HCR Manorcare, Inc. v. Youngblood, CIVIL ACTION NO.: 3:16-CV-32

HCR MANORCARE, INC., and HEARTLAND OF MARTINSBURG WV, LLC, Plaintiffs, v. MARY BETH YOUNGBLOOD, Administratrix for the Estate of Mary Etta Youngblood, Defendant.

CIVIL ACTION NO.: 3:16-CV-32

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF WEST VIRGINIA MARTINSBURG

September 2, 2016

(GROH)

MEMORANDUM OPINION AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS OR, IN THE ALTERNATIVE, MOTION TO ABSTAIN AND GRANTING PLAINTIFFS' MOTION TO COMPEL ARBITRATION

Currently pending before the Court is the Defendant's Motion to Dismiss or, in the Alternative, Motion to Abstain [ECF No. 5] and the Plaintiffs' Motion to Compel Arbitration [ECF No. 7]. For the reasons set forth below, the Court DENIES the Defendant's Motion to Dismiss or, in the Alternative, Motion to Abstain and GRANTS the Plaintiffs' Motion to Compel Arbitration.

I. Background

Mary Etta Youngblood ("the decedent") was a nursing home resident at Heartland of Martinsburg WV, LLC ("Heartland")—a subsidiary of HCR ManorCare, Inc. ("ManorCare")—during May 13, 2014, through May 30, 2014. On May 15, 2014, the decedent signed an admission agreement with Heartland and the following day she executed a separate voluntary arbitration agreement. The arbitration agreement provided, in pertinent part:

All claims arising out of or relating to this Agreement, the Admission Agreement or any and all past or future admissions of the Patient at this Center, or any sister Center operated by any subsidiary of HCR ManorCare, Inc. ("Sister Center"), including claims for malpractice, shall be submitted to arbitration.

ECF No. 1-1 at 1. As a result of alleged medical negligence during her residency at Heartland, the decedent suffered physical and emotional injury and subsequently died on June 25, 2014.

On February 16, 2016, the Estate of Mary Etta Youngblood ("the Estate") served a notice of claim and certificate of merit upon ManorCare; HCR ManorCare, LLC; HCR MC Operations, LLC; Manor Care, Inc.; HCR Manor Care Services, LLC; Heartland Employment Services, LLC; Heartland; and Nancy Mason. The notice of claim stated the Estate's intent to file a medical malpractice suit "relate[d] to the care and treatment provided to [the decedent] at Heartland." ECF No. 7-2 at 4. More specifically, the notice of claim alleged that during her residency at Heartland, the decedent "suffered permanent and irreparable injury and death resulting from Defendants [sic] failure to follow the accepted standard of care." ECF No. 7-2 at 4. Following their receipt of the notice of claim, on March 17, 2016, ManorCare and Heartland sent the Estate a letter demanding that arbitration be initiated, pursuant to the May 16, 2014 arbitration agreement, within seven days. Absent any reply from the Estate, on March 28, 2016, ManorCare and Heartland filed a complaint with this Court to compel arbitration against the Estate pursuant to the arbitration agreement. One week later, on April 4, 2016, the Estate filed a wrongful death action in the Circuit Court of Kanawha County, West Virginia, against HCR ManorCare, LLC; ManorCare; HCRMC Operations, LLC; Manor Care, Inc.; HCR Manor Care Services, LLC; HCR IV Healthcare, LLC; Heartland Employment Services,LLC; Heartland; Nancy Mason; John Does 1 through 10; and Unidentified Entities 1 through 10.

On April 18, 2016, the Estate filed its motion to dismiss or abstain in this case, raising several arguments. First, the Estate argues that the arbitration agreement signed by the decedent does not apply to it as a nonsignatory. Next, the Estate contends that the complaint filed by ManorCare and Heartland should be dismissed because they failed to join Nancy Mason, the licensed nursing home administrator of Heartland during the decedent's residency, who the Estate avers is a necessary and indispensable party. Additionally, the Estate claims that the relief sought by ManorCare and Heartland is improper in light of the Anti-Injunction Act ("AIA"), 28 U.S.C. § 2283. Finally, the Estate argues that the Court should abstain from exercising jurisdiction pursuant to Younger v. Harris, 401 U.S. 37 (1971), and Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976). On May 5, 2016, ManorCare and Heartland filed their motion to compel arbitration, arguing that the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1-16, is applicable to the Estate's claims presented in the state court wrongful death action and requesting that this Court compel the Estate to arbitrate pursuant to the terms of the May 16, 2014 arbitration agreement. Both parties' motions have been fully briefed and are ripe for review.

