Elderberry of Weber City, LLC v. Living Centers - Southeast, Inc. et al

Filing 54

MEMORANDUM OPINION. Signed by Judge Norman K. Moon on 4/5/13. (hnw)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
LYNCHBURG DIVISION

CASE NO. 6:12-cv-00052

ELDERBERRY OF WEBER CITY, LLC,
Plaintiff,

MEMORANDUM OPINION
v.
LIVING CENTERS – SOUTHEAST, INC., ET AL.,

JUDGE NORMAN K. MOON

Defendants.

This matter is before the Court upon Defendant Mariner Health Care, Inc.’s motion for
certification of interlocutory appeal under 28 U.S.C. § 1292(b). For the following reasons, I will
deny the motion.
I. BACKGROUND
Plaintiff Elderberry of Weber City, LLC (“Elderberry”) filed this action alleging one
count of breach of a lease agreement against Living Centers – Southeast, Inc. (“Living Centers);
FMSC Weber City Operating Company, LLC; and ContiniumCare of Weber City, LLC
(“Continium”) (collectively, the “Continium Defendants”), and a separate count for breach of
contract against Mariner Health Care, Inc. (“Mariner”). Elderberry owns property in Weber
City, VA, on which the Continium Defendants at various times separately operated a long-term
skilled nursing facility pursuant to a lease agreement. In 2006, Elderberry and Living Centers
signed an amendment to the lease in which they agreed that Living Centers could assign the lease
to Family Senior Care Holdings, LLC or any of its subsidiaries or affiliates, provided that

Mariner guarantee the obligations of the assignee. At the time the parties signed the lease
amendment, Boyd Gentry, Executive Vice President and Chief Financial Officer of Mariner,
signed a document entitled “Lease Guaranty” (the “Guaranty”), which was attached as an exhibit
to the lease amendment.1
Continium stopped paying rent to Elderberry in March 2012, and no entity has paid rent
since then. Elderberry sent a letter to Living Centers, Continium, Mariner, and The Bernstein
Law Firm on August 15, 2012, demanding payment of past-due rent and notifying all parties that
if Elderberry did not receive payment within seven days of the notice, Elderberry would
terminate the lease and pursue remedies in court if necessary. On August 24, 2012, Elderberry
sent another letter to the same four recipients terminating the lease. A week later, on August 31,
2012, Mariner filed a declaratory judgment action against Elderberry in the U.S. District Court
for the Northern District of Georgia, seeking a declaration that the Guaranty is void under
Georgia law. On September 27, 2012, Elderberry moved to dismiss the Georgia action and filed
the instant action in this Court the same day.
Mariner responded to Elderberry’s complaint on November 2, 2012, by filing a motion to
dismiss, stay, or transfer this case to the Northern District of Georgia. After completion of
briefing on that motion, Mariner filed a motion to dismiss for lack of personal jurisdiction
pursuant to Federal Rule of Civil Procedure 12(b)(2) on January 10, 2013.2 The parties
submitted further briefing on the personal jurisdiction issue, and on March 20, 2013, I denied
Mariner’s motion to dismiss for lack of personal jurisdiction, holding that Mariner had waived
the personal jurisdiction defense by failing to raise it in its first motion to dismiss. Mariner now

1

Gentry also signed the lease amendment on behalf of Living Centers in his capacity as Vice President of that
entity.
2
Oral argument on the first motion was originally scheduled for January 7, 2013—three days before Mariner filed
its 12(b)(2) motion—but was postponed one week to January 14, 2013, at the request of Mariner’s counsel.

