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Jerry Erwin Associates, Inc. v. Estate of Asher

United States District Court, D. New Mexico

November 30, 2017

JERRY ERWIN ASSOCIATES, INC., d/b/a JEA Senior Living, Plaintiff,
v.
ESTATE OF LUCILLE ASHER, Deceased, by and through Personal Representative, KEVIN ZANGARA, Defendant.

          Tomas J. Garcia Michelle A. Hernandez Modrall, Sperling, Roehl, Harris & Sisk, P.A. Albuquerque, New Mexico Attorneys for the Plaintiff.

          James H. Wood Thomas Gordon Wood Law Office of James H. Wood, P.C. Albuquerque, New Mexico Attorneys for the Defendant.

          MEMORANDUM OPINION [1]

         THIS MATTER comes before the Court on: (i) the Plaintiff's Motion to Compel Arbitration, filed January 8, 2016 (Doc. 2)(“Motion”); and (ii) the Defendant's Motion to Dismiss Plaintiff's Complaint to Compel Arbitration and Memorandum Brief in Support, filed February 4, 2016 (Doc. 15)(“Zangara's Motion”). The Court held a hearing on March 29, 2016. The primary issues are: (i) whether the Court has subject-matter jurisdiction in this case because of the parties' diversity, despite the existence of possible non-diverse parties in the underlying state court action who are not before this Court; (ii) whether decedent Lucille Asher's conservator had the authority to bind Lucille Asher and her estate to the Arbitration Agreement, Resident Admission Agreement at 3, filed January 8, 2016 (Doc. 3-2)(“Arbitration Agreement”); (iii) whether the Arbitration Agreement is within the scope of the Federal Arbitration Act, 9 U.S.C. §§ 1-16 (“FAA”); (iv) whether the claims asserted are within the Arbitration Agreement's scope; (v) whether Plaintiff Jerry Erwin Associates, Inc. (“Erwin Associates”) has the power to enforce the Arbitration Agreement, even though it is not a party to the Arbitration Agreement; and (vi) whether the Arbitration Agreement is unconscionable. The Court concludes that: (i) the Court has subject-matter jurisdiction in this case, because the parties before the Court are diverse, and the Court should not “look through” to the state court action to determine diversity; (ii) Lucille Asher's conservator had the authority to bind her and her estate to the Arbitration Agreement; (iii) the Arbitration Agreement is within the FAA's scope; (iv) the claims asserted are within the Arbitration Agreement's scope; (v) Erwin Associates has the power to enforce the Arbitration Agreement; and (vi) the relevant part of the Arbitration Agreement is not unconscionable. Accordingly, the Court grants the Plaintiff's Motion and denies Zangara's Motion.

         FACTUAL BACKGROUND

         In 2011, a state district court issued an order appointing a Guardian of Person and a Conservator of the Estate for an elderly woman named Lucille Asher (“L. Asher”). See Order Appointing Guardian of Person and Conservator of Estate of An Incapacitated Person at 3-4, filed January 8, 2016 (Doc. 3-1)(“Guardianship Order”). Specifically, the Guardianship Order appointed William R. “Randy” Asher (“W. Asher”), L. Asher's son, as Guardian of Person, and Urbielewicz Murphree CPAs, P.C. (“Murphree CPAs”) as Conservator of the Estate. See Guardianship Order at 3-4. The Guardianship Order declares that “William R. ‘Randy' Asher shall have the final and ultimate authority to make all medical decisions for the incapacitated person, including but not limited to making decisions regarding where the incapacitated person should reside.” Guardianship Order at 4.

