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Hunt v. Waters

United States District Court, D. New Mexico

April 29, 2019

LEE HUNT, as Personal Representative of the Wrongful Death Estate of HEATH DALE BENNETT, deceased, Plaintiff,
v.
JACK V. WATERS, D.C., P.C., a New Mexico for-profit professional corporation; JACK V. WATERS, an individual; THE NATIONAL CHIROPRACTIC COUNCIL, a California for-profit corporation, and ALLIED PROFESSIONALS INSURANCE CO., A RISK RETENTION GROUP, INC., an Arizona for profit corporation, Defendants.

          Philomena M. Hausler Robles, Rael & Anaya, P.C. Albuquerque, New Mexico and Michael Sievers A. Elicia Montoya Randi McGinn McGinn, Montoya, Love & Curry, PA Albuquerque, New Mexico Attorneys for the Plaintiff

          Donna L. Chapman Jessica Singer Mitchell J. Freedman Chapman and Priest, P.C. Albuquerque, New Mexico Attorneys for the Defendants Jack V. Waters and Jack V. Waters, D.C., P.C.

          Gregory L. Biehler Lewis Brisbois Bisgaard & Smith LLP Albuquerque, New Mexico Attorneys for the Defendants The National Chiropractic Council and Allied Professionals Insurance Company

          MEMORANDUM OPINION AND ORDER

         THIS MATTER comes before the Court on: (i) the Plaintiff's Motion to Remand for Lack of Subject Matter Jurisdiction and for Fees Incurred as a Result of Improper Removal, filed October 1, 2018 (Doc. 11)(“Motion to Remand”); (ii) the Defendants' Motion to Compel Arbitration and Stay Proceedings, filed November 2, 2018 (Doc. 28)(“Motion to Compel”); (iii) the Defendants the National Chiropractic Council and Allied Professionals Insurance Co., a Risk Retention Group, Inc's, Motion to Dismiss for Failure to State a Claim at 4, filed September 28, 2018 (Doc. 9)(“MTD”); and (iv) the Plaintiff's Motion to Stay Federal Proceedings Pending Determination of Motion to Remand (Doc. 12)(“Motion to Stay”). The Court held a hearing on January 29, 2019. See Clerk's Minutes at 1, filed January 29, 2019 (Doc. 33). The primary issues are: (i) whether the Court should ignore the citizenships of Defendants Jack V. Waters, D.C., P.C. and Dr. Jack V. Waters(collectively, the “Waters Defendants”) for the purpose of determining diversity pursuant to 28 U.S.C. § 1332, because the Waters Defendants entered an arbitration agreement with Heath Dale Bennett, the deceased; (ii) whether maintaining jurisdiction of Defendants The National Chiropractic Council and Allied Professional Insurance Company, a Risk Retention Group, Inc. (collectively, the “Insurance Defendants”) violates 28 U.S.C. § 1441(b)(2) -- forum-defendant rule -- if the Court otherwise concludes that it has subject-matter jurisdiction; (iii) whether the Court should require that the Insurance Defendants pay Plaintiff Lee Hunt, the personal representative for Bennett's estate, the fees and costs for litigating these first two issues; (iv) whether the Court should compel arbitration between Hunt and the Waters Defendants; (iv) whether Hunt adequately pleads a claim against the Insurance Defendants for their requirement that the Waters Defendants enter arbitration agreements with patients; and (v) whether the Court should stay proceedings in the case pending a decision on the Motion to Remand. The Court concludes that: (i) it will not ignore the Waters Defendants' citizenships, because it cannot decide properly the Motion to Compel, before determining whether it has subject-matter jurisdiction; (ii) the Court would not apply the forum-defendant rule if the Court concluded that it otherwise had subject-matter jurisdiction, because, in that scenario, the Court would have deemed the Waters Defendants not to be “parties in interest, ” 28 U.S.C. § 1441; and (iii) the Court will not grant Hunt's request for fees and costs. As Hunt and the Waters Defendants are New Mexico citizens, see Complaint for Chiropractic Malpractice, Breach of Fiduciary Duty, Unfair Trade Practices, Aiding and Abetting Breach of Fiduciary Duty, Civil Conspiracy and Wrongful Death ¶ 1, at 1, filed in state court July 31, 2018, filed in federal court September 13, 2018 (Doc. 1-1)(“Complaint”); id. ¶¶ 6-8, at 2, the Court lacks subject-matter jurisdiction over this matter and remands the case to the County of Santa Fe, First Judicial District, State of New Mexico. The Court grants the Motion to Stay in part and denies it in part, because, at the hearing, the Court began arguments with the MTD, see Draft Transcript of Hearing at 3:5-15 (taken January 29, 2019)(Court, Biehler)(“Tr.”), [1] but the parties otherwise agree to the Motion to Stay, see Tr. at 38:20-39:8 (Court, McGinn, Biehler, Freedman). The Court lacks subject-matter jurisdiction to decide the remaining issues.

