Prof'l Hosp. Guaynabo v. MSO of P.R.

MEMORANDUM AND ORDER

PEDRO A. DELGADO HERNANDEZ, United States District Judge.

Before the court is MSO of Puerto Rico, Inc.'s “Motion to Dismiss Amended Complaint for Lack of Jurisdiction Under Rule 12(B)(1)” (Docket No. 18), which Professional Hospital Guaynabo, Inc., opposed (Docket No. 21). MSO replied (Docket No. 24). For the reasons explained below, the court lacks subject matter jurisdiction over this case. Therefore, MSO's motion must be granted and the Amended Complaint dismissed.

I. FACTUAL BACKGROUND

A. The Amended Complaint

On November 30, 2020, plaintiff, Professional Hospital Guaynabo, Inc., filed an Amended Complaint against MSO of Puerto Rico, Inc., asking the court to vacate an arbitration award issued in favor of MSO (Docket No. 16).^[1] The award was the result of a “Healthcare Commercial

Demand for Arbitration” filed by Professional Hospital for payment of $618, 938.00 relating to outstanding medical and hospitalization services, in accordance with an arbitration provision included in the Hospital Services Agreement (“HSA”) entered into between the parties. See, Docket No. 16, Exh. 1 (Award dated May 26, 2020). On December 20, 2020, MSO moved to dismiss the Amended Complaint for lack of jurisdiction (Docket No. 18).^[2]

B. The award (Docket No. 16, Exh 1)

As recounted by the arbitrator, on May 9, 2013, the parties entered into an HSA which provided for arbitration pursuant to the Commercial Rules of the American Arbitration Association (“AAA”) as the alternate dispute resolution method to resolve any dispute with respect to the performance or interpretation of any clause of the HSA when Professional Hospital “is not satisfied with resolution of any matter in controversy submitted to the MSO, and/or the Executive Management of the MSO.” See, Docket No. 16, Exh. 1, p. 1 and Article 9.3 of the HSA. On December 18, 2017, Professional Hospital filed a Demand for Arbitration with the AAA, describing the dispute as “medical and hospitalization services which shall remain unpaid” and asking for $618, 938.00, plus attorney's fees, interest and arbitration costs (Docket No. 16, Exh. 1, p. 1).

MSO requested dismