United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER DENYING DEFENDANTS'
MOTION TO DISMISS PLAINTIFFS' AMENDED COMPLAINT TO COMPEL
ARBITRATION PURSUANT TO RULE 12
MATTER comes before the Court upon Defendants' Motion to
Dismiss Plaintiffs' Amended Complaint to Compel
Arbitration Pursuant to Rule 12 of the Federal Rules of Civil
Procedure, filed on September 6, 2018 by Defendants Marc
Grano and Jack Cantrell (Doc. 24). Having
reviewed the parties' pleadings and the applicable law,
the Court finds that Defendants' motion is not well-taken
and, therefore, is denied.
case stems from a wrongful death lawsuit in state court,
filed in the County of San Miguel, Fourth Judicial District
Court, involving the death of Carol Cantrell. See
Doc. 21-1 (state court complaint). In that lawsuit, Marc
Grano as personal representative of Carol Cantrell's
estate and Jack Cantrell, Carol's brother, are suing
Plaintiff Jerry Williamson for Ms. Cantrell's allegedly
wrongful death from a fatal complication of untreated
diabetes. Mr. Williamson is member/owner of WW
Healthcare, L.L.C. which does business as Princeton Place, a
skilled nursing facility located in Albuquerque, New Mexico.
On May 9, 2018, Plaintiff Williamson (who is the defendant in
the state court action) filed this independent and separate
federal action to compel arbitration of all matters related
to the care and treatment that Ms. Cantrell received at
seek dismissal of Plaintiffs' Amended Complaint to Compel
Arbitration on three grounds:
(1) Plaintiffs are not the real parties in interest;
(2) Plaintiffs have failed to join Princeton Place as a
necessary and indispensable party; and
(3) lack of subject matter jurisdiction over this case.
contend that both the Federal Arbitration Act
(“FAA”), 9 U.S.C. §§1-14, and the New
Mexico Uniform Arbitration Act, NMSA 1978 §44-7A-1,
favor arbitration, and that Defendants' motion is an
attempt to avoid the agreement entered into by Ms.
Cantrell's power of attorney to arbitrate disputes.
12(b)(6) permits the Court to dismiss a complaint for
“failure to state a claim upon which relief can be
granted.” Fed.R.Civ.P. 12(b)(6). To survive a motion to
dismiss, the complaint must have sufficient factual matter
that if true, states a claim to relief that is plausible on
its face. Ashcroft v. Iqbal, 556 U.S. 662, 677
(2009) (“Iqbal”). As such, a
plaintiff's “[f]actual allegations must be enough
to raise a right to relief above the speculative
level.” Bell Atlantic Corp. v. Twombly, 550
U.S. 544 (2007) (“Twombly”). All well-pleaded
factual allegations are “viewed in the light most
favorable to the nonmoving party.” Brokers'
Choice of Am., Inc. v. NBC Universal, Inc., 757 F.3d
1125, 1136 (10th Cir. 2014). In ruling on a motion to
dismiss, “a court should disregard all conclusory
statements of law and consider whether the remaining specific
factual allegations, if assumed to be true, plausibly suggest
the defendant is liable.” Kan. Penn Gaming, LLC v.
Collins, 656 F.3d 1210, 1214 (10th Cir. 2011). Mere
“labels and conclusions” or “formulaic
recitation[s] of the elements of a cause of action”
will not suffice. Twombly, 550 U.S. at 555.
Whether Plaintiffs Are Real Parties in Interest
contend that Plaintiffs are not the real parties in interest
in this lawsuit. According to the amended complaint, Carol
Cantrell's attorney executed a Mutual Agreement to
Arbitrate Disputes (“Arbitration Agreement”) on
March 5, 2016, the day after Ms. Cantrell was admitted to the
facility. Doc. 22, ¶11.
First paragraph of the Arbitration Agreement states:
It is understood and agreed by Princeton
Place (the “Facility”) and
Cantrell, Carol (“Resident” or
“Resident's Authorized Representative”),
hereinafter collectively the “Resident” that any
legal dispute, controversy, demand or claim (hereinafter
collectively referred to as “claim” or
“claims”) that arises out of or relates to the
Resident Admission Agreement or any service or healthcare
provided by the Facility to the Resident, shall be resolved
exclusively by binding Arbitration . . . .
Doc. 1-3 (Arbitration Agreement) (emphasis added). Defendants
argue that this language establishes that the only two
parties to the Arbitration Agreement Princeton Place and Ms.
Carroll, and that Plaintiffs are not the real parties in
interest because they are not the intended beneficiaries of
the agreement under New Mexico law.
Civ. Pro. 17(a) requires that an action be prosecuted in the
name of the real party in interest. A “real party in
interest” is a party that has a substantive right that
is enforceable under applicable substantive law.
Scheufler v. General Host Corp., 895 F.Supp. 1416,
1418 (D. Kan. 1995), aff'd, 126 F.3d 1261 (10th Cir.
a contract cannot be enforced by a person who is not a party
to the contract or not in privity with a party to the
contract. Tarin's Inc. v. Tinley, 2000-NMCA-048,
129 N.M. 185; Fleet Mortgage Corp. v. Schuster,
1991-NMSC-046, ¶ 4, 112 N.M. 48, (one who is not a party
to a contract cannot sue to enforce it). A third-party
beneficiary, however, may have an enforceable right against a
party to a contract “if the parties to the contract
intended to benefit the third party.” Id.,
¶4, 112 N.M. 48. “Whether a party is a third-party
beneficiary depends on if the parties to the contract
intended to benefit the third party.” Id.
“Such intent must appear either from the contract
itself or from some evidence that the [third party] is an
intended beneficiary.” Id. Further, a person
claiming to be a third-party beneficiary has the burden of
showing that the parties to a contract intended to benefit
the third party, individually or as a member of a class of
beneficiaries. Casias v. Cont'l Cas. Co., 125
N.M. 297, 300 (citing Jaramillo v. Providence Wash. Ins.
Co., 117 N.M. 337, 343 (1994)). Intent to benefit a
third party “must appear either from the contract
itself or from some evidence that the person claiming to be a
third-party beneficiary is an intended beneficiary.”
Valdez v. Cillessen & Son, Inc., 105 N.M. 575,
581, 734 P.2d 1258, 1264 (1987).
party beneficiary doctrine applies also to arbitration
contracts. See Rivera v. American Gen. Fin. Servs.,
Inc., 2010-NMCA-046, ¶¶ 20-22, 148 N.M. 784,
242 P.3d 351, rev'd on other grounds by 2011-NMSC-033,
150 N.M. 398, 259 P.3d 803; Gibson v. Wal-Mart Stores,
Inc., 181 F.3d 1163, 1170 n.3 (10th Cir.1999) (a
nonsignatory may enforce an arbitration agreement if the
nonsignatory “was, at the very least, a third party
beneficiary of the Agreement”); THI of New Mexico
at Hobbs Center v. Patton, No. 11-537, 2012 WL 112216,
at *8 (D.N.M. Jan. 3, 2012) (Patton II) (concluding
that the New Mexico Supreme Court would likely follow the
reasoning of numerous cases cited therein extending
third-party beneficiary doctrine to arbitration agreements).
question here is where Plaintiffs have shown that under New
Mexico law, ...