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requests that I certify for interlocutory appeal the following issue: “whether a defendant filing a
motion to transfer or stay waives any and all rights to object to personal jurisdiction.”3
II. DISCUSSION
The procedure for appealing interlocutory orders of a district court is governed by 28
U.S.C. § 1292(b), which provides, in pertinent part, as follows:
When a district judge, in making in a civil action an order not otherwise
appealable under this section, shall be of the opinion that such order involves a
controlling question of law as to which there is substantial ground for difference
of opinion and that an immediate appeal from the order may materially advance
the ultimate termination of the litigation, he shall so state in writing in such order.
The Court of Appeals which would have jurisdiction of an appeal of such action
may thereupon, in its discretion, permit an appeal to be taken from such order, if
application is made to it within ten days after the entry of the order . . . .
Thus, courts have recognized that “leave to file an interlocutory appeal should be granted only
when (1) the order involves a controlling question of law, (2) as to which there is a substantial
ground for a difference of opinion, and (3) immediate appeal would materially advance the
termination of the litigation.” Univ. of Va. Patent Found. v. Gen. Elec. Co., 792 F. Supp. 2d 904,
909 (W.D. Va. 2011); see also Terry v. June, 368 F. Supp. 2d 538, 539 (W.D. Va. 2005);
Lovelace v. Rockingham Mem’l Hosp., 299 F. Supp. 2d 617, 623 (W.D. Va. 2004). The Fourth
Circuit has characterized a “controlling question of law” as “a narrow question of pure law
whose resolution will be completely dispositive of the litigation, either as a legal or practical
matter, whichever way it goes.” Fannin v. CSX Transp., Inc., 873 F.2d 1438, at *5 (4th Cir.
1989) (per curiam) (unpublished). Finally, “[a]s an exception to the general rule that a party may
appeal only a final judgment, interlocutory appeals under section 1292(b) are justified in
circumstances that are limited and strictly construed.” Young v. Sheetz, Inc., 998 F. Supp. 670,
3

I note that in framing the issue that it seeks to certify for interlocutory appeal, Mariner describes its first motion as
a motion “to transfer or stay.” However, Mariner captioned the motion itself as a motion to “dismiss, stay, or
transfer,” and devoted a significant part of its brief to discussion of why the case should be dismissed, not just stayed
or transferred.

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672–73 (W.D. Va. 1998) (citing Matterhorn, Inc. v. NCR Corp., 727 F.2d 629, 633 (7th Cir.
1984)); see also Myles v. Laffitte, 881 F.2d 125, 127 (4th Cir. 1989).
I find that the issue Mariner wishes to certify for appeal is not a controlling question as
that term has been described by the Fourth Circuit, and I also find that granting Mariner’s motion
would not materially advance the termination of the litigation. Resolution of the question
whether Mariner waived its objection to personal jurisdiction by failing to raise it in its motion to
dismiss, stay, or transfer would not be “completely dispositive of the litigation, either as a legal
or practical matter, whichever way it goes.” Regardless of how the Fourth Circuit might decide
the issue, this Court would still have to decide the merits of the case. On the one hand, if the
Fourth Circuit were to find that Mariner had not waived its personal jurisdiction objection, such a
decision would not be completely dispositive of the personal jurisdiction issue raised by a single
defendant, let alone the entire case; this court would still have to decide whether Mariner is
subject to personal jurisdiction in this district.4 On the other hand, if the Fourth Circuit were to
agree with this Court and find that Mariner did waive its personal jurisdiction objection, then the
interlocutory appeal would have served only to further delay the resolution of this matter, which
has already been delayed by Mariner’s decision to file separate motions to dismiss. Thus,
regardless of the outcome of an interlocutory appeal, granting Mariner leave to appeal at this
stage would not dispose of the case or save resources, but rather would prolong the case without

4

Although I decided that Mariner has waived its objection to personal jurisdiction and I need not revisit that issue
now because I find that Mariner has not met the high standard required by 28 U.S.C. § 1292(b), I note that I find it
very hard to believe that Mariner is not subject to personal jurisdiction in this district. Plaintiff has alleged that
Mariner agreed to guarantee a lease involving the operation of a long-term skilled nursing facility licensed by a
Virginia state agency and located on Virginia real property owned by a Virginia LLC. I find it particularly telling
that although Mariner claims that the Guaranty would not be sufficient to subject it to personal jurisdiction in
Virginia, the company asserts that the same Guaranty would be sufficient to subject Elderberry to personal
jurisdiction in Georgia, despite the fact that the only apparent connection to Georgia is that Mariner is based in that
state, and Gentry allegedly signed the documents there.

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materially advancing the termination of the litigation.5 In sum, I find that Mariner has failed to
meet the strict requirements for certification of interlocutory appeal set forth by 28 U.S.C. §
1292(b).
III. CONCLUSION
For the foregoing reasons, I will deny Mariner’s motion for certification of interlocutory
appeal. An appropriate order accompanies this memorandum opinion.
The Clerk of the Court is hereby directed to send a certified copy of this memorandum
opinion and the accompanying order to all counsel of record.

5th
Entered this ________ day of April, 2013.

5

Imposing a delay to address the waiver issue would be particularly inappropriate in this case and with respect to
this issue. As I noted in my opinion denying Mariner’s motion to dismiss for lack of personal jurisdiction, the
purpose of Rule 12’s consolidation requirements is to avoid exactly this type of dilatory piecemeal litigation.

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