Golden Gate National Senior Care, LLC et al v. Bateman et al

Filing 32

MEMORANDUM (Order to follow as separate docket entry). Signed by Honorable Yvette Kane on 3/10/17. (rw)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
GOLDEN GATE NATIONAL
SENIOR CARE LLC, et al.,
Petitioners
v.
DONNA M. BATEMAN,
Administratrix for the Estate of DORIS
J. SNYDER, deceased,
Respondent

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No. 1:16-cv-898
(Judge Kane)

MEMORANDUM
Before the Court is Petitioners Golden Gate National Senior Care LLC’s, et al.,1 motion
to compel arbitration and stay state court proceedings. (Doc. No. 7.) For the following reasons,
the Court will deny without prejudice the motion to compel.
I.

BACKGROUND
Petitioners are eight business entities (Doc. No. 1 ¶¶ 2-9), and Respondent Donna M.

Bateman is the administratrix of the estate of her mother Doris J. Snyder (Id. ¶¶ 11-12). From
June 15, 2012 to March 15, 2014, Snyder resided at one of Petitioners’ nursing home facilities,
Golden LivingCenter – West Shore Facility (“the Facility”), in Camp Hill, Pennsylvania. (Id. ¶
11.) Around the time of Snyder’s admission to the Facility, Respondent Bateman allegedly
signed an arbitration agreement (“Arbitration Agreement”) on Synder’s behalf and pursuant to a
durable power of attorney dated March 15, 2012. (Id. ¶¶ 18-19.)
On April 25, 2016, Respondent Bateman filed a complaint in the Court of Common Pleas
of Cumberland County, Pennsylvania against the Petitioners, Beverly Fry, and Denise Curry.

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Petitioners are “Golden Gate National Senior Care, LLC; GGNSC Camp Hill West
Shore, LP, d/b/a Golden LivingCenter – West Shore; GGNSC Camp Hill West Shore GP, LLC;
GPH Camp Hill West Shore, LP; GGNSC Equity Holdings, LLC; GGNSC Holdings, LLC;
GGNSC Administrative Services, LLC; and GGNSC Clinical Services, LLC.” (Doc. No. 7 n.1.)
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(Doc. Nos. 1 ¶ 26; 1-2.) In her state-court complaint, Respondent Bateman brought three counts
against Respondents, alleging inter alia that Petitioners insufficiently staffed the Facility, failed
to provide the resources necessary for Snyder, and caused injury to Snyder as of result of their
negligence, carelessness, and recklessness. (Doc. No. 1-2 ¶¶ 42, 46, 51, 89, 105-109, 120, 129.)
Respondent Bateman brought her second and third count pursuant to 42 Pa. C.S. § 8302
(“Survival Statute”) and 42 Pa. C.S. § 8301 (“Wrongful Death Statute”), respectively. (Id. ¶¶
124, 133.)
On May 16, 2016, Petitioners filed a petition for order compelling arbitration with this
Court. (Doc. No. 1.) In their petition, Petitioners bring a count to compel arbitration under the
Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16, a count to enjoin Respondent from pursuing
the state-court action, and a count for declaratory relief. (Id.) Petitioners attach the Arbitration
Agreement to their petition. (Doc. No. 1-3.) On May 27, 2016, Petitioners filed a motion to
compel arbitration pursuant to the FAA, 9 U.S.C. §§ 1-16. (Doc. No. 7.) Petitioners filed a brief
in support on May 27, 2016 (Doc. No. 8.) Respondent filed a brief in opposition on July 7, 2016
(Doc. No. 13), a motion for leave to file a supplemental brief and for arbitration-related
discovery on July 25, 2016 (Doc. No. 16), and a supplemental brief in opposition on July 25,
2016 (Doc. No. 17).
On March 7, 2017, the parties informed this Court that, in accordance with a December 8,
2016 stipulated order in the underlying state court proceedings, the parties have begun to conduct
arbitration-related discovery in order for Respondent to “explore her contract defenses.” (Doc.
No. 30-1 ¶¶ 4, 6; 31 at 7.) The parties also report being currently engaged in a discovery dispute
in the underlying state court proceedings over the deposition of an admissions employee. (Doc.

