Hall v. The Evangelical Lutheran Good Samaritan Society, Inc. et al
Filing
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MEMORANDUM OPINION AND ORDER Signed by Chief Judge Joseph H. McKinley, Jr. on 8/28/2017: The motion by Defendant to dismiss 9 is DENIED. the motion by Defendant to stay these proceedings and compel the parties to arbitrate this matter 11 is GRANTED IN PART AND DENIED IN PART. The entire action is STAYED and arbitration is COMPELLED regarding all claims except the claim for wrongful death. Consistent with the representation of defense counsel, the Defendant shall provide a copy of the agreed-upon arbitration rules to Plaintiff no later than 9/5/2017. cc: Counsel (JBM)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION
CIVIL ACTION NO. 3:17CV-00193-JHM
RONALD HALL, AS
ADMINISTRATOR OF THE ESTATE
OF JACKIE HALL, DECEASED
PLAINTIFF
V.
THE EVANGELICAL LUTHERAN GOOD
SUMARITAN SOCIETY, INC., d/b/a GOOD
SAMARITAN SOCIETY-JEFFERSONTOWN, ET AL.
DEFENDANTS
MEMORANDUM OPINION AND ORDER
This matter is before the Court on a motion by Defendant to dismiss [DN 9] and on a
motion by Defendant to stay these proceedings and compel the parties to arbitrate this matter.
[DN 11]. Fully briefed, these matters are ripe for decision.
I. BACKGROUND
Jackie Hall (hereinafter “Jackie”) was a resident of Defendant, The Evangelical Lutheran
Good Samaritan Society, Inc., d/b/a Good Samaritan Society-Jeffersontown (hereinafter “Good
Samaritan”), from August 4, 2013, until June 4, 2016. On August 11, 2011, well before Jackie
was a resident at Good Samaritan, she executed a “Durable General Power of Attorney” in which
she named her children, Ronald and Mary Hall, as her attorney-in-fact. [DN 11-2]. This power
of attorney (“POA”) granted Ronald and Mary Hall the power to individually or jointly “do and
perform all acts, deeds, matters and things whatsoever concerning my property and personal
affairs necessary and advisable in the judgment of my said attorney in fact as fully and
effectually to all intents and purposes as I could do if personally present and acting.” (Id.) In
addition to this grant of authority, Ronald and Mary were given the power to perform a number
of acts in Jackie’s stead, including the ability to “ask, demand, sue for and recover, collect and
receive all money, checks, deposits, accounts, interest, dividends, payments or benefits from any
government or governmental agency, and any other credits of whatsoever kind or nature as are
now or hereafter shall become due, owing or payable to me and to make, execute and deliver
acquittances, receipts, releases, or other discharges therefore.” (Id.) The POA also gave Ronald
or Mary Hall authority to “[s]ettle, adjust or compromise any and all claims accounts or debts,
owing to or by me.” (Durable General Power of Attorney [DN 11-2] ¶¶ 1–3) (subdivisions
omitted).
With this POA, Ronald Hall (hereinafter “Ronald”) executed the paperwork for Jackie
upon her admission to Good Samaritan on August 4, 2013. Included with Jackie’s admission
paperwork was a form titled “Resolution of Legal Disputes.” [DN 11-3]. As part of the
Resolution document, Ronald agreed, on behalf of Jackie, that “[a]ny legal controversy, dispute,
disagreement or claim arising between the parties . . . in which Resident, or person acting on his
or her behalf, alleges a violation of any right granted Resident under law shall be settled
exclusively by binding arbitration” and that “any legal controversy, dispute, disagreement or
claim of any kind . . . related to the care of stay at the Facility, shall be settled exclusively by
binding arbitration.” (Id.) The agreement also stated that “[t]his arbitration clause is meant to
apply to all controversies, disputes, disagreements or claims including, but not limited to, all
breach of contract claims, all negligence and malpractice claims, all tort claims and all
allegations of fraud concerning entering into or canceling this Admission Agreement.” (Id.)
On March 13, 2017, Plaintiff, Ronald Hall, as administrator of the estate of Jackie Hall,
filed an action in Jefferson Circuit Court asserting negligence, medical negligence, and wrongful
death claims against Defendants, Good Samaritan, Claude Mapp, in his capacity as administrator
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of Good Samaritan, and John Does 1 through 3. Plaintiff alleges that on August 4, 2013, Jackie
was admitted to Good Samaritan where she resided until June 4, 2016. Plaintiff claims that
Jackie suffered personal injuries and ultimately death as a result of Defendants’ failure to
properly care for her. On March 30, 2017, Good Samaritan removed the action to this Court
based on diversity jurisdiction.
