High v. Capital Senior Living Props. 2-Heatherwood, Case No. 08-13066.

• Decision Date: 17 December 2008
• Docket Number: Case No. 08-13066.
• Parties: Sidney HIGH, personal representative of the Estate of Vunies B. High, deceased, Plaintiff, v. CAPITAL SENIOR LIVING PROERTIES 2—HEATHERWOOD, INC., Defendants.
• Court: U.S. District Court — Eastern District of Michigan

594 F.Supp.2d 789

Sidney HIGH, personal representative of the Estate of Vunies B. High, deceased, Plaintiff, v. CAPITAL SENIOR LIVING PROERTIES 2—HEATHERWOOD, INC., Defendants.

Case No. 08-13066.

United States District Court, E.D. Michigan, Southern Division.

December 17, 2008.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Jules B. Olsman, Stephanie L. Arndt Olsman, Mueller, Berkley, MI, Richard H.

Bernstein, Samuel I. Bernstein Assoc., Farmington Hills, MI, for Plaintiff.

Kenneth M. Mattson, Plunkett & Cooney, Detroit, MI, for Defendants.

OPINION AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS

DAVID M. LAWSON, District Judge.

Relying on an unsigned agreement containing arbitration and choice-of-forum clauses, the defendant has moved to dismiss this wrongful death case for failure to state a claim, want of subject-matter jurisdiction and improper venue. The parties presented oral argument on the motion in open court on December 11, 2008. Because the record casts considerable doubt over the question whether the plaintiffs decedent knowingly and intentionally waived her right to adjudicate disputes in court or assented to those terms in the defendant's contract, the motion to dismiss must be denied.

I.

The case arises out of the death of the plaintiffs decedent, Vunies High, who at the time was a resident of the assistedliving facility operated by the defendant, Capital Senior Living Properties 2— Heatherwood, Inc. ("Heatherwood"), in Southfield, Michigan. According to the amended complaint, High was promised twenty-four-hour-a-day staffing and emergency call support at Heatherwood. At 10:30 a.m. on February 18, 2008, she was found frozen to death outside of the facility, with her face stuck to the ice on the ground. Her caregiver, Gloria Williams, claims to have placed High into bed on February, 17, 2008 at around 8:10 p.m., which means that sometime between 8:10 p.m. on that evening and 10:30 a.m. on the next day, High wandered outside without anybody ever noticing her exit the facility.

The defendant answered the complaint and raised in its affirmative defenses the claim that the Court lacks subject-matter jurisdiction because the parties agreed to arbitrate their dispute. The answer makes reference to a document entitled Heatherwood Resident Agreement. The Agreement contains an arbitration clause phrased as follows:

ARBITRATION. To the extent allowed by law, You and the Provider agree that, with regard to any dispute whatsoever between You, your agent, or Your legal representatives, heirs, executors and/or administrators or any other person acting on Your behalf and the Community, Provider or Provider's agents, ... including but not limited to, a Dispute pertaining to: (i) the interpretation and enforcement of this Agreement, the Attachments, and/or the Resident Handbook, including but not limited to, any dispute alleging breach of contract; (ii) the goods and services provided to You by the Provider and its employees; or (iii) the maintenance of the physical environment of the Community (including but not limited to the Premises), the Provider has the right, at the Provider's sole and unfettered option, to require that the Dispute be settled by arbitration, which shall be conducted at a location chosen by the Provider in accordance with, at Provider's election, either the rules of the American Arbitration Association or of the American Health Lawyers Association Alternative Dispute Resolution Service Rules of Procedure for Arbitration, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The decision of the arbitrator shall be binding on both parties. Subject to the terms of this Agreement including the limitation of liability provision, the award, cost and expenses of the arbitration shall be awarded at the discretion of the arbitrator. Notwithstanding the foregoing, the Provider maintains the right to institute an action with regard to any Dispute in any court of competent jurisdiction and YOU HEREBY WAIVE YOUR RIGHT TO A TRIAL BY JURY IN SUCH A COURT PROCEEDING.

Heatherwood Resident Agr. ¶ 7, at 11, Ex. 3, Pl.'s Response [dkt # 9].

The next paragraph of the agreement contains a waiver of trial by jury for actions that are not subject to arbitration by law. Agr. ¶ 8, at 11, Ex. 3, Pl.'s Response [dkt # 9].

A forum-selection clause included in the agreement restricts venue to the county in which the Community is located. It states:

VENUE. If any action is brought by You, Your family, Your legal representatives, heirs, executors or administrators, Your responsible party or Your estate, against the Community, its owner(s), its management or other agents, directors, officers, assigns or successors, venue will only be proper in the county in which the Community is located.

