GGNSC Greensburg, LLC et al v. Smith

Filing 16

MEMORANDUM OPINION AND ORDER by Judge Greg N. Stivers on 11/14/2017. Plaintiffs' Motion to Compel Arbitration (DN 5 ) is GRANTED IN PART and DENIED IN PART. Defendant is ENJOINED from proceedings against Plaintiffs in the State Court Action, except for the wrongful death claims. The parties to this action are COMPELLED to arbitrate all claims (except the wrongful death claims), which are the subject of the State Court Action. Counsel SHALL promptly notify th e Green Circuit Court of this Memorandum Opinion and Order. Defendant's Motion to Dismiss (DN 10 ) is GRANTED IN PART as to the wrongful death claim only and DENIED IN PART as to all other claims. This case is STAYED until the conclusion of the ordered arbitration. cc: Counsel(JWM)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
BOWLING GREEN DIVISION
CIVIL ACTION NO. 1:17-CV-00150-GNS

GGNSC GREENSBURG, LLC
d/b/a GOLDEN LIVINGCENTER – GREEN HILL;
GOLDEN GATE NATIONAL SENIOR CARE, LLC;
GGNSC ADMINISTRATIVE SERVICES, LLC;
GGNSC HOLDINGS, LLC;
GGNSC EQUITY HOLDINGS, LLC;
GGNSC EQUITY HOLDINGS II, LLC;
GOLDEN GATE ANCILLARY, LLC; and
GGNSC CLINICAL SERVICES, LLC

PLAINTIFFS

v.

ANGELA MARIE SMITH, as Administratrix of the
ESTATE OF GENEVA ANN JANES, Deceased

DEFENDANT

MEMORANDUM OPINION AND ORDER
This matter is before the Court on Plaintiffs’ Motion to Compel Arbitration (DN 5) and
Defendant’s Motion to Dismiss (DN 10). The motions have been fully briefed by the parties and
are ripe for adjudication. For the reasons outlined below, the Motion to Compel Arbitration is
GRANTED IN PART and DENIED IN PART, and the Motion to Dismiss is GRANTED IN
PART and DENIED IN PART.
I.

SUMMARY OF FACTS AND CLAIMS

On June 24, 2003, Geneva Janes (“Janes”) executed a general power of attorney
instrument (“POA”). (Compl. Ex. C, DN 1-4). Under the terms of the POA, Janes designated
Angela Marie Smith (“Smith”) as her attorney-in-fact.

At or about the time of Janes’ admission to Golden LivingCenter – Green Hill, which is a
facility operated by Plaintiffs, Smith executed a document entitled “Alternative Dispute
Resolution Agreement” (“Agreement”) on Janes’ behalf. (Compl. Ex. A, at 1-4, DN 1-2). The
Agreement provides that “[t]he Parties agree that any disputes covered by this Agreement
(‘Covered Disputes’) that may arise between them shall be resolved exclusively by an ADR
process that shall include mediation and, where mediation is not successful, binding arbitration.”
(Compl. Ex. A, at 1). The term “Covered Disputes” is defined as:
any and all disputes arising out of or in any way relating to this Agreement or to
the Resident’s stay at the Facility or the Admissions Agreement between the
Parties that would constitute a legally cognizable cause of action in a court of law
sitting in the state where Facility is located. Covered Disputes include but are not
limited to all claims in law or equity arising from one Party’s failure to satisfy a
financial obligation to the other Party; a violation of a right claimed to exist under
federal, state, or local law or contractual agreement between the Parties; tort;
breach of contract; consumer protection; fraud; misrepresentation; negligence;
gross negligence; malpractice; and any alleged departure from any applicable
federal, state, or local medical, health care, consumer, or safety standards.
(Compl. Ex. A, at 2).
On June 14, 2017, Smith, as Administratrix of Janes’ estate, filed a lawsuit in Green
Circuit Court entitled Smith v. GGNSC Greensburg, LLC et al., Civil Action No. 17-CI-00079
(the “State Court Action”). In the state court complaint, Smith asserted claims against Plaintiffs
for, inter alia, negligence, medical negligence, and wrongful death. (Compl. Ex. B, ¶¶ 27-40,
63-66). Following the initiation of the State Court Action, Plaintiffs filed this action in federal
court asserting jurisdiction under 28 U.S.C. § 1332(a) and Section 4 (9 U.S.C. § 4) of the Federal
Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16. (Compl. ¶ 15, DN 1). Plaintiffs seek to enforce the
Agreement executed by Janes’ attorney-in-fact, and Smith has moved to dismiss this case on
various bases. (Compl. ¶¶ 28-31; Pl.’s Mem. Supp. Mot. Compel Arbitration 3-21, DN 5-1;
Def.’s Mem. Supp. Mot. Dismiss & Resp. Pl.’s Mot. Compel Arbitration 3-36, DN 10-1).
2