         W. Asher “decided to try to admit Lucille to North Ridge” Alzheimer's Special Care Center (“North Ridge”), a nursing home that Erwin Associates manages and operates. Defendant's Response to Plaintiff's Motion to Compel Arbitration at 3, filed January 29, 2016 (Doc. 14)(“Response 1”); Plaintiff's Memorandum of Law in Support of Plaintiff's Motion to Compel Arbitration at 1, filed January 8, 2016 (Doc. 3)(“Memorandum”). Erwin Associates has a Management Services Agreement with Albuquerque Care Group, LLC (“Albuquerque Care”), a company that owns the nursing home. See Management Services Agreement at 1, filed February 16, 2016 (Doc. 17-3)(“Management Agreement”). According to the Management Agreement, Erwin Associates “will perform all services necessary to provide and maintain quality care and management for the Facility and the Residents . . . including . . . [r]epresenting the Facility in all dealings with regulatory authorities, creditors, Residents, Facility Employees and other personnel and insurers.” Management Agreement at 2.

         L. Asher was admitted to North Ridge, and Murphree CPAs, but not W. Asher, signed the Resident Admission Agreement. See Arbitration Agreement at 3. The other party to the Arbitration Agreement is “Albuquerque Care Group, LL[C], doing business as North Ridge Alzheimer's Special Care Center” and not Erwin Associates. Arbitration Agreement at 1. In key part, the Arbitration Agreement reads:

Agreement to Resolve Disputes Through Arbitration: The Facility, Resident, and the Resident's Representative agree, as an important and integral part of this Agreement, that any and all claims and disputes arising from or related to this Agreement or to Resident's care, services, or residency at the Facility shall be resolved by submission to neutral, binding arbitration rather than a trial before a judge or jury (except for the specific claims and disputes set forth in the following paragraph). . . . This arbitration clause binds all parties to this Agreement and their spouses, heirs, representatives, executors, administrators, successors, and assigns, as applicable.
Actions Not Subject to Arbitration:
The parties agree that any claim or dispute involving or related to unlawful detainer (eviction) proceedings shall not be subject to arbitration unless both parties agree to arbitrate such proceedings. Furthermore, any action arising out of or relating to this Agreement for which arbitration is not allowed by law, or which the parties have agreed (herein or otherwise) not to arbitrate, shall be brought in the appropriate court before a judge rather than a jury.

         Arbitration Agreement at 3. W. Asher, and not Murphree CPAs, signed other forms on L. Asher's behalf, including an Authorization for Medication Assistance and a Notification of Rights and Responsibilities with Incident Reporting. See Arbitration Agreement at 10-11.

         L. Asher died in 2012. See Memorandum at 4. Allegedly, “Ms. Asher went to the emergency room . . . [and] [f]ollowing abdominal surgery, she was diagnosed with suspected perforated appendicitis resulting in an abscess and a large area of infection.” Estate of Lucille Asher, Deceased, by and through Personal Representative, Kevin Zangara v. JEA Senior Living, Inc., d/b/a North Ridge Alzheimer's Special Care Center, and Tamara Goodman, MD, LLC, ¶ 13, at 3, D-820-CV-2015-00311 (Eighth Judicial District Court, County of Taos, State of New Mexico), in file at January 8, 2016 (Doc. 3-5)(“State Court Complaint”). According to the State Court Complaint, “Ms. Asher died . . . of septic shock due to the abdominal infection.” State Court Complaint ¶ 14, at 3. Allegedly, North Ridge was negligent “by failing to timely and properly diagnose Ms. Asher's appendicitis.” State Court Complaint ¶ 16, at 3. According to the State Court Complaint, “North Ridge was negligent in hiring unqualified staff and in granting clinical privileges to and permitting the continued exercise of clinical privileges by physicians North Ridge knew or reasonably should have known were not qualified to exercise clinical privileges with reasonable skill.” State Court Complaint at 4.

         Defendant Kevin Zangara was appointed L. Asher's Personal Representative for the purpose of bringing a wrongful death action against Erwin Associates. See Memorandum at 4. Zangara filed such an action in state district court. See State Court Complaint ¶ 1, at 1.

