GGNSC Louisville Camelot, LLC et al v. Coppedge

Filing 13

MEMORANDUM OPINION AND ORDER Signed by Judge David J. Hale denying defendant 6 Motion to Dismiss; granting plaintiff 5 Motion to compel arbitration; Coppedge is ENJOINED from proceeding against GGNSC in the Jefferson Circuit Court action on al l but the wrongful-death claim; Counsel shall promptly inform the Jefferson Circuit Court of this Order; this proceeding is STAYED pending conclusion of the parties arbitration, at which time the Court will decide whether to enter judgment approving any arbitral award; parties shall submit a joint status report every ninety (90) days from the date of entry of this Order until the conclusion of the arbitration. cc: Counsel(MLG)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION
GGNSC LOUISVILLE CAMELOT, LLC, et
al.,

Plaintiffs,

v.

Civil Action No. 3:17-cv-127-DJH

JOYCE COPPEDGE, as Administratrix of the
Estate of Amanda Coppedge,

Defendant.

* * * * *
MEMORANDUM OPINION AND ORDER
Joyce Coppedge sued various GGNSC entities and affiliates in Jefferson Circuit Court on
behalf of her mother-in-law Amanda Coppedge, who was a resident of Golden LivingCenter –
Camelot, a skilled nursing facility located in Louisville, Kentucky, and operated by GGNSC.1
(See D.N. 1-2) Coppedge alleges that GGNSC violated Amanda’s rights as a nursing-home
resident under Kentucky law and negligently injured her, ultimately resulting in her wrongful
death.

(Id., PageID # 27–36, 42–43)

Coppedge also sued two Golden LivingCenter

administrators, asserting similar claims. (Id., PageID # 38–43)
GGNSC filed this action pursuant to the Federal Arbitration Act, seeking to compel
arbitration of Coppedge’s claims and enjoin her from pursuing the state-court action. (D.N. 1)
GGNSC has moved to compel arbitration. (D.N. 5) Coppedge moves to dismiss on various
grounds. (D.N. 6) For the reasons set forth below, the Court will deny Coppedge’s motion to
dismiss and grant GGNSC’s motion to compel arbitration, excluding Coppedge’s wrongful-death
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Named as defendants in the state-court action are GGNSC Louisville Camelot, LLC; GGNSC
Administrative Services, LLC; GGNSC Holdings, LLC; GGNSC Equity Holdings, LLC;
GGNSC Equity Holdings II, LLC; Golden Gate National Senior Care, LLC; Golden Gate
Ancillary, LLC; GGNSC Clinical Services, LLC; GPH Louisville Camelot, LLC; Clifton Lake,
in his capacity as Administrator of Golden LivingCenter – Camelot; and Kathy Dearing, in her
capacity as Administrator of Golden LivingCenter – Camelot.
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claim. Coppedge will accordingly be enjoined from continuing the state-court action on all but
the wrongful-death claim.
I.

Background

In November 2013, Golden LivingCenter – Camelot admitted Amanda Coppedge as a
resident. (D.N. 1-2, PageID # 19) As part of the admissions process, Joyce Coppedge, allegedly
acting lawfully as Amanda’s attorney-in-fact, executed an arbitration agreement. (See D.N. 1-1)
The ADR Agreement requires the parties to arbitrate
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.
(Id., PageID # 12) The Agreement bound Amanda and her legal representatives. (Id., PageID #
11)
Joyce Coppedge asserts various claims of negligence against GGNSC in the state-court
action on Amanda’s behalf. (See D.N. 1-2) According to the state-court complaint, GGNSC
failed to discharge its obligations of care to Amanda Coppedge, and in so failing, caused
Amanda to suffer injuries, which allegedly resulted in her wrongful death. (See id.).
In this case, GGNSC seeks to compel arbitration of Coppedge’s claims pursuant to the
Federal Arbitration Act.

