Jeager v. Genesis Healthcare
ORDER granting 91 Motion to Compel. 1. Peak's Motion to Compel Arbitration is GRANTED. 2. All proceedings in this case are stayed under 9 USC Section 3 pending arbitration. 3. The ppt conf set for 3/15/17 is VACATED to be reset if appropri ate by further order of the court. 4. Beginning within 3 months of the date of this Order, and every three months thereafter, the parties shall file a joint status report in this case to update the Court as to the progress of arbitration. Signed by Judge Sam E Haddon on 3/10/2017. (ELL)
MAR 10 2017
Clerk, U.S. District Court
District Of Montana
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
GINA JAEGER, individually, AND
AS PERSONAL REPRESENTATIVE
OF THE ESTATE OF HER SISTER
No. CV 16-30-BU-SEH
PEAK MEDICAL MONTANA
Plaintiff Gina Jaeger, sister of Charlene Hill ("Hill"), and Personal
Representative of the Estate of Charlene Hill, filed this action in state court
alleging claims relating to Hill's inpatient care provided from August 13, 2015, to
August 25, 2015, at a nursing facility known as the Butte Center in Butte,
Montana. 1 The case was removed to this Court on June 10, 2016. 2 An amended
complaint was filed on August 2, 2016. 3
The Court, following removal, denied Plaintiffs motion to remand and
dismissed for fraudulent joinder and without prejudice three individual defendants
named in the amended complaint. 4 The Court also granted Genesis Healthcare,
Inc. 's motion to dismiss, leaving Peak Medical Montana Operations, LLC
("Peak") as the sole remaining defendant. 5 The claim against Peak asserts
vicarious liability based on the purported negligence of the same three previously
dismissed individual Montana citizen employees of Peak alleged in the amended
complaint to have caused Hill's personal injury and subsequent death. 6
Motion to Compel Arbitration
On February 14, 2017, Peak moved "for an order compelling the parties to
submit to arbitration and staying this action until arbitration has been completed." 7
Doc. 28 at 4-6.
Doc. 91 at 2.
The motion is grounded in a Voluntary Binding Arbitration Agreement (the
"Agreement") entered into between Hill and Peak on August 14, 2015. 8 Plaintiff
opposes enforcement of the Agreement with the argument that "[w]hen Charlene
Hill, a person of limited education, with a severe anxiety disorder signed this
agreement under the influence of narcotics, the Arbitration agreement as to her
situation is clearly unconscionable." 9
Federal Arbitration Act
The Federal Arbitration Act 10 ("FAA") was enacted "to 'ensur[e] that
private arbitration agreements are enforced according to their terms. "' 11 It
"provide[ s] for the enforcement of arbitration agreements within the full reach of
the Commerce Clause." 12
Section 2 of the FAA, "the primary substantive provision of the Act," 13 is
recognized "as reflecting both a 'liberal federal policy favoring arbitration,' and
Doc. 94 at 3.
Doc. 95 at 4.
9 U.S.C. §§ 1-16 (2012).
AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 344 (2011) (quoting Volt Info. Scis.,
Inc. v. Board of Trustees ofLeland Stanford Junior Univ., 489 U.S. 468, 478 (1989)).
Perry v. Thomas, 482 U.S. 483, 490 (1987).
Moses H Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. l, 24 (1983).
the 'fundamental principle that arbitration is a matter of contract[.]"' 14
"As federal substantive law, the FAA preempts contrary state law." 15
However, the final phrase of§ 2 of the FAA, termed the saving clause, "permits
agreements to arbitrate to be invalidated by 'generally applicable contract
defenses, such as fraud, duress, or unconscionability.'" 16 The saving clause
however is not to be construed with "an intent to preserve state-law rules that
stand as an obstacle to the accomplishment of the FAA's objectives." 17
Determination of whether a contract is unconscionable under Montana law
"is a two-step inquiry: ( 1) whether the provision fits the doctrine of a contract of
adhesion such that the weaker bargaining party had no meaningful choice
regarding its acceptance; and (2) whether the contractual terms are unreasonably
favorable to the drafter, usually the party with superior bargaining power." 18
Concepcion, 563 U.S. at 339 (quoting Moses H Cone Mem 'l Hosp., 460 U.S. at 24;
Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67 (2010)).