         PROCEDURAL BACKGROUND

         Erwin Associates moves the Court to compel Zangara to arbitrate claims that Zangara has asserted in state court against Erwin Associates. See Memorandum at 1. Zangara moves to dismiss the Plaintiff's Motion. See Zangara's Motion at 1. The Court will summarize the parties' arguments.

         1. Erwin Associates' Motion and Memorandum.[2]

         Erwin Associates contends that the claims which Zangara asserts in the state court action are subject to a binding arbitration provision. See Memorandum at 4. Erwin Associates further contends that the FAA governs the Arbitration Agreement, because there is a valid written arbitration agreement and the dispute is within the agreement's scope. See Memorandum at 6. Erwin Associates asserts that, because Murphree CPAs signed the Arbitration Agreement on L. Asher's behalf, L. Asher and her estate are bound. See Memorandum at 4. In the alternative, Erwin Associates argues that L. Asher was “bound to arbitrate as the intended beneficiary and third-party beneficiary” of the Arbitration Agreement, because “the resident is the person named in the agreement who is admitted to the facility and is conferred certain rights and benefits.” Memorandum at 9.

         Next, Erwin Associates asserts that the Defendant is “estopped from denying the validity of the arbitration provision.” Memorandum at 12. Specifically, Erwin Associates argues that Murphree CPAs “made a promise to JEA to be bound by the terms in the Admission Agreement, including the arbitration provision. Thus, Erwin Associates reasonably relied on . . . Murphree's promise to abide by the terms of the arbitration provision.” Memorandum at 12.

         Finally, Erwin Associates contends that the “Defendant's claims are clearly within the scope of the arbitration provision.” Memorandum at 13. Erwin Associates notes that the Arbitration Agreement says that “‘any and all claims and disputes'” are subject to arbitration, and that the Arbitration Agreement binds all ‘“spouses, heirs, representatives, executors, administrators, successors, and assigns.'” Memorandum at 13-14. Erwin Associates thus concludes that the claims at issue are within the Arbitration Agreement's scope. See Memorandum at 14. Regarding relief, Erwin Associates requests the Court to grant the Motion and stay the state court proceedings. See Memorandum at 14.

         2. Zangara's Response.

         Zangara responds to the Motion and Memorandum. See Response 1 at 1. First, Zangara argues that Erwin Associates is not a real party in interest to this suit. See Response 1 at 6. Zangara concludes that, because Erwin Associates is not a real party in interest, Erwin Associates cannot enforce the Arbitration Agreement. See Response 1 at 6.

         Next, Zangara contends that Erwin Associates “cannot enforce the agreement because Erwin Associates is not an intended beneficiary of the agreement.” Response 1 at 7. According to Zangara, because Erwin Associates is not mentioned anywhere in the agreement, one cannot say that the parties intended for the agreement to benefit Erwin Associates. See Response 1 at 9. For this reason, Zangara concludes that Erwin Associates “has no right to enforce the Agreement.” Response 1 at 9.

         Further, Zangara asserts that the Arbitration Agreement is both substantively and procedurally unconscionable. See Response 1 at 12. Regarding substantive unconscionability, Zangara contends that, because the Arbitration Agreement excludes claims from arbitration “involving or related to eviction, the Agreement requires the arbitration of the vast majority of claims that would be brought by the patient, who is the weaker party, while excluding those disputes that would exclusively be pursued by the nursing home.” Response 1 at 12. Regarding procedural unconscionability, Zangara asserts that, because “the Agreement was offered . . . on a take-it-or-leave-it basis, ” and because the Arbitration Agreement was mandatory, the Arbitration Agreement is procedurally unconscionable. See Response 1 at 13. Zangara adds that the nursing home “had all the bargaining power.” Response 1 at 13. Zangara concludes that the Court should deny the Motion. See Response 1 at 14.