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No. 30 at 2-3; 31 at 2.) Petitioners’ motion to compel has been fully briefed and is now ripe for
disposition.
II.

LEGAL STANDARD
The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16, provides the “body of federal

substantive law establishing and governing the duty to honor agreements to arbitrate disputes”
and expresses a “strong federal policy in favor of resolving disputes through arbitration.”
Century Indem. Co. v. Certain Underwriters at Lloyd's, London, 584 F.3d 513, 522 (3d Cir.
2009). Even in light of the FAA, however, arbitration is “strictly a matter of contract.” Bel-Ray
Co. v. Chemrite (Pty) Ltd., 181 F.3d 435, 444 (3d Cir. 1999). “If a party has not agreed to
arbitrate, the courts have no authority to mandate that he do so.” Id. “Thus, in deciding whether
a party may be compelled to arbitrate under the FAA, we first consider ‘(1) whether there is a
valid agreement to arbitrate between the parties and, if so, (2) whether the merits-based dispute
in question falls within the scope of that valid agreement.’” Flintkote Co. v. Aviva PLC, 769
F.3d 215, 220 (3d Cir. 2014) (quoting Century Indem., 584 F.3d at 527).
As to the first question, the United States Court of Appeals for the Third Circuit has
recently clarified “the standard for district courts to apply when determining whether, in a
specific case, an agreement to arbitrate was actually reached.” Guidotti v. Legal Helpers Debt
Resolution, L.L.C., 716 F.3d 764, 771 (3d Cir. 2013). In effect, to determine whether there is a
valid agreement to arbitrate, a district court “must initially decide whether the determination is
made under Fed.R.Civ.P. 12(b)(6) or 56.” Sanford v. Bracewell & Guiliani, LLP, No. 14-1763,
2015 WL 4035614, at *2 (3d Cir. July 2, 2015). The Rule 12(b)(6) standard is appropriate where
“it is apparent, based on ‘the face of a complaint, and documents relied upon in the complaint,’
that certain of a party’s claims ‘are subject to an enforceable arbitration clause.’” Guidotti, 716

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F.3d at 776; accord Sanford, 2015 WL 4035614, at *2. In such cases, a court may “consider
only the complaint, exhibits attached to the complaint, matters of public record, as well as
undisputedly authentic documents if the complainant's claims are based upon these documents.”
Guidotti, 716 F.3d at 772 (quoting Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010)).
In contrast, the Rule 56 standard is appropriate: (1) where “the motion to compel
arbitration does not have as its predicate a complaint with the requisite clarity to establish on its
face that the parties agreed to arbitrate,” or (2) where “the opposing party has come forth with
reliable evidence that is more than a naked assertion ... that it did not intend to be bound by the
arbitration agreement, even though on the face of the pleadings it appears that it did.” Guidotti,
716 F.3d at 774; accord Sanford, 2015 WL 4035614, at *2. In such cases, the district court
should allow limited discovery on the question of arbitrability before “entertaining [the] motion
[to compel arbitration] under a summary judgment standard.” Guidotti, 716 F.3d at 780.
III.

DISCUSSION
Petitioners move the Court to determine that a valid agreement to arbitrate exists under

the Rule 12(b)(6) standard, compel arbitration, and stay the state court proceedings. (Doc. No.
7.) Respondent contends that her wrongful death claims are not subject to arbitration because
Petitioners did not obtain the signatures of two wrongful death beneficiaries. (Doc. No. 13 at 3.)
As to Respondent’s survival claims, she seeks an opportunity to conduct discovery to determine
whether a “meeting of the minds” occurred, whether any contract defenses exist, and whether
Petitioners’ relationship with their arbitration provider, JAMS, “poses a real threat to an injured
resident’s ability to a fair and impartial proceeding.” (Id. at 9-11.)
As discussed above, the Court must decide (1) whether the complaint facially establishes
arbitrability; and (2) if so, whether Plaintiff has put forward “reliable evidence that is more than

