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Life Care Centers of America, Inc. v. Estate of Deal

United States District Court, D. New Mexico

March 20, 2019

LIFE CARE CENTERS OF AMERICA, INC., Plaintiff,
v.
ESTATE OF FANNIE DEAL, Deceased, by and through Co-Personal Representatives LORETTA D. HARRISON AND WISDOMA LIFEWARRIOR, Defendants.

          MEMORANDUM OPINION AND ORDER

          MARTHA VÁZQUEZ UNITED STATES DISTRICT JUDGE.

         THIS MATTER comes before the Court on Plaintiffs Motion to Compel Arbitration [Doc. 4]. The Court, having considered the motion, briefs, and relevant law, and being otherwise fully informed, finds that the Motion is well-taken and will be granted.

         BACKGROUND

         Plaintiff Life Care Centers of America, Inc. ("LCCA") is the management company of Life Care Center of Farmington ("Life Care Center") where the decedent, Fannie Deal, resided. Doc. 4 at 1. On May 13, 2015, Ms. Deal was admitted as a resident to the Life Care Center and placed under Plaintiffs care. Doc. 4-5 at ¶ 21. In connection with her admission to the Life Care Center, Ms. Deal's daughter, Defendant Wisdoma Lifewarrior, signed a Resident Admission Agreement on behalf of Ms. Deal as her "legal representative." Doc. 4-3. The Resident Admission Agreement incorporates "Facility Inserts," including a Voluntary Agreement for Arbitration. Id. The Voluntary Agreement for Arbitration ("Arbitration Agreement"), which Ms. Lifewarrior also signed on May 13, 2015, as Ms. Deal's "legal representative," provides that it is an agreement "to arbitrate any dispute that might arise between Fannie Deal and LCC of Farmington." Doc. 4-2. The Arbitration Agreement further provides:

The parties agree that they shall submit to binding arbitration all disputes against each other and their agents, affiliates, governing bodies and employees arising out of or in any way related or connected to the Resident's stay and care provided at the Facility, including but not limited to any disputes concerning alleged personal injury to the Resident caused by improper or inadequate care, including allegations of medical malpractice; any disputes concerning whether any statutory provisions relating to the Resident's rights under New Mexico law were violated; and any other dispute under New Mexico or federal law based on contract, tort, or statute.

Id.

         Ms. Deal was a resident of the Life Care Center until her death on January 12, 2016. Doc. 4-5 at ¶ 21. After Ms. Deal's death, Defendants Loretta D. Harrison and Wisdoma Lifewarrior, as co-personal representatives of Ms. Deal's estate, brought a wrongful death action against Plaintiff in the Eleventh Judicial District Court, San Juan County, New Mexico ("State Court Action"). Id. In the State Court Action, Defendants allege that Ms. Deal died because of Plaintiffs inadequate care and treatment, and bring claims of wrongful death, negligence, negligence per se, negligent or intentional representations, violation of the New Mexico Unfair Trade Practices Act ("UPA"), and punitive damages. Id., Ex. 5.

         On February 23, 2018, Plaintiff commenced the instant action in this Court by filing a Complaint to Compel Arbitration. Doc. 1. In the Complaint, Plaintiff seeks a judgment ordering Defendants to submit their claims against Plaintiff to arbitration. On February 26, 2018, Plaintiff filed the instant Motion to Compel Arbitration. Defendants oppose the Motion.

         LEGAL STANDARD

         Under Section 4 of the Federal Arbitration Act ("FAA"), "[a] party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court [. . .] for an order directing that such arbitration proceed in the manner provided for in such agreement." 9 U.S.C. § 4. The FAA provides that a written agreement requiring arbitration of controversies arising out of a contract "evidencing a transaction involving commerce [. . .] shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. Section 2 of the FAA creates a substantive rule applicable in state as well as federal courts. Southland Corp. v. Keating, 465 U.S. 1, 16 (1984).

         In enacting the FAA, "Congress intended to foreclose state legislative attempts to undercut the enforceability of arbitration agreements." Perry v. Thomas, 482 U.S. 483, 489 (1987) (citation and internal quotation marks omitted). There is a clear federal policy of requiring arbitration unless the agreement to arbitrate is not part of a contract evidencing (1) interstate commerce or (2) is revocable upon such grounds as exist at law or (3) in equity for the revocation of any contract. See 9 U.S.C. § 2. Further, the Supreme Court has emphasized the "fundamental principle that arbitration is a matter of contract[.]" AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (internal citation and quotation marks omitted). "In line with these principles, courts must place arbitration agreements on an equal footing with other contracts, [. . .] and enforce them according to their terms." Id. (internal citation and quotation marks omitted).

         The FAA, however, "was not enacted to force parties to arbitrate in the absence of an agreement." Avedon Eng'g, Inc. v. Seatex, 126 F.3d 1279, 1286 (10th Cir. 1997). "Congress' concern was to enforce private agreements into which parties had entered." Id. (citations and internal quotation marks omitted).

         Accordingly, "[t]he existence of an agreement to arbitrate is a threshold matter which must be established before the FAA can be invoked." Id. at 1287 (citation omitted). The Court looks "to state law principles of contract formation to tell us whether an agreement to arbitrate has been reached." Id. (citation omitted). It is the party seeking judicial enforcement of an arbitration agreement who bears the burden of persuasion. THI of New Mexico at Hobbs Center, LLC v. Patton, Civ. No. 11-537 (LH/CG), 2012 WL 112216, *6 (D.N.M. Jan. 3, 2012) (citation omitted).

         DISCUSSION

         Under Section 4 of the FAA, Plaintiff moves to compel Defendants to arbitrate their claims. Defendants do not dispute that the Arbitration Agreement falls within the scope of the FAA or that their claims in the State Court Action fall within the scope of the Arbitration Agreement, but nonetheless argue that they should not be compelled to arbitrate their claims. Specifically, Defendants argue that the Court should abstain from reaching a decision, that Ms. Lifewarrior was not authorized to bind Ms. Deal to the Arbitration Agreement, and that the Arbitration Agreement is unenforceable.

         I. The Court will not Abstain from Exercising Jurisdiction.

         Defendants, for the first time in their Supplemental Memorandum in Response to Plaintiffs Motion to Compel Arbitration, [Doc. 25], which the Court considers a reply, argue that, under the doctrine set forth in Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976), the Court should abstain from exercising jurisdiction over this case. The Court notes that it was improper for Defendants to raise this new argument in their Supplemental Memorandum. Plaintiff, however, filed, and the Court granted, Plaintiffs Unopposed Motion for Leave to File Supplemental Reply in Support of its Motion to Compel Arbitration, attaching a Supplemental Reply to the Motion [Doc. 26]. Because Plaintiffs Supplemental Reply responds to Defendants' abstention argument, Plaintiff is not prejudiced by the Court's consideration of the abstention argument.

         In Colorado River, the Supreme Court announced an abstention doctrine under which a federal court, for reasons of "wise judicial administration," may stay or dismiss a federal suit pending resolution of a parallel state court proceeding. 424 U.S. at 817. The doctrine is governed by the general principle that "[a]bstention from the exercise of federal jurisdiction is the exception not the rule[.]" Id. at 813. Declining to exercise jurisdiction based on the Colorado River doctrine is appropriate only in "exceptional" circumstances. Id. at 818. Accordingly, this Court's "task ... is not to find some substantial reason for the exercise of federal jurisdiction by the federal court; rather, the task is to ascertain whether there exist exceptional circumstances, the clearest of ...


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