Roth v. Evangelical Lutheran Good Samaritan Soc'y

• Decision Date: 04 December 2015
• Docket Number: No. C 15–4074–MWB,C 15–4074–MWB
• Citation: 147 F.Supp.3d 806
• Parties: Mary E. Roth and Michael A. Roth, Individually and as Co–Executors of the Estate of Cletus Roth, Anna M. Roth, Individually, and Bradley E. Roth, Individually, Plaintiffs, v. The Evangelical Lutheran Good Samaritan Society d/b/a Good Samaritan Society—George, Defendant.
• Court: U.S. District Court — Northern District of Iowa

147 F.Supp.3d 806

Mary E. Roth and Michael A. Roth, Individually and as Co–Executors of the Estate of Cletus Roth, Anna M. Roth, Individually, and Bradley E. Roth, Individually, Plaintiffs,

v.The Evangelical Lutheran Good Samaritan Society d/b/a Good Samaritan Society—George, Defendant.

No. C 15–4074–MWB

United States District Court, N.D. Iowa, Western Division.

Signed December 4, 2015

Benjamin Philip Long, Riccolo, Semelroth & Henningsen, P.C., Pressley Wade Henningsen, Timothy S. Semelroth, RSH Legal, P.C., Cedar Rapids, IA, for Plaintiffs.

Christopher P. Jannes, Kendall R. Watkins, Davis Brown Koehn Shors & Roberts, Des Moines, IA, for Defendant.

MEMORANDUM OPINION AND ORDER REGARDING DEFENDANT'S MOTION TO DISMISS OR STAY AND TO COMPEL ARBITRATION AND ORDER CERTIFYING QUESTIONS TO THE IOWA SUPREME COURT

MARK W. BENNETT, UNITED STATES DISTRICT COURT JUDGE

, NORTHERN DISTRICT OF IOWA

TABLE OF CONTENTS

I. INTRODUCTION ...808

II. LEGAL ANALYSIS ...809

A. The Estate's Claims ...809

B. The Roth Children's Claims ...810

1. The effect of language in the arbitration clause ...810

2. Theories to compel non-signatories to arbitration ...811

a. Estoppel ...811

b. “Derivative” or “independent” nature of the consortium claims ...812

C. Certification Of Questions To The Iowa Supreme Court ...813

D. Dismissal Or Stay? ...814

III. CONCLUSION ...814

I. INTRODUCTION

This case arises from alleged negligent, grossly negligent, or reckless treatment and dependent adult abuse of Cletus Roth, while he was a resident in the defendant's nursing home; breach by the nursing home of a contract entered into by Cletus Roth's son Michael for Cletus's care; and Cletus's adult children's loss of parental consortium. It is before me on the September 22, 2015, Combined Motion To Dismiss Or Stay The Proceedings And To Compel Arbitration (Combined Motion) (docket no. 6), as subsequently supplemented, by defendant The Evangelical Lutheran Good Samaritan Society d/b/a Good Samaritan Society—George (Good Samaritan).

Good Samaritan's original Combined Motion was premised on Good Samaritan's understanding that Michael Roth had falsely represented that he had the healthcare and financial power of attorney for his father when he signed an Admission Agreement on Cletus's behalf. That Admission Agreement included an arbitration provision (called “Resolution Of Legal Disputes”) that the signatory could accept or decline without affecting Cletus's admission to the nursing home. On October 1, 2015, however, Good Samaritan filed a motion (docket no. 10) to supplement its Combined Motion, based on initial disclosures by the plaintiffs (collectively the Roths) that demonstrated that Michael Roth did have general and healthcare powers of attorney for Cletus Roth, jointly or separately, with Mary Roth, at the pertinent time. Good Samaritan requested and was granted time to supplement its Combined Motion in light of the new information. See Order (docket no. 11). Good Samaritan filed its Supplement To Combined Motion To Dismiss Or Stay The Proceedings And To Compel Arbitration (docket no. 12) on October 13, 2015. The Roths filed their Resistance (docket no. 13) on October 30, 2015, and Good Samaritan filed its Reply (docket no. 14) on November 5, 2015. Notwithstanding the Roths' requests for discovery and a hearing, I conclude that Good Samaritan's Combined Motion, as supplemented, is fully submitted on the parties' written submissions.

II. LEGAL ANALYSIS

A. The Estate's Claims

Indeed, I find that the question of whether I must compel arbitration of the estate's claims in this case is settled, much more simply and directly than the parties argue, simply by reference to the arbitration provision in the Admission Agreement. In pertinent part, that arbitration provision states, in bold font,

The Parties expressly agree that the Arbitrator shall have exclusive authority to resolve any disputes related to the existence and/or enforceability of this Resolution of Legal Disputes provision, including but not limited to any claim that all or any part of this Resolution of Legal Disputes provision is void or voidable.