Plaintiff subsequently moved to remand the action to the
Jefferson Circuit Court, and the Court denied the motion to remand. Good Samaritan has now
filed two motions: a motion to dismiss and a motion to stay the proceedings and compel the
parties to arbitrate this matter.
II. MOTION TO DISMISS
Defendant has moved to dismiss the complaint arguing that it does not adequately plead
sufficient facts to meet the plausibility standard set forth in Twombly and Iqbal. Defendant
maintains that the complaint fails to provide it with any notice of any conduct on its behalf which
could have caused injury to Jackie.
A. Standard of Review
Upon a motion to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6),
a court “must construe the complaint in the light most favorable to plaintiff,” League of United
Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007) (citation omitted), “accept all
well-pled factual allegations as true[,]” id., and determine whether the “complaint states a
plausible claim for relief[,]” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). Under this standard,
the plaintiff must provide the grounds for his or her entitlement to relief which “requires more
than labels and conclusions, and a formulaic recitation of the elements of a cause of action.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A plaintiff satisfies this standard only
when he or she “pleads factual content that allows the court to draw the reasonable inference that
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the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. A complaint falls
short if it pleads facts “merely consistent with a defendant’s liability” or if the alleged facts do
not “permit the court to infer more than the mere possibility of misconduct.” Id. at 678, 679.
Instead, the allegations must “‘show[ ] that the pleader is entitled to relief.’” Id. at 679 (quoting
Fed. R. Civ. P. 8(a)(2)).
B. Discussion
In relevant part, the complaint alleges that Jackie looked to Defendant for treatment of
her total needs for custodial, nursing, and medical care, and those needs were not met by the
facility. Specifically, Plaintiff contends that Good Samaritan negligently failed to deliver care,
services, and supervision to Jackie, including failure to maintain all records on Jackie and failure
to monitor or increase the number of nursing personnel. Plaintiff alleges that Good Samaritan
failed to ensure that Jackie received, among other things, timely and accurate care assessments,
prescribed treatment and medication in accordance with physician’s orders, appropriate diet and
nutrition, appropriate infection control measures and hygiene, timely and appropriate turning and
repositioning, and warm and palatable meals. Additionally, Plaintiff contends that the Defendant
failed to inform the physician and the family of significant changes in her condition and failed to
discharge its other legal obligations. The complaint alleges that as a result of this wrongful
conduct, Jackie suffered accelerated deterioration of her health and physical condition beyond
that caused by the normal aging process, including infections, falls, fracture, skin impairments,
and ultimately death. Plaintiff also alleges that Jackie suffered unnecessary loss of personal
dignity and extreme pain and suffering. Based on these facts, Plaintiff asserts negligence,
medical negligence, corporate negligence, and wrongful death claims against Good Samaritan.
Construing the complaint in the light most favorable to Plaintiff, the Court finds the
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complaint sufficiently pleads “’factual content that allows the Court to draw a reasonable
inference that the Defendant is liable for the misconduct alleged.” Frierson v. Evangelical
Lutheran Good Samaritan Soc’y, Inc., 2013 U.S. Dist. LEXIS 161412. *2 (W.D. Ky. Nov. 13,
2013)(citation omitted). Contrary to Defendant’s argument, the complaint is sufficient to put
Defendant on notice that Plaintiff claims that Good Samaritan breached its duty with respect to
the care and treatment of Jackie and the breach resulted in the injuries and death of Jackie. In
short, the Court finds that the allegations contained in Plaintiff’s complaint are sufficient to meet
the standard set forth in Iqbal and Twombly. Accordingly, the motion to dismiss is denied.
III. MOTION TO STAY AND COMPEL ARBITRATION
A. Wrongful Death Claim
The Court now turns to the Defendant’s motion to compel arbitration, addressing first the
claim for wrongful death. A review of the case law reflects that Ronald is not required to
arbitrate the wrongful death claim. In Ping v. Beverly Enterprises, Inc., 376 S.W.3d 581 (Ky.
2012), the Kentucky Supreme Court held that a wrongful death claim does not derive from any
claim on behalf of the decedent but instead belongs to the beneficiary under the wrongful death
statute. KRS § 411.130(2). Accordingly, the wrongful death beneficiaries “do not succeed to the
decedent’s dispute resolution agreements” and are not bound by the decedent’s agreement to
arbitrate. Ping, 376 S.W.3d at 600. The Sixth Circuit likewise has held that a beneficiary is not
required to arbitrate the wrongful-death claim and that this rule is not preempted by the Federal
Arbitration Agreement. Richmond Health Facilities v. Nichols, 811 F.3d 192, 197–98 (6th Cir.