II.

DISCUSSION

In support of her motion to dismiss, Smith asserts various bases pursuant to Fed. R. Civ.
P. 12(b)(1), 12(b)(6), and 12(b)(7). In particular, she raises the following arguments: (i) the
Court lacks subject matter jurisdiction; (ii) Plaintiffs failed to join indispensable parties—namely
nursing home personnel who are defendants in the State Court Action—as parties to this action;
(iii) the Court should abstain from exercising jurisdiction based upon the Colorado River
abstention doctrine; (iv) the Agreement is invalid and unenforceable; (v) the Agreement is
unconscionable; and (vi) Plaintiffs’ request for injunctive relief would violate the Anti-Injunction
Act, 28 U.S.C. § 2283.

(Def.’s Mem. Supp. Mot. Dismiss & Resp. Pl.’s Mot. Compel

Arbitration 3-36, DN 10-1).

These same arguments have been unsuccessfully raised in

numerous other recent cases before this Court challenging the enforcement of arbitration
agreements between nursing homes and its residents or the residents’ estates.1 See GGNSC
Louisville St. Matthews v. Grevious, No. 3:16-cv-829-DJH, 2017 WL 3623805 (W.D. Ky. Aug.
23, 2017); GGNSC Louisville St. Matthews, LLC v. Phillips, No. 3:17-CV-00406-JHM, 2017
WL 3446181 (W.D. Ky. Aug. 10, 2017); GGNSC Louisville Camelot, LLC v. Coppedge, No.
3:16-CV-00834-TBR, 2017 WL 3430579 (W.D. Ky. Aug. 9, 2017); GGNSC Louisville St.
Matthews v. Madison, No. 3:16-CV-00830-TBR, 2017 WL 2312699 (W.D. Ky. May 26, 2017);
GGNSC Louisville St. Matthews, LLC v. Saunders, No. 3:17-cv-00185-CRS-CHL, 2017 WL
2196752 (W.D. Ky. May 18, 2017); GGNSC Louisville Mt. Holly, LLC v. Turner, No. 3:16-CV00149-TBR, 2017 WL 537200 (W.D. Ky. Feb. 9, 2017); GGNSC Louisville Mt. Holly LLC v.
Stevenson, No. 3:16CV-00423-JMH, 2016 WL 5867427 (W.D. Ky. Oct. 6, 2016); Preferred

1

The Court notes that Smith has failed to cite to or in any way seek to distinguish the adverse
decisions of this Court in which its counsel’s law firm represented parties who unsuccessfully
opposed arbitration.
3