         3. Erwin Associates' Reply.

         Erwin Associates replies to Zangara's Response. See Reply in Support of Plaintiff's Motion to Compel Arbitration, filed February 16, 2016 (Doc. 17)(“Reply 1”). Erwin Associates contends that it is a real party in interest, noting that in the state court action, “Defendant sued and served JEA. Defendant, now to avoid arbitration, is claiming that JEA is not a real party in interest.” Reply 1 at 3. Erwin Associates also contends that it is a third-party beneficiary to the Arbitration Agreement. See Reply 1 at 3. It notes that the Arbitration Agreement binds the parties' “representatives, ” “administrators, ” and “assigns.” Reply 1 at 5. Erwin Associates asserts that it is “a representative of, administrator, and assign of Albuquerque Care Group, LLC pursuant to a Management Services Agreement.” Reply 1 at 6.

         Erwin Associates further argues that the Arbitration Agreement is not unconscionable. See Reply 1 at 9. It argues that “the United States District Court for the District of New Mexico has held that a nursing home admission agreement is not procedurally unconscionable just because it contains an arbitration provision.” Reply 1 at 10 (citing THI of New Mexico at Hobbs Ctr., LLC v. Spradlin, 893 F.Supp.2d 1172, 1185-86 (D.N.M. 2012)(Vazquez, J.)(“Spradlin”)). Regarding substantive unconscionability, Erwin Associates asserts that

[t]he Court in Spradlin also held that an arbitration agreement in a nursing home admission contract was not substantively unconscionable because the arbitration provision divested the nursing home of its right to have its claims decided in a court in the same manner as it divested the resident's interest.

         Reply 1 at 11 (citing Spradlin, 893 F.Supp.2d at 1186). JEA contends that the Arbitration Agreement here is similar to the one in Spradlin. See Reply 1 at 11.

         4. Zangara's Motion.

         Zangara moves to dismiss Erwin Associates' Motion. See Zangara's Motion at 1. Zangara re-alleges that JEA is not a real party in interest to, nor an intended third-party beneficiary of, the Arbitration Agreement. See Zangara's Motion at 7-8. He adds that the Arbitration Agreement never mentions Erwin Associates, and that the only party to the agreement -- other than L. Asher -- is Albuquerque Care. See Zangara's Motion at 9.

         Zangara next re-asserts that the Arbitration Agreement is both substantively and procedurally unconscionable. See Zangara's Motion at 13-14. Regarding substantive unconscionability, he contends that “the Agreement requires arbitration of the vast majority of claims that would be brought by the patient, who is the weaker party, while excluding those disputes that would exclusively be pursued by the nursing home.” Zangara's Motion at 14. Zangara then re-asserts his procedural unconscionability arguments. See Zangara's Motion at 14-16.

         Finally, Zangara argues that the Court lacks subject-matter jurisdiction over this case. See Zangara's Motion at 16. He contends that Erwin Associates “fails to meet its burden of proving the diverse citizenship of each real party in interest.” Zangara's Motion at 17 (emphasis in original). Specifically, he alleges that “[t]he only named parties to the Agreement for which Lucille Asher or her representatives could have intended the Agreement to benefit are ABQ Care, LL[C], North Ridge, or ABQ Care, LL[C] doing business as North Ridge.” Zangara's Motion at 17. Zangara concludes that because all of these entities are New Mexico citizens, the Court has no diversity jurisdiction. See Zangara's Motion at 17.

         5. Erwin Associates' Response.

         Erwin Associates responds to Zangara's Motion. See Plaintiff's Response to Defendant's Motion to Dismiss, filed February 22, 2016 (Doc. 19)(“Response 2”). Erwin Associates begins by arguing that the Court has subject-matter jurisdiction over the case. See Response 2 at 3. Erwin Associates alleges that “Ms. Asher and the personal representative of her estate, were at all relevant times New Mexico residents, [and] JEA is a Washington corporation with its principal place of business in Vancouver, Washington.” Response 2 at 3. Erwin Associates thus concludes that the Court has diversity jurisdiction. See Response 2 at 3.

