GGNSC Montgomery, LLC v. Norris (CONSENT)
MEMORANDUM OPINION AND ORDER: It is ORDERED and ADJUDGED as follows: 1. That the plaintiff's motion to compel arbitration (doc. 1 ) be and is hereby GRANTED. 2. That the parties shall have until on or before 3/20/2013, to jointly agree on an ar bitrator which the court will then appoint to arbitrate this matter. If the parties cannot agree on an arbitrator, the parties shall file a joint status report on or before 3/20/2013 advising the court that an agreement was not reached, at which time the court will appoint an arbitrator. 3. Pursuant to 9 U.S.C. § 3, this case be and is hereby STAYED andADMINISTRATIVELY CLOSED pending notification by the parties that arbitration iscomplete. 4. Beginning on 6/1/2013, the plaintiff shall file a status report every 60 days concerning the status of arbitration until a decision is rendered. The monthly status report shall be filed no later than the fifth day of each month. Signed by Honorable Judge Charles S. Coody on 2/20/2013. (Attachments: # 1 Civil Appeals Checklist) (dmn, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
GGNSC MONTGOMERY, LLC,
doing business as
GOLDEN LIVING CENTER
KAREN F. NORRIS, Administratrix
of the Estate of Leila Jackson Scott,
CIVIL ACT. NO. 2:12cv711-CSC
MEMORANDUM OPINION and ORDER
Plaintiff GGNSC Montgomery, LLC d/b/a Golden LivingCenter Montgomery,
(“GGNSC”), filed this action against the defendant, Karen Norris (“Norris”), the
Administratrix of the Estate of Leila Jackson Scott, to compel arbitration of all claims
asserted by Norris against GGNSC in her state court case pending in the Circuit Court of
Montgomery County, Alabama. The court has jurisdiction of this matter pursuant to its
diversity jurisdiction, 28 U.S.C. § 1332, and in accordance with its jurisdictional grant
contained in the Federal Arbitration Act, 9 U.S.C. § 4. Pursuant to 28 U.S.C. § 636(c)(1) and
M.D. Ala. LR 73.1, the parties have consented to a United States Magistrate Judge
conducting all proceedings in this case and ordering the entry of final judgment.
This action is now pending before the court on the plaintiff’s motion to compel
arbitration (doc. # 1). The defendant opposes the motion arguing that the arbitration
agreement is unenforceable “because the entity selected to conduct the arbitration is no
longer in that business.” (Doc. # 5 at 3). Consequently, she asserts that she should not be
bound by the agreement because it is “a legal nullity.” (Doc. # 6 at 1). After careful review
of the motion, the briefs filed in support of and in opposition to the motion, and the
supporting and opposing evidentiary materials, the court concludes that the motion to compel
arbitration is due to be granted.
The facts are undisputed. Decedent Leila Jackson Scott was first admitted to GGNSC
on April 27, 2004. (Doc. # 2, Ex. 3 at 2, ¶ 3). During the admission process, Scott’s
daughter and authorized representative, Carolyne Norris, signed an arbitration agreement.
The arbitration agreements provide, in pertinent part, as follows:
The parties to this Arbitration Agreement acknowledge and agree that upon
execution, this Arbitration Agreement becomes part of the Admission
Agreement, and that the Admission Agreement evidences a transaction
involving interstate commerce governed by the Federal Arbitration Act. It is
understood and agreed by Facility and Resident that any and all claims,
disputes, controversies (hereafter collectively referred to as a “claim” or
collectively as “claims”) arising out of, or in connection with, or relating in
any way to the Admission Agreement or any service or health care provided
by the Facility to the Resident shall be resolved exclusively by binding
arbitration to be conducted at a place agreed upon by the Parties, or in the
absence of such an agreement, at the Facility, in accordance with the National
Arbitration Forum Code of Procedure, which is hereby incorporated into this
Agreement\] (sic), and not by a lawsuit or resort to court process. This
agreement shall be governed by and interpreted under the Federal Arbitration
Act, 9 U.S.C. Sections 1-16.
This agreement to arbitrate includes, but is not limited to, any claim for
payment, nonpayment, or refund for services rendered to the Resident by the
Facility, violations of any right granted to the Resident by law or by the
Admission Agreement, breach of contract, fraud or misrepresentation,
negligence, gross negligence, malpractice, or claims based on any departure
from accepted medical or health care or safety standards, as well as any and all
claims for equitable relief or claims based on contract, tort, statute, warranty,
or any alleged breach, default, negligence, wantonness, fraud,
misrepresentation, suppression of fact, or inducement. . . .
It is the intention of the parties to this Arbitration Agreement that it shall inure
to the benefit of and bind the parties, their successors, and assigns, including
without limitation the agents, employees, and servants of the Facility, and all
persons whose claim is derived through or on behalf of the Resident, including
any parent, spouse, sibling, child, guardian, executor, legal representative,
administrator, or heir of the Resident. The parties further intend that this
agreement is to survive the lives or existence of the parties hereto.
