- Lancaster; GGNSC LANCASTER GP, LLC; GGNSC EQUITY
HOLDING, LLC; GGNSC ADMINISTRATIVE SERVICES LLC; GGNSC CLINICAL
SERVICES LLC; GGNSC HOLDINGS, LLC; GOLDEN GATE ANCILLARY, LLC, Appellants
v.
JAMES D. MINICH, AS ADMINISTRATOR
FOR THE ESTATE OF MARY E. SHAFFER, DECEASED

No. 14-4459

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Submitted: October 8, 2015
October 16, 2015

NOT PRECEDENTIAL

On Appeal from the United States District Court for the Eastern District of Pennsylvania
(D.C. No. Civ. 5-14-mc-00219)
District Judge: Honorable Gerald Austin McHugh, Jr.

Submitted under Third Circuit LAR 34.1(a)
October 8, 2015

Before: SHWARTZ, KRAUSE, and COWEN, Circuit Judges

OPINION^*

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KRAUSE, Circuit Judge.

Following the death of Mary E. Shaffer, the administrator of her estate—James D. Minich—filed a lawsuit in Pennsylvania state court against her caretakers, Golden Gate National Senior Care ("Golden Living"), alleging various tort claims that arose from her treatment and care. Golden Living countered by filing in federal court to enforce an arbitration agreement previously signed by Minich as Shaffer's power of attorney. Pursuant to a motion to dismiss by Minich, and in recognition of the contemporaneous state court proceedings, the District Court dismissed the action on Colorado River abstention grounds. We conclude that dismissal was improper, and we therefore vacate the District Court's order of dismissal and remand the case for further proceedings.

I. Background

Appellant Golden Living is a nursing home in Lancaster, Pennsylvania, which housed Shaffer until February 28, 2014. Upon Shaffer's admittance to Golden Living, Appellee Minich, who had power of attorney for Shaffer, signed an arbitration agreement, which provided that any dispute arising out of Shaffer's stay at Golden Living would be resolved by alternative dispute resolution, including mediation and, if necessary, binding arbitration.¹ On May 20, 2014, after Shaffer's death, Minich nonetheless commenced an action in the Lancaster County Court of Common Pleas as

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administrator of Shaffer's estate. Minich served his complaint on Golden Living on August 1, 2014, setting forth tort claims for neglect, survival, wrongful death, and punitive damages, based on Golden Living's treatment of Shaffer.

Seventeen days later, Golden Living commenced its federal court action to compel arbitration under the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1-16. On the same day, to comply with filing deadlines and to avoid waiving any arguments, Golden Living filed preliminary objections in state court, seeking to invoke the arbitration agreement. Minich filed a motion to dismiss the federal action based on Colorado River abstention, which was granted by the District Court in a two-paragraph order on October 22, 2014. Golden Living timely appealed that dismissal to this Court. Meanwhile, when the state court declined to enforce arbitration on February 4, 2015, Golden Living appealed that decision to the Pennsylvania Superior Court, where that case is now pending.

II. Jurisdiction

The District Court had diversity jurisdiction to hear this case under 28 U.S.C. § 1332, and we have jurisdiction under 28 U.S.C. § 1291.

III. Legal Standards

Colorado River abstention provides that, under "exceptional circumstances," a federal court may abstain from its otherwise "virtually unflagging obligation" to assert jurisdiction over a case because (1) there is a parallel case in state court, and (2) after "careful[ly] balancing" a series of factors "heavily weighted in favor of the exercise of jurisdiction," maintaining the federal case would be a waste of judicial resources. Moses

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H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 13-16, 19 (1983); Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817-18 (1976).

The first step a district court must take before abstaining under Colorado River is to determine whether the federal and state proceedings are "parallel." Nationwide Mut. Fire Ins. Co. v. George V. Hamilton, Inc., 571 F.3d 299, 307-08 (3d Cir. 2009). Two proceedings generally are considered parallel when they "involve the same parties and substantially identical claims, raising nearly identical allegations and issues," Yang v. Tsui, 416 F.3d 199, 204 n.5 (3d Cir. 2005) (citation and internal quotation marks omitted), and when plaintiffs in each forum seek the same remedies, see Harris v. Pernsley, 755 F.2d 338, 346 (3d Cir. 1985).

If a court finds the proceedings to be parallel, it then carefully balances a host of factors to determine if abstention is warranted, bearing in mind that it should place a thumb on the scales in favor of granting jurisdiction. See Moses H. Cone, 460 U.S. at 16. We have defined the pertinent factors as: "(1) [in an in rem case,] which court first assumed jurisdiction over [the] property; (2) the inconvenience of the federal forum; (3) the desirability of avoiding piecemeal litigation; (4) the order in which jurisdiction was obtained; (5) whether federal or state law controls; and (6) whether the state court will adequately protect the interests of the...