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Evangelical Lutheran Good Samaritan Society v. Moreno

United States District Court, D. New Mexico

February 28, 2019

BEATRICE MORENO, deceased, by the personal representative of the wrongful death estate, MONICA CRUZ HATTON, Defendant.

          Martha G. Brown Deana M. Bennett J Zoe E. Lees Jeremy K. Harrison Modrall, Sperling, Roehl, Harris & Sisk, PA Albuquerque, New Mexico Attorneys for the Plaintiff

          Mary Ellen Reilly Wayne T. Freeland Wilkes & McHugh, P.A. Phoenix, Arizona Attorneys for the Defendant


         THIS MATTER comes before the Court on the Defendant's Motion for Appointment of a Neutral Arbitrator, filed June 7, 2018 (Doc. 20)(“Motion”). The Court held a hearing on January 7, 2019. See Clerk's Minutes at 1, filed January 7, 2019 (Doc. 25). The primary issue is who from among the following individuals the Court, pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1-14 (“FAA”), should appoint as a neutral arbitrator in this matter: (i) the Honorable James Hall, former state District Judge for the First Judicial District of the State of New Mexico; (ii) Mr. William Madison of Madison, Mroz, Steinman & Dekleva, P.A.; (iii) Mr. Bruce Hall of Rodey, Dickason, Sloan, Akin, & Robb, P.A.; (iv) the Honorable Bruce Black, former United States of America District Judge for the District of New Mexico; (v) the Honorable William P. Lynch, former United States Magistrate Judge for the District of New Mexico; or (vi) the Honorable Alan Torgerson, former United States Magistrate Judge for the District of New Mexico. The Court concludes that it will appoint an arbitrator in this matter and that it will appoint Judge Hall as the arbitrator.


         The Court recited the factual background and early procedural history in its Memorandum Opinion and Order, filed September 29, 2017, 277 F.Supp.3d 1191 (Doc. 19)(“MOO”). The Court incorporates that recitation here. The Court takes its facts from the Complaint to Compel Arbitration and Petition for Appointment of Arbitrator, filed December 13, 2016 (Doc. 1)(“Complaint”). The Court provides these facts for background. It does not adopt them as the truth, and it recognizes that these facts are largely Plaintiff the Evangelical Lutheran Good Samaritan Society, d/b/a Good Samaritan Society -- Betty Dare's (“Good Samaritan”) version of events.

Good Samaritan owns and operates a nursing home in Alamogordo, New Mexico. See Complaint . . . ¶ 1[, ] at 1 . . . . On February 27, 2014, Good Samaritan admitted [Defendant Beatrice ]Moreno into that nursing home, and she lived there until her death on August 26, 2015. See Complaint ¶¶ 8, 19, at 2, 5; [Plaintiffs Motion to Compel Arbitration and Petition for Appointment of Arbitrator at 1, filed December 13, 2016 (Doc. 3)(“Motion to Compel”)]. Also on February 27, 2014, the Twelfth Judicial District, County Court of Otero of the State of New Mexico, appointed SM Gantz OT Services, Inc. (“SM Gantz”) Moreno's temporary guardian. See Complaint ¶ 6, at 2. As temporary guardian, SM Gantz received a Letter of Temporary Guardianship that authorized SM Gantz to make decisions regarding Moreno's “medical and psychiatric care, residential placement, safety, and supervision.” See Complaint ¶ 7, at 2. When Moreno entered the nursing home, SM Gantz, acting as her legal temporary guardian, reviewed and signed the [Good Samaritan Society Admission Agreement (dated February 27, 2014), filed December 13, 2016 (Doc. 1 -1)(“ Admission Agreement”)] on Moreno's behalf. See Complaint ¶ 8, at 2-3; . . . Admission Agreement at 14-15 . . . . The Admission Agreement contains an Arbitration Agreement that gives the resident or his or her legal representative the option to agree to arbitrate disputes or to elect not to arbitrate disputes. See Admission Agreement [¶¶ A-E, ] at 13-14 . . .; Complaint ¶¶ 10-11, at 3. If a resident or legal representative elects to arbitrate, the Admission Agreement explains that the resident is electing to waive his or her right to sue in a court of law and to a trial by jury. See Complaint ¶ 15, at 4; Admission Agreement [¶ C, ] at 13 . . . . SM Gantz elected to arbitrate disputes on Moreno's behalf. See Complaint ¶ 18, at 5; Admission Agreement at 14 . . . .

