Wright v. SSC Nashville Operating Company LLC et al

Filing 29

MEMORANDUM OPINION OF THE COURT. Signed by District Judge Waverly D. Crenshaw, Jr on 3/8/2017. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(eh)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
JACQUELINE WRIGHT, as next of kin
and on behalf of the wrongful death
beneficiaries of RACHEL COOK
WRIGHT,
Plaintiff,
v.
SSC NASHVILLE OPERATING
COMPANY LLC d/b/a Greenhills Health
and Rehabilitation Center,
Defendant.

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NO. 3:16-cv-00768
JUDGE CRENSHAW

MEMORANDUM OPINION
SSC Nashville Operating Company LLC d/b/a Greenhills Health and Rehabilitation Center
(“SSC”) has filed a Motion to Compel Arbitration and Stay Lawsuit. (Doc. No. 22.) Jacqueline
Wright (“Plaintiff”) has filed a Response (Doc. No. 24), and SSC has filed a Reply (Doc. No. 27).
For the reasons below, that motion is GRANTED and the case is STAYED. The Court will
administratively close the matter, and it may be reopened for cause on the motion of either party.
Plaintiff’s Motion to Ascertain Status (Doc. No. 28) is DENIED as moot.
I. BACKGROUND
On January 19, 2006, Rachel Cook Wright executed a durable power of attorney and
healthcare power of attorney in favor of Plaintiff, her daughter. (Doc. Nos. 22-3 & 22-4.) On
December 1, 2014, Rachel Cook Wright was admitted to the SSC-operated Greenhills Health and
Rehabilitation Center (“GHRC”). (Doc. No. 1-2 at ¶ 11.) Pursuant to her mother’s admission to
the facility, Plaintiff signed several portions of a Resident Admission Agreement (“RAA”). (Doc.
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No. 24-1 at 13–15, 20, 32, 45–46, 48.) The RAA includes an integration clause providing that
“This Agreement . . . supersedes all other agreements . . . between the parties” and that the
“Agreement may be amended only by a written agreement signed on behalf of the Facility and the
Resident.” (Id. at 12.)
On the same day, Plaintiff signed a document entitled “Dispute Resolution Program”
(“DRP”). The DRP provides that the Wrights “waive their right to a judge or jury trial” for any
“dispute” arising with SSC, “dispute” being defined as “a cause of action either Party could bring
in a court of law for any claim totaling $50,000.” (Doc. No. 23-1 at 2.) The DRP provides three
possible signature lines for the resident or her representative: one for “[i]f the resident is mentally
competent to consent to this Agreement under state law”; one for “[i]f competent resident is unable
to physically execute the Agreement and authorizes a representative to sign Agreement on the
resident’s behalf”; and one for “[i]f the resident is adjudged incompetent.” (Id. at 5–6.) The
document provides no signature line, however, for the representative of a resident who is
incompetent but has never been formally adjudged so. Plaintiff signed the line pertaining to a
“competent resident [who] is unable to physically execute the Agreement and authorizes a
representative to sign,” despite the fact that, the parties agree, Rachel Cook Wright was not
mentally capable of making decisions for herself at the time. (Doc. No. 24 at 2; Doc. No. 27 at 3.)
The DRP also calls for signatures from one “Facility Agent” and two “Facility
Witness[es].” (Doc. No. 23-1 at 5–6.) The only signature appearing on the document on behalf
of SSC, however, is that of Katherine Hunter on the line for “Facility Witness #1.” The same
Katherine Hunter appears to have executed the RAA on behalf of SSC. (Doc. No. 24-1 at 13, 15,
20, 32, 45.) There, she is referred to as a “Facility Representative.” (Id. at 15, 20.)

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Rachel Cook Wright died on December 15, 2014. (Doc. No. 1-2 at ¶ 23.) Plaintiff alleges
that her mother’s death was a result of GHRC staff allowing her to become dehydrated and develop
infections. (Id. at ¶ 22.) On March 30, 2016, Plaintiff sued SSC and five other Defendants for
claims related to her mother’s death. (Id. at ¶¶ 26–37.) Defendants jointly removed the case to
this Court based on diversity of citizenship. (Doc. No. 1 at ¶¶ 2–8.) Plaintiff stipulated to dismissal
without prejudice of all defendants other than SSC. (Doc. Nos. 16 & 20.) SSC filed a motion to
compel arbitration and stay the case. (Doc. No. 22.)
II. ANALYSIS
A. Standard of Review
Under the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1–16, where a litigant establishes
the existence of a valid agreement to arbitrate, the district court must grant the litigant’s motion to
compel arbitration and to stay or dismiss proceedings until the completion of arbitration. Glazer
v. Lehman Bros., Inc., 394 F.3d 444, 451 (6th Cir. 2005) (citing 9 U.S.C. §§ 3–4). The FAA
creates a strong presumption in favor of arbitration, O.J. Distrib., Inc. v. Hornell Brewing Co., 340
F.3d 345, 355 (6th Cir. 2003), and any doubts regarding arbitrability must be resolved in favor of
arbitration. Fazio v. Lehman Bros., Inc., 340 F.3d 386, 392 (6th Cir. 2003). Nevertheless, an
arbitration agreement may be voided for the same reasons for which any contract may be
invalidated under state law, “provided the contract law applied is general and not specific to
arbitration clauses.” Fazio, 340 F.3d at 393.
Where a party challenges the validity of an arbitration clause that is part of a larger
agreement, she must rely on defects that would render the arbitration clause in particular, not the
contract itself, invalid. Burden v. Check into Cash of Ky., LLC, 267 F.3d 483, 488 (6th Cir. 2002).
That is, “unless the challenge is to the arbitration clause itself, the issue of the contract’s validity

