THI of N.M. at Vida Encantada, LLC v. Lovato

• Decision Date: 22 March 2012
• Docket Number: Civ. No. 11–634 MV/RHS.
• Citation: 848 F.Supp.2d 1309
• Parties: THI OF NEW MEXICO AT VIDA ENCANTADA, LLC, Thi of New Mexico, LLC, Fundamental Administrative Services, LLC, and Fundamental Clinical Consulting, LLC, Plaintiffs, v. Mary Louise LOVATO, as Personal Representative of the Wrongful Death Estate of Guadalupe Duran, deceased, Defendant.
• Court: U.S. District Court — District of New Mexico

848 F.Supp.2d 1309

THI OF NEW MEXICO AT VIDA ENCANTADA, LLC, Thi of New Mexico, LLC, Fundamental Administrative Services, LLC, and Fundamental Clinical Consulting, LLC, Plaintiffs,

v.Mary Louise LOVATO, as Personal Representative of the Wrongful Death Estate of Guadalupe Duran, deceased, Defendant.

Civ. No. 11–634 MV/RHS.

United States District Court, D. New Mexico.

March 22, 2012.

Lori D. Proctor, Proctor & Associates, PC, J. Jonathan Hlavinka, John Serpe, M. Randall Jones, Serpe, Jones, Andrews, Callender & Bell, PLLC, Houston, TX, for Plaintiff.

Dusti Harvey, Jennifer J. Foote, Juliet Keene, Harvey Law Firm, LLC, Albuquerque, NM, for Defendant.

MEMORANDUM OPINION AND ORDER

MARTHA VAZQUEZ, District Judge.

THIS MATTER comes before the Court on Plaintiffs' Motion to Compel Arbitration [Doc. 2] and Defendant's Motion to Dismiss for Lack of Subject Matter Jurisdiction [Doc. 9]. The Court, having considered the motions, briefs, relevant law and being otherwise fully informed, finds that Plaintiffs' Motion is well-taken in part and will be GRANTED in part and denied in part, and that Defendant's Motion is not well-taken and will be DENIED.

BACKGROUND

On February 6, 2007, Guadalupe Duran executed a statutory power of attorney, (“Power of Attorney”) appointing Mary Ann Atencio and two other individuals as her attorneys-in-fact. Doc. 4–1, Exhibit C, at 1. In the Power of Attorney, Ms. Duran initialed a space indicating her approval of a pre-printed legend that reads: “If more than one person is appointed to serve as my attorney-in-fact then they may act severally, alone and independent of each other.” Id. The Power of Attorney enumerates 17 areas of responsibility as to which Ms. Duran could choose to confer authority upon her attorneys-in-fact, including “claims and litigation” and “decisions relating to ... nursing care, medication, hospitalization, [and] institutionalization in a nursing home or other facility and home health care.” Id. at 2–3. Ms. Duran initialed the last line, conferring upon her attorneys-in-fact, including Ms. Atencio, “all of the above powers, including financial and health care decisions.” Id. at 3. Ms. Duran signed her name below a legend that reads: “I agree that any third party who receives a copy of this power of attorney may act under it.” Id. at 4. Finally, the last page of the Power of Attorney contains a legend that reads: “By accepting or acting under the power of attorney, your agent assumes the fiduciary and other legal responsibilities of an agent acting on your behalf.” Id. at 5. Ms. Atencio's authority to act as Ms. Duran's attorney-in-fact became effective upon execution of the Power of Attorney. Id. at 3–4.

On May 8, 2007, Ms. Duran was admitted to THI of New Mexico at Vida Encantada, LLC (“Vida Encantada”) to obtain care. In connection with her admission, Ms. Atencio, as Ms. Duran's representative, executed a Vida Encantada admission agreement (the “Admission Agreement”). Doc. 4–1, Exhibit A. The Admission Agreement provides that, as Ms. Duran's representative, Ms. Atencio “will be bound by the applicable terms and conditions of this Agreement.” Id. at 1. The Admission Agreement further provides that “Representative will supply [Vida Encantada] with a copy of any power of attorney ... or other legal documentation permitting him or her to act on Resident's behalf.” Id. at 10. Pursuant to this provision, Ms. Atencio provided Vida Encantada with the Power of Attorney.

That same day, Ms. Atencio, as Ms. Duran's personal representative, also signed an arbitration agreement (the “Arbitration Agreement”) executed “by and among” Vida Encantada and Ms. Duran. Doc. 4–1, Exhibit B. The parties agreed “to bind not only themselves, but also their successors, assigns, heirs, personal representatives, guardians or any persons deriving their claims through or on behalf of Resident.” Id. at 1. The Arbitration Agreement provides in relevant part:

In the event of any controversy or dispute between the parties arising out of or relating to Resident's stay at [Vida Encantada], [Vida Encantada's] Admission agreement, or breach thereof, or relating to the provision of care or services to Resident, including but not limited to any alleged tort, personal injury, negligence or other claim; or any federal or state statutory or regulatory claim of any kind; or whether or not there has been a violation of any right or rights granted under State law (collectively “Disputes”), and the parties are unable to resolve such through negotiation, then the parties agree that such Dispute(s) shall be resolved by arbitration, as provided by the National Arbitration Forum Code of Procedure or other such association.