Care of Del. Inc. v. Estate of Hopkins, No. 5:15-CV-00191-GNS-LLK, 2016 WL 3546407
(W.D. Ky. June 22, 2016); Diversicare Highland, LLC v. Lee, No. 3:15-CV-00836-GNS, 2016
WL 3512256 (W.D. Ky. June 21, 2016); Golden Gate Nat’l Senior Care, LLC v. Fleshman, No.
3:15-CV-00891-GNS, 2016 WL 3406159 (W.D. Ky. June 17, 2016); Owensboro Health
Facilities, L.P. v. Henderson, No. 4:16CV-00002-JHM, 2016 WL 2853569 (W.D. Ky. May 12,
2016); Riney v. GGNSC Louisville St. Matthews, LLC, No. 3:16CV-00122-JHM, 2016 WL
2853568 (W.D. Ky. May 12, 2016); GGNSC Louisville Mt. Holly, LLC v. Mohamed-Vall, No.
3:16-cv-136-DJH, 2016 WL 9024811 (W.D. Ky. Apr. 6, 2016); Preferred Care of Del., Inc. v.
Crocker, No. 5:15-CV-177-TBR, 2016 WL 1181786 (W.D. Ky. Mar. 24, 2016); GGNSC
Louisville Hillcreek, LLC v. Watkins, No. 3:15-cv-902-DJH, 2016 WL 815295 (W.D. Ky. Feb.
29, 2016); Sun Healthcare Grp., Inc. v. Dowdy, No. 5:13-CV-00169-TBR, 2014 WL 790916
(W.D. Ky. Feb. 26, 2014); Life Care Ctrs. of Am., Inc. v. Estate of Neblett, No. 5:14-CV-00124TBR, 2014 WL 5439623 (W.D. Ky. Oct. 22, 2014). See also Preferred Care, Inc. v. Howell,
187 F. Supp. 3d 796 (E.D. Ky. 2016); GGNSC Frankfort, LLC v. Tracy, No. CIV. 14-30-GFVT,
2015 WL 1481149 (E.D. Ky. Mar. 31, 2015).
After considering the arguments of the parties and the cases referenced above, the Court
denies the motion to dismiss for the reasons set forth in Estate of Neblett and Crocker. In short,
the Court finds that it has subject matter jurisdiction, and that the nursing home personnel are not
indispensable parties to this action. See Estate of Neblett, 2014 WL 5439623, at *2-7; Crocker,
2016 WL 1181786, at *4-6. With regard to the specific circumstances here, the Court will
address the issues of abstention, validity, unconscionability, and enforceability of the Agreement,
as well as the inapplicability of the Anti-Injunction Act.

4

A.

Colorado River Abstention Doctrine

Smith asserts that the Court should abstain from exercising jurisdiction based on
Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976). In that case,
the Supreme Court recognized that federal courts should sometimes abstain from exercising
jurisdiction over an action involving “substantially the same issues and substantially the same
parties as a parallel case in state court.” Total Renal Care, Inc. v. Childers Oil Co., 743 F. Supp.
2d 609, 612 (E.D. Ky. 2010) (citing Colorado River, 424 U.S. at 817-21). Such abstention,
however, should occur “only in the exceptional circumstances where the order to the parties to
repair to the state court would clearly serve an important countervailing interest.” Great Earth
Cos. v. Simons, 288 F.3d 878, 886 (6th Cir. 2002) (quoting Colorado River, 424 U.S. at 813).
In determining whether abstention is warranted, this Court must consider the following
factors:
(1) whether the state court has assumed jurisdiction over any res or property; (2)
whether the federal forum is less convenient to the parties; (3) avoidance of
piecemeal litigation; . . . (4) the order in which jurisdiction was obtained[;] . . . (5)
whether the source of governing law is state or federal; (6) the adequacy of the
state-court action to protect the federal plaintiff's rights; (7) the relative progress
of the state and federal proceedings; and (8) the presence or absence of concurrent
jurisdiction.
Id. (quoting PaineWebber, Inc. v. Cohen, 276 F.3d 197, 206 (6th Cir. 2001)). In the case sub
judice, there is no property at issue, which renders the first factor irrelevant. As to the second
factor, the two courthouses are approximately 65 miles apart, which the Court does not perceive
as a significant inconvenience to the parties. The Court also believes that there is no danger of
piecemeal litigation because the Court will compel arbitration as to the estate’s claims only and
enjoin Smith from pursuing those claims in state court. Although the state court action was filed
first, neither court has reached the merits of the claim, which results in neither the fourth or

5

seventh factor weighing in favor of abstention. See id. at 887 (citing Moses H. Cone Mem’l
Hosp. v. Mercury Constr. Corp., 450 U.S. 1, 21-22 (1983)). As to the fifth factor, the governing
law is the FAA, and, under the sixth factor, neither the state court nor this Court is more likely to
adequately protect Plaintiffs’ rights, which renders that factor neutral.