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is considered by the arbitrator in the first instance.” Buckeye Check Cashing, Inc. v. Cardegna,
546 U.S. 440, 445–46 (2006).
B. Enforceability
As an initial matter, the Court concludes that Plaintiff’s claims fall within the scope of the
plain language of the DRP. Plaintiff nevertheless argues that the DRP is unenforceable for three
reasons: (1) Plaintiff signed a signature line that did not accurately reflect her legal relationship
with her mother; (2) the agreement was signed by only one representative of the facility, on a line
apparently intended for a witness; and (3) the integration clause of the RAA supersedes the DRP. 1
Because each of these objections attacks the DRP itself and relies on general principles of contract
law, each is appropriate for consideration by the Court before granting a motion to compel
arbitration.
Plaintiff’s arguments related to the parties’ signatures seem to be based in a highly
formalistic, technical vision of contractual formation that is not reflected in Tennessee law. “[I]n
Tennessee, otherwise binding written contracts need not be signed in order for an arbitration clause
contained therein to be enforceable.” T.R. Mills Contractors, Inc. v. WRH Enters., LLC, 93
S.W.3d 861, 870 (Tenn. Ct. App. 2002). “The key,” rather, “is mutual assent to be bound.” Robert
J. Denley Co. v. Neal Smith Const. Co., No. W2006-00629-COA-R3CV, 2007 WL 1153121, at
*3 (Tenn. Ct. App. Apr. 19, 2007). “In determining mutuality of assent, courts must apply an
objective standard based upon the parties’ manifestations.” Staubach Retail Servs.-Se., LLC v.
H.G. Hill Realty Co., 160 S.W.3d 521, 524 (Tenn. 2005) (citing T.R. Mills, 93 S.W.3d at 866).

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Plaintiff’s counsel also speculates that Plaintiff’s signing the wrong line suggests that Plaintiff
had doubts about her legal authority to enter into the contract under her powers of attorney. (Doc.
No. 24 at 2.) Plaintiff does not, however, actually advance any challenge to either the durable
power of attorney or healthcare power of attorney.
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Tennessee law permits a court to consider the parties’ respective levels of sophistication in
determining whether mutual assent has been reached. See Wofford v. M.J. Edwards & Sons
Funeral Home Inc, 490 S.W.3d 800, 812 (Tenn. Ct. App. 2015), appeal denied (May 6, 2016).
Accordingly, an individual consumer may be held not to have assented in a situation where a more
sophisticated commercial entity would.

Id.

Even considering Plaintiff’s status as a mere

consumer, however, the signatures on the DRP are plainly adequate to objectively manifest mutual
assent. That the signatories happened to sign the wrong lines does not render the agreement a
nullity. Plaintiff moreover cites no authority for the proposition that the lack of two additional
signature witnesses renders the DRP unenforceable. Plaintiff’s arguments based on the signatures
or lack thereof fail.
Plaintiff’s argument with regard to the integration clause is similarly unavailing. When a
court interprets a contract under Tennessee law, its “role is to ascertain the intention of the
parties.” MLG Enters., LLC v. Johnson, No. M2014-01205-SC-R11-CV, 2016 WL 4582174, at
*3 (Tenn. Sept. 2, 2016) (quoting 84 Lumber Co. v. Smith, 356 S.W.3d 380, 383 (Tenn.2011)).
While the RAA does purport to supersede all other agreements, it also states that it may be
amended in writing.

The parties signed the agreements, by all appearances, essentially

contemporaneously. It would make little sense to sign the DRP while at the same time expecting
it to be wholly superseded. A much more plausible reading of the parties’ intent is that the DRP
is an amendment to the RAA and remains enforceable.
This court has construed the FAA as permitting either dismissal or a stay of consideration
of claims pending arbitration. See Dean v. Draughons Jr. Coll., Inc., 917 F. Supp. 2d 751, 764
(M.D. Tenn. 2013); Tenn. Imps., Inc. v. Filippi, 745 F. Supp. 1314, 1323 (M.D. Tenn. 1990). At
this juncture, SSC has requested only a stay, and the Court is reluctant to dismiss the matter on its

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own motion. Nevertheless, the Court sees very little left for it to do in this case, at least until
arbitration is completed. Accordingly, the Court will administratively close the case. If either
party wishes to re-open it, that party may do so by way of a motion setting forth the status of the
arbitration proceeding and explaining the ground for seeking administrative re-opening.
VI. CONCLUSION
For the foregoing reasons, SSC’s Motion to Compel Arbitration and Stay Lawsuit is
GRANTED. Plaintiff is ORDERED to submit to arbitration, and this case is STAYED pending
resolution.

Plaintiff’s Motion to Ascertain Status is DENIED as moot.

The case is

ADMINISTRATIVELY CLOSED and may be reopened for cause on the motion of either party.
The Court will issue an appropriate Order.

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WAVERLY D. CRENSHAW, JR.
UNITED STATES DISTRICT JUDGE

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