ERIE OPERATING, LLC et al v. FOSTER
Filing
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MEMORANDUM OPINION AND ORDER granting in part and denying in part 24 Motion to Dismiss; denying 40 Defendant's objections to the R&R; and adopting 38 Report and Recommendations, as explained therein. Signed by Judge Terrence F. McVerry on 10/8/15. (mh)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
ERIE OPERATING, LLC d/b/a
GOLDEN LIVING CENTER-WALNUT
CREEK, ERIE ACQUISITION, LLC;
GOLDEN GATE NATIONAL SENIOR
CARE, LLC; GGNSC EQUITY
HOLDINGS, LLC; GGNSC CLINICAL
SERVICES, LLC;
GGNSC ADMINISTRATIVE SERVICES,
LLC; SPECTRA HEALTHCARE
ALLIANCE, INC.; SPECTRA
HEALTCARE ALLIANCE VI, LLC; and
BEVERLY ENTERPRISES, INC.,
Plaintiffs,
v.
TOM FOSTER, Administrator of the
Estate of Kenneth W. Foster, Deceased,
Defendant.
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C.A. No. 14-72 Erie
MEMORANDUM OPINION AND ORDER OF COURT
On August 13, 2015, Magistrate Judge Susan Paradise Baxter issued a Report and
Recommendation (“R&R”) (ECF No. 38), which recommended that DEFENDANT’S MOTION
TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT (ECF No. 24) filed by Defendant Tom
Foster, Administrator of the Estate of Kenneth W. Foster (“Foster”) be granted in part and denied
in part.
Now pending before the Court is the OBJECTION TO REPORT AND
RECOMMENDATION (ECF No. 40) filed by Defendant Foster. Plaintiffs (collectively “Erie
Operating”) filed a response in opposition to the Objection.
On September 29, 2015,
Magistrate Judge Susan Paradise Baxter denied Defendant’s motion for leave to file an amended
motion to dismiss the complaint. Accordingly, the Objection is ripe for disposition.
Factual and Procedural Background
This civil action under the Federal Arbitration Act was referred to United States
Magistrate Judge Susan Paradise Baxter for report and recommendation (“R&R”) in accordance
with the Magistrates Act, 28 U.S.C. ' 636(b)(1), and Local Rules 72.1.3 and 72.1.4. In essence,
Plaintiffs are related entities which operate a skilled nursing facility in Erie, Pennsylvania.
Defendant is the administrator of the estate of his father, who was a resident in that nursing
facility.
At the time of his admission, Kenneth Foster executed an Alternative Dispute
Resolution (“ADR”) Agreement.
The parties dispute the scope of the ADR Agreement.
The procedural history is tortuous, but need not be recited in full herein.
As relevant to
the pending issues, Foster filed a general docket civil action in the Court of Common Pleas of
Erie County, Pennsylvania (‘Erie County Court”) in which he asserted claims against Erie
Operating under the Pennsylvania Survival Statute, 42 Pa.C.S.A. § 8302, and Pennsylvania
Wrongful Death Act, 42 Pa.C.S.A. § 8301.
Erie Operating commenced this action in federal
court pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., which seeks the
following relief:
(1) an Order which compels arbitration of Foster’s claims pursuant to the
terms of the ADR Agreement; (2) an Order pursuant to the FAA which stays the case filed by
Foster in the Erie County Court; and (3) issuance of an injunction under the Anti-Injunction Act,
28 U.S.C. § 2283, which enjoins Foster from pursuing the Erie County Court action.
Legal Analysis
The narrow issue in this federal case is strictly procedural – in what forum should the
underlying substantive claims be resolved?
Foster contends that both the Survival and
Wrongful Death claims should proceed in the Erie County Court.
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Erie Operating contends in
its Complaint that both the Survival and Wrongful Death claims should be resolved in
arbitration. Magistrate Judge Baxter, in a well-reasoned and Solomonic decision, concluded
that the claims should be severed, such that the Wrongful Death shall go forward in Erie County
and the Survival claim is subject to the ADR Agreement (if valid) and must be arbitrated.
The Court agrees with the analysis of Magistrate Judge Baxter and will adopt her R&R as
the opinion of the Court.
Under Pennsylvania law, Survival claims and Wrongful Death claims
are “two separate and distinct causes of action [that] arise from a single injury.”
Extendicare Homes, Inc., 77 A.3d 651, 656-57 (Pa. Super. 2013).
Pisano v.
A Survival action is
dependent upon the rights that the decedent possessed at the time of his death.
contrast, a Wrongful Death claim belongs to the heir(s) rather than the decedent.
By stark
Id.
In this
case, because Kenneth Foster signed the ADR Agreement, the Survival action may be subject to
arbitration.
