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

• Decision Date: 20 August 2015
• Docket Number: CIVIL ACTION 15–17
• Citation: 123 F.Supp.3d 619
• Parties: Golden Gate National Senior Care, LLC, et. al., Petitioners, v. Pamela L. Beavens, as Executrix for the Estate of Agnew E. Beavens, Respondent.
• Court: U.S. District Court — Eastern District of Pennsylvania

123 F.Supp.3d 619

Golden Gate National Senior Care, LLC, et. al., Petitioners,
v.
Pamela L. Beavens, as Executrix for the Estate of Agnew E. Beavens, Respondent.

CIVIL ACTION 15–17

United States District Court, E.D. Pennsylvania.

Signed August 20, 2015

123 F.Supp.3d 625

Jacqueline M. Carolan, Eric E. Reed, Scott C. Oberlander, Fox Rothschild LLP, Philadelphia, PA, for Petitioners.

Sara E. Weiss, Andrei N. Govorov, Wilkes & McHugh PA, Philadelphia, PA, for Respondent.

MEMORANDUM

STENGEL, District Judge

This Federal Arbitration Act petition arises from a lawsuit filed by the Estate of Agnew Beavens against Golden Gate National Senior Care and its related corporate entities (GGNSC) in the Berks County Court of Common Pleas. GGNSC claims that the state court action is covered by an Alternative Dispute Resolution Agreement, and it moves for an order compelling arbitration. Pamela Beavens, the executrix of the estate, moves to dismiss GGNSC's petition. For the reasons that follow, I will deny the motion to dismiss and grant the motion to compel in part.

I Background

On April 2, 2013, the Golden Living Center—Reading Facility (the Facility) admitted Agnew Beavens as a resident. The facility is a wholly owned subsidiary of GGNSC. Mr. Beavens remained in the care of GGNSC until his death on September 6, 2013. On December 4, 2014, Pamela Beavens, Mr. Beavens' daughter and executrix of his estate, filed suit in the Berks County Court of Common Pleas pursuant to Pennsylvania's wrongful death and survival statutes. 42 Pa.C.S. §§ 8301 ; 8302.

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The lawsuit alleges that GGNSC was negligent in their care and treatment of Mr. Beavens.

GGNSC filed this FAA action claiming that the Berks County case is covered by an Alternative Dispute Resolution (ADR) Agreement which was executed by Ms. Beavens as power of attorney. The ADR Agreement, which consists of four plainly worded pages, provides that any dispute arising out of Mr. Beavens' stay at the Facility "shall be resolved exclusively by an ADR process that shall include mediation and, where mediation is not successful, binding arbitration." Pet. ¶ 23; ADR Agreement, doc. no. 1–2, Art. II. The ADR Agreement broadly covers "all disputes arising out of or in any way relating to ... the Resident's stay at the Facility ... that would constitute a legally cognizable cause of action in a court of law...." Pet. ¶ 23; ADR Agreement, Art. III. Specifically, but not by way of limitation, the ADR Agreement illustrates that it covers claims for "negligence; gross negligence; malpractice; and any alleged departure from any applicable federal, state, or local medical, health care, consumer or safety standards...." Pet. ¶ 25; ADR Agreement Art. III.

The parties agreed to submit any disputes to JAMS for mediation. ADR Agreement, Art. IV. In big bold letter on the front page, the ADR Agreement warned Ms. Beavens that she was waiving Mr. Beavens' right to a jury trial to resolve any covered dispute:

THE PARTIES UNDERSTAND, ACKNOWLEDGE, AND AGREE THAT THEY ARE SELECTING A METHOD OF RESOLVING DISPUTES WITHOUT RESORTING TO LAWSUITS OR THE COURTS, AND THAT BY ENTERING INTO THIS AGREEMENT, THEY ARE GIVING UP THEIR CONSTITUTIONAL RIGHT TO HAVE THEIR DISPUTES DECIDED IN A COURT OF LAW BY A JUDGE OR JURY ...."

Pet. ¶ 24; ADR Agreement, Art. II (emphasis in original). In the event that Mr. Beavens would file a claim with JAMS for mediation, the ADR Agreement limited Mr. Beavens' filing fee to $250. ADR Agreement, Art. V. "[A]ll other fees and costs, including any remaining JAMS case management fees and professional fees for the arbitrator's services, shall be paid by the Facility." Id. By signing the Agreement, Ms. Beavens acknowledged that "she ha[d] the right to seek advice of legal counsel concerning [the ADR] Agreement; ... her signing of [the ADR] Agreement [was] not a condition of admission to [ ] the Facility; [and] ... she [could] revoke [the ADR] Agreement ... within thirty (30) days of signing it...." Pet. ¶ 27; ADR Agreement, Art. IX.