         FACTUAL BACKGROUND

         The Court takes its facts from the Complaint. The Court provides these facts for background. It does not adopt them as the truth, and it recognizes that these facts are largely Hunt's version of events.

         This case arises from Bennett's February 7, 2017, visit to Dr. Waters' chiropractic clinic, Jack V. Waters, D.C., P.C. See Complaint ¶ 3, at 2; id. ¶¶ 7-8, at 2; id. ¶ 56, at 8. Dr. Waters resides in Clovis, New Mexico, and, at all times relevant to this case, held a license “as a doctor of chiropractic” in the State of New Mexico. Complaint ¶ 6, at 2. Dr. Waters operates Jack V. Waters, D.C., P.C. in Clovis, and Jack V. Waters, D.C., P.C.'s principal place of business is Clovis. See Complaint ¶¶ 6-8, at 2.

         The Waters Defendants held an insurance policy with the Insurance Defendants. See Complaint ¶ 26, at 4. National Chiropractic purchases “group malpractice insurance for chiropractors, ” and its principle place of business is in Orange, California. Complaint ¶¶ 9, 11, at 2. Allied Professional is an Arizona corporation that “operate[s] a joint venture” with National Chiropractic “for the purpose of getting chiropractors to purchase APIC-NCC group malpractice insurance policies.” Complaint ¶ 6, at 3. See id. ¶ 23, at 4. The Insurance Defendants require policyholders to enter “pre-dispute arbitration agreements with patients and have patients sign blanket informed consent forms.” Complaint ¶ 24, at 4.

         Bennett saw Dr. Waters intermittently for eight years. See Complaint ¶ 52, at 8. On his first visit to Dr. Waters on December 29, 2008, Bennett signed “[a]n Informed Consent to Treat Form, ” which “contained a short paragraph on arbitration.” Complaint ¶ 28, at 5. The paragraph in the Arbitration Agreement, filed November 2, 2018 (Doc. 28), states:

It is understood that any dispute as to medical malpractice, that is as to whether any medical services rendered under this contract were unnecessary or unauthorized or were improperly, negligently or incompetently rendered, will be determined by submission to arbitration as provided by state and federal law, and not by a lawsuit or resort to court process except as state and federal law provides for judicial review of arbitration proceedings. Both parties to this contract, by entering into it, are giving up their constitutional right to have any such dispute decided in a court of law before a jury, and instead are accepting the use of arbitration.

         Arbitration Agreement at 1. The arbitration agreement and informed consent form omit material relevant to disputes over chiropractic care and the risks that chiropractic care poses, such as “the risk of vertebral arterial dissection . . . or ischemic stroke.” Complaint ¶ 31, at 5. See id. ¶¶ 30-31, at 5. On February 7, 2017, Bennett suffered “an acute left vertebral artery injury during chiropractic manipulation” from Dr. Waters. Complaint ¶ 92, at 15. The injury led “to a fatal stroke” at Jack V. Waters, D.C., P.C. Complaint ¶ 93, at 15.