(D.N. 1)

Because the FAA does not provide federal-question

jurisdiction, Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 21–22 n.32
(1983), GGNSC invoked the Court’s diversity jurisdiction. (See D.N. 1, PageID # 5) Coppedge
argues that diversity is lacking and that dismissal is warranted on various other legal and
equitable grounds. (See D.N. 6-2)

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II.

Motion to Dismiss

According to Coppedge, the present action should be dismissed (i) for GGNSC’s failure
to join an indispensable party; (ii) on the basis of Colorado River abstention; (iii) because the
Federal Arbitration Act does not apply; (iv) because she did not have the requisite authority to
sign the ADR Agreement on Amanda’s behalf; (v) because the ADR Agreement is
unconscionable; (vi) because of the Anti-Injunction Act; (vii) and because the wrongful-death
claim is not subject to the ADR Agreement. (See D.N. 6-2) This Court has previously found
that wrongful-death claims are not barred by arbitration agreements between decedents and
nursing homes, see Brandenburg Health Facilities, LP v. Mattingly, No. 3:15-cv-833-DJH, 2016
WL 3448733, at *6 (W.D. Ky. June 20, 2016), and the same reasoning applies here. However,
the Court has addressed—and rejected—Coppedge’s remaining arguments in numerous recent
cases. See, e.g., GGNSC Louisville St. Matthews v. Grevious, No. 3:16-cv-829-DJH, 2017 WL
3623805 (W.D. Ky. Aug. 23, 2017); Mattingly, 2016 WL 3448733; GGNSC Louisville Mt.
Holly, LLC v. Mohamed–Vall, No. 3:16-cv-136-DJH, 2016 WL 9024811 (W.D. Ky. Apr. 6,
2016); GGNSC Louisville Hillcreek, LLC v. Watkins, No. 3:15-cv-902-DJH, 2016 WL 815295
(W.D. Ky. Feb. 29, 2016). Coppedge is represented by the same counsel that represented
defendants in those cases, and her lawyers have submitted briefs in this litigation containing
legal arguments practically identical to those the Court considered and rejected in previous cases.
The Court’s discussion of the pending motions will accordingly be brief. Consistent with its
prior rulings, the Court will deny Coppedge’s motion and compel her to arbitrate all but the
wrongful-death claim.

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a. Jurisdiction
Coppedge first argues that this court lacks jurisdiction because indispensable nondiverse
parties (i.e., Golden LivingCenter administrators Clifton Lake and Kathy Dearing) were not
joined. (D.N. 6-2, PageID # 123–36) Contrary to Coppedge’s assertion, the nursing-home
administrators are not indispensable: “the Court can decide the entire controversy in [their]
absence; [their] interests in the litigation are the same as [GGNSC’s]; and there is no danger of
inconsistent obligations.” Grevious, 2017 WL 3623805, at *2; see also Fed. R. Civ. P. 19(a);
PaineWebber, Inc. v. Cohen, 276 F.3d 197 (6th Cir. 2001) (finding that an investment brokerage
firm’s branch manager was not an indispensable party to a federal action to compel arbitration).
Coppedge’s reliance on Cytec Industries, Inc. v. Powell, 630 F. Supp. 2d 680 (N.D. W.
Va. 2009), does not change this conclusion. As the Eastern District of Kentucky previously
observed, “Cytec has no precedential effect on this Court [and] the conclusion reached in Cytec
directly contradicts the holdings of many courts in this District and beyond that nursing home
administrators who are named as defendants in parallel state court actions are not indispensable
parties to [a federal action to compel arbitration].” GGNSC Frankfort, LLC v. Tracy, No. 14-30GFVT, 2015 WL 1481149, at *6 (E.D. Ky. Mar. 31, 2015). Thus, under these circumstances, the
fact that Lake and Dearing may be Kentucky citizens does not deprive the Court of diversity
jurisdiction. See Grevious, 2017 WL 3623805, at *2.
Similarly, Coppedge’s reliance on Vaden v. Discover Bank, 556 U.S. 49 (2009), is
misplaced. Vaden does not apply in diversity cases. See Watkins, 2016 WL 815295 at *2. Thus,
the Court will not “look through” to the underlying state-court action to determine whether
subject-matter jurisdiction exists. See id.