Mortensen v. Bresnan Commc 'ns, LLC, 722 F.3d 1151, 1158 (9th Cir. 2013) (citations
Concepcion, 563 U.S. at 339 (quoting Doctor's Assocs., Inc. v. Casarotto, 517 U.S.
681, 687 (1996)).
Id. at 343 (citations omitted).
Highway Specialties, Inc. v. State, Dep 't of Transp., 215 P .3d 667, 670 (Mont. 2009)
(citing Arrowhead School Dist. No. 75 v. Klyap, 79 P.3d 250, 263 (Mont. 2003)).
"Whether or not the clause is unreasonably favorable to the drafter in tum involves
an inquiry into whether the clause is within the reasonable expectations of the
weaker party or is unduly oppressive to the weaker party." 19 Factors to be
considered in determining whether a provision is outside a party's reasonable
 [W]hether the waiver clause was conspicuous and
explained the consequences of the provision (e.g. waiver
of the right to trial by jury and right of access to the
courts);  whether a disparity existed in the bargaining
power of the contracting parties;  whether a difference
in business experience and sophistication of the parties
existed;  whether the party charged with the waiver
was represented by counsel at the time the agreement
was executed;  whether economic, social or practical
duress compelled a party to execute the contract; 
whether the parties actually signed the agreement or
separately initialed the waiver provision; and  whether
the waiver clause was ambiguous or misleading. 20
Plaintiff fails to demonstrate the Agreement is unconscionable under
Montana law. The FAA's clear mandate that private arbitration agreements are to
be enforced according to their terms governs.
Klyap, 79 P.3d at 263 (citing !wen v. US. West Direct, 977 P.2d 989, 994-95 (Mont.
°Kelker v. Geneva-Roth Ventures, Inc., 303 P.3d 777, 781 (Mont. 2013) (citing Kortum-
Managhan v. Herbergers NBGL, 204 P.3d 693, 699 (Mont. 2009)).
The Agreement is not a contract of adhesion. It unambiguously states:
"THIS AGREEMENT IS VOLUNTARY AND IS NOT A PRECONDITION
TO RECEIVING SERVICES AT THE CENTER." 21
The Kelker factors support the conclusion that arbitration was within Hill's
reasonable expectations at the time of contracting. The Agreement is a standalone
document. It states in multiple places that it is voluntary. 22 Cancellation in
writing by Hill within thirty days of signing was permitted. 23 The waiver of trial
by judge or jury is stated in the Agreement three separate times, twice in
capitalized type. 24 Finally, the signature page restates certain key provisions in
capitalized type. It was signed by Charlene Hill and Jamie LeProwse on behalf of
Peak. 25 A plainly-worded cover page providing an overview of arbitration is
attached to the Agreement. 26
The Agreement's applicability to the issues and parties in this matter is not
in dispute. No viable contract defense to arbitration has been established.
Doc. 92-1 at 5; see also Doc. 92-1 at 1, 2.
Doc. 92-1 at 2, 5.
Doc. 92-1 at 2.
Doc. 92-1 at 2, 5.
Doc. 92-1 at 5.
Doc. 92-1 at 1.
Arbitration is directed under 9 U.S.C. § 4 to proceed.
Peak's Motion to Compel Arbitration27 is GRANTED.
All proceedings in this case are stayed under 9 U.S.C. § 3 pending
The preliminary pretrial conference set for March 15, 201 7, is
VACATED to be reset, if appropriate, by further order of court.
Beginning within three months of the date of this Order, and every
three months thereafter, the parties shall file a joint status report in this case to
update the Court as to the progress of arbitration.
/~ay of March, 2017.
United States District Judge
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