         MOO at 2, 277 F.Supp.3d at 1197.

         The Admission Agreement contains two sentences relevant to choosing an arbitrator. See Admission Agreement ¶¶ C-D, at 13-14. First, the Admission Agreement provides: “The Parties shall work together in good faith to select a mutually agreeable individual arbitrator or a nationally recognized arbitration service provider.” Admission Agreement ¶ C, at 13. Second, the Admission Agreement states: “The Parties agree that in the event they are unable to agree upon selection of a mutually agreeable individual arbitrator or nationally recognized arbitration service provider, Section 5 of the FAA shall control.” Admission Agreement ¶ D, at 14.

After Moreno died on August 26, 2015, Moreno's daughter, Monica Cruz Hatton, was appointed personal representative of Moreno's estate. [See Complaint ¶ 20, at 5-6.] Hatton subsequently filed a lawsuit in the Twelfth Judicial District Court [of New Mexico] against Good Samaritan. See Complaint ¶ 20, at 5-6. On November 21, 2016, Hatton filed an amended complaint in state court against Good Samaritan, among other defendants, alleging causes of action for wrongful death, negligence, negligence per se, negligent or intentional misrepresentation, violation of the Unfair Practices Act, and punitive damages. See Complaint ¶ 20-21, at 5-6; First Amended Complaint for Wrongful Death, Negligence, Negligence Per Se, Misrepresentation, Violation of the Unfair Trade Practices Act, and Punitive Damages at 1-22, filed December 13, 2016 (Doc. 1-2)(“State Court Action”).

         MOO at 4, 277 F.Supp.3d at 1198.


On December 13, 2016, Good Samaritan filed its Complaint requesting the Court to compel the parties to: (i) arbitrate pursuant to the Admission Agreement's terms; (ii) order Hatton to arbitrate all claims that she brought in the State Court Action against Good Samaritan; (iii) stay the State Court Action pending resolution of the arbitration process; (iv) stay further proceedings in this action pending the arbitration's conclusion or dismiss the matter without prejudice; and (v) order other proper relief. See Complaint, Prayer for Relief ¶¶ A-E, at 12.

         MOO at 4-5, 277 F.Supp.3d at 1197-98. In the MOO, the Court stayed the case and ordered that the parties pursue arbitration. See MOO at 74, 277 F.Supp.3d at 1239. More than six months after the Court filed the MOO, Hatton filed the Motion, complaining that the parties could not agree to an arbitrator. See Motion at 3.

         1. The Motion.

         Hatton asks that, because over six months have passed since the Court ordered arbitration and the parties have yet to agree to an arbitrator, the Court appoint a neutral arbitrator. See Motion at 2. Hatton encourages the Court to choose Mr. Madison. See Motion at 2. Hatton explains that, under the arbitration agreement, when the parties cannot agree to a neutral arbitrator, the FAA's § 5 controls. See Motion at 1 (citing Arbitration Agreement at 13-14). According to Hatton, § 5 provides that the court shall “designate and appoint an arbitrator” “if for any reason there shall be a lapse in the naming of an arbitrator.” Motion at 1 (quoting 9 U.S.C. § 5). Hatton explains that, in discussions with Good Samaritan, she proposed Mr. Madison; Mr. Hall; Mr. Paul Bardacke of Bardacke Allison; and Mr. ...

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