         PROCEDURAL BACKGROUND

         Hunt alleges that: (i) Dr. Waters committed chiropractic negligence, see Complaint ¶¶ 94-104, at 12-14; (ii) Dr. Waters breached his fiduciary duty to Bennett, see Complaint ¶¶ 105-12, at 14-16; (iii) Jack V. Waters, D.C., P.C. violated the Unfair Practices Act, N.M. Stat. Ann. §§ 57-12-1 to -26, see Complaint ¶¶ 113-22, at 16-18; and (iv) the Insurance Defendants aided and abetted the breach of fiduciary duty and conspired with Dr. Waters to commit the breach of fiduciary duty, see Complaint ¶¶ 123-35, at 18-20. The Waters Defendants want their arbitration agreement with Bennett enforced. See generally Motion to Compel. On September 13, 2018, the Insurance Defendants removed the case to federal court on the basis of 28 U.S.C. § 1332. See Notice of Removal at 3, filed September 13, 2018 (Doc. 1). In removing the case, the Insurance Defendants ignore the Waters Defendants' citizenships, “because [the Waters Defendants] are subject to mandatory arbitration.” Notice of Removal at 2. The Insurance Defendants also filed an Amended Answer to Complaint, filed September 28, 2018 (Doc. 8)(“Amended Answer”), in which they seek to compel Hunt to arbitrate with them pursuant to the Arbitration Agreement. See Amended Answer ¶ 24, at 3.

         1. The Motion to Remand.

         In the Motion to Remand, Hunt asks that the Court remand the case, because the Waters Defendants, like him, are New Mexico citizens, and no law supports disregarding the Waters Defendants' citizenship based on the Arbitration Agreement. See Motion to Remand at 1. Hunt describes that the Insurance Defendants had “no good ground to remove this case, ” and accordingly asks that the Court award him “reasonable attorney's fees and costs incurred as a result of the removal.” Motion to Remand at 1. Hunt explains that no court has found that he must arbitrate with the Waters Defendants and that the parties have not argued the Waters Defendants' Motion to Compel. See Motion to Remand at 7. Hunt contends that, until a court dismisses the Waters Defendants, complete diversity does not exist. See Motion to Remand at 7-8. Hunt anticipates that the Insurance Defendants might argue that the Waters Defendants were fraudulently joined, and contends that, “to establish that a party was fraudulently joined, a defendant has the burden of demonstrating that ‘there is no possibility that the plaintiff would be able to establish a cause of action' against the party alleged to be fraudulently joined.” Motion to Remand at 8-9 (quoting Bio-Tec Envtl., LLC v. Adams, 792 F.Supp.2d 1208, 1216 (D.N.M. 2011)(Browning, J.)). Hunt avers that “[t]here is a legitimate question about whether the Waters Defendants are even parties to the purported Arbitration Agreement, ” and argues that he will “demonstrate that the Arbitration Agreement was obtained by misrepresentation, breach of fiduciary duty, and is unenforceable because it is procedurally and substantively unconscionable, ” and that “[c]ourts in New Mexico have invalidated and refused to enforce such arbitration agreements as a matter of state contract law.” Motion to Remand at 10-11.

         According to Hunt, the Insurance Defendants should have known that they had no “legal basis for the Court to disregard” their citizenship and that “there is incomplete diversity of citizenship among the parties.” Motion to Remand at 11. Hunt, therefore, asks that the Court award him the fees for litigating the removal issue, because the Insurance Defendants' “decision to remove this action was so unreasonable that it suggests a motive to delay and multiply the proceedings.” Motion to Remand at 12. See id. at 11-12. Hunt characterizes the removal as providing the Insurance Defendants “an indefinite extension for itself and all other Defendants on discovery.” Motion to Remand at 12. Hunt also suggests that, in the Notice of Removal, the Insurance Defendants made misstatements of fact that “are demonstrably untrue and/or misleading.” Motion to Remand at 12. According to Hunt, such misstatements of fact include that Hunt contends that the Defendants violated federal law and that Hunt is subject to mandatory arbitration. See Motion to Remand at 12.