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b. Colorado River Abstention
Coppedge next asks the Court to abstain from exercising jurisdiction pursuant to
Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976). (D.N. 6-2,
PageID # 136–40) The Colorado River Court emphasized, however, that abstention is the
exception, not the rule: “abstention is an extraordinary and narrow exception to the duty of a
District Court to adjudicate a controversy properly before it.” 424 U.S. at 813. To determine if
the Court should abstain under Colorado River, the Court considers six 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.
Great Earth Cos., Inc. v. Simons, 288 F.3d 878, 886 (6th Cir. 2002) (alteration in original)
(quoting PaineWebber, Inc. v. Cohen, 276 F.3d 197, 206 (6th Cir. 2001). As was the case in the
Court’s previous opinions, these factors weigh heavily against abstention here. First, there is no
property at issue. See Mattingly, 2016 WL 3448733, at *3. Second, this Court is just as
convenient to the parties, as it sits a few city blocks from the Jefferson Circuit Court. See
Grevious, 2017 WL 3623805, at *3. Third, because the Court will compel arbitration of the
majority of Coppedge’s claims, there will be little piecemeal litigation among the existing
parties. Id. Fourth, although the state-court action was filed first, it has not proceeded to the
merits. See Mattingly, 2016 WL 3448733, at *3 (citing Moses H. Cone Mem’l Hosp., 460 U.S.
at 21 (“[P]riority should not be measured exclusively by which complaint was filed first, but
rather in terms of how much progress has been made in the two actions.”)). Fifth, the governing
law here is federal. Id. As the Court found in Grevious, “the sixth factor is neutral; neither the

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state court nor this Court is more likely to adequately protect [GGNSC’s] rights.” 2017 WL
3623805, at *3. Seventh, the proceedings are both at preliminary stages. Mattingly, 2016 WL
3448733, at *3. Finally, there is concurrent jurisdiction. Id.
In sum, the Colorado River factors do not weigh in favor of abstention, and Coppedge’s
argument fails. Her reliance on Preferred Care of Delaware, Inc. v. VanArsdale does not change
this conclusion. There, the state court had already determined that the ADR agreement at issue
was not enforceable. 676 F. App’x 388, 395 (6th Cir. Jan. 13, 2017). That circumstance is not
present in this case.
c. Interstate Commerce
Coppedge next presents several arguments asserting that the underlying ADR Agreement
is invalid and unenforceable. She first argues that the Agreement is unenforceable because “it
does not evidence a transaction involving interstate commerce” as required by the FAA. (D.N.
6-2, PageID # 141) See also 9 U.S.C. § 2. But as the Court has explained in multiple previous
decisions, this argument is meritless: “the Sixth Circuit has determined that the nursing-home
industry affects interstate commerce.” Grevious, 2017 WL 3623805, at *3 (citing Glen Manor
Home for the Jewish Aged v. N.L.R.B., 474 F.2d 1145, 1149 (6th Cir. 1973)); see also Mattingly,
2016 WL 3448733, at *5; Mohamed-Vall, 2016 WL 9024811, at *6.
d. Power of Attorney
Coppedge next argues that she lacked authority under the power of attorney to bind
Amanda to arbitration. (D.N. 6-2, PageID # 143–45) The Court disagrees. Coppedge relies
heavily on Extendicare Home, Inc. v. Whisman, 478 S.W.3d 306 (Ky. 2015) and Ping v. Beverly
Enterprises, Inc., 376 S.W.3d 581 (Ky. 2012). Neither case is controlling here, however, in light