Heatherwood Resident Agr. ¶ 10, at 12, Ex. 3, Pl.'s Response [dkt # 9].

The last page of the Agreement contains places for names to be printed and signatures affixed. The Agreement in this case is fully signed by Heatherwood's representative, but neither the plaintiffs decedent nor a representative on her behalf signed it, although she apparently printed her name under the signature line.

The plaintiff explains that on January 19, 2002, Ms. High and her daughter, Lisa Wells, visited the defendant's assisted-living facility with the view to place theneighty-five-year-old High there as a resident. During that walk-in visit, Wells filled out a Resident Inquiry Card, on which she responded to a question about her mother's mental status with a phrase "some confusion." Resident Inquiry Card, Ex. 1, Pl.'s Response. The card indicates that at that time, High was in need of safety checks and assistance with administering the three types of medication she was on. Three days later, on January 22, 2002, the two women returned to the facility and completed the application for residency, with the move-in date scheduled for January 25, 2002.

On the date of the move-in, High and Wells were presented with the Heatherwood Resident Agreement. The defendant does not dispute the plaintiffs assertion that Ms. High did not sign the document, even though she may have "printed her name" on it. See Def.'s Reply [dkt # 10], at 1 Instead, the defendant argues that the Court should infer Ms. High's intention to be bound by the Agreement because she lived by its terms for seven years after printing her name on it, paid the rent, and received the services mentioned in it.

On December 23, 2007, Lisa Wells signed a Renewal Addendum, which extended the Heatherwood Resident Agreement for a one-year period and adjusted the rent. Also, on February 14, 2006, after the decedent had lived at the facility for four years, Kathy Ostrowski, the defendant's agent, contacted Lisa Wells about the concern that Ms. High could no longer maintain her own personal hygiene. As a result of that contact, Wells enrolled Ms. High into a program that, for an additional fee, would provide assistance with personal hygiene, including a twenty-four-hour-perday staffing and an emergency call system and the "Personal Care Program," which involved regular safety checks, dressing and undressing, transportation within the building itself, shower assistance, medication reminders, and other services consistent with those provided by assistedliving facilities. There is no documentation in the record, however, that Lisa Wells had the authority to sign contracts on behalf of Ms. High.

Sidney High, the personal representative of Vunies High's estate, commenced the present action on July 16, 2008. After answering the complaint, the defendant filed the present motion to dismiss for want of subject-matter jurisdiction premised on the arbitration clause in the unsigned Agreement.

II.

A motion attacking the court's subject-matter jurisdiction is governed by Federal Rule of Civil Procedure 12(b)(1). "A Rule 12(b)(1) motion can either attack the claim of jurisdiction on its face, in which case all allegations of the plaintiff must be considered as true, or it can attack the factual basis for jurisdiction, in which case the trial court must weigh the evidence and the plaintiff bears the burden of proving that jurisdiction exists." Abbott v. Michigan, 474 F.3d 324, 328 (6th Cir. 2007) (citing DLX, Inc. v. Kentucky, 381 F.3d 511, 516 (6th Cir.2004)). It appears that the defendant is proceeding under the first option. It has been said, however, that a motion to dismiss grounded on an arbitration clause is more properly brought under Rule 12(b)(6) than Rule 12(b)(1) because the existence of a valid arbitration clause does not technically deprive the Court of subject matter jurisdiction. Moore v. Ferrellgas, Inc., 533 F.Supp.2d 740 (W.D.Mich.2008) (citing Liveware Publishing, Inc. v. Best Software, Inc., 252 F.Supp.2d 74, 78 (D.Del.2003); Nationwide Ins. Co. v. Patterson, 953 F.2d 44, 45 n. 1 (3d Cir.1991)).

The Court believes this is the better view, since the existence of an arbitration agreement does not undermine the authority of the Court to proceed. After all, under the Federal Arbitration Act, the Court retains the authority to stay a case pending arbitration and then enter judgment on the award afterward. See 9 U.S.C. §§ 3, 9. The Sixth Circuit has admonished courts to be more exacting when addressing challenges that are phrased as an attack on jurisdiction:

In two very recent decisions, the Supreme Court has admonished courts to use the term "jurisdiction" with more precision, describing the term as "a word of many, too many, meanings," Kontrick v. Ryan, 540 U.S. 443, 453, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004) (quoting Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 90, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998)). In Kontrick, a unanimous Court held that time requirements of Federal Rules of Bankruptcy Procedure 4004 and 9006 did not implicate subject-matter jurisdiction, but were instead "claim-processing rules." Id. at...