         2. The Motion to Remand Response.

         The Insurance Defendants respond. See Response to Motion to Remand for Lack of Subject Matter Jurisdiction and for Fees Incurred as a Result of Improper Removal, filed October 12, 2018 (Doc. 16)(“Motion to Remand Response”). The Insurance Defendants contend that “[p]arties who do not have a real interest in the litigation have historically not been considered by the court when evaluating diversity.” Motion to Remand Response at 2. According to the Insurance Defendants, “‘[e]arly in its history, [the Supreme Court of the United States of America] established that the citizens upon whose diversity a plaintiff grounds jurisdiction must be real and substantial parties to the controversy.'” Motion to Remand Response at 2 (quoting Navarro Sav. Ass'n v. Lee, 446 U.S. 458, 460-61 (1980)). The Insurance Defendants characterize the Waters Defendants as nominal parties. See Motion to Remand Response at 2. The Insurance Defendants argue that Hunt will not convince a court “to invalidate” the arbitration agreement. Motion to Remand Response at 3. According to the Insurance Defendants, that a court will uphold the Arbitration Agreement means that the Court should “adhere to the contract” and should not remand the case. Motion to Remand Response at 3. The Insurance Defendants clarify that they do not argue fraudulent joinder. See Motion to Remand Response at 4. The Insurance Defendants also disagree that the Court should award Hunt attorney's fees and costs, because, according to the Insurance Defendants, they have not acted with “malicious intent”; they do not seek to avoid discovery; and the Arbitration Agreement binds the Waters Defendants and Hunt. Motion to Remand Response at 4.

         3. The Motion to Remand Reply.

         Hunt summarizes that the Insurance Defendants concede three facts: (i) that the case is not based on a federal question; (ii) that no diversity exists between Hunt and the Waters Defendants; and (iii) that Hunt did not fraudulently join the Waters Defendants. See Plaintiffs' Reply in Support of their Motion to Remand at 1-2, filed October 24, 2018 (Doc. 24)(“Motion to Remand Reply”). Hunt then attacks the Insurance Defendants' nominal-party theory. See Motion to Remand Reply at 2-5. He argues: “Defendants either ignore or misunderstand the meaning of the term ‘nominal party.' A nominal party, as Navarro used that term, is one who has ‘no real interest in the controversy.'” Motion to Remand Reply at 2 (quoting Navarro Sav. Ass'n v. Lee, 446 U.S. at 460-61; and citing City of Carlsbad v. I & W, Inc., No. CIV 12-0080 BB/CG, 2012 WL 12931286, at *6 (D.N.M. May 15, 2012)(Black, J.)). According to Hunt, a party is nominal when “no relief is sought” against that party. Motion to Remand Reply at 2 (emphasis omitted)(quoting City of Carlsbad v. I&W, Inc., 2012 WL 12931286, at *6; and citing Brazell v. Waite, 525 Fed.Appx. 878');">525 Fed.Appx. 878, 883 (10th Cir. 2013)(unpublished); Becker v. Angle, 165 F.2d 140, 142 (10th Cir. 1947); Moya v. 3316 22nd Ave. Se., CIV 18-0104 JB/JHR, 2018 WL 2447801, at *1 n.2 (D.N.M. May 31, 2018)(Ritter, M.J.); Am. Lung Ass'n v. Am. Lung Ass'n, Civil No. 02-108-B, 2002 U.S. Dist. LEXIS 13593 (D.N.H. July 25, 2002)(Barbadoro, J.)). Hunt reiterates that a court may not even enforce the Arbitration Agreement. See Motion to Remand Reply at 4. Further, Hunt avers that the Waters Defendants “are significant wrongdoers in this case, ” Motion to Remand Reply at 4, and that they have an interest in avoiding liability, see Motion to Remand Reply at 4. Hunt notes that, moreover, in their Amended Answer, the Insurance Defendants argue that Hunt's claims against them are subject to arbitration. See Motion to Remand Reply at 5. According to Hunt, under the Insurance Defendants' nominal-parties theory, this allegation would mean that all the Defendants are nominal parties. See Motion to Remand Reply at 5.