Finally, concurrent

jurisdiction exists. Accordingly, the factors do not weigh in favor of abstention.
In arguing for abstention, Smith relies on the Sixth Circuit’s decision in Preferred Care
of Delaware, Inc. v. VanArsdale, 676 F. App’x 388 (6th Cir. 2017). (Def.’s Mem. Supp. Mot.
Dismiss & Resp. Pls.’ Mot Compel Arbitration 19). As counsel is well aware, however, this
Court has previously distinguished VanArsdale because the trial court in that case had already
held that the arbitration agreement was unenforceable. See GGNSC Louisville Camelot, LLC v.
Coppedge, No. 3:16-CV-00834-TBR, 2017 WL 3430579, at *3 (W.D. Ky. Aug. 9, 2017). In the
case sub judice, the parties have not made this Court aware of any such ruling by the Green
Circuit Court, which distinguishes this case from VanArsdale. For these reasons, the Court will
not abstain from exercising jurisdiction.
B.

Interstate Commerce

Under the FAA, a written agreement to arbitrate concerning a dispute arising out of a
contract involving interstate commerce “shall be valid, irrevocable, and enforceable, save upon
such grounds as exist at law or in equity for the revocation of any contract.” Stout v. J.D.
Byrider, 228 F.3d 709, 714 (6th Cir. 2000) (quoting 9 U.S.C. § 2). Smith asserts that the
Agreement is invalid because it does not evidence a transaction involving interstate commerce.
Specifically, Smith argues that “[t]he mere fact that the ADR Agreement asserts that it is a
contract involving interstate commerce does not make it so.” (Def.’s Mem. Supp. Mot. Dismiss
& Resp. Pl.’s Mot. Compel Arbitration 20).

6

This argument, however, lacks merit. As this Court reasoned in Turner:
The Supreme Court has interpreted the phrase “involving commerce” in the FAA
as signaling the broadest permissible exercise of Congress’ Commerce Clause
power. Based upon that interpretation, this Court has found on multiple prior
occasions that nursing home admission agreements implicate interstate
commerce. In [GGNSC Louisville Hillcreek, LLC v. Warner, No. 3:13-CV-752H, 2013 WL 6796421 (W.D. Ky. Dec. 19, 2013)], this Court emphasized that
while the nursing care may occur wholly within the borders of Kentucky, the
food, medicine, medical, and other supplies all likely come from elsewhere and
that it would be impracticable for the nursing home to procure all goods necessary
for the daily operations purely through intrastate channels. The Warner Court
also noted that, like here, Defendant’s state court complaint alleged that foreign
entities owned, operated, managed, controlled, and provided services for the
nursing home.
Id. at 83 (internal citations omitted) (citation omitted).

Because the present facts are

indistinguishable from Turner, the Court concludes that the Agreement is a contract involving
interstate commerce.
C.