         Erwin Associates next argues that it is the real party in interest to this case. See Response 2 at 4. Erwin Associates re-alleges that Zangara sued Erwin Associates in state court, but now, to avoid arbitration, Zangara asserts that Erwin Associates is not a real party in interest. See Response 2 at 4. Erwin Associates further contends that it may enforce the Arbitration Agreement, because it is a third-party beneficiary of the Arbitration Agreement, re-alleging that the Arbitration Agreement binds Albuquerque Care's “representatives, ” “administrators, ” and “assigns.” Response 2 at 8. Erwin Associates contends that it is a representative, administrator, and assign of Albuquerque Care pursuant to its Management Agreement with Albuquerque Care. See Response 2 at 8.

         Erwin Associates again argues that the Arbitration Agreement is not unconscionable. See Response 2 at 15. Erwin Associates re-asserts its argument that Spradlin held that “a nursing home admission agreement is not procedurally unconscionable just because it contains an arbitration agreement.” Response 2 at 16 (citing Spradlin, 893 F.Supp.2d at 1185-86). Erwin Associates also re-alleges its arguments regarding substantive unconscionability. See Response 2 at 17. Erwin Associates concludes that the Court should deny Zangara's Motion. See Response 2 at 18.

         6. Zangara's Reply.

         Zangara replies to Erwin Associates' Response. See Defendant's Reply to Plaintiff's Response to Defendant's Motion to Dismiss, filed March 14, 2016 (Doc. 21)(“Reply 2”). First, Zangara contends that “the fact that [he] sued JEA in state court has no bearing on JEA's status as a real party in interest.” Reply 2 at 3. Zangara asserts that “JEA has the burden of pleading facts sufficient to establish that JEA is an intended third-party beneficiary of the Agreement, ” and that Erwin Associates has not done so. Reply 2 at 4 (emphasis in original). Zangara continues that “JEA focuses its argument . . . on the undisputed fact that Lucille Asher was an intended third-party beneficiary of the Agreement” and that “JEA seems to equate itself to Lucille Asher as an intended third-party beneficiary of the Agreement.” Reply 2 at 4.

         Zangara then re-alleges his arguments regarding lack of subject-matter jurisdiction and procedural unconscionability before asserting that “Murphree had neither actual nor implied authority to bind Lucille Asher to an agreement regarding medical decisions or where Lucille Asher would reside.” Reply 2 at 9. He notes that the Guardianship Order says that W. Asher, not Murphree CPAs, has “‘final and ultimate authority to make all medical decisions . . . including, but not limited to, making decisions regarding where [L. Asher] should reside.'” Reply 2 at 9 (quoting Guardianship Order at 4). Zangara then re-alleges his substantive unconscionability arguments. See Reply 2 at 10-11. Zangara concludes that the Court should grant the Defendant's Motion. See Reply 2 at 12.

         7. The Hearing.

         The Court held a hearing on March 29, 2016. See Draft Transcript of Motion Proceeding (taken March 29, 2016)(“Tr.”).[3] Erwin Associates began by announcing that the state district court had stayed the state proceeding, and that Erwin Associates was no longer asking the Court to stay the state proceedings. See Tr. at 5:21-25 (Hernandez). Erwin Associates then argued that it could enforce the Arbitration Agreement, asserting that the Arbitration Agreement binds the signers' “administrators” and “assigns, ” and that Erwin Associates is an administrator and an assign of Albuquerque Care. Tr. at 8:7-18 (Hernandez).

         Regarding procedural unconscionability, Erwin Associates argued that unconscionability is an affirmative defense, and that Zangara had not met his burden to establish such a defense. See Tr. at 15:2-6 (Hernandez). Turning to substantive unconscionability, Erwin Associates argued that “the Tenth Circuit addressed an arbitration agreement and exclusions regarding guardianship, collection, and eviction claims and specifically stated that under the FAA, you cannot treat arbitration agreements as inferior to litigation.” Tr. at 15:23-16:3 (Hernandez).