         Hunt also contends that the Insurance Defendants “essentially” are arguing fraudulent joinder, because, according to Hunt, they speculate that a court “would grant the Waters Defendants' opposed motion to compel arbitration.” Motion to Remand Reply at 6. Hunt contends that the Insurance Defendants “purposely avoid alleging fraudulent joinder because they cannot meet their burden to prove fraudulent joinder by establishing that Plaintiffs have no possibility of recovery against the party whose joinder is questioned.” Motion to Remand Reply at 6. Hunt suggests that the Insurance Defendants attempt to shift to him the burden to disprove fraudulent joinder, and he encourages the Court not to engage in this analysis. See Motion to Remand Reply at 6-7.

         Hunt then contends that the Court should determine its jurisdiction before it decides the Motion to Compel. See Motion to Remand Reply at 7. Hunt cites Zavanna, LLC v. RoDa Drilling Co., No. 4:09-cv-0222009, U.S. Dist. LEXIS 102726, at *33 (D.N.D. Sept. 14, 2009)(Miller, J), and Brotherhood of Maintenance of Way Employees Division of International Brotherhood of Teamsters v. Union Pacific Railroad 475 F.Supp.2d 819, 831 (N.D. Iowa 2007)(Bennett, J.), for the proposition that a court must decide challenges to subject-matter jurisdiction before deciding other issues. See Motion to Remand Reply at 7. Hunt contends that, if the Court does not have subject-matter jurisdiction over the case, the Court cannot decide the Motion to Compel. See Motion to Remand Reply at 8.

         Hunt ends by repeating his request for the fees and costs for combating the removal. See Motion to Remand Reply at 8. Hunt contends that “[a]ttorney fees are appropriate where the removing party lacked an objectively reasonable basis for seeking removal.” Motion to Remand Reply at 8 (citing Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005)). Hunt argues that the Insurance Defendants need not have intended “to disrupt the state proceedings and delay discovery, ” Motion to Remand Reply at 8, because their justification for removal “is utterly devoid of legal support, ” Motion to Remand Reply at 9. Hunt indicates that the Insurance Defendants cannot provide a single case to support their arguments. See Motion to Remand Reply at 8. According to Hunt, that the Waters Defendants do not join the Motion to Remand Response indicates that the Insurance Defendants do not have “good ground to remove this case.” Motion to Remand Reply at 1. Hunt concludes: “[W]here a plaintiff has a colorable argument supporting a claim for relief against a non-diverse defendant, remand is appropriate and the court should award costs and fees for improper removal.” Motion to Remand Reply at 10 (citing Ambrose v. Grindell & Romero Ins., No. CIV 17-0681 MV/SMV, 2018 U.S. Dist. LEXIS 29160, at *14 (D.N.M. Feb. 23, 2018)(Vidmar, M.J.); Bernier v. Allstate Ins., No. CIV 08-0366 MV/KBM, 2009 WL 10666369, at *2 (D.N.M. March 30, 2009)(Vázquez, J.); Tran v. Waste Mgmt., 290 F.Supp.2d 1286 (M.D. Fla. 2003)(Conway, J.)).

         4. The Motion to Compel.

         The Waters Defendants seek to compel arbitration. See Motion to Compel at 1. They argue that, pursuant to the Arbitration Agreement that Bennett and the Waters Defendants signed, any suit arising from Bennett's medical care is subject to arbitration. See Motion to Compel at 3-4. The Waters Defendants, accordingly, ask that the Court stay all decisions in this matter until it decides the Motion to Compel. See Motion to Compel at 5. The Waters Defendants note that the Federal Arbitration Act, 9 U.S.C. §§ 1-14 (“FAA”), applies and that Hunt cannot show the Arbitration Agreement is procedurally or substantively unconscionable. See Motion to Compel at 8-9.