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a naked assertion ... that it did not intend to be bound by the arbitration agreement, even though
on the face of the pleadings it appears that it did.” Guidotti, 716 F.3d at 774.2 This inquiry
requires the Court to distinguish between (1) a “mere naked assertion that [Plaintiff] did not
intend to be bound by the terms” of an arbitration agreement and (2) a “not insubstantial” amount
of evidence in response to the arbitration motion. Id. at 777, 779 (internal quotations and
citations omitted).
Here, the operative pleading for the Guidotti analysis is Petitioners’ petition for order
compelling arbitration to which Petitioners attached the Arbitration Agreement. (Doc. Nos. 1, 12); see Golden Gate Nat. Sr. Care, LLC v. Sulpizio, No. 15-00174, 2015 WL 4878348, at *3
(M.D. Pa. Aug. 14, 2015). The Arbitration Agreement purports to be signed by Respondent on
behalf Doris J. Snyder and provides, in relevant part, as follows:
THE PARTIES UNDERSTAND, ACKNOWLEDGE, AND AGREE THAT
THEY ARE SELECTING A METHOD OF RESOLVING DISPUTES
WITHOUT RESORTING TO LAWSUITS OR THE COURTS, AND THAT
BY ENTERING INTO THIS AGREEMENT, THEY ARE GIVING UP
THEIR CONSTITUTIONAL RIGHT TO HAVE THEIR DISPUTES
DECIDED IN A COURT OF LAW BY A JUDGE OR JURY, THE
OPPORTUNITY TO PRESENT THEIR CLAIMS AS A CLASS ACTION
AND/OR TO APPEAL ANY DECISION OR AWARD OF DAMAGES
RESULTING FROM THE ADR PROCESS EXCEPT AS PROVIDED
HEREIN.
(Doc. No. 1-3 at 2-5) (emphasis in original). However, in her answer and opposition to the
pending motion to compel, Respondent Bateman asserts that the Arbitration Agreement is a
“procedurally and substantively unconscionable contract of adhesion” (Doc. No. 14 at 7), and,
further, substantively unconscionable given JAMS’ alleged, institutional bias (see Doc. Nos. 13
at 10-11, 13; 14 at 7).
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“To determine whether there is a valid agreement to arbitrate between [the parties], we
must initially decide whether the determination is made under Fed. R. Civ. P. 12(b)(6) or 56 and
thus, what materials we may consider.” Sanford v. Bracewell & Guiliani, LLP, 618 F. App’x
114, 117 (3d Cir. 2015).
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Upon consideration of the standard articulated in Guidotti, the Court finds that the
assertions made in response to Petitioners’ motion constitute more than a “naked assertion” that
Plaintiff did not intend to be bound by the Arbitration Agreement. Guidotti, 716 F.3d at 777 &
n.5, 779 (“Pre-arbitration discovery has also been allowed to determine whether an arbitration
clause is unconscionable”); see Golden Gate Nat. Sr. Care, LLC v. Sulpizio, No. 15-00174, 2015
WL 4878348, at *4 (M.D. Pa. Aug. 14, 2015). Accordingly, the parties are “entitled to discovery
on the question of arbitrability before a court entertains further briefing on [the] question.”3
Guidotti, 716 F.3d at 777, 779. However, given that the parties have already begun to conduct
arbitration-related discovery in the underlying state court proceeding (Doc. No. 30-1 ¶¶ 4, 6; 31
at 7),4 Petitioners may renew their motion to compel arbitration and stay state court proceedings
after the parties complete the ongoing, arbitration-related discovery.
IV.

CONCLUSION
The Court will deny without prejudice Petitioners’ motion to compel arbitration. An

order consistent with this memorandum follows.

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The Third Circuit has specified the next steps in addressing the issue of arbitrability:
“[A] restricted inquiry into factual issues will be necessary to properly evaluate whether there
was a meeting of the minds on the agreement to arbitrate, and the non-movant must be given the
opportunity to conduct limited discovery on the narrow issue concerning the validity of the
arbitration agreement.” Guidotti, 716 F.3d at 774 (internal citations and quotations omitted).
4
In her filings before this Court, Respondent Bateman has not raised an abstention
argument or cited the authority of Colorado River Water Conservation District v. United States,
424 U.S. 800 (1976). Accordingly, absent any briefing and given the procedural posture of the
underlying state court proceeding, the Court declines, at this stage, to sua sponte address the
matter of abstention.
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