Upon receiving service of the Berks County Action, GGNSC requested that Ms. Agnew's counsel voluntarily dismiss the lawsuit and submit the claim to alternative dispute resolution. Pet. ¶ 30. Ms. Beavens declined the request. Id. As a result, GGNSC filed this FAA petition which demands a judgment that the ADR Agreement applies to the parties' dispute. Ms. Beavens has moved to dismiss the FAA petition, and GGNSC has moved to compel arbitration. GGNSC also seek an order staying the Berks County action which is currently in limited discovery on the issue of the ADR Agreement's validity. I will address Ms. Beavens' motion to dismiss first.

II Motion to Dismiss

The ADR agreement at issue is the frequent subject of dispute in the federal courts of Pennsylvania.¹ Indeed, this is

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my second case arising from the GGNSC ADR Agreement. GGNSC Lancaster v. Roberts, 13–CV–5291, 2014 WL 1281130 (E.D.Pa. Mar. 31, 2014) (denying motion to dismiss). In each case, the respondents have moved to dismiss the petition asserting the same arguments which Ms. Beavens does here, and each theory has been soundly rejected. I will deny Ms. Beavens' motion to dismiss for similar reasons.

a) Lack of Subject Matter Jurisdiction

Section 4 of the Federal Arbitration Act "bestows no federal jurisdiction but rather requires for access to a federal forum an independent jurisdictional basis over the parties' dispute." Vaden v. Discover Bank, 556 U.S. 49, 129 S.Ct. 1262, 1271, 173 L.Ed.2d 206 (2009). GGNSC maintains that I have diversity jurisdiction pursuant to 28 U.S.C. § 1332. According to GGNSC, there is complete diversity of citizenship because Ms. Beavens is a citizen of Pennsylvania² and GGNSC is a citizen of Delaware and California. Ms. Beavens counters that GGNSC failed to join Francis Dunion and Denise Curry who are parties to the state court action. Ms. Beavens moves to dismiss the complaint because Ms. Dunion and Ms. Curry are indispensable to the present action. As Ms. Dunion and Ms. Curry are citizens of Pennsylvania, their joinder would destroy diversity jurisdiction.³

Federal Rule of Civil Procedure 19 specifies the circumstances in which the joinder of a particular party is compulsory. Gen. Refractories Co. v. First State Ins. Co., 500 F.3d 306, 312 (3d Cir.2007). I must first determine whether Ms. Dunion and Ms. Curry are necessary parties. Id. Rule 19(a) defines a necessary party as a person who

claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may ... leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest.

F.R.Cv.P. 19(a)(2)(ii). Ms. Dunion and Ms. Curry have an interest in this litigation because the ADR Agreement covers Ms. Beavens' state claims against GGNSC, Ms. Dunion and Ms. Curry. See GGNSC v. Breslin, 14 MC 00450, 2014 WL 5463856 at * 3 (M.D.Pa. Oct. 27, 2014) (interpreting an identical agreement). If I enforce the ADR Agreement as to GGNSC but the state court does not enforce the ADR Agreement as to Ms. Dunion and Ms. Curry, the parties will have inconsistent obligations. Ms. Dunion and Ms. Curry are necessary parties. See PaineWebber inc. v. Cohen, 276 F.3d 197 (6th Cir.2001) (non-diverse parties with an interest in an arbitration agreement are necessary parties); Owens–Illinois, Inc v. Meade, 186 F.3d 435 (4th Cir.1999) (same); GGNSC v. Thompson ex rel. Mullen, 15–CV–445, 2015 WL 1932330 at *2 (M.D.Pa. Apr. 28, 2015) (interpreting identical agreement

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and determining that GGNSC managerial employee was necessary party); GGNSC v. Lane, 14–CV–1957, 2015 WL 926432 at *3 (M.D.Pa. Mar. 4, 2015) (interpreting identical agreement and finding Ms. Curry was a necessary party); Breslin, 2014 WL 5463856 (same); GGNSC v. Addison, 14 MC 0421, 2014 WL 4792386 at *6–7 (M.D.Pa. Sept. 24, 2014) (same).

As already noted, I cannot join Ms. Dunion or Ms. Curry without destroying federal jurisdiction. Rule 19(b) instructs that I must "determine whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed." The factors which I must consider include:

first, to what extent a judgment rendered in the person's absence might be prejudicial to the person or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person's absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder.

Gen. Refractories Co., 500 F.3d at 319 (citing Fed.R.Civ.P. 19(b) ). If I find that Ms. Dunion and Ms. Curry are indispensable to the action, I must grant Ms. Beavens' motion to dismiss. Id.

Concededly, the prejudice analysis of Rule...