         5. The Motion to Compel Response.

         Hunt asks the Court to deny the Motion to Compel. See Plaintiffs' Response in Opposition to the Waters Defendants' Motion to Compel Arbitration and Stay Proceedings, Filed in New Mexico State District Court Before Removal, filed October 5, 2018 (Doc. 14)(“Motion to Compel Response”). Hunt notes that New Mexico law governs the Arbitration Agreement. See Motion to Compel Response at 8-9. He argues that a court should determine whether the Arbitration Agreement compels arbitration here. See Motion to Compel Response at 10. He contends that the Arbitration Agreement should not apply, because it does not identify the parties to the agreement; the Waters Defendants did not disclose the burden that arbitration would impose on Bennett or that they received better insurance when they obtained arbitration agreements; the Arbitration Agreement is procedurally unconscionable as the terms disfavor the weaker party; the Arbitration Agreement is substantively unconscionable, because even the arbitration forum disfavors arbitration between healthcare providers and patients, and because the Arbitration Agreement permits the Waters Defendants to sue in court; the Arbitration Agreement lacks consideration; and no mutual assent continued over the eight years that Bennett worked with the Waters Defendants. See Motion to Compel Response at 11-22. Hunt notes that the Court should remand the case or, in the alternative, permit him to conduct discovery relevant to the Arbitration Agreement's validity. See Motion to Compel Response at 22-24.

         6. The Motion to Compel Reply.

         The Waters Defendants contend that the Arbitration Agreement is valid, that Bennett and the Waters Defendants agreed to arbitration, and that they signed the Arbitration Agreement. See Reply in Support of Defendants' Motion to Compel Arbitration and Stay Proceedings at 3-4, filed November 1, 2018 (Doc. 26)(“Motion to Compel Reply”). The Waters Defendants indicate that they made no material misrepresentations to Bennett; that they had no duty to Bennett, as he signed the Arbitration Agreement when he was a prospective patient; and that the Arbitration Agreement is not substantively unconscionable, because it binds both parties to arbitration. See Motion to Compel Reply at 5-10. The Waters Defendants contend that no discovery will help Hunt argue against the Motion to Compel. See Motion to Compel Reply at 10-11.

         7. The MTD.

         On September 28, 2018, the Insurance Defendants filed the Defendants the National Chiropractic Council and Allied Professionals Insurance Co., a Risk Retention Group, Inc's, Motion to Dismiss for Failure to State a Claim at 4, filed September 28, 2018 (Doc. 9)(“MTD”). The Insurance Defendants argue that they did nothing illegal by requiring chiropractors to use arbitration agreements and that Hunt does not allege an agreement to commit an unlawful act. See MTD ¶ 3-4, at 2. The Insurance Defendants ask that the Court dismiss with prejudice the claims against them. See MTD at 3.

         8. The MTD Response.

         Hunt filed the Plaintiff's Response in Opposition to Defendants National Chiropractic Council and Allied Professionals Insurance Co.'s Motion to Dismiss Count IV for Failure to State a Claim, filed October 12, 2018 (Doc. 18)(“MTD Response”). Hunt contends that he does not need to allege that the Insurance Defendants conspired to commit an illegal act and argues that he adequately states a civil conspiracy claim alleging the Insurance Defendants required that the Waters Defendants have arbitration agreements with patients. See MTD Response at 7-8. Hunt argues that the Insurance Defendants conspired with the Waters Defendants to breach a fiduciary duty to Bennett by failing to disclose information about arbitration and about chiropractic care's risk of death, by hiding the Arbitration Agreement among other forms, by having new and returning patients complete the same forms, and by allowing the Arbitration Agreement to continue over eight years of treatment. See MTD Response at 15.

         9. The Motion to Stay.

         On October 1, 2018, Hunt filed the Motion to Stay Federal Proceedings Pending Determination of Motion to Remand (Doc. 12)(“Motion to Stay”). Hunt indicates that he served discovery on all the Defendants and that proceeding with the case in the Court will waste party and court resources. See Motion to Stay at 4. Hunt argues that the Court must have subject-matter jurisdiction before proceeding to other issues and so it must first decide the Motion to Remand. See Motion at Stay at 4-5.