Personal Injury & Statutory Claims

Whether the arbitration provision is enforceable first depends upon the authority of Janes’
attorney-in-fact to bind any claims that she or her estate may have against Plaintiffs. In Ping v.
Beverly Enterprises, Inc., 376 S.W.3d 581 (Ky. 2012), the Kentucky Supreme Court noted:
The scope of th[e] authority [granted to the attorney-in-fact] is thus left to the
principal to declare, and generally that declaration must be express. . . . [E]ven a
“comprehensive” durable power would not be understood as implicitly
authorizing all the decisions a guardian might make on behalf of a ward. Rather,
we have indicated that an agent’s authority under a power of attorney is to be
construed with reference to the types of transaction expressly authorized in the
document and subject always to the agent’s duty to act with the “utmost good
faith.”
Ping, 376 S.W.3d at 592 (citation omitted). The court further recognized the general rule that
“[a]bsent authorization in the power of attorney to settle claims and disputes or some such
express authorization addressing dispute resolution, authority to make such a waiver is not to be
inferred lightly.” Id. at 593.
7

Smith relies on the Kentucky Supreme Court’s decision in Extendicare Homes, Inc. v.
Whisman, 478 S.W.3d 306 (Ky. 2015), in arguing that she lacked the authority to sign a binding
arbitration agreement on Janes’ behalf. (Def.’s Mem. Supp. Mot. Dismiss & Resp. Pl.’s Mot.
Compel Arbitration 23-24). In that case, the court considered three different power-of-attorney
instruments and held that only one of the three contained language broad enough to empower the
attorney-in-fact to execute an arbitration agreement. See Whisman, 478 S.W.3d at 312. With
regard to all three instruments, however, the Kentucky Supreme Court held that there was a lack
of “a clear and convincing manifestation of the principal’s intention” to waive the personal right
to a trial by jury, which rendered the arbitration agreement unenforceable. See id. at 312-13,
328-29.

For those reasons, the court held that the power-of-attorney instruments did not

authorize the attorneys-in-fact to sign arbitration agreements and to waive the grantors’ right to a
jury trial. See id. at 330.
Subsequently, in Kindred Nursing Centers Ltd. Partnership v. Clark, 137 S. Ct. 1421
(2017), the U.S. Supreme Court rejected the Kentucky Supreme Court’s imposition of a more
stringent requirement for POAs which evidenced a clear hostility towards arbitration provisions.
See id. at 1426-28. As this Court noted in a recent decision, Clark “left open the possibility that
one of the POAs at issue [in Whisman] could still be found insufficient . . . .” Grevious, 2017
WL 3623805, at *4 (citing Clark, 137 S. Ct. at 1429). Discussing the POAs at issue in Whisman,
this Court explained:
One (the “Clark POA”) granted the attorney in fact “the power ‘[t]o draw, make,
and sign in my name any and all checks, promissory notes, contracts, deeds or
agreements; . . . and [g]enerally to do and perform for me and in my name all that
I might do if present;’ and ‘[t]o institute or defend suits concerning my property
or rights.’” The Kentucky Supreme Court concluded that the latter provision did
not convey the authority to bind the principal to arbitration. In contrast, the
powers “to transact, handle, and dispose of all matters affecting [the principal]
and/or [her] estate in any possible way” and “to do and perform for [her] in [her]
8

name all that [she] might if present” were deemed broad enough to encompass
entering an arbitration agreement; the court found these provisions to be
inadequate only insofar as they failed to expressly authorize waiver of the right to
trial by jury.
Grevious, 2017 WL 3623805, at *4 (internal citations omitted) (citation omitted).
In the present case, the POA granted Smith the power:
to act as [Janes’] attorney-in-fact with full power for [her] and in [her] name and
stead, to make any contracts . . . [;] to retain, make and sign any and all . . .
contracts or agreements; defend suits concerning [Janes’] property or rights, and
generally do and perform for [her] and in [her] name all that [Janes] might do if
present; and [Janes] hereby adopt[ed] and ratif[ied] all of the acts of [her] said
attorney, done in pursuance of the power granted as fully as if [Janes] were
present acting in [her]own proper person . . . .
(Compl. Ex. C, at 1). Similar to the POA discussed above, Janes’ POA contains a broad,
universal delegation of authority that implicitly authorized Smith to bind Janes to pursue any
claims against Plaintiffs in arbitration. See Grevious, 2017 WL 3623805, at *4 (upholding the
validity of virtually an identical power of attorney under Whisman). For these reasons, the POA
is enforceable under the rationale of Whisman.
D.