Good Samaritan's Combined Motion, Exhibit A (docket no. 6–2), 15. As the parties acknowledge in their extensive briefing, the United States Supreme Court has explained, “The question whether the parties have submitted a particular dispute to arbitration, i.e., the ‘question of arbitrability, ’ is ‘an issue for judicial determination [u]nless the parties clearly and unmistakably provide otherwise.’ ” Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002)

(quoting AT & T Technologies, Inc. v. Communications Workers, 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986), with emphasis added in Howsam ). Notwithstanding the portion of the arbitration provision quoted above, which on its face unmistakably provides that questions of arbitrability are for the arbitrator, the Roths rely on the presumption that arbitrability is to be determined by the court, citing First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 945, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). They also argue that issues concerning the “validity” of the arbitration agreement are always “threshold questions” for the court to decide. These arguments are not enough to require me to decide any question of arbitrability or validity in this case, in light of the language of the arbitration clause that unmistakably provides that such questions are for the arbitrator. Howsam, 537 U.S. at 83, 123 S.Ct. 588.

This case contrasts sharply with the circumstances in Nebraska Machinery Company v. Cargotec Solutions, L.L.C., 762 F.3d 737 (8th Cir.2014)

, a case in which the Eighth Circuit Court of Appeals addressed the resisting party's contention that, despite certain language in the arbitration provision, “validity” issues still belonged to the court. In that case, the court concluded that the parties had not eliminated the presumption of judicial determination of all “threshold questions” simply by pointing to the invocation of the rules of the American Arbitration Association in the arbitration provision. 762 F.3d at 740–41 and n. 2

. The court explained,

Cargotec relies on the disputed arbitration agreement itself in arguing that the parties intended to submit the present case to an arbitrator. Cargotec insists that because the arbitration provision incorporates the AAA's Commercial Rules of Arbitration, which vests an arbitrator with authority to determine its own jurisdiction, an arbitrator must determine arbitrability. In Fallo v. High–Tech Institute,

we held that an arbitration provision that incorporated the AAA Rules was “a clear and unmistakable expression of the parties' intent to reserve the question of arbitrability for the arbitrator and not the court.” 559 F.3d 874, 878 (8th Cir.2009). However, Fallo did not address the threshold question we now confront: whether the arbitration agreement itself is valid. Thus, Cargotec's argument puts the cart before the horse, as it presumes the arbitration provision formed part of the contract at issue.

Nebraska Machinery, 762 F.3d at 741 n. 2

.

Unlike the situation in Nebraska Machinery,

the arbitration provision in the Admission Agreement, here, does more than simply vest the arbitrator with authority to determine its own jurisdiction. Instead, it vests the arbitrator with the “exclusive authority to resolve any disputes related to the existence and/or enforceability of this Resolution of Legal Disputes provision,” as well as “any claim that all or any part of this Resolution of Legal Disputes provision is void or voidable.” Such authority plainly includes the authority to resolve the “threshold questions” of validity raised by the Roths, based on their arguments concerning the circumstances in which Michael Roth signed, and the genuineness of his signatures on, the arbitration provision and the Admission Agreement, as well as “threshold questions” concerning purported “unconscionability” of the arbitration provision. Here, compelling arbitration of the estate's claims does not “put the cart before the horse,” compare

id. because the arbitration provision unmistakably gives the arbitrator the authority to drive the horse and cart. Thus, the estate's claims must be submitted to arbitration.

B. The Roth Children's Claims

1. The effect of language in the arbitration clause

Whether I must compel arbitration of Cletus Roth's adult children's claims for loss of parental consortium, see State Court Petition, Count IV (docket no. 3), is a considerably more complicated question. The arbitration provision purports to “bind[ ] all parties whose claims may arise out of or relate to treatment or service provided by the center including any spouse or heirs of the Resident,” and provides that “[t]he issue of whether a Party's claim(s) is subject to arbitration under this Resolution of Legal Disputes provision shall be decided by the arbitrator.” Good Samaritan's Combined Motion, Exhibit A (docket no. 6–2), 14. While this provision purportedly requires arbitration of the Roth children's consortium claims, it is an oft-repeated principle of arbitration law “that ‘arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.’ ” Howsam, 537 U.S. at 83, 123 S.Ct. 588

(quoting Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960) ). The Roth children are correct that none of them signed the arbitration agreement in their individual capacities or otherwise agreed to arbitration of their individual claims. Thus, the first question concerning arbitration of the loss of consortium claims is whether Good Samaritan, as a signatory to the arbitration agreement, can compel non-signatories, the Roth children, to arbitrate the loss of consortium claims.

2. Theories to compel non-signatories to arbitration

As the Eighth Circuit Court of Appeals has...