Myers v. GGNSC Holdings, LLC et al
Filing
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MEMORANDUM OPINION re 25 Order on Motion to Dismiss. Signed by Neal B. Biggers on 05/08/2013. (jlh)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
DELTA DIVISION
LEXIE M. MYERS
PLAINTIFF
v.
CASE NO. 2:11CV133-B-A
GGNSC Holdings, LLC
GGNSC Southaven, LLC d/b/a Golden
Living Center Southaven
DEFENDANTS
______________________________________________________________________________
MEMORANDUM OPINION
Presently before the court is Defendants’ motion to dismiss the proceeding or
alternatively, to compel arbitration [9]. Upon due consideration of the parties’ filings and
supporting and opposing authority, the court is ready to rule.
Plaintiff Lexie Myers was admitted to Defendants’ nursing home, Golden Living, on
September 4, 2003. Myers’ son, Barry Luka, holds Myers’ power of attorney. In creating the
document entitled “Power of Attorney,” Myers gave Luka authority to “perform any and every
act which [she] might do [herself], including the making of contracts . . . .” See Power of
Attorney at 1. Myers further specifically granted Luka full power and authority to act and ratified
all acts performed by Luka.
At the time Myers was admitted to Golden Living, Luka executed a “Resident and
Facility Arbitration Agreement” on behalf of Myers. The arbitration agreement provides that
“any and all claims, disputes, and controversies . . . arising out of, or in connection with, or
relating in any way to any service or health care provided by the Facility to the Resident shall be
resolved by binding arbitration . . . .” See Resident and Facility Arbitration Agreement, at 1.
During Myers’ residency at the Defendants’ facility, she suffered an injury as the result of a
battery-dead pacemaker. Myers alleges that the nursing facility had a duty to monitor her pacemaker
and failed to do so as ordered by her physician on January 22, 2007, and thereafter until January 10,
2008. Myers claims that she began to experience disorientation and confusion in late October 2007.
On January 10, 2008, Myers was taken to the hospital after complaints of shortness of breath, dry
couch, wheezing, and lethargy. Doctors determined that Myers had a slow heart rate and that the
battery in Myers’ pacemaker was dead and that the battery had been dead or nearly dead since the
end of October 2007. As a result, Myers continues to suffer from a diminished mental capacity.
Plaintiff initiated the instant action alleging negligence, medical malpractice, and deviations
from the standard of care owed to a nursing home resident. Defendants move to dismiss Plaintiff’s
claims, arguing that the statute of limitations has run, and alternatively seek to enforce the parties’
arbitration agreement.1
In deciding a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure,
the district court accepts as true those well-pleaded factual allegations in the complaint. C.C. Port,
Ltd. v. Davis-Penn Mortgage Co., 61 F.3d 288, 289 (5th Cir. 1995). “The district court may not
dismiss a complaint under Rule 12(b)(6) ‘unless it appears beyond doubt that the plaintiff can prove
no set of facts in support of [her] claim which would entitle [her] to relief.’” Collins v. Morgan
Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000) (quoting Conley v. Gibson, 355 U.S. 41, 4546 (1957)). In ruling on a Rule 12(b)(6) motion to dismiss, the court generally may not look
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Defendants do not specify a section of Rule 12 under which the motion is brought
before the court. Based on Defendants’ arguments, the court is of the opinion that Fed. R. Civ. P.
12(b)(6) applies. See Jones v. Alcoa, Inc., 339 F.3d 359, 366 (5th Cir. 2003). Thus, the court
will analyze the motion under this section.
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beyond the pleadings. Cinel v. Connick, 15 F.3d 1338, 1341 (5th Cir. 1994). Matters of public
record and matters of which the court may take judicial notice as well as documents attached to the
complaint are exceptions. Id. at 1343 n.6; Lovelace v. Software Spectrum, Inc., 78 F.3d 1015, 1017
(5th Cir. 1996). Further, “[d]ocuments that a defendant attaches to a motion to dismiss are
considered part of the pleadings if they are referred to in the plaintiff’s complaint and are central to
[the] claim.” Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2001).
