Wilkerson ex rel. Estate of Wilkerson v. Nelson

• Decision Date: 17 May 2005
• Docket Number: No. 1:04 CV 00143.,1:04 CV 00143.
• Citation: 395 F.Supp.2d 281
• Court: U.S. District Court — Middle District of North Carolina
• Parties: Donald Neil WILKERSON, as Administrator of the Estate of Sandra Hatcher Wilkerson, deceased, Plaintiff, v. Rendon C. NELSON, M.D., Bryan M. Clary, M.D., Duke University Hospital, Duke University Medical Center, Duke University Health System, t/a/d/b/a Duke Health, Duke University School of Medicine, Defendants.

395 F.Supp.2d 281

Donald Neil WILKERSON, as Administrator of the Estate of Sandra Hatcher Wilkerson, deceased, Plaintiff, v. Rendon C. NELSON, M.D., Bryan M. Clary, M.D., Duke University Hospital, Duke University Medical Center, Duke University Health System, t/a/d/b/a Duke Health, Duke University School of Medicine, Defendants.

No. 1:04 CV 00143.

United States District Court, M.D. North Carolina.

May 17, 2005.

COPYRIGHT MATERIAL OMITTED

Darren M. Dawson, Marvin Key Blount, Jr., Harry H. Albritton, Jr., The Blount

Law Firm, P.L.L.C., Greenville, NC, for Plaintiff.

William E. Freeman, Moore & Van Allen, Durham, NC, John M. Simpson, Fulbright & Jaworski, L.L.P., Washington, DC, for Defendants.

MEMORANDUM OPINION and ORDER

OSTEEN, District Judge.

Plaintiff Donald Neil Wilkerson, as Administrator of the Estate of Sandra Hatcher Wilkerson, deceased ("Sandra Wilkerson"), brings this diversity action against Defendants Rendon C. Nelson, M.D. and Bryan M. Clary, M.D.; and health care providers Duke University Hospital, Duke University Medical Center, Duke University Health System, Duke Health, and Duke University School of Medicine (collectively, "Duke").¹ Plaintiff brings this wrongful death suit alleging negligence by Defendants in the medical treatment of Sandra Wilkerson. This matter is now before the court on Defendants' motion to stay this action and compel arbitration or, in the alternative, to dismiss the case for improper venue and Plaintiff's motion for oral argument. For the reasons set forth herein, Defendants' motion to stay pending binding arbitration will be granted and Plaintiff's motion for oral argument will be denied.

I. BACKGROUND

Sandra Wilkerson, a Virginia resident, was diagnosed with benign liver tumors in 1995. On March 22, 1999, Mrs. Wilkerson visited the Private Diagnostic Clinic ("PDC")² at Duke, a North Carolina-based health care provider, and was presented a form typically furnished to and completed by patients while in the waiting room. The form contains three distinct sections, each with its own signature line. The top section requests the patient's insurance information and contains an authorization for the insurance company to make payments to the PDC. The bottom section seeks the patient's agreement to a statement of financial responsibility. Sandwiched in the middle is a paragraph stating the patient's agreement to arbitrate all existing or future claims or issues arising out of or relating to medical treatment provided by Defendants. The arbitration agreement provides:

AGREEMENT TO ALTERNATIVE DISPUTE RESOLUTION

In accordance with the terms of the United States Arbitration Act, I agree that any dispute arising out of or related to the provision of health care services to me by Duke University, the Private Diagnostic Clinic (PDC), or their employees, physician partners, and agents, shall be subject to final and binding resolution exclusively through the Health Care Claim Settlement Procedures of the American Arbitration Association, a copy of which is available to me upon request. I understand that this agreement includes all health care services which previously have been or will in the future be provided to me and that this agreement is not restricted to those health care services rendered in connection with this admission or visit. I understand that this agreement also is binding on any individual or entity claiming by or through me or on my behalf. I understand that this agreement is voluntary and is not a precondition to receiving health care services.

(Defs.' Original Answer & Countercl. Ex. A.). Mrs. Wilkerson filled in the requested information, signed, and dated all three sections. The completed form was made a part of her medical records at Duke.

Beginning in 2002, Mrs. Wilkerson returned to Duke for treatment of her liver tumors. On April 11, 2002, Dr. Clary, a general surgeon practicing at Duke, performed surgery to remove the tumorous portion of Mrs. Wilkerson's liver. Despite the surgery, a postoperative pathology report indicated the existence of additional benign liver tumors. Dr. Clary, along with Dr. Nelson, a radiologist specializing in image-guided interventional procedures and also practicing at Duke, determined the best course of action for Mrs. Wilkerson was an ultrasound guided percutaneous radiofrequency ablation, a procedure to burn the tumorous area with an electrode. Dr. Nelson performed the ablation procedure on December 11, 2002. The procedure resulted in sudden liver failure, a liver transplant, and the death of Mrs. Wilkerson on December 17, 2002.