2016). Thus, the Plaintiff is not required to arbitrate the claim for wrongful death, as the
beneficiaries to whom that claim belongs have not consented to arbitrate.
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B. Decedent’s Personal Claims
Next, the Court turns to the remaining claims asserted by Plaintiff. The Resolution of
Legal Disputes Agreement provides that the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1–16,
shall govern the agreement. (Resolution of Legal Disputes, ¶A, DN 11-3.) The FAA “‘manifests
a liberal federal policy favoring arbitration agreements.’” Yaroma v. Cashcall, Inc., 130 F. Supp.
3d 1055, 1061 (E.D. Ky. 2015)(quoting Masco Corp. v. Zurich American Ins. Co., 382 F.3d 624,
626 (6th Cir. 2004)). “Section 2 of the FAA states that arbitration clauses in commercial
contracts ‘shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or
in equity for the revocation of any contract.’” Id. (quoting 9 U.S.C. § 2). “Under § 4, when a
party is ‘aggrieved by the failure of another party to arbitrate under a written agreement for
arbitration,’ that party ‘may petition a federal court for an order directing that such arbitration
proceed in the manner provided for’ by the contract.” Id. (quoting Rent–A–Center, West, Inc. v.
Jackson, 561 U.S. 63 (2010) (quoting 9 U.S.C. § 4) (internal quotation marks omitted)). The
FAA “places arbitration agreements on an equal footing with other contracts . . . and requires
courts to enforce them according to their terms.” Rent–A–Center, 561 U.S. at 67.
Before compelling arbitration, the Court “must engage in a limited review to determine
whether the dispute is arbitrable.” Masco Corp. v. Zurich American Ins. Co., 382 F.3d 624, 627
(6th Cir. 2004) (quoting Javitch v. First Union Sec., Inc., 315 F.3d 619, 624 (6th Cir. 2003)).
This review requires the Court to determine first whether “‘a valid agreement to arbitrate exists
between the parties,’ and second whether ‘the specific dispute falls within the substantive scope
of the agreement.’” GGNSC Louisville Camelot, LLC v. Coppedge, 2017 WL 3430579, at *4
(W.D. Ky. Aug. 9, 2017)(quoting Masco, 382 F.3d at 627). “‘Because arbitration agreements are
fundamentally contracts,’ the Court must ‘review the enforceability of an arbitration agreement
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according to the applicable state law of contract formation.’” Coppedge, 2017 WL 3430579, at
*4 (quoting Seawright v. American Gen. Fin. Servs., Inc., 507 F.3d 967, 972 (6th Cir. 2007)).
Plaintiff does not appear to argue that the decedent’s personal claims fall outside the
scope of the arbitration agreement; rather, Plaintiff argues that no valid arbitration agreement
exists between Ronald as POA for Jackie and Defendant because the POA did not give Ronald
the authority to enter into any arbitration agreement on Jackie’s behalf. Thus, the issue that must
be resolved is the proper scope of the POA and whether it encompasses the execution of the
arbitration agreement.
Until recently, “Kentucky courts routinely ‘declined to give effect to . . . arbitration
agreements executed by individuals holding powers of attorneys.’” Preferred Care, Inc. v.
Aaron, 2017 WL 3319378, at *7 (E.D. Ky. Aug. 3, 2017)(quoting Kindred Nursing Centers Ltd.
P’ship v. Clark, 137 S. Ct. 1421, 1424-25 (2017)).
The Kentucky Supreme Court had
determined that “‘a general grant of power (even if seemingly comprehensive) does not permit a
legal representative to enter into an arbitration agreement for someone else.’” Id. (quoting
Kindred, 137 S.Ct. at 1425). Rather, to form such a contract, the power of attorney must contain
language specifically authorizing the representative to waive the principal’s constitutional rights
to access to the courts and to trial by jury. Coppedge, 2017 WL 3430579, at *4. However, the
United States Supreme Court recently rejected this view. In Kindred Nursing Centers Ltd.
P’ship v. Clark, 137 S.Ct. 1421 (2017), the Supreme Court held that “[t]he Kentucky Supreme
Court’s clear-statement rule [announced in Extendicare Homes, Inc. v. Whisman, 478 S.W.3d
306, 327 (Ky. 2015)] . . . fails to put arbitration agreements on an equal plane with other
contracts.” Id. at 1426-1427. The Supreme Court held that such a rule “single[d] out arbitration
agreements for disfavored treatment” and thus, violated the FAA. Kindred, 137 S.Ct. at 1425.