         Zangara began his argument. See Tr. at 16:19 (Wood). He requested that, “if the Court is . . . not inclined to decide the issue of the motion to compel arbitration as a matter of unconscionability, specifically as it pertains to procedural unconscionability, we'd request an evidentiary hearing on that matter initially.” Tr. at 16:22-17:2 (Wood). The Court then asked if a New Mexico case existed in which a court found procedural unconscionability, but not substantive unconscionability. See Tr. at 20:8-13 (Court). Zangara responded that he had not seen such a case. See Tr. at 20:14 (Wood). Zangara added, however, that the cases “do establish that you can have both or one. It doesn't require both. And then the case law is clear on that because it's been decided as a matter of substantive unconscionability on [more than] one occasion.” Tr. at 21:16-19 (Wood). Zangara added that “the FAA has explicitly allowed state law to govern the matter of whether or not a contract was formed under the equitable principle of unconscionability . . . so New Mexico case law on matters of unconscionability is the controlling law on this issue.” Tr. at 25:2-11 (Wood).

         Zangara continued that the Arbitration Agreement

is signed by the conservator who as an initial matter really doesn't even have the authority to bind Lucille Asher to decisions regarding where she lives . . . but when we get to the procedural unconscionability issue, I think it's significant that William Asher was known to exist . . . [and] was given two exhibits to sign . . . but was never given the [Arbitration Agreement].

Tr. at 33:8-34:1 (Wood).

         Erwin Associates responded to some of Zangara's arguments. Regarding the request for an evidentiary hearing, Zangara contended that the “defendant is in control of the evidence that would be relevant here . . . . I don't see why we need an evidentiary hearing for defense counsel to get evidence from his own client with respect to any procedural unconscionability.” Tr. at 41:13-24 (Hernandez). Erwin Associates also expressly stated that it withdraws its request for this Court to stay the state court proceedings. See Tr. at 47:22-23 (Hernandez).

         The Court concluded the hearing by saying “the substantive/procedural unconscionability, my initial reaction is those are not going to prevent a granting of the Plaintiff's motion.” Tr. at 51:3-5 (Court). The Court added: “I also think that I have jurisdiction, at least over the limited case that I have.” Tr. at 51:5-7 (Court). The Court also noted: “I guess the thing I'm most concerned about is the fact that the agreement is with Albuquerque [Care] and the party that's . . . trying to enforce this arbitration agreement is not a signatory to that agreement.” Tr. at 51:11-15 (Court).

         LAW REGARDING DIVERSITY JURISDICTION AND ARBITRATION

         “Subject-matter jurisdiction under 28 U.S.C. § 1332(a)(1) requires: (i) complete diversity among the parties; and (ii) that ‘the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs.'” Thompson v. Intel Corp., No. CIV 12-0620, 2012 WL 3860748, at *12 (D.N.M. Aug. 27, 2012)(Browning, J.)(citing 28 U.S.C. § 1332(a)). As the Court has previously explained, “[t]he Supreme Court of the United States has described this statutory diversity requirement as ‘complete diversity, ' and it is present only when no party on one side of a dispute shares citizenship with any party on the other side of a dispute.” McEntire v. Kmart Corp., No. CIV 09-0567, 2010 WL 553443, at *3 (D.N.M. Feb. 9, 2010) (Browning, J.)(citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267-68 (1806), overruled in part by Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149 (1908); McPhail v. Deere & Co., 529 F.3d 947, 951 (10th Cir. 2008)). The amount-in-controversy requirement is an “estimate of the amount that will be put at issue in the course of the litigation.” Valdez v. Metro. Prop. & Cas. Ins. Co., No. CIV 11-0507, 2012 WL 1132374, at *15 (D.N.M. March 19, 2012)(Browning, J.)(citing McPhail v. Deere & Co., 529 F.3d at 956). See De La Rosa v. Reliable, Inc., 113 F.Supp.3d 1135, 1150 (D.N.M. 2015)(Browning, J.); Ullman v. Safeway Ins. Co., 995 F.Supp.2d 1196, 1213-14 (D.N.M. 2013)(Browning, J.). The Court will discuss the two requirements in turn.