Unconscionability

Smith also seeks dismissal of this action on the basis that the arbitration provision is
unconscionable. (Def.’s Mem. Supp. Mot. Dismiss & Resp. Pl.’s Mot. Compel Arbitration 3032).

Under Kentucky law, “[t]he doctrine of unconscionability is recognized as a narrow

exception to Kentucky’s fundamental rule of enforcing validly executing contracts according to
their terms.” Davis v. Glob. Client Sols., LLC, 765 F. Supp. 2d 937, 940 (W.D. Ky. 2011)
(citation omitted). To determine whether this doctrine precludes enforceability of the arbitration
provision, the Court must conduct “a two step process—first, a review focused on the procedures
surrounding the making of the arbitration clause (procedural unconscionability) and second, a

9

review of the substantive content of the arbitration clause (substantive unconscionability).”
Schnuerle v. Insight Commc’ns Co., L.P., 376 S.W.3d 561, 575 (Ky. 2012) (citation omitted).
With regard to procedural unconscionability, this Court has noted:
Procedural unconscionability, also known as unfair surprise . . . pertains to the
process by which an agreement is reached and the form of an agreement,
including the use therein of fine print and convoluted or unclear language. The
Supreme Court of Kentucky recently held that an arbitration clause was not
procedurally unconscionable where: the clause was not concealed or disguised
within the form; its provisions are clearly stated such that purchasers of ordinary
experience and education are likely to be able to understand it, at least in its
general import; and its effect is not such as to alter the principal bargain in an
extreme or surprising way”
Davis, 765 F. Supp. 2d at 941 (internal quotation marks omitted) (internal citation omitted)
(citation omitted). Smith maintains that, because the agreements were boilerplate and executed
as part of the numerous documents signed during admission, the arbitration provisions are
procedurally unconscionable. (Def.’s Mem. Supp. Mot. Dismiss & Resp. Pl.’s Mot. Compel
Arbitration 25). The Court rejects these arguments. “That the ADR Agreement is a ‘boilerplate, pre-printed’ document does not render it unconscionable.” Warner, 2013 WL 6796421, at
*9. A lengthy admissions process with numerous forms to execute does not arise to the level of
unconscionability. See Watkins, 2016 WL 815295, at *6 (“[M]any situations—such as buying a
house or a car, visiting the doctor, or starting a new job—involve a lengthy process in which an
individual must complete a substantial amount of paperwork. This alone does not make a
contract procedurally unconscionable.”).
Likewise, the Agreement is not precluded by substantive unconscionability. As this
Court has explained:
Substantive unconscionability refers to contractual terms that are unreasonably or
grossly favorable to one side and to which the disfavored party does not assent.
As for substantive unconscionability, courts consider the commercial

10

reasonableness of the contract terms, the purpose and effect of the terms, the
allocation of the risks between the parties, and similar public policy concerns.
Davis, 765 F. Supp. 2d at 941 (internal quotation marks omitted) (internal citation omitted)
(citation omitted).

Smith maintains that the provisions were substantively unconscionable

because of the gross disparity in bargaining power and the fact that the fees for pursuing
arbitration were not disclosed. (Def.’s Mem. Supp. Mot. Dismiss & Resp. Pl.’s Mot. Compel
Arbitration 31-32). These arguments also lack merit. A difference in bargaining power alone
does not amount to unconscionability. See Conseco Fin. Servicing Corp. v. Wilder, 47 S.W.3d
335, 341 (Ky. App. 2001).

