Denton v. Allenbrooke Nursing & Rehab. Ctr., LLC

495 F.Supp.3d 601

Mabel DENTON, Next of Kin of Reginald Denton, deceased, and on behalf of the wrongful death beneficiaries of Reginald Denton, Plaintiff,

v.ALLENBROOKE NURSING AND REHABILITATION CENTER, LLC, d/b/a Allenbrooke Nursing and Rehabilitation Center, et al., Defendants.

No. 2:20-cv-02282-TLP-tmp

United States District Court, W.D. Tennessee, Western Division.

Signed October 16, 2020

Carey Lynn Acerra, Deena Knopf Arnold, Jehl Law Group, PLLC, Memphis, TN, for Plaintiff.

William Davis Frye, George Clanton Gunn, IV, Butler Snow LLP, Ridgeland, MS, Brent E. Siler, Kathryn K. Van Namen, Butler Snow LLP, Memphis, TN, for Defendants.

ORDER DENYING DEFENDANT ALLENBROOKE NURSING AND REHABILITATION CENTER, LLC'S MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS

THOMAS L. PARKER, UNITED STATES DISTRICT JUDGE

This case arises from the alleged mistreatment of Reginald Denton while at Allenbrooke Nursing and Rehabilitation Center, LLC, in Memphis, Tennessee. Plaintiff Mabel Denton sues as next of kin of Mr. Denton and on behalf of his wrongful death beneficiaries. Defendant, Allenbrooke Nursing and Rehabilitation Center, LLC,¹ moves to compel arbitration of Plaintiff's claims and for the Court to stay the case pending arbitration. (ECF Nos. 18 & 19.) Plaintiff timely responded in opposition. (ECF No. 24.) The Court granted Allenbrooke leave to reply and Plaintiff leave to file a sur-reply. (See ECF Nos. 33 & 34.)

For the reasons below, the Court DENIES Allenbrooke's motion to compel arbitration of Plaintiff's claims. The Court also DENIES Allenbrooke's motion to stay the case.

BACKGROUND

Plaintiff took her son, Reginald Denton, to Allenbrooke's long-term care and rehabilitation facility in December 2017. (ECF No. 1 at PageID 9.) Allenbrooke then admitted Mr. Denton who resided at the nursing home until July 2019 when it transferred him to Baptist Memorial Hospital East. (Id. ) Then Baptist discharged him to Grace Healthcare of Cordova. (Id. ) Mr. Denton passed away in August 2019. (Id. )

Plaintiff alleges that, while under Allenbrooke's care, Mr. Denton suffered mental anguish, pain and suffering, and physical injuries including, but not limited to, pressure sores, severe pain, and injuries to his dignity which eventually led to his death. (Id. at PageID 15.) Plaintiff contends that these injuries arose because of Allenbrooke's negligence in caring for Mr. Denton. (Id. at PageID 15–16.)

And so Plaintiff sued for "survival and wrongful death" alleging all Defendants were negligent under the Tennessee Healthcare Liability Act, Tennessee Code Annotated §§ 29-26-101, et seq. ; and, in the alternative, the Non-Facility Defendants are liable for ordinary negligence. (Id. at PageID 12–20.) Allenbrooke now moves to compel arbitration and stay this case pending resolution of that arbitration. (ECF No. 18.)

When Allenbrooke admitted Plaintiff's son, Plaintiff signed many documents on Mr. Denton's behalf. One document was an appointment of surrogate form ("Surrogate Form"). (ECF No. 19-2.) The form designates Plaintiff as Mr. Denton's surrogate. (Id. at PageID 200.) The date by her signature is legible. It reads December 5, 2017. (Id. at PageID 201.)

Mr. Denton's primary physician, Dr. Dana Nash, also signed the form designating Plaintiff as Mr. Denton's health care surrogate. (Id. at PageID 201.) Dr. Nash checked a box reflecting her determination that Mr. Denton lacked capacity to make and communicate health decisions for himself. (Id. ) But because the date by Dr. Nash's signature is illegible, it is unclear when Dr. Nash made that determination. (Id. ) Ordinarily the date of the doctor's signature is the date when the surrogate's authority is binding.

But this Surrogate Form included language seeking to backdate Dr. Nash's designation to when the surrogate signed. The text above Dr. Nash's signature reads, "[i]t is my intention that the designation of surrogate is effective back to the date of acceptance by the surrogate, so that healthcare decisions made by the surrogate for the resident date back to that day are valid." (Id. )

Plaintiff also executed a "Resident and Facility Arbitration Agreement" (the "Agreement") on December 5, 2017. (ECF No. 19-1 at PageID 199.) Plaintiff signed on the line for "Signature of Family Member or other Representative." (Id. ) The Agreement declares that it constitutes a "health care decision" and becomes part of the Resident's underlying Admission Agreement. (Id. at PageID 197.) The Agreement designates Mr. Denton as the "Resident." (Id. at PageID 197.) And it defines "Resident" as collectively referring "to those signing with or for the Resident," and designates the "Resident" as a "a third party beneficiary" of the Agreement. (Id. )

Under the Agreement:

Any and all disputes between the Resident and the Facility shall be submitted to binding arbitration where the amount in controversy exceeds $25,000. This includes any disputes arising out of or in any way relating to this Agreement (its enforceability), the Admission Agreement, or any or the Resident's stays at the Facility, whether existing or arising in the future, whether for statutory, compensatory or punitive damages, and irrespective of the legal theories upon which the claim is asserted.