Defendants argue that dismissal is warranted on the grounds that Plaintiff’s claims are time
barred. “A statute of limitations may support dismissal under Rule 12(b)(6) where it is evident from
the plaintiff’s pleadings that the action is barred and the pleadings fail to raise basis for tolling or
the like.” Jones, 339 F.3d at 366. Plaintiff contends that Miss. Code Ann.§ 15-1-69, known as the
“savings statute,” defeats Defendants motion to dismiss. The savings statute provides, in relevant
part:
If any action, duly commenced within the time allowed, the writ shall be abated, or the
action otherwise or defeated, by the death of any party thereto, or for any matter of form
. . . the plaintiff may commence a new action for the same cause, at any time within one
year after the abatement or other determination of the original suit.
Miss. Code Ann. § 15-1-69 (emphasis added).
“Section 15-1-69 applies to those cases ‘[w]here the plaintiff has been defeated by some
matter not affecting the merits, some defect or informality, which [the plaintiff] can remedy or avoid
by a new process, the statute shall not prevent him from doing so, provided he follows it promptly,
by suit within a year.’” Marshall v. Kan. City S. Rys. Co., 7 So.3d 210, 214 (¶ 16) (Miss. 2009)
(citing Hawkins v. Scottish Union & Nat’l Ins. Co., 69 So. 710, 713 (1915)). “The statute is highly
remedial and should be liberally construed to accomplish its purpose.” Id. (citing Hawkins, 69 So.
at 712).
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Plaintiff initiated the first case based on these facts on January 10, 2010, two days prior the
running of the statute of limitations. This first suit was filed without Plaintiff providing presuit
notice required by Mississippi state statute for suing a defendant medical provider.
See Miss. Code Ann. § 15-1-36(15). Defendants filed a Motion to Dismiss in the state court case
based on the lack of presuit notice and failure to attach an expert consultation, to which Plaintiff
failed to respond. Instead, on May 18, 2010, Plaintiff filed a notice voluntarily dismissing the
action. No reason was cited for the dismissal.
Plaintiff then served Defendants with presuit notice and subsequently filed suit again in
state court on May 16, 2011, within the one-year time line required by the savings statute.
Defendants removed the action to this court on June 17, 2011, based on diversity jurisdiction.
In Crawford v. Morris Transp., 990 So.2d 162 (Miss. 2008), the Mississippi Supreme
Court considered the applicability of the savings statute when the initial case was voluntarily
dismissed. The court held that a voluntary dismissal was a “matter of form” for purposes of the
savings statute since the dismissal was not a mere abatement of the action or for any matter of
form. The Crawford court further distinguished a previous Mississippi Supreme Court case, W.T.
Raleigh v. Barnes, 143 Miss. 597 (1926), where counsel agreed to a voluntary nonsuit, as follows:
While the savings statute did not apply to a voluntary dismissal in Barnes, we noted
that nothing in the record showed that dismissal had been a “mere abatement” of the
action or that the dismissal was for any matter of form . . . unlike Barnes, the record
in this case supports that dismissal was based upon a “matter of form” not affecting the
merits - namely a lack jurisdiction due to the absence of a complaint. Crawford
inadvertently found himself in a procedural quagmire and made a good-faith effort to
preserve his claim.
Crawford v. Morris Transp., Inc., 990 So.2d 162, 174 (¶ 44) (Miss. 2008) (quoting Barnes, 143
Miss. at 600).
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While Crawford involved a voluntary dismissal for lack of jurisdiction, the court finds it
instructive as to when a voluntary dismissal falls under the purview of the savings statute.
Similarly to Crawford, the facts of the case at bar support a finding that Myers dismissed the first
state action because she could not remedy her failure to provide presuit notice. By providing
presuit notice and filing a second state court action within one year, Myers did not merely
abandon the action, but instead appeared to cure the defect and continue to prosecute the case.
