Hunt v. Jack V. Waters, D.C., P.C.

• Citation: 403 F.Supp.3d 1036
• Decision Date: 29 April 2019
• Docket Number: No. CIV 18-0863 JB\KK,CIV 18-0863 JB\KK
• Parties: Lee HUNT, as Personal Representative of the Wrongful Death Estate of Heath Dale Bennett, deceased, Plaintiff, v. JACK V. WATERS, D.C., P.C., a New Mexico for-profit professional corporation; Jack V. Waters, an individual; The National Chiropractic Council, a California for-profit corporation, and Allied Professionals Insurance Co., a Risk Retention Group, Inc., an Arizona for profit corporation, Defendants.
• Court: U.S. District Court — District of New Mexico

403 F.Supp.3d 1036

Lee HUNT, as Personal Representative of the Wrongful Death Estate of Heath Dale Bennett, deceased, Plaintiff,
v.
JACK V. WATERS, D.C., P.C., a New Mexico for-profit professional corporation; Jack V. Waters, an individual; The National Chiropractic Council, a California for-profit corporation, and Allied Professionals Insurance Co., a Risk Retention Group, Inc., an Arizona for profit corporation, Defendants.

No. CIV 18-0863 JB\KK

United States District Court, D. New Mexico.

Filed April 29, 2019

403 F.Supp.3d 1041

Philomena M. Hausler, Robles, Rael & Anaya, P.C., Albuquerque, New Mexico --and-- Michael Sievers, A. Elicia Montoya, Randi McGinn, McGinn, Montoya, Love & Curry, PA, Albuquerque, New Mexico, Attorneys for the Plaintiff.

Donna L. Chapman, Jessica Singer, Mitchell J. Freedman, Chapman and Priest, P.C., Albuquerque, New Mexico, Attorneys for the Defendants Jack V. Waters and Jack V. Waters, D.C., P.C..

Gregory L. Biehler, Lewis Brisbois Bisgaard & Smith LLP, Albuquerque, New Mexico, Attorneys for the Defendants The National Chiropractic Council and Allied Professionals Insurance Company.

MEMORANDUM OPINION AND ORDER

JAMES O. BROWNING, UNITED STATES DISTRICT JUDGE

THIS MATTER comes before the Court on: (i) the Plaintiff's Motion to Remand for Lack of Subject Matter Jurisdiction and for Fees Incurred as a Result of Improper Removal, filed October 1, 2018 (Doc. 11)("Motion to Remand"); (ii) the Defendants' Motion to Compel Arbitration and Stay Proceedings, filed November 2, 2018 (Doc. 28)("Motion to Compel"); (iii) the Defendants the National Chiropractic Council and Allied Professionals Insurance Co., a Risk Retention Group, Inc's, Motion to Dismiss for Failure to State a Claim at 4, filed September 28, 2018 (Doc. 9)("MTD"); and (iv) the Plaintiff's Motion to Stay Federal Proceedings Pending Determination of Motion to Remand (Doc. 12)("Motion to Stay"). The Court held a hearing on January 29, 2019. See Clerk's Minutes at 1, filed January 29, 2019 (Doc. 33). The primary issues are: (i) whether the Court should ignore the citizenships of Defendants Jack V. Waters, D.C., P.C. and Dr. Jack V. Waters(collectively, the "Waters Defendants") for the purpose of determining diversity pursuant to 28 U.S.C. § 1332, because the Waters Defendants entered an arbitration agreement with Heath Dale Bennett, the deceased; (ii) whether maintaining jurisdiction of Defendants The National Chiropractic Council and Allied Professional Insurance Company, a Risk Retention Group, Inc. (collectively, the "Insurance Defendants") violates 28 U.S.C. § 1441(b)(2) -- forum-defendant rule -- if the Court otherwise concludes that it has subject-matter jurisdiction; (iii) whether the Court should require that the Insurance Defendants pay Plaintiff Lee Hunt, the personal representative for Bennett's estate, the fees and costs for litigating these first two issues; (iv) whether the Court should compel arbitration between Hunt and the Waters Defendants; (iv) whether Hunt adequately pleads a claim against the Insurance Defendants for their requirement that the Waters Defendants enter arbitration

403 F.Supp.3d 1042

agreements with patients; and (v) whether the Court should stay proceedings in the case pending a decision on the Motion to Remand. The Court concludes that: (i) it will not ignore the Waters Defendants' citizenships, because it cannot decide properly the Motion to Compel, before determining whether it has subject-matter jurisdiction; (ii) the Court would not apply the forum-defendant rule if the Court concluded that it otherwise had subject-matter jurisdiction, because, in that scenario, the Court would have deemed the Waters Defendants not to be "parties in interest," 28 U.S.C. § 1441 ; and (iii) the Court will not grant Hunt's request for fees and costs. As Hunt and the Waters Defendants are New Mexico citizens, see Complaint for Chiropractic Malpractice, Breach of Fiduciary Duty, Unfair Trade Practices, Aiding and Abetting Breach of Fiduciary Duty, Civil Conspiracy and Wrongful Death ¶ 1, at 1, filed in state court July 31, 2018, filed in federal court September 13, 2018 (Doc. 1-1)("Complaint"); id. ¶¶ 6-8, at 2, the Court lacks subject-matter jurisdiction over this matter and remands the case to the County of Santa Fe, First Judicial District, State of New Mexico. The Court grants the Motion to Stay in part and denies it in part, because, at the hearing, the Court began arguments with the MTD, see Draft Transcript of Hearing at 3:5-15 (taken January 29, 2019)(Court, Biehler)("Tr."),¹ but the parties otherwise agree to the Motion to Stay, see Tr. at 38:20-39:8 (Court, McGinn, Biehler, Freedman). The Court lacks subject-matter jurisdiction to decide the remaining issues.