(Id. ) What is more, the Agreement purports to bind both the person receiving services (Mr. Denton) and any person signing on his behalf (Plaintiff) or any of the Resident's "successors, assigns, agents, attorneys, third party beneficiaries, insurers, heirs, trustees and representatives, including the personal representative or executor of the estate, the spouse, children, grandchildren, all decedents and next friends, and any person whose claim is derived through the Resident." (Id. at 198–99.)

The Agreement also provides that the Resident may receive services at Allenbrooke, even if the Resident does not sign the Agreement. (Id. at PageID 199.) It advises those signing that they may consult an attorney (Id. at PageID 197) and can revoke the Agreement by written notice within thirty days of signing. (Id. at PageID 199.)

Allenbrooke now moves to compel arbitration relying on the Agreement. Plaintiff opposes the motion. The parties present several issues for the Court:

1. Is Plaintiff challenging the enforceability or the existence of the Agreement?

2. Did Plaintiff have authority to create a contract between Allenbrooke and Mr. Denton?

3. Is Mr. Denton bound to the Agreement as a third-party beneficiary?

4. Is Plaintiff bound to the Agreement in her individual capacity?

5. Should the Court allow the parties to engage in arbitration-related discovery?

The Court will address these issues in turn.

COURT'S AUTHORITY TO DETERMINE THE EXISTENCE OF A VALID ARBITRATION AGREEMENT

I. Legal Standards for Determining the Existence of an Arbitration Agreement

A. The Federal Arbitration Act

The Agreement says that the arbitrator will apply the law of the state where the facility is located, except that "the parties expressly stipulate that the Federal Arbitration Act, 9 U.S.C. §§ 1 – 16 shall exclusively govern the enforcement of this Agreement." (ECF No. 19-1 at PageID 197.) Although the Tennessee Uniform Arbitration Act ("TUAA"), Tennessee Code Annotated §§ 29-5-301 et seq., governs the conduct of any arbitration, the Federal Arbitration Act ("FAA"), which preempts any conflicting state laws, governs whether the Court has to enforce an arbitration agreement. See Allied-Bruce Terminix Cos., Inc. v. Dobson , 513 U.S. 265, 271–72, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995).

So the FAA is the starting point for this analysis. Congress enacted the FAA "to overcome judicial resistance to arbitration." Buckeye Check Cashing, Inc. v. Cardegna , 546 U.S. 440, 443, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006). Under the FAA, a party to a contract may petition a court to compel arbitration. 9 U.S.C. § 4. Before compelling arbitration, courts first determines whether the parties agreed to arbitrate. Stout v. J.D. Byrider , 228 F.3d 709, 714 (6th Cir. 2000). Next, a court has to decide the scope of that agreement. Id. Finally, if not all the claims are referred to arbitration, the court must decide whether to stay the remainder of the case. Id.

Section 2 of the FAA reflects the Act's breadth. Under this section,

A written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract ... 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. Also "any ambiguities in the contract or doubts as to the parties’ intentions should be resolved in favor of arbitration." Stout , 228 F.3d at 714. But despite the FAA's broad reach, plaintiffs can challenge an arbitration agreement under the savings clause in § 2. Under the savings clause, a party can invalidate an arbitration agreement "upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. A party therefore can challenge the validity, enforceability, or formation of an arbitration agreement.

But who determines the validity, enforceability, or formation of an arbitration agreement—the Court or the arbitrator? It often depends on the contract. Rent-A-Center, West, Inc. v. Jackson , 561 U.S. 63, 69–70, 130 S.Ct. 2772, 177 L.Ed.2d 403 (2010) (finding "arbitration is a matter of contract," and "[a]n agreement to arbitrate a gateway issue" proper under the FAA). Parties can agree to delegate "threshold arbitrability question[s] to an arbitrator," such as whether the arbitration agreement applies to a particular issue. Henry Schein, Inc. v. Archer & White Sales, Inc. , ––– U.S. ––––, 139 S. Ct. 524, 530, 202 L.Ed.2d 480 (2019). When parties do delegate such questions to the arbitrator, "a court possesses no power to decide the arbitrability issue." Id. at 529. But courts do have power when the question is whether an arbitration agreement exists.

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