Gray v. Acadia Healthcare Co.

• Decision Date: 09 October 2020
• Docket Number: Case No. 19-cv-00338-JFH
• Parties: DEBORAH GRAY, as Next Friend of REBECAH BANUELOS, Plaintiff, v. ACADIA HEALTHCARE COMPANY, INC. AND ROLLING HILLS HOSPITAL, LLC, Defendants.
• Court: U.S. District Court — Eastern District of Oklahoma

DEBORAH GRAY, as Next Friend of REBECAH BANUELOS, Plaintiff, v. ACADIA HEALTHCARE COMPANY, INC. AND ROLLING HILLS HOSPITAL, LLC, Defendants.

Case No. 19-cv-00338-JFH

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF OKLAHOMA

October 9, 2020

ORDER

Before the Court is the Motion to Dismiss Plaintiff's Second Amended Complaint filed by Defendants Acadia Healthcare Company, Inc. ("Acadia") and Rolling Hills Hospital, LLC ("Rolling Hills") (collectively, "Defendants") [Dkt. No. 71]. Plaintiff Deborah Gray, as Next Friend of Rebecah Banuelos, filed a Response [Dkt. No. 75] and Defendants filed a Reply [Dkt. No. 77].

BACKGROUND

Plaintiff Deborah Gray ("Plaintiff") commenced this action on March 20, 2019, in the First Judicial District Court of Rio Arriba County, New Mexico, on behalf of Rebecah Banuelos ("Ms. Banuelos"). Dkt. No. 1. On May 2, 2019, Defendants jointly removed the action to the United States District Court for the District of New Mexico. Id. Rolling Hills then filed a Motion to Dismiss or, in the alternative, Motion to Transfer Venue on May 9, 2019. Dkt. No. 8. The Motion to Transfer Venue was granted on October 1, 2019, and the case was transferred to the United States District Court for the Eastern District of Oklahoma on October 7, 2019. Dkt. Nos. 30 and 31.

Plaintiff filed a Second Amended Complaint on March 18, 2020, wherein she alleges Ms. Banuelos was in the custody of the New Mexico Children Youth and Families Department ("CYFD") when placed in residential treatment at Rolling Hills' facility in Ada, Oklahoma in December of 2018. Dkt. No. 67 at ¶¶ 66-67. Plaintiff contends Rolling Hills is a facility owned by Acadia. Id. at ¶ 6. While receiving treatment at Rolling Hills, Ms. Banuelos was allegedly sexually assaulted on January 12, 2009 by an unknown staff member and/or resident while in a tv room at the facility. Id. at ¶ 68. Plaintiff also alleges Ms. Banuelos was raped by a Rolling Hills employee, "Jason H.," in the facility's laundry room sometime between December 13, 2018 and January 30, 2019. Id. at ¶¶ 70-71. Ms. Banuelos was a minor at the time of the alleged incidents. Id. at ¶ 72.

STANDARD FOR DISMISSAL

In considering a motion under Rule 12(b)(6), a court must determine whether the claimant has stated a claim upon which relief may be granted. A motion to dismiss is properly granted when a complaint provides no "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint must contain enough "facts to state a claim to relief that is plausible on its face" and the factual allegations "must be enough to raise a right to relief above the speculative level." Id. (citations omitted). "Once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Id. at 563. Although decided within an antitrust context, Twombly stated the pleadings standard for all civil actions. See Ashcroft v. Iqbal, 556 U.S. 662 (2009). For the purpose of making the dismissal determination, a court must acceptall the well-pleaded allegations of the complaint as true, even if doubtful in fact, and must construe the allegations in the light most favorable to claimant. Twombly, 550 U.S. at 555; Alvarado v. KOB-TV, L.L.C., 493 F.3d 1210, 1215 (10th Cir.2007); Moffett v. Halliburton Energy Servs., Inc., 291 F.3d 1227, 1231 (10th Cir.2002). However, a court need not accept as true those allegations that are conclusory in nature. See Erikson v. Pawnee Cnty. Bd. Of Cnty. Com'rs, 263 F.3d 1151, 1154-55 (10th Cir.2001). "[C]onclusory allegations without supporting factual averments are insufficient to state a claim upon which relief can be based." Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir.1991).

ANALYSIS

The Court will address each of Defendants' arguments in turn below:

I. Proper Party Plaintiff

Plaintiff brings this litigation as Ms. Banuelos' "Next Friend." "A 'next friend' is one who pursues an action on behalf of the real party in interest, when that person cannot appear on her own behalf for some legitimately recognized reason 'such as inaccessibility, mental incompetence or other disability.'" Wallace ex rel. Wallace v. Okla. Dept. of Human Services, 109 Fed. Appx. 240, 243 (10th Cir. 2004) (unpublished)¹ (citations omitted). "Where an incompetent person is represented by 'a general guardian, committee, conservator, or other like fiduciary,' that representative is the proper person to sue or defend on her behalf.'" Id. (quoting Fed. R. Civ. P. 17(c)). "Only if the incompetent person is unrepresented by such a fiduciary may she be represented by a next of friend." Id. A guardian ad litem is an "other like fiduciary" for purposes of Rule 17(c). Id.