However, the heir(s) cannot be required to arbitrate the Wrongful Death claim(s)
because they are not bound by the ADR Agreement.
The Court acknowledges that there is a split of authority as to whether the FAA preempts
Pa.R.C.P. 213(e) (which mandates consolidation of Survival and Wrongful Death claims).
Compare, e.g., Taylor v. Extendicare Health Facilities, Inc., 113 A.3d 317 (Pa. Super. 2015)
with Golden Gate Nat'l Senior Care, LLC v. Beavens, 2015 WL 5000886, at *10 (E.D. Pa. Aug.
20, 2015) (concluding that federal district courts are not bound by the Pennsylvania Superior
Court’s decision in Taylor). The Court further recognizes that the result of this decision will
create inefficiency, as the parties will be forced to litigate very similar disputes in separate
forums.
Nevertheless, the Supreme Court explained in Moses H. Cone Mem'l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 19-20 (1983), that related claims must sometimes be resolved
piecemeal in different forums to accomplish the goals of the FAA.
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The Court notes that the pending Objections arise in the context of a ruling on a motion
to dismiss.
Magistrate Baxter noted that “the validity and enforceability of the ADR
Agreement is still at issue.”
See Kirleis v. Dickie, McCamey & Chilcote, P.C., 560 F.3d 156,
160 (3d Cir. 2009) (“a court must determine that (1) a valid agreement to arbitrate exists, and (2)
the particular dispute falls within the scope of that agreement”).
Upon remand, the Magistrate
Judge should proceed expeditiously to determine whether the issues of validity and
enforceability are truly contested.
See Beavens, 2015 WL 5000886, at *5:
I may resolve GGNSC's motion to compel arbitration at the pleading stage without
the benefit of discovery if “it is apparent, based on ‘the face of [the petition], and
documents relied upon in the [petition],’ that certain of a party's claims ‘are subject
to an enforceable arbitration clause’....” Guidotti v. Legal Helpers Debt Resolution,
L.L.C., 716 F.3d 764, 776 (3d Cir.2013) (citing Somerset Consulting, LLC v.
United Capital Lenders, LLC, 832 F.Supp.2d 474, 482 (E.D.Pa.2011)).
If the issues are contested, the Magistrate Judge should resolve them quickly so that this case can
be closed and the parties can present their substantive disputes in the appropriate forum(s).1
Conclusion
The Court finds that Magistrate Judge Baxter reached a reasoned, well-supported
decision in the August 13, 2015 R&R.
Accordingly, after a de novo review of the Objections,
responses and other pleadings and documents in this case, an appropriate Order follows.
McVerry, S.J.
1 Defendant also objected to the R&R’s analysis of the Colorado River abstention doctrine.
The Court agrees with and adopts Magistrate Judge Baxter’s analysis.
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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
ERIE OPERATING, LLC d/b/a
GOLDEN LIVING CENTER-WALNUT
CREEK, ERIE ACQUISITION, LLC;
GOLDEN GATE NATIONAL SENIOR
CARE, LLC; GGNSC EQUITY
HOLDINGS, LLC; GGNSC CLINICAL
SERVICES, LLC;
GGNSC ADMINISTRATIVE SERVICES,
LLC; SPECTRA HEALTHCARE
ALLIANCE, INC.; SPECTRA
HEALTCARE ALLIANCE VI, LLC; and
BEVERLY ENTERPRISES, INC.,
Plaintiffs,
v.
TOM FOSTER, Administrator of the
Estate of Kenneth W. Foster, Deceased,
Defendant.
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C.A. No. 14-72 Erie
ORDER OF COURT
AND NOW, this 8th day of October, 2015, IT IS HEREBY ORDERED, ADJUDGED
and DECREED that the R&R of August 13, 2015 is ADOPTED as the Opinion of the Court;
Defendant’s OBJECTION TO REPORT AND RECOMMENDATION (ECF No. 40) is
DENIED; and DEFENDANT’S MOTION TO DISMISS PLAINTIFFS’ AMENDED
COMPLAINT (ECF No. 24) is GRANTED IN PART AND DENIED IN PART.
The case is hereby remanded to Magistrate Judge Baxter for further proceedings in
accordance with this Memorandum Opinion.
s/ Terrence F. McVerry
TERRENCE F. McVERRY
Senior United States District Judge
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cc:
U.S. Magistrate Judge Susan Paradise Baxter
William M. Buchanan, Esq.
Email: wmbuchanan@burnswhite.com
Patrick L. Mechas, Esq.
Email: plmechas@burnswhite.com
Michael T. Collis, Esq.
Email: mcollis@wilkesmchugh.com
Ryan J. Duty, Esq.
Email: rduty@wilkesmchugh.com
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