         10. The Motion to Stay Response.

         The Insurance Defendants filed a response to the Motion to Stay. Response to Motion to Stay Federal Proceedings Pending Determination of Motion to Remand, filed October 12, 2018 (Doc. 17)(“Motion to Stay Response”). The Insurance Defendants do not object to the Motion to Stay. See Motion to Stay Response at 1. The Insurance Defendants ask that, at the hearing, the Court hear the Motion to Compel, the Motion to Remand, and the MTD in that order. See Motion to Stay Response at 1.

         12. The Motion to Stay Reply.

         Hunt objects to the order that the Insurance Defendants request for the hearing. See Plaintiff's Reply in Support of His Motion to Stay Federal Proceedings Pending Determination of Motion to Remand at 3, filed October 25, 2018 (Doc. 22)(“Motion to Stay Reply”). Hunt argues that the Court must decide its subject-matter jurisdiction before deciding other issues. See Motion to Stay Reply at 1-3. Hunt argues that the Court should not hear arguments on the Motion to Compel before the Motion to Remand and should grant his request in the Motion to Stay. See Motion to Stay Reply at 3.

         12. The Hearing.

         The Court began by indicating its intention to start the hearing with MTD arguments, and the Insurance Defendants began the arguments. See Tr. at 3:5-15 (Court, Biehler). According to the Insurance Defendants, Hunt alleges that they entered a conspiracy to have, or aided and abetted having, their clients sign arbitration agreements with patients. See Tr. at 5:6-13 (Biehler). The Insurance Defendants argued that entering an arbitration agreement and encouraging their clients to enter arbitration agreement are not unlawful actions. See Tr. at 3:15-4:25 (Biehler).

         Hunt explained that he sued the Insurance Defendants anticipating that the Waters Defendants would contend that the Insurance Defendants provided the Arbitration Agreement that Bennett signed. See Tr. at 8:9-16 (McGinn). Hunt argued that the Waters Defendants did not alone decide to present the Arbitration Agreement and that civil conspiracy offers a cause of action against the Insurance Defendants. See Tr. at 9:2-10 (McGinn). The Court asked whether a fiduciary relationship exists before a potential patient becomes a patient. See Tr. at 9:11-12 (Court). Hunt contended that a fiduciary duty exists and cited King v. Bryant, 795 S.E.2d 340 ( N.C. 2017). See Tr. at 9:14-10:19 (McGinn). Hunt clarified that he brings an aiding-and-abetting claim and a civil conspiracy claim. See Tr. at 11:2-3 (Court, McGinn). Hunt explained that the Insurance Defendants drafted the informed consent and arbitration forms, and required that chiropractors have patients sign them before treating patients, without explaining the forms and without disclosing the risk of death. See Tr. at 11:6-12:21 (McGinn).

         The Court asked the Insurance Defendants whether Hunt had a case on point for his arguments, and the Insurance Defendants replied that he did not have one. See Tr. at 14:2-12 (Court, Biehler). The Insurance Defendants argued that providing the forms did not constitute a breach by anyone. See Tr. at 14:18-15:4 (Biehler). The Court asked the Insurance Defendants whether King v. Bryant made the Insurance Defendants' conduct a breach of fiduciary duty, and the Insurance Defendants opined that it did not have this effect. See Tr. at 15:14-16:1 (Court, Biehler). The Insurance Defendants emphasized that Bennett did not have a fiduciary relationship with the Waters Defendants when he signed the Arbitration Agreement and that Hunt did not allege that the Insurance Defendants told the Waters Defendants what information to provide potential patients. See Tr. at 16:15-17:3 (Biehler). The Court asked when the fiduciary relationship begins, and the Insurance Defendants indicated that the relationship begins when the patient accepts treatment. See Tr. at 17:4-15 (Court, Biehler). The Waters Defendants intervened to note that, in THI of New Mexico at Hobbs Center LLC v. Spradlin, 532 Fed.Appx. 813, 819 (10th Cir. 2013)(unpublished), the United States Court of Appeals for the Tenth Circuit stated that a business relationship exists between a nursing home and a prospective patient. See Tr. at 17:25-18:13 (Freedman). The Waters Defendants noted that nursing homes provide medical services once someone enters the nursing home. See Tr. at 18:20-19:4 (Freedman).