Therefore, the court determines that there is sufficient evidence in the record to construe that
Myers filed a notice of voluntary dismissal in the first action due to her failure to provide presuit
notice on the medical provider defendants. The Mississippi Supreme Court has held that the
savings statute applies to toll the statute of limitations when a case is dismissed by the court for a
plaintiff’s failure to provide presuit notice to medical providers, as the statutory notice is a matter
of form encompassed by the savings statute. See Arceo v. Tolliver (“Tolliver II”), 19 So.3d 67,
74-75 (¶¶ 38-39) (Miss. 2009).
Based on Mississippi Supreme Court precedent as applied to the facts of this case, the
court finds sufficient evidence in the record to infer that Plaintiff did not intend to abandon her
claim, but merely dismissed the first action as a matter of form in order to serve the necessary
presuit notice on the defendant medical provider. As such, the savings statute permitted Myers to
refile within a year. The portion of Defendants’ motion to dismiss based on the statute of
limitations is denied.
Alternatively, Defendants argue that Plaintiff’s claim are subject to the parties’ arbitration
agreement. Congress provided in the Federal Arbitration Act that a written agreement to
arbitrate in a contract involving interstate commerce “shall be valid, irrevocable and enforceable,
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save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. §
2. In addition, the FAA expresses a strong federal policy in favor of arbitration, and any doubts
concerning the scope of arbitration issues should be resolved in favor of arbitration. Southland
Corp. v. Keating, 465 U.S. 1, 10 (1983); Mouton v. Metropolitan Life Ins. Co., 147 F.3d 453, 456
(5th Cir. 1998).
There is a two-step inquiry to determine whether a party should be compelled to arbitrate.
Washington Mut. Fin. v. Bailey, 364 F.3d 260, 263 (5th Cir. 2004). A court must determine if (1)
the parties agreed to arbitrate the dispute; and whether (2) “any federal statute or policy renders
the claims nonarbitrable.” Id. Whether the parties agreed to arbitration requires a further
analysis: (1) the existence of a valid agreement to arbitrate; and (2) if the dispute in question falls
within the scope of that agreement. Will-Drill Res., Inc. v. Samson Res. Co., 352 F.3d 211, 214
(5th Cir. 2003).
Generally, principles of state contract law govern the question of whether the parties
formed a valid agreement to arbitrate. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938,
943 (1995); see also Bailey, 364 F.3d at 264. Under Mississippi law, “[a] valid contract must
have (1) two or more contracting parties, (2) consideration, (3) an agreement that is sufficiently
definite, (4) parties with legal capacity to make a contract, (5) mutual assent, and (6) no legal
prohibition precluding contract formation.” Grenada Living Ctr., LLC v. Coleman, 961 So. 2d
33, 37 (¶ 9) (Miss. 2007) (citing Rotenberry v. Hooker, 864 So. 2d 266, 270 (Miss. 2003)).
Plaintiff failed to respond to Defendants’ argument that the parties’ arbitration clause
applies. Defendants claim that the instant case is arbitrable since Myers is a third-party
beneficiary to the contract between Defendants and Luka, Myers’ son and power-of-attorney.
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The court finds that Myers would be considered a third party beneficiary to the agreement
entered into between Luka and the defendant nursing facility under the principles of Mississippi
contract law. “[N]on-signatories may be bound by an arbitration agreement if they are
determined to be a third-party beneficiary.” Forest Hill Nursing Ctr. v. McFarlan, 995 So. 2d
775, 783 (¶ 25) (Miss. Ct. App. 2008). The court must consider whether (1) the contract was
entered into for the benefit of the decedent; (2) whether the promisee owed a legal obligation to
the third party; and (3) whether that legal obligation connected the third party to the contract. Id.
at 782 (¶ 21). In McFarlan, a resident’s granddaughter signed admission paperwork, including
an arbitration agreement, as the responsible party. The Mississippi Court of Appeals found that
McFarlan, the resident, received the benefits and services flowing from the admission agreement
that specifically referenced the terms of her care. Id. at 783 (¶¶ 18-24). The court determined
that McFarlan’s care was the essential purpose of the agreement and that she was bound by all
the terms of the contract, including the agreement to arbitrate any legal disputes related to the
contract. Id.