Plaintiff Mr. Wilkerson, in his capacity as estate administrator, brought this suit for negligence seeking wrongful death damages under North Carolina General Statutes § 18A-18-2. Plaintiff alleges Defendants acted negligently by failing to inform Sandra Wilkerson of the risks of the ablation procedure and alternative treatments available, by negligently deciding to perform and performing the ablation procedure, and by failing to acquire informed consent from Mrs. Wilkerson. Defendants answered Plaintiff's complaint denying negligence and bringing a counterclaim seeking a stay or, in the alternative, dismissal with prejudice for improper venue based on the arbitration agreement. Defendants renewed their counterclaim by way of a motion. After Defendants' motion was fully briefed, Plaintiff moved for oral argument. These motions are now pending before the court.

II. STANDARD OF REVIEW

Plaintiff does not dispute the court's authority to stay these proceedings pending arbitration. The arbitration agreement specifies that the United States Arbitration Act (often referred to as the Federal Arbitration Act ("FAA")), 9 U.S.C. §§ 1 et seq., governs any dispute between the parties.³ Section 3 of the FAA provides "[i]f any suit ... be brought in any of the courts of the United States upon any issue referable to arbitration ... the court in which such suit is pending... shall ... stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement." 9 U.S.C. § 3. Therefore, the court must stay Plaintiff's claims if they are "referable" to arbitration, i.e., if the arbitration agreement is enforceable.

To determine whether the arbitration agreement is enforceable, the court must apply the relevant state law principles that govern the formation of contracts. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943-44, 115 S.Ct. 1920, 1924, 131 L.Ed.2d 985 (1995) ("[A]rbitration is simply a matter of contract between the parties."); see also 9 U.S.C. § 2 (stating arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract"). Here, the applicable state law is that of North Carolina,⁴ which requires offer, acceptance, consideration, mutual assent, and the presence of no valid defenses for contract formation. See Copy Products, Inc. v. Randolph, 62 N.C.App. 553, 555, 303 S.E.2d 87, 88 (1983); Snyder v. Freeman, 300 N.C. 204, 218, 266 S.E.2d 593, 602 (1980) ("The essence of any contract is the mutual assent of both parties to the terms of the agreement so as to establish a meeting of the minds."). If the arbitration agreement is enforceable, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, "whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983). This reflects the "liberal federal policy favoring arbitration agreements" embodied in the FAA. Id. at 24, 103 S.Ct. 927.

III. ANALYSIS

Plaintiff argues the arbitration agreement is unenforceable because (1) it lacks consideration; (2) Defendants have not proven mutual assent; (3) it does not bind the claims of Mrs. Wilkerson's husband and child; and (4) it violates public policy. (Mem. Opp'n Defs.' Mot. Stay Proceedings Pending Arbitration and/or Dismiss Pl.'s Compl. Improper Venue ("Mem. Opp'n Defs.' Mot. Stay").) The court will consider each contention in turn.

A. Whether the Agreement Lacks Consideration

Plaintiff's first contention is the arbitration agreement is invalid because it was not supported by adequate consideration. (Id. at 3-5.) Plaintiff finds no consideration because Mrs. Wilkerson did not receive from Defendants any care or treatment in return for signing the arbitration provision, nor did she receive a reciprocal agreement to arbitrate any claims Defendants may have against her. Without these forms of consideration, Plaintiff argues the agreement must fail.

To be enforceable, a contract must be supported by adequate consideration. Investment Props. of Asheville, Inc. v. Norburn, 281 N.C. 191, 195, 188 S.E.2d 342, 345 (1972). "A mere promise, without more, is unenforceable." Id. Legal consideration is some benefit or advantage to the promisor or some loss or detriment to the promisee. Carolina Helicopter Corp. v. Cutter Realty Co., 263 N.C. 139, 147, 139 S.E.2d 362, 368 (1964). Mutual promises are sufficient consideration to support a contract. See Penley v. Penley, 314 N.C. 1, 16, 332 S.E.2d 51, 60 (1985).

The arbitration does not lack consideration because it contains reciprocal obligations to be bound by any arbitration decision. While the court agrees with Plaintiff that the arbitration agreement does not contain a reciprocal agreement by Defendants to arbitrate any claims they may have against Mrs. Wilkerson, such an agreement is not required. The only reciprocal promise necessary for consideration is that both parties agree to be bound by the rules of the arbitration procedure and its result, irrespective of whose claims must be arbitrated. See Johnson v. Circuit City Stores, 148 F.3d 373, 378-79 (4th Cir.1998) (reaffirming the holding in O'Neil...