         1. Diversity of Citizenship.

         For diversity jurisdiction purposes, a person's domicile determines citizenship. See Crowley v. Glaze, 710 F.2d 676, 678 (10th Cir. 1983). “A person's domicile is defined as the place in which the party has a residence in fact and an intent to remain indefinitely, as of the time of the filing of the lawsuit.” McEntire v. Kmart Corp., 2010 WL 553443, at *3 (citing Crowley v. Glaze, 710 F.2d at 678). See Freeport-McMoRan, Inc. v. KN Energy, Inc., 498 U.S. 426, 428 (1991)(“We have consistently held that if jurisdiction exists at the time an action is commenced, such jurisdiction may not be divested by subsequent events.”). If neither a person's residence nor the location where the person has an intent to remain can be established, the person's domicile is that of his or her parents at the time of the person's birth. See Gates v. Comm'r of Internal Revenue, 199 F.2d 291, 294 (10th Cir. 1952)(“[T]he law assigns to every child at its birth a domicile of origin. The domicile of origin which the law attributes to an individual is the domicile of his parents. It continues until another domicile is lawfully acquired.”). Additionally, “while residence and citizenship are not the same, a person's place of residence is prima facie evidence of his or her citizenship.” McEntire v. Kmart Corp., 2010 WL 553443, at *3 (citing State Farm Mut. Auto. Ins. Co. v. Dyer, 19 F.3d 514, 520 (10th Cir. 1994)). A corporation, on the other hand, is “deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.” Gadlin v. Sybron Int'l Corp., 222 F.3d 797, 799 (10th Cir. 2000)(quoting 28 U.S.C. § 1332(c)(1)). See De La Rosa v. Reliable, Inc., 113 F.Supp.3d at 1151; Ullman v. Safeway Ins. Co., 995 F.Supp.2d at 1214.

         2. Amount in Controversy.

         The statutory amount-in-controversy requirement, which presently stands at $75, 000.00, must be satisfied as between a single plaintiff and a single defendant for a federal district court to have original jurisdiction over the dispute; “a plaintiff cannot aggregate independent claims against multiple defendants to satisfy the amount-in-controversy requirement, ” nor can multiple plaintiffs aggregate their claims against a single defendant to exceed the threshold. Martinez v. Martinez, No. CIV 09-0281, 2010 WL 1608884, at *18 (D.N.M. March 30, 2010)(Browning, J.). If multiple defendants are jointly liable, or jointly and severally liable, on some of the claims, however, the amounts of those claims may be aggregated to satisfy the amount-in-controversy requirement as to all defendants jointly liable for the claims. See Alberty v. W. Sur. Co., 249 F.2d 537, 538 (10th Cir. 1957); Martinez v. Martinez, 2010 WL 1608884, at *18. Similarly, multiple plaintiffs may aggregate the amounts of their claims against a single defendant if the claims are not “separate and distinct.” Martin v. Franklin Capital Corp., 251 F.3d 1284, 1292 (10th Cir. 2001)(Seymour, C.J.), abrogated on other grounds by Dart Cherokee Basin Operating Co. v. Owens, 135 S.Ct. 547, 554 (2014). Multiple claims by the same plaintiff against the same defendant may be aggregated, even if the claims are entirely unrelated. See 14AA Charles A. Wright, Arthur R. Miller, Edward H. Cooper, Vikram D. Amar, Richard D. Freer, Helen Hershkoff, Joan E. Steinman, & Catherine T. Struve, Federal Practice and Procedure, Jurisdiction § 3704, at 566-95 (4th ed. 2011). While the rules on aggregation sound complicated, they are not in practice: if a single plaintiff -- regardless whether he or she is the only plaintiff who will share in the recovery -- can recover over $75, 000.00 from a single defendant -- regardless whether the defendant has jointly liable co-defendants -- then the court has original jurisdiction over the dispute between that plaintiff and that defendant. The court can then exercise supplemental jurisdiction over other claims and parties that “form part of the same case or controversy under Article III, ” 28 U.S.C. § 1367(a), meaning that they “derive from a common nucleus or operative fact, ” United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966).