         The Court began the discussion regarding the Motion to Remand by asking Hunt to whom the phrase “nominal parties” in the Motion to Remand refers. See Tr. at 20:21-24 (Court). Hunt explained that, according to the Insurance Defendants, the Waters Defendants are nominal parties, because they “seek . . . to compel arbitration.” Tr. at 21:4-7 (McGinn). The Court responded: “But I guess I'm having a hard time -- who, then, are the real parties, are the important parties, if it's not the doctor and his PC?” Tr. at 21:8-10 (Court). Hunt agreed with the Court's concerns and continued: “What [the Insurance Defendants] say is: Look, the Waters [D]efendants are nominal parties because they are entitled to this arbitration, and we think the Court is going to enforce it at some point.” Tr. at 21:13-16 (McGinn). In response, the Court inquired whom the arbitration agreement allegedly binds. See Tr. at 21:20-22 (Court). Hunt responded that Bennett and the Waters Defendants signed the arbitration agreement, but, according to Hunt, the Insurance Defendants filed an “amended answer asserting that the arbitration agreement applies to them as well as third party beneficiaries.” Tr. at 21:25-22:2 (McGinn). Hunt then repeated his contention from the Motion to Remand Reply that, under the Insurance Defendants' nominal-party theory, this allegation would imply that the Insurance Defendants are also nominal parties. See Tr. at 22:8-10 (Montoya). The Court asked who filed the Amended Answer. See Tr. at 22:4 (Court). Hunt explained that the Insurance Defendants filed the document. See Tr. at 22:5-8 (McGinn). The Court then turned to the parties' citizenships: “But just to make sure I understand: Hunt is from New Mexico, Bennett was from New Mexico, Waters is [a New Mexico citizen], and his PC [is] a New Mexico Corporation, correct?” Tr. at 22:11-14 (Court). Hunt confirmed that summary is correct. See Tr. at 22:15 (McGinn). The Court proposed: “So that is enough to destroy complete diversity?” Tr. at 16-17 (Court). Hunt agreed with the Court's suggestion. See Tr. at 22:18 (McGinn). The Court followed this statement by expressing its assumption that the Insurance Defendants are not New Mexico citizens. See Tr. at 22:19-21 (Court). Hunt again confirmed the Court's supposition. See Tr. at 22:22-23 (McGinn).

         As Hunt turned to his argument, the Court asked him to further explain nominal parties. See Tr. at 23:5-7 (Court). Hunt began by describing that, in Navarro Savings Association v. Lee, which the Insurance Defendants cite, “the named parties, were an association of collective trustees who had the power to manage, to hold, to disperse assets for shareholders.” Tr. at 23:10-13 (McGinn). According to Hunt, the parties in Navarro Savings Association v. Lee did not dispute that “the named parties were completely diverse.” Tr. at 14-15 (McGinn). Hunt described that the parties instead debated whether, in determining diversity, the Supreme Court should consider the shareholders, whom the plaintiff had not named. See Tr. at 23:15-24 (McGinn, Court). According to Hunt, the Supreme Court decided that “the shareholders are the nominal parties, the real parties in interest are the parties who had the power to control, to manage, to dispose of the property at interest.” Tr. at 23:18-21 (McGinn). Hunt then summarized several descriptions of nominal parties: “a nominal party is one who has, quote, [‘]no real interest in the controversy.['] Another description is [‘]no relief is sought against them where it's a party a John Doe, a Jane Doe or somebody named but there is not that complaint against ...


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