* * *

The parties agree that only one (1) arbitrator is required to resolve any Dispute(s) and the arbitrator shall be selected from a panel having experience and knowledge of the health care industry.

* * *

RESIDENT/REPRESENTATIVE UNDERSTANDS THAT BY SIGNING THIS ARBITRATION AGREEMENT, HE/SHE IS WAIVING HIS/HER RIGHT TO HAVE CLAIMS, INCLUDING MALPRACTICE CLAIMS, HE/SHE MAY HAVE AGAINST THE HEALTH CARE CENTER (INCLUDING ITS AGENTS, EMPLOYEES, SERVANTS, PARENTS, SUBSIDIARIES AND AFFILIATES) BROUGHT AS A LAWSUIT IN COURT BEFORE A JUDGE OR JURY.

Id. at 1–2 (bold and capitals in original). In the Arbitration Agreement, Ms. Atencio acknowledged that she was “not required to use [Vida Encantada] for [Ms. Duran's] healthcare needs and that there are numerous other health care providers in the State where [Vida Encantada] is located that are qualified to provide such care.” Id. at 1. Ms. Atencio also acknowledged that “signing this Agreement to arbitrate is not a precondition for medical treatment or admission to [Vida Encantada].” Id. The parties also agreed that the Arbitration Agreement would be “governed and interpreted under the Federal Arbitration Act.” Id. Finally, the Arbitration Agreement afforded Ms. Atencio “the right to terminate/revoke this Arbitration Agreementwithin three (3) business days of execution.” Id. at 2. Ms. Atencio never revoked her consent to the Arbitration Agreement.

Prior to her admission to Vida Encantada, Ms. Duran had been living at the New Mexico Behavioral Health Center. Doc. 11 at 7. When another resident assaulted her in April 2007, her family began to look for a new place for her to live. Id. Many of Ms. Duran's relatives accompanied Ms. Duran on her move from the Behavioral Health Center to Vida Encantada. Id. at 8. According to Defendant, Vida Encantada was not ready for Ms. Duran, and she had to wait in the car, and then in the lobby, while her family rushed to fill out the paperwork for her admission. Id. Defendant contends that Vida Encantada “had Ms. Atencio sign paperwork, including the arbitration clause at issue here ... [d]uring this very stressful time.” Id. Further, Defendant contends that Ms. Atencio was “merely being handed pieces of paper, with Vida Encantada staff pointing to the places where she needed to sign.” Id. at 9. Defendant also contends that the Arbitration Agreement is “written in very dense, legalistic language,” and Ms. Atencio “had no work experience with legal terms or the law.” Id.

On August 16, 2010, Defendant Mary Louise Lovato, Ms. Duran's granddaughter, in her capacity as a personal representative of Ms. Duran's wrongful death beneficiaries, filed an action in the Fourth Judicial District Court, New Mexico (the “State Court Action”), against, inter alia, Plaintiffs herein, alleging wrongful death, negligence, negligent or intentional misrepresentation, violation of New Mexico's Unfair Trade Practices Act, and punitive damages. Defendant alleges that, while a resident of Vida Encantada, Ms. Duran suffered from several unreported and uninvestigated falls in a short span of time, physical and verbal abuse, pressure ulcers, improper medication administration, and a fall resulting in a hip fracture. Id. at 2. Defendant further allege that Ms. Duran died on October 1, 2007, as a result of the poor care and treatment she received at Vida Encantada. Id.

On July 18, 2011, Plaintiffs Vida Encantada, THI of New Mexico, LLC (“THI”), Fundamental Administrative Services, LLC (“FAS”), and Fundamental Clinical Consulting, LLC (“FCC”), commenced the instant action under Section 4 of the Federal Arbitration Act (“FAA”), basing federal jurisdiction on the diversity of citizenship between Plaintiffs, all Delaware limited liability companies, and Defendant, alleged to be a New Mexico citizen. See Doc. 1. In their Complaint and in their Motion to Compel Arbitration, Plaintiffs seek an order compelling Defendant to arbitrate the claims she asserted against Plaintiffs in the State Court Action and staying this case and the State Court Action pending arbitration. See Docs. 1 and 2.

On August 1, 2011, Defendant filed a Motion to Dismiss the instant action. See Doc. 9. In the alternative, Defendant asks this Court to abstain under the doctrine set forth in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). On the same day, Defendant also filed an opposition to Plaintiffs' motion, arguing that the Arbitration Agreement is invalid and unenforceable.

DISCUSSION

I. Defendant's Motion to Dismiss

Defendant moves to dismiss on two grounds. First, Defendant argues that federal jurisdiction is lacking, as there is not complete diversity of citizenship between the parties. In the alternative, Defendant argues that the Colorado River abstention doctrine applies.

A. Jurisdiction

The FAA provides that a written agreement requiring arbitration of controversies arising out of “a contract evidencing a transaction involving commerce ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. Section 2 creates “a substantive rule applicable in state as well as federal courts.” Southland Corp. v. Keating, 465 U.S. 1,...