The arbitration agreement at issue in this case became part of the admission agreement
upon execution, as reflected by its express terms. Myers’ son, Luka, signed the agreement;
however, Myers is named as the resident to be admitted to the facility. Myers’ care was the
essential purpose of the agreement. Id. at 783 (¶ 24). Thus, she is an intended third-party
beneficiary of the agreement between the facility and Luka. As such, Myers is bound by the
terms of the contract, including the arbitration provision. Id.
Alternatively, the court finds Myers executed a valid power of attorney such that Myers’
son, Luka, was able to execute a valid arbitration agreement on her behalf. “The power of
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attorney must be a writing that (a) authorizes an attorney-in-fact or other agent to do, execute or
perform any act that the principal might or could do, or (b) evidences the principal's intent to give
the attorney-in-fact or agent full power to handle the principal's affairs . . . .” Monticello Cmty.
Care Ctr., LLC v. Estate of Martin ex rel. Peyton, 17 So. 3d 172, 177 (¶ 15) (Miss. Ct. App.
2009) (quoting Miss. Code Ann. § 87-3-7). Myers’ written authorization meets this criteria.
First, Myers’ writing appoints Luka to “perform any and every act that [Myers] might do
[herself], including the making of contracts . . . .” Power of Attorney, at 1. Second, the
document grants Luka “full power and authority to do and perform all and every act” and ratified
such acts without any condition or contingency. Thus, the power of attorney is valid and Luka
had express authority to act on Myers’ behalf and to bind her to the arbitration agreement at
issue.
It appears to the court that the parties willingly agreed to the arbitration provision, as the
agreement is not unconscionable. “Mississippi law defines an unconscionable contract as ‘one
such as no man in his senses and not under a delusion would make on the one hand, and no
honest and fair man would accept on the other.’” Pride, 341 F.Supp.2d at 622 (quoting Entergy
Miss., Inc. v. Burdette Gin Co., 726 So. 2d 1202, 1207 (Miss. 1998)). Mississippi law provides
for both procedural and substantive unconscionability. York v. Georgia-Pacific Corp., 585
F.Supp. 1265, 1278 (N.D. Miss. 1984). “Procedural unconscionability may be proved by
showing ‘a lack of knowledge, lack of voluntariness, inconspicuous print, the use of complex
legalistic language, disparity in sophistication or bargaining power of the parties and/or a lack of
opportunity to study the contract and inquire about the contract terms.’” East Ford, Inc. v.
Taylor, 826 So. 2d 709, 714 (Miss. 2002) (quoting Pridgen v. Green Tree Fin. Servicing Corp.,
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88 F.Supp.2d 655, 657 (S.D. Miss. 2000)). Substantive unconscionability may be proven by
showing the terms of the arbitration agreement to be oppressive. York, 585 F.Supp. at 1278. The
agreement was not a contract of adhesion, as Myers’ admission to the facility was not contingent
upon the signing of an arbitration agreement, and there is no evidence that the arbitration
agreement was otherwise unconscionable.
Finding a valid agreement to arbitrate, the court must now consider whether the parties
agreed to arbitrate this dispute. Plaintiff does not contend that the dispute falls outside the scope
of the agreement. The court notes that the arbitration agreement language is broad and
encompasses all disputes related to the admissions agreement or any service or health care
provided by the facility to the resident. Thus, the present dispute need only “touch” matters
covered by the agreement to be arbitrable. Pennzoil Exploration & Prod. Co. v. Ramco Energy
Ltd., 139 F.3d 1061, 1068 (5th Cir. 1998). The dispute in this case involves alleged negligent
acts related to the health care provided to Myers during her residency in the Defendants’ facility.
The court finds the arbitration agreement encompasses the present dispute and further that no
federal statute or policy renders the claims nonarbitrable. As such, the present claim is arbitrable
and this portion of Defendants’ motion is GRANTED. A separate order in accord with this
opinion will issue this day.
This, the 8th day of May, 2013.
/s/ Neal B. Biggers
NEAL B. BIGGERS
UNITED STATES DISTRICT JUDGE
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