II. Standards of Review

A. Rule 12(b)(6) Motion to Dismiss

Rule 12(b)(6) of the Federal Rules of Civil Procedure allows a defendant to challenge the sufficiency of a complaint by moving to dismiss it for failing "to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). When reviewing a motion todismiss pursuant to Rule 12(b)(6), the Court must assume all of the allegations contained within the complaint to be true, resolve all doubts and inferences in favor of the plaintiff and view the allegations in a light most favorable to the plaintiff. Edwards v. City of Goldsboro, 178 F.3d 231, 243-44 (4th Cir. 1999). Nevertheless, if a complaint fails to allege "enough facts to state a claim to relief that is plausible on its face," it must be dismissed. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Even though "detailed factual allegations" are not required, a complaint must offer "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and citation omitted). For example, a complaint that provides "labels and conclusions or a formulaic recitation of the elements of a cause of action will not do." Id. (internal quotations and citation omitted). Likewise, a complaint that tenders only "naked assertion[s] devoid of further factual enhancement" does not suffice. Id. (alteration in original) (internal quotations and citation omitted). A plaintiff is required to articulate facts that, when accepted as true, "show" he is plausibly entitled to relief. Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (citing Iqbal, 556 U.S. at 678). In reviewing a Rule 12(b)(6) motion, courts may consider facts derived from sources beyond the four corners of the complaint, including documents attached to the complaint and the motion to dismiss, "so long as they are integral to the complaint and authentic." Philips v. Pitt Cty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009).

B. Rule 12(b)(7) Motion to Dismiss

Rule 12(b)(7) of the Federal Rules of Civil Procedure allows for dismissal of an action when a necessary and indispensable party has not been joined as required by Rule 19. See Fed. R. Civ. P. 12(b)(7). In considering a 12(b)(7) motion, the court must firstdetermine, pursuant to Rule 19(a), whether the absent party "is necessary to a proceeding because of its relationship to the matter under consideration." Owens-Illinois, Inc. v. Meade, 186 F.3d 435, 440 (4th Cir. 1999) (internal quotations omitted) (quoting Teamsters Local Union No. 171 v. Keal Driveaway Co., 173 F.3d 915, 917-18 (4th Cir. 1999)). If the absent party is necessary, then the court will order its joinder. Id. However, if joinder will destroy diversity, then the court must determine, pursuant to Rule 19(b), whether the case can continue in the party's absence. Id. If not, then "the party is indispensable and the action should be dismissed." Teamsters, 173 F.3d at 918. Dismissal for nonjoinder is disfavored, see Meade, 186 F.3d at 441, and the moving party bears the burden of demonstrating that joinder is required, see Am. Gen. Life and Accident Ins. Co. v. Wood, 429 F.3d 83, 92 (4th Cir. 2005).

III. Discussion

A. Joinder of Nancy Mason

The Court will first consider the Estate's argument regarding the joinder of Nancy Mason as it implicates the Court's jurisdiction to hear this case. In its motion to dismiss, the Estate argues that dismissal of this action is required because ManorCare and Heartland failed to join Nancy Mason, a resident of West Virginia who the Estate claims is a necessary and indispensable party, "in an attempt to manufacture federal diversity jurisdiction." ECF No. 6 at 2. The Estate avers that Nancy Mason is a necessary and indispensable party in light of her status as the licensed nursing home administrator of Heartland during the decedent's residency. However, "in the case of nursing home administrators . . . courts have held that those administrators are not necessary parties under Rule 19 when another alleged joint tortfeasor seeks to enforce arbitration." CanyonSudar Partners, LLC v. Cole, Civil Action No. 3:10-1001, 2011 WL 1233320, at *3 (S.D. W. Va. Mar. 29, 2011); see also Northport Health Servs. of Ark., LLC v. Rutherford, 605 F.3d 483, 491 (8th Cir. 2010) (collecting cases) ("In the arbitration context, to our knowledge every circuit to consider the issue has concluded that a party joined in a parallel state court contract or tort action who would destroy diversity jurisdiction is not an indispensable party under Rule 19 in a federal action to compel arbitration.") Here, other alleged tortfeasors, ManorCare and Heartland, are seeking to enforce arbitration. Therefore, Nancy Mason is not a necessary party to this case. Consequently, she is not required to be joined as a plaintiff and, as a result, complete diversity remains between the parties.

B. The Arbitration Agreement

The principal argument set forth by the Estate is that the arbitration agreement entered into between ManorCare, Heartland and the decedent does not apply to it because "as a nonsignatory [it] cannot be compelled to arbitrate claims he or she never agreed to so arbitrate." ECF No. 6 at 2. In response, ManorCare and Heartland aver that, based upon the derivative nature of wrongful death actions, because the decedent's "right to...