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“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.’” Coppedge,
2017 WL 3430579, at *5 (quoting Kindred, 137 S.Ct. at 1429).
The grant of authority in the POA vesting Ronald with authority “to do and perform all
acts, deeds, matters and things whatsoever concerning my property and personal affairs” as
Jackie could do personally is a broad delegation of authority. This language unquestionably
encompasses the power to enter into an arbitration agreement. Therefore, the Plaintiff had the
requisite authority to enter into the Arbitration Agreement. See Coppedge, 2017 WL 3430579,
at *5 (POA vesting attorney-in-fact with “full power and authority to do every act necessary,
requisite, or proper” as the principal could do personally encompasses the power to enter into an
arbitration agreement.); Pembroke Health Facilities, L.P. v. Ford, 2017 WL 2486354, * (W.D.
Ky. June 8, 2017)(POA vesting attorney-in-fact with “full power . . . to transact, handle, and
dispose of all matters” as the principal could do encompasses the power to enter into an
arbitration agreement); Diversicare Healthcare Servs., Inc. v. Riley, 2017 WL 3317672, at *2
(Ky. App. Aug. 4, 2017)(POA vesting attorney-in-fact with “power . . . to do all things that [the
principal] could do, including but not limited to” various acts described in non-exhaustive list
held broad enough to encompass the authority to enter into an arbitration agreement); GGNSC
Louisville St. Matthews v. Madison, 2017 WL 2312699, at *6 (W.D. Ky. May 26, 2017)(POA
vesting attorney-in-fact with maximum power to perform any act on the principal’s behalf that he
could do personally including but not limited to “all claims and litigation, and any and all
business transactions” held broad enough to encompass the authority to enter into an arbitration
agreement). Furthermore, the POA also granted Ronald the authority to “demand, sue for and
recover, collect and receive” all money due Jackie and to “settle, adjust or compromise any and
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all claims accounts or debts, owing to or by” Jackie, which provides strong evidence of Jackie’s
intent to give Ronald authority with respect to legal matters well beyond the categories of health
care and financial decisions. See GGNSC Stanford LLC v. Gilliam, 205 F. Supp. 3d 884, 892
(E.D. Ky. 2016). Thus, the Court finds that the POA was broad and granted Ronald sufficient
authority to execute an arbitration agreement on Jackie’s behalf.
C. Stay
Given the Court’s decision, it is necessary to divide the claims for resolution. As
explained above, the wrongful death claim is not subject to arbitration. Plaintiff’s remaining
claims for negligence, medical negligence, and corporate negligence against Defendant are
compelled to arbitration. In the interest of judicial economy, the Court finds it appropriate to
stay the entire action pending arbitration, including the wrongful death claim.1 See Moses H.
Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 20 n.23 (1983) (whether to stay
nonarbitrable claims is within court’s “discretion to control its docket”). See also Crumpton v.
Hurstbourne Healthcare, LLC, 2017 WL 1091790, at *3 (W.D. Ky. Mar. 22, 2017); Owensboro
Health Facilities, L.P. v. Canary, 2017 WL 1015859, at *4 (W.D. Ky. Mar. 15, 2017); GGNSC
Louisville St. Matthews, LLC v. Saunders, 2017 WL 2196752, at *10 (W.D. Ky. May 18,
2017)(staying the wrongful death claim in the interests of judicial economy and consistency).
D. Limited Discovery
If the Court were inclined to compel arbitration, Plaintiff requests limited discovery be
allowed to obtain and review the agreed-upon arbitration rules, including the “neutral code of
procedure available from The Evangelical Lutheran Good Samaritan Society.” In response,
Defendant represents that because the rules were originally referenced and agreed upon at the
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It does not appear that the remaining Defendants have been properly served in this action.
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time of the decedent’s admission to the long-term care facility, Good Samaritan has no objection
to providing the agreed-upon rules. Accordingly, discovery is unnecessary.
IV. CONCLUSION
For the reasons set forth above, IT IS HEREBY ORDERED that the motion by
Defendant to dismiss [DN 9] is DENIED.
IT IS FURTHER ORDERED that the motion by Defendant to stay these proceedings
and compel the parties to arbitrate this matter [DN 11] is GRANTED IN PART AND DENIED
IN PART. The entire action is STAYED and arbitration is COMPELLED regarding all claims
except the claim for wrongful death. Consistent with the representation of defense counsel, the
Defendant shall provide a copy of the agreed-upon arbitration rules to Plaintiff no later than
September 5, 2017.
cc: counsel of record
August 28, 2017
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