         Satisfaction of the amount-in-controversy requirement must be established by a preponderance of the evidence. See McPhail v. Deere & Co., 529 F.3d at 953. In the context of establishing an amount-in-controversy, the defendant seeking removal could appear to be bound by the plaintiff's chosen amount of damages in the complaint, which would seem to allow a plaintiff to avoid federal jurisdiction “merely by declining to allege the jurisdictional amount [in controversy].” McPhail v. Deere & Co., 529 F.3d at 955. The United States Court of Appeals for the Tenth Circuit's decision in McPhail v. Deere & Co. has foreclosed such an option from a plaintiff who wishes to remain in state court. McPhail v. Deere & Co. holds that a defendant's burden in establishing jurisdictional facts is met if the defendant proves “jurisdictional facts that make it possible that $75, 000 is in play.” 529 F.3d at 955.

         The Supreme Court recently clarified that a defendant seeking removal to federal court need only include in the notice of removal a plausible allegation that the amount in controversy exceeds the jurisdictional threshold. See Dart Cherokee Basin Operating Co. v. Owen, 135 S.Ct. at 554. The district court should consider outside evidence, and find by a preponderance of the evidence whether the amount in controversy is satisfied “only when the plaintiff contests, or the court questions, the defendant's allegation.” Dart Cherokee Basin Operating Co. v. Owen, 135 S.Ct. at 554. See De La Rosa v. Reliable, Inc., 113 F.Supp.3d at 1152.

         3. Diversity of Citizenship in Motions to Compel Arbitration.

         In the context of FAA motions to compel arbitration, parties often invoke a federal court's diversity jurisdiction, because the FAA does not by itself create federal question jurisdiction. “[T]he Act does nothing, being ‘something of an anomaly in the field of federal-court jurisdiction' in bestowing no federal jurisdiction but rather requiring an independent jurisdictional basis.” Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 581-82 (2008)(quoting Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 25 n.32 (1983)).

         A common issue in the arbitration context is the situation in which not all of the parties to a state court action are present in a federal court action to compel arbitration of the state lawsuit. Such a situation implicates the Court's diversity jurisdiction. Although the Supreme Court and the Tenth Circuit have not ruled on whether a federal court should “look through” to the state court complaint to determine diversity jurisdiction in an FAA motion to compel arbitration, the Court concludes that that it should not “look through” to the state court complaint, but rather, should look only at the diversity of the parties before the federal court.

         The Supreme Court has held that “a federal court may ‘look through' an [FAA motion to compel arbitration] to determine whether it is predicated on an action that ‘arises under' federal law.” Vaden v. Discover Bank, 556 U.S. 49, 62 (2009)(“Vaden”). Importantly, this ruling applies only to federal question jurisdiction, and not diversity. See Vaden, 556 U.S. at 62. Although the Tenth Circuit has not ruled on this issue, the United States Court of Appeals for the Eighth Circuit has held that “diversity of citizenship is determined in these cases by the citizenship of the parties named in the proceedings before the district court, plus any indispensable parties who must be joined pursuant to Rule 19.” Northport Health Serv's ofArkansas LLC v. Rutherford, 605 F.3d 483, 491 (8th Cir. 2010)(“Rutherford”). In Rutherford, the Eighth Circuit noted that “the pre-Vaden circuit decisions were unanimous in ...


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