THE PARTIES UNDERSTAND AND AGREE THAT THIS
CONTRACT CONTAINS A BINDING ARBITRATION PROVISION
WHICH MAY BE ENFORCED BY THE PARTIES, AND THAT BY
ENTERING INTO THIS ARBITRATION AGREEMENT, THE
PARTIES ARE GIVING UP AND WAIVING THEIR
CONSTITUTIONAL RIGHT TO HAVE ANY CLAIM DECIDED IN A
COURT OF LAW BEFORE A JUDGE AND A JURY, AS WELL AS
ANY APPEAL FROM A DECISION OR AWARD OF DAMAGES.
(Doc. # 2, Ex. 4, Att. A, Arbitration Agreement at 1-2) (emphasis in original).
Carolyne Norris signed another, identical arbitration agreement upon Ms. Scott’s
readmission to GGNSC on July 16, 2006. (Id.)
Carolyne Norris died on January 18, 2009. On February 19, 2010, while a resident
of GGNSC, Leila Scott died. Defendant Karen Norris was appointed Administratrix of her
estate on August 11, 2010.
On December 20, 2011, Norris, as the Administratrix of the Estate of Scott, filed suit
against Golden Living Center and others asserting medical malpractice claims against the
defendants related to the death of her mother. (Doc. # 1, Ex. 1).
GGNSC filed this action to compel arbitration on August 17, 2012.
III. Standard of Review
Pursuant to the Federal Arbitration Act (“FFA”), “[a] written provision in any . . .
contract evidencing a transaction involving commerce to settle by arbitration a controversy
. . . arising out of such contract . . . 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.
Under the FFA, “[a] party aggrieved by the alleged failure, neglect, or refusal of another to
arbitrate under a written agreement” may petition the court “for an order directing that such
arbitration proceed.” 9 U.S.C. § 4.
The FAA “seeks broadly to overcome judicial hostility to arbitration agreements and
that [it] applies in both federal and state court.” Allied-Bruce Terminix Cos., Inc. v. Dobson
513 U.S. 265, 272 (1995). See also, Green Tree Fin. Corp. v. Randolph, 531 U.S. 79, 89
(2000) (“In considering whether respondent’s agreement to arbitrate is unenforceable, we are
mindful of the FAA’s purpose ‘to reverse the longstanding judicial hostility to arbitration
agreements . . . and to place arbitration agreements on the same footing as other contracts.’”).
The court is cognizant of the Supreme Court’s instructions that, under the FAA, “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, 24 (1983). Furthermore, “as with any contract, the parties’
intentions control, but those intentions are generously construed as to issues of arbitrability.”
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985). The
FFA “declare[s] a national policy favoring arbitration.” Nitro-Lift Technologies, LLC, v.
Howard, — U.S. —, 133 S.Ct. 500, 503 (2012) quoting Southland Corp. v. Keating, 465
U.S. 1, 10 (1984). See also Marmet Health Care Cnt., Inc. v. Brown, — U.S. —, 132 S.Ct.
1201, 1203 (2012) (federal policy is one “in favor of arbitral dispute resolution”);
CompuCredit Corp. v. Greenwood, — U.S. —, 132 S.Ct. 665, 669 (2012) (FFA evinces “a
liberal federal policy favoring arbitration agreements.”); Green Tree, 531 U.S. at 91 (federal
policy liberally favors arbitration agreements) .
After hearing the parties1, if the court is “satisfied that the making of the agreement
for arbitration or the failure to comply therewith is not in issue,” the court shall direct the
parties “to proceed to arbitration in accordance with the terms of the agreement.” 9 U.S.C.
The parties do not dispute that the arbitration agreements in question involve interstate
The parties have thoroughly briefed the issue of arbitration and submitted evidentiary materials
in support of their respective positions.
commerce and that the agreements are within the scope of the Federal Arbitration Act. See
Docs. # 1 at ¶ and Doc. # 5 at ¶5. The plaintiff asks the court to order arbitration pursuant
to the FAA on the basis that a valid agreement to arbitrate exists between the parties.
Relying on Stewart v. GGNSC-Canonsburg, L.P., 9 A.3d 215 (Pa. Super 2010), a
Pennsylvania intermediate appellate court decision, the defendant argues that the agreements
are not enforceable because the entity selected to conduct the arbitration is no longer
available. Her reliance is misplaced because this court, of course, is bound by Circuit
precedence. In a well-reasoned opinion, the Eleventh Circuit has squarely addressed this
Brown also argues that the arbitration clause is void because the specified
forum, the National Arbitration Forum (NAF), had dissolved. This argument
is without merit. Section 5 of the FAA provides a mechanism for appointment
of an arbitrator where “for any [ ] reason there shall be a lapse in the naming
of an arbitrator . . .” 9 U.S.C. § 5 (West 2000). The unavailability of the NAF
does not destroy the arbitration clause.