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of the Supreme Court’s recent decision in Kindred Nursing Centers Ltd. Partnership v. Clark,
137 S. Ct. 1421 (2017).
In Whisman, the Kentucky Supreme Court held that the power to waive the principal’s
right to trial by jury “must be unambiguously expressed in the text of the power-of-attorney
document in order for that authority to be vested in the attorney-in-fact.” 478 S.W.3d at 328.
And in Ping, the Kentucky Supreme Court held that the scope of authority created in a POA
agreement must “generally . . . be express.” 376 S.W.3d at 592 (emphasis added). However, the
United States Supreme Court recently rejected this reasoning. In Kindred, the Supreme Court
held that “[t]he Kentucky Supreme Court’s clear-statement rule . . . fails to put arbitration
agreements on an equal plane with other contracts.” 137 S. Ct. at 1423–24. “Such a rule is too
tailor-made to arbitration agreements—subjecting them, by virtue of their defining trait, to
uncommon barriers—to survive the FAA’s edict against singling out those contracts for
disfavored treatment.” Id. at 1427.
“Following Kindred, then, the proper inquiry is whether the grant of authority contained
in the power of attorney is ‘sufficiently broad to cover executing an arbitration agreement.’”
GGNSC Louisville Camelot, LLC v. Coppedge, 3:16-CV-00834-TBR, 2017 WL 3430579, at *5
(W.D. Ky. Aug. 9, 2017) (quoting Kindred, 137 S. Ct. at 1429). Here, the POA contains a
general grant of authority vesting Coppedge with “full power and authority to do every act
necessary, requisite, or proper” as Amanda could do personally. (D.N. 1-3, PageID # 47) This
language undoubtedly encompasses the power to enter into an arbitration agreement. See Golden
Gate Nat’l Senior Care, LLC v. Hudson, No. 3:17-cv-00431-JHM, 2017 WL 4274167, at *2–3
(W.D. Ky. Sept. 26, 2017); Coppedge, 2017 WL 3430579 at *5. Therefore, Coppedge possessed
the requisite authority to enter into the ADR Agreement.

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e. Unconscionability
Coppedge also maintains that the ADR Agreement should not be enforced because it is
unconscionable.

(D.N. 6-2, PageID # 145–47) As this Court and others have repeatedly

discussed, the fact that the nursing-facility admissions process “entails a great deal of
paperwork—similar to ‘buying a house or a car, visiting the doctor, or starting a job’—does not
render the ADR Agreement procedurally unconscionable.” Grevious, 2017 WL 3623805, at *4
(quoting Watkins, 2016 WL 815295, at *6).

Nor is the ADR Agreement substantively

unconscionable. Like similar agreements that this Court has considered, the ADR Agreement
here “is plainly stated . . . it does not limit recovery; it is reciprocal; and [Coppedge] could have
opted out of the agreement within thirty days of signing it.” Mattingly, 2016 WL 3448733, at *5.
Additionally, the agreement was not a precondition to admission to Golden LivingCenter. (See
D.N. 1-1, PageID # 11)
f. Anti-Injunction Act
Coppedge also argues that the Anti-Injunction Act prevents this Court from enjoining the
state-court action and that this action therefore must be dismissed. (D.N. 6-2, PageID # 147–50)
As the Court has noted previously, however, “a district court’s injunction of state-court
proceedings after compelling arbitration [does] not violate the Anti-Injunction Act.” GGNSC
Louisville Hillcreek, LLC v. Warner, No. 3:13-CV-752-H, 2013 WL 6796421, at *10 (W.D. Ky.
Dec. 19, 2013) (citing Great Earth, 288 F.3d at 893).

Thus, enjoining Coppedge from

proceeding against GGNSC in the state-court action will not violate the Anti-Injunction Act. See
Mattingly, 2016 WL 3448733, at *5.

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g. Wrongful Death
Finally, recent Sixth Circuit caselaw makes clear that this Court cannot compel
arbitration of Coppedge’s wrongful-death claim.

See Richmond Health Facilities, et al. v.