From the Agreement itself, the arbitration provisions are not

substantively unconscionable because: (i) the provisions are plainly stated; (ii) the implications
are in bold type (including a notation that “[t]his Arbitration Agreement [] governs important
legal rights. Please read it carefully and fully before signing it.”); (iii) the provisions are
reciprocal and do not limit recovery by either party; (iv) the Agreement granted the resident the
right to opt out of the arbitration provision within thirty days of execution of the Agreement; and
(v) as disclosed by the Agreement, the resident’s portion of the fee for arbitration was limited to
$250.2 (Compl. Ex. A, at 1-4). There is nothing in the record to otherwise support Smith’s

2

The Agreement further states:
Where Resident initiates arbitration against Facility, the only fee required to be
paid by Resident is $250, which is approximately equivalent to a court filing fee;
all other fees and costs, including any remaining JAMS case management fees
and professional fees for the arbitrator’s services, shall be paid by Facility.
Where Facility initiates arbitration, Facility will pay all fees and costs associated
with the arbitration other than Resident’s attorney fees, if any. The Parties shall
bear their own costs and attorney’s fees except that the arbitrator may, in the
Award, allocate all or part of the costs of the arbitration, including the fees of the
arbitrator and the reasonable attorneys’ fees of the prevailing party.

(Compl. Ex. A, at 3).
11

naked assertion that arbitration fees are necessarily higher than litigating this dispute in court.
Under these circumstances, the Court finds that there is no substantive unconscionability.
For these reasons, the doctrine of unconscionability does not preclude the enforcement of
the arbitration provisions in this case. The motion to dismiss on this basis will be denied.
E.

Wrongful Death Claim

A different outcome, however, results with respect to arbitration of the wrongful death
claims. Under KRS 411.130, a wrongful death claim may be pursued by the decedent’s personal
representative, and state law specifies the beneficiaries of such claims. See KRS 411.130. See
also KRS 411.140 (providing that a wrongful death claim survives the decedent’s death and may
be brought by the personal representative).

Thus, under Kentucky law, the personal

representative of the decedent has the legal duty to bring a wrongful death action even though the
personal representative may not be a beneficiary entitled to recover for the decedent’s death. See
Vaughn’s Adm’r v. Louisville N.R. Co., 179 S.W.2d 441, 444 (Ky. 1944).
In Pete v. Anderson, 413 S.W.3d 291 (Ky. 2013), the Kentucky Supreme Court reiterated
the premise that wrongful death claims belong to the statutory heirs of the decedent as opposed
to the decedent’s estate, explaining:
[T]his Court’s recent decision in Ping . . . puts to rest any dispute as to whether
the statutory beneficiaries are the real parties in interest to a wrongful death
action. In Ping, the administrator of the estate of a woman who had been a longterm care facility resident brought suit against the operators of the facility alleging
negligence resulting in injuries causing the woman’s death. Our opinion, which
resolved the question of whether a decedent can bind his or her beneficiaries to
arbitrate a wrongful death claim, examined the distinction between the wrongful
death statute and the survival statute, KRS 411.140. We concluded that while a
survival action is derivative of a personal injury claim which belongs to the estate,
a wrongful death action is an independent claim belonging to the intended
beneficiaries under KRS 411.130, a claim that “accrues separately to the wrongful
death beneficiaries and is meant to compensate them for their own pecuniary
loss.” Based on the plain language of KRS 411.130 and our holding in Ping, we
must reject Pete’s contention that the wrongful death action belongs to the estate.
12