The Supreme Court addressed "next friend" standing under the habeas corpus statutes in Whitmore v. Arkansas, 495 U.S. 149 (1990). The Supreme Court recognized that 28 U.S.C. § 2242 provides for "next friend" standing but found that "standing is by no means granted automatically to whomever seeks to pursue an action on behalf of another." Whitmore, 495 U.S. at 163.

First, a "next friend" must provide an adequate explanation—such as inaccessibility, mental incompetence, or other disability—why the real party in interest cannot appear on his own behalf to prosecute the action . . . . Second, the "next friend" must be truly dedicated to the best interests of the person on whose behalf he seeks to litigate."

Id. This concept of "next friend standing" has been applied by courts to proceedings beyond 28 U.S.C. § 2242. See e.g., S.U. ex rel. v. Youth Care of Utah, Inc., 345 F. Supp. 2d 1269, 1270 (D. Utah 2004); Brown v. Tulsa County Dist. Court, No. 06-CV-0431, 2007 WL 188271, at *2 (N.D. Okla. Jan. 22, 2007).

Here, Defendants contend Plaintiff is not a proper plaintiff because Ms. Banuelos is not an infant and her signature on the state court petition for appointment of next friend is signed by Ms. Banuelos - indicating she is not incompetent. Dkt. No. 71 at 12-13. Defendants also emphasize the state court petition for appointment of next friend has no allegation that Ms. Banuelos is incompetent, only that Ms. Banuelos' "vulnerability as a result of childhood abuse, [has] rendered her incapable of the maturity and experience necessary to navigate or advocate for her best interests [and] [a]ppointment of a Next Friend under the circumstances is appropriate." Dkt. No. 71-1.

Plaintiff responds she is the proper party in interest because when the action was filed, Ms. Banuelos "was still in the custody of CYFD. The New Mexico Children's Code, Section 32A-1-7(F) required a guardian ad litem appointment (Deborah Gray) to pursue claims on Rebecah's behalf." Dkt. No. 75 at 14 (emphasis in original).

Incompetency is not the only grounds for appointing a next friend - as recognized by the Supreme Court. See Whitmore, 495 U.S. at 163. For example, inaccessibility is another basis for appointing a next friend. Id. The New Mexico state court concluded Plaintiff provided an adequate explanation why the real party in interest, Ms. Banuelos, cannot appear on her own behalf to prosecute the action when it entered the Order Appointing Next Friend. Dkt. No. 75-2. The Court is not inclined to second guess District Court Judge Carl Butkus. The Court will permit Plaintiff to proceed as Next Friend under Rule 17(c).

II. Alter Ego Claim

Plaintiff first asserts a claim for "alter ego/ instrumentality." Plaintiff alleges Rolling Hills is the alter ego of Acadia. See Dkt. No. 67 at ¶¶ 76-99. Defendants contend Acadia is the parent company and owner of Rolling Hills and, as such, Acadia is a member of Rolling Hills. Dkt. No. 71 at 14. Defendants argue a suit or claim cannot be brought against a member of an LLC for the debt or liability of an LLC until judgment is obtained therefor against the LLC and execution thereon returned unsatisfied. Id. (citing Okla. Stat. tit. 12, §§ 682(B) and (C)). Plaintiff responds Section 628 is inapplicable to the case at bar and applies only to individual officers, directors, shareholders or members. Dkt. No. 75 at 17. Further, Plaintiff contends she is bringing the suit against Acadia directly, not merely as a result of Acadia's status as Rolling Hills' member. Id.

Section 682 provides:

(B) No suit or claim of any nature shall be brought against any officer, director or shareholder for the debt or liability of a corporation of which he or she is an officer, director or shareholder, until judgment is obtained therefor against the corporation and execution thereon returned unsatisfied. This provision includes, but is not limited to, claims based on vicarious liability and alter ego. Provided, nothing herein prohibits a suit or claim against an officer, director or shareholder for their own conduct, act or contractual obligation, not within the scope of their role as an officer, director or shareholder, arising out of or in connection with their direct involvement in the same or related transaction or occurrence.

(C) Members and managers of limited liability companies shall be afforded the same substantive and procedural protection from suits and claims as the protections provided to officers, directors and shareholders of a corporation as set forth in subsection B of this section.

Okla. Stat. tit. 12, § 682 (emphasis added). The plain language of the statute reveals the statute is intended to benefit individual officers, directors, shareholders or members.² A corporate entity is not a he or she. Additionally, the three (3) published Oklahoma cases citing Section 682(B) all contemplate claims against an individual, not an entity. See Tyree v. Cornman, 453 P.3d 497 (Okla. App. 2019); Maree v. Neuwirth, 374 P.3d 750 (Okla. App. 2016); Sauders v. Mangum Nursing Center, LLC, 377 P.3d 180 (Okla. App. 2016). This Court is unaware of any case wherein a court has addressed the individual/entity distinction and...