Nichols, 811 F.3d 192 (6th Cir. Jan. 15, 2016); see also Mattingly, 2016 WL 3448733 at *6. In
Nichols, the Sixth Circuit affirmed a decision from the Eastern District of Kentucky that
Kentucky state law treats wrongful-death claims as independent of any claims held by the
decedent. Beneficiaries of a wrongful-death claim are thus not barred by arbitration agreements
between decedents and nursing homes from pursuing a wrongful-death claim in court. Id. at 197.
Coppedge signed the arbitration agreement while acting as attorney-in-fact for Amanda
Coppedge. Although Amanda was bound by the agreement, she had “no cognizable legal rights
in the wrongful death claim[]” that Coppedge now pursues. Id. (quotation omitted). And so,
“the [arbitration agreement] cannot be enforced against” Coppedge.

Id. (citation omitted).

Given this binding authority, the Court will not compel arbitration of the wrongful-death claim.
Coppedge may pursue that claim in state court.
III.

Motion to Compel Arbitration

The Court will grant GGNSC’s motion to compel arbitration and enjoin Coppedge from
pursuing the state-court action with respect to all of her claims except the wrongful-death claim.
The FAA states that
[a] party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate
under a written agreement for arbitration may petition any United States district
court . . . for an order directing that such arbitration proceed in the manner
provided for in such agreement . . . . The court shall hear the parties, and upon
being satisfied that the making of the agreement for arbitration or the failure to
comply therewith is not in issue, the court shall make an order directing the
parties to proceed to arbitration in accordance with the terms of the agreement.

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9 U.S.C. § 4. The Act further provides that an arbitration clause in “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. When
deciding whether to compel arbitration, this Court must (1) “determine whether the parties
agreed to arbitrate”; (2) “determine the scope of that agreement”; (3) “if federal statutory claims
are asserted, it must consider whether Congress intended those claims to be nonarbitrable”; and
(4) “if the court concludes that some, but not all, of the claims in the action are subject to
arbitration, it must determine whether to stay the remainder of the proceedings pending
arbitration.” Stout v. J.D. Byrider, 228 F.3d 709, 714 (6th Cir. 2000).
Here, the parties executed a valid arbitration agreement that requires arbitration of the
claims asserted in Coppedge’s Jefferson Circuit Court complaint. (See D.N. 1-1) Furthermore,
other than her wrongful-death claim, Coppedge’s claims fall within the scope of the Agreement,
and no federal statutory claims are asserted. (See id.; D.N. 1-2) Therefore, the Court will
compel arbitration of Coppedge’s claims, excluding her wrongful-death claim.
Coppedge’s response to GGNSC’s motion to compel arbitration merely restates her
arguments in the motion to dismiss. (See D.N. 7-1) The Court has already addressed these
arguments.
IV.

Conclusion

For the reasons set forth above, and the Court being otherwise sufficiently advised, it is
hereby
ORDERED as follows:
(1)

Coppedge’s motion to dismiss (D.N. 6) is DENIED.

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(2)

GGNSC’s motion to compel arbitration (D.N. 5) is GRANTED. The parties are

COMPELLED to arbitrate pursuant to the terms of the Alternative Dispute Resolution
Agreement (D.N. 1-1) the claims asserted by Coppedge in Jefferson Circuit Court, excluding
Coppedge’s wrongful-death claim.
(3)

Coppedge is ENJOINED from proceeding against GGNSC in the Jefferson

Circuit Court action on all but the wrongful-death claim.
(4)

Counsel shall promptly inform the Jefferson Circuit Court of this Order.

(5)

Pursuant to 9 U.S.C. § 3, this proceeding is STAYED pending conclusion of the

parties’ arbitration, at which time the Court will decide whether to enter judgment approving any
arbitral award.
(6)

The parties shall submit a joint status report every ninety (90) days from the date

of entry of this Order until the conclusion of the arbitration. The parties shall promptly report on
the resolution of the arbitration or of any settlement.
March 19, 2018

David J. Hale, Judge
United States District Court

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