Id. at 300 (citations omitted) (footnote omitted). Pete did not deal with any arbitration issues.
See also Moore v. Citizens Bank of Pikeville, 420 S.W.2d 669, 672 (1967) (“KRS 411.130
creates a cause of action for wrongful death. This is a statutory right of action which did not
exist prior to the wrongful death but arises by reason thereof. It has been pointed out that the
wrongful death action is not derivative. It is brought to compensate survivors for loss occasioned
by the death and not to recover for injuries to the decedent. The cause is distinct from any that
the deceased may have had if he had survived. The damage caused by the wrongful death begins
with, and flows from, the death.”). Instead, Pete clarifies that under Kentucky law, wrongful
death claims belong to the statutory beneficiaries, not to the decedent’s estate.
Recently, in Richmond Health Facilities-Kenwood, LP v. Nichols, 811 F.3d 192 (6th Cir.
2016), the Sixth Circuit addressed whether a decedent could contractually bind his heirs to
arbitrate claims for his wrongful death. See id. at 193-94. The court noted that the wrongful
death beneficiary was not a party to the arbitration agreement and held that wrongful death
claims were not required to be arbitrated, based upon Ping and its progeny. See id. at 197. The
Sixth Circuit concluded that Ping was not preempted by the FAA because Ping did not disfavor
arbitration agreements, but held that only the wrongful death beneficiaries had the right to limit
any rights related to those claims. See id. at 197-201. In particular, the Sixth Circuit noted:
Wrongful-death beneficiaries are thus no more or less bound by a decedent’s
agreement to arbitrate than they are by a decedent’s waiver of certain claims,
selection of a forum to litigate disputes, or selection of the law governing an
agreement. To illustrate, suppose that a decedent and the long-term facility enter
into an agreement in which the parties select a Kentucky state court as the forum
to litigate the wrongful-death claim. Under Ping, the wrongful-death beneficiary
is not bound by this forum-selection clause because the decedent never had an
interest in the claim itself. And because the beneficiary is not bound by the
clause, the beneficiary could very well elect to arbitrate the wrongful-death claim
instead—so long as the long-term facility agrees. Ping is thus indifferent to
arbitration.
13

Id. at 199.
In this case, the Court concludes that Janes’ attorney-in-fact did not have the authority to
waive any rights of the wrongful death beneficiaries under Kentucky law because those claims
did not belong to Janes. See id.; Pete, 413 S.W.3d at 300. Accordingly, Plaintiffs are not
entitled to compel arbitration regarding the wrongful death claim because Janes could not grant
her attorney-in-fact powers beyond her control, such as the right to constrain the claims of her
wrongful death beneficiaries. For this reason, the Court will grant the motion to dismiss and
deny the motion to compel arbitration with respect to the wrongful death claim only.
F.

Anti-Injunction Act

Finally, Smith argues that the Anti-Injunction Act prohibits this Court from enjoining the
state court proceeding.

(Def.’s Mem. Supp. Mot. Dismiss & Resp. Pl.’s Mot. Compel

Arbitration 33-36). As this Court has previously noted, “a district court’s injunction of statecourt proceedings after compelling arbitration [does] not violate the Anti-Injunction Act.”
Warner, 2013 WL 6796421, at *10 (W.D. Ky. Dec. 19, 2013) (citing Great Earth, 288 F.3d 878,
893 (6th Cir. 2002)). The Anti-Injunction Act specifically excepts injunctions “necessary . . . to
protect or effectuate [the district court’s own] judgments.” 28 U.S.C. § 2283. The Sixth Circuit
has recognized that an order enjoining a parallel state court proceeding as part of an order
compelling arbitration falls within this exception.

See Great Earth, 288 F.3d at 893.

Accordingly, this argument lacks merit, and the motion to dismiss will be denied on this basis.
III.

CONCLUSION

For the reasons outlined above, IT IS HEREBY ORDERED as follows:
1.

Plaintiffs’ Motion to Compel Arbitration (DN 5) is GRANTED IN PART and

DENIED IN PART. Defendant is ENJOINED from proceeding against Plaintiffs in the State
14

Court Action, except for the wrongful death claims.

The parties to this action are

COMPELLED to arbitrate all claims (except the wrongful death claims), which are the subject
of the State Court Action. Counsel SHALL promptly notify the Green Circuit Court of this
Memorandum Opinion and Order.
2.

Defendant’s Motion to Dismiss (DN 10) is GRANTED IN PART as to the

wrongful death claim only and DENIED IN PART as to all other claims.
3.

This case is STAYED until the conclusion of the ordered arbitration.

Greg N. Stivers, Judge
United States District Court
November 14, 2017

cc:

counsel of record

15