FACTUAL BACKGROUND

The Court takes its facts from the Complaint. The Court provides these facts for background. It does not adopt them as the truth, and it recognizes that these facts are largely Hunt's version of events.

This case arises from Bennett's February 7, 2017, visit to Dr. Waters' chiropractic clinic, Jack V. Waters, D.C., P.C. See Complaint ¶ 3, at 2; id. ¶¶ 7-8, at 2; id. ¶ 56, at 8. Dr. Waters resides in Clovis, New Mexico, and, at all times relevant to this case, held a license "as a doctor of chiropractic" in the State of New Mexico. Complaint ¶ 6, at 2. Dr. Waters operates Jack V. Waters, D.C., P.C. in Clovis, and Jack V. Waters, D.C., P.C.'s principal place of business is Clovis. See Complaint ¶¶ 6-8, at 2.

The Waters Defendants held an insurance policy with the Insurance Defendants. See Complaint ¶ 26, at 4. National Chiropractic purchases "group malpractice insurance for chiropractors," and its principle place of business is in Orange, California. Complaint ¶¶ 9, 11, at 2. Allied Professional is an Arizona corporation that "operate[s] a joint venture" with National Chiropractic "for the purpose of getting chiropractors to purchase APIC-NCC group malpractice insurance policies." Complaint ¶ 6, at 3. See id. ¶ 23, at 4. The Insurance Defendants require policyholders to enter "pre-dispute arbitration agreements with patients and have patients sign blanket informed consent forms." Complaint ¶ 24, at 4.

Bennett saw Dr. Waters intermittently for eight years. See Complaint ¶ 52, at 8. On his first visit to Dr. Waters on December 29, 2008, Bennett signed "[a]n Informed Consent to Treat Form," which "contained a short paragraph on arbitration."

403 F.Supp.3d 1043

Complaint ¶ 28, at 5. The paragraph in the Arbitration Agreement, filed November 2, 2018 (Doc. 28), states:

It is understood that any dispute as to medical malpractice, that is as to whether any medical services rendered under this contract were unnecessary or unauthorized or were improperly, negligently or incompetently rendered, will be determined by submission to arbitration as provided by state and federal law, and not by a lawsuit or resort to court process except as state and federal law provides for judicial review of arbitration proceedings. Both parties to this contract, by entering into it, are giving up their constitutional right to have any such dispute decided in a court of law before a jury, and instead are accepting the use of arbitration.

Arbitration Agreement at 1. The arbitration agreement and informed consent form omit material relevant to disputes over chiropractic care and the risks that chiropractic care poses, such as "the risk of vertebral arterial dissection ... or ischemic stroke." Complaint ¶ 31, at 5. See id. ¶¶ 30-31, at 5. On February 7, 2017, Bennett suffered "an acute left vertebral artery injury during chiropractic manipulation" from Dr. Waters. Complaint ¶ 92, at 15. The injury led "to a fatal stroke" at Jack V. Waters, D.C., P.C. Complaint ¶ 93, at 15.

PROCEDURAL BACKGROUND

Hunt alleges that: (i) Dr. Waters committed chiropractic negligence, see Complaint ¶¶ 94-104, at 12-14; (ii) Dr. Waters breached his fiduciary duty to Bennett, see Complaint ¶¶ 105-12, at 14-16; (iii) Jack V. Waters, D.C., P.C. violated the Unfair Practices Act, N.M. Stat. Ann. §§ 57-12-1 to -26, see Complaint ¶¶ 113-22, at 16-18; and (iv) the Insurance Defendants aided and abetted the breach of fiduciary duty and conspired with Dr. Waters to commit the breach of fiduciary duty, see Complaint ¶¶ 123-35, at 18-20. The Waters Defendants want their arbitration agreement with Bennett enforced. See generally Motion to Compel. On September 13, 2018, the Insurance Defendants removed the case to federal court on the basis of 28 U.S.C. § 1332. See Notice of Removal at 3, filed September 13, 2018 (Doc. 1). In removing the case, the Insurance Defendants ignore the Waters Defendants' citizenships, "because [the Waters Defendants] are subject to mandatory arbitration." Notice of Removal at 2. The Insurance Defendants also filed an Amended Answer to Complaint, filed September 28, 2018 (Doc. 8)("Amended Answer"), in which they seek to compel Hunt to arbitrate with them pursuant to the Arbitration Agreement. See Amended Answer ¶ 24, at 3.

1. The Motion to Remand.

In the Motion to Remand, Hunt asks that the Court remand the case, because the Waters Defendants, like him, are New Mexico citizens, and no law supports disregarding the Waters Defendants' citizenship based on the Arbitration Agreement. S...