Brown v. ITT Consumer Fin. Corp., 211 F.3d 1217, 1222 (11th Cir. 2000).
The Eleventh Circuit held that where “there is no evidence that the choice of the NAF
as the arbitration forum was an integral part of the agreement to arbitrate,” a substitute
arbitrator may be selected. Id.
Only if the choice of forum is an integral part of the agreement to arbitrate,
rather than an “ancillary logistical concern” will the failure of the chosen
forum preclude arbitration.
In this case, the court concludes that the NAF is an “ancillary logistical concern”
rather than an “integral part of the agreements.” First, the Agreements require claims to be
resolved exclusivity by binding arbitration. Clearly, the intent of the Arbitration Agreements
is that all claims are to be resolved through arbitration, and not litigation. See Khan v. Dell,
Inc., 669 F.3d 350, 355 (3rd Cir. 2012) (“intent to arbitrate [ ] trumped the designation of a
particular arbitrator who was no longer available.”) Next, there is no evidence before the
court that the NAF was an integral part of either Arbitration Agreement. The defendant
argues that while she may be bound by the agreement to “arbitrate with the “National
Arbitration Forum” pursuant to the “National Arbitration Code of Procedure,” she did not
agree to arbitrate “under any other set of rules or procedures.” (Doc. # 6 at 5). According
to the defendant, the NAF is an integral part of the Agreements because otherwise, the court
would have to redraft the Arbitration Agreements. The court disagrees. The defendant
ignores the language in both Arbitration Agreements that specify that the Agreements are
“governed and interpreted under the Federal Arbitration Act.” (Doc. # 2, Ex. 4, Att. A & B).
Pursuant to the FFA, section 5 provides a method for selecting an arbitrator “if for any other
reason there shall be a lapse in the naming of an arbitrator.” 9 U.S.C. § 5. See also Brown,
211 F.3d at 1222 (“Where the chosen forum is unavailable, however, or has failed for some
reason, § 5 applies and a substitute arbitrator may be named.”); Obremski v. Springleaf Fin.
Servs., Inc., 2012 WL 3264521, *4 (M.D. Fla., Aug. 10, 2012) (No. 8:12-cv-1594-T-33AEP)
(“Section 5 of the FFA specifically provides that in circumstances such as these the court
shall appoint an alternate arbitrator.”); Sankey v. Sears, Roebuck & Co., 100 F.Supp.2d 1290,
1298 (M.D. Ala. 2000) (“The court will invoke § 5 of the FFA and give the parties until July
7, 2000 to jointly agree on an arbitrator...”); Stinson v. America’s Home Place, Inc., 108
F.Supp.2d 1278, 1285 (M.D. Ala. 2000) (“Although the arbitrator specified in [the
plaintiff’s] contract . . . is not now available . . ., there is no indication that the choice of that
particular arbitrator was central to the arbitration clause. In such cases, § 5 dictates that the
court choose another arbitrator and enforce the arbitration clause.”)
Finally, any ambiguities in the Agreements must be resolved in favor of arbitration.
See Volt Information Sciences, Inc. v. Bd. of Trustees of Leland Stanford Jr. Univ., 489 U.S.
468, 476 (1989) (“ambiguities as to the scope of the arbitration clause itself resolved in favor
of arbitration”); Moses H. Cone Mem’l Hosp., 489 U.S. at 475 (“any doubts concerning the
scope of arbitrable issues . . . be resolved in favor of arbitration.”) See generally E.E.O.C.
v. Waffle House, Inc., 534 U.S. 279, 294 (2002) (“ambiguities in the language of the
agreement should be resolved in favor or arbitration.”)
For the reasons as stated, the court concludes that the NAF is not an “integral part”
of the Arbitration Agreements, and that the Agreements should be enforced in accordance
with the FFA.
Accordingly, it is
ORDERED and ADJUDGED as follows:
That the plaintiff’s motion to compel arbitration (doc. # 1) be and is hereby
That the parties shall have until on or before March 20, 2013, to jointly agree
on an arbitrator which the court will then appoint to arbitrate this matter. If the parties cannot
agree on an arbitrator, the parties shall file a joint status report on or before March 20, 2013
advising the court that an agreement was not reached, at which time the court will appoint
Pursuant to 9 U.S.C. § 3, this case be and is hereby STAYED and
ADMINISTRATIVELY CLOSED pending notification by the parties that arbitration is
Beginning on June 1, 2013, the plaintiff shall file a status report every 60 days
concerning the status of arbitration until a decision is rendered. The monthly status report
shall be filed no later than the fifth day of each month.
Done this 20th day of February, 2013.
/s/Charles S. Coody
CHARLES S. COODY
UNITED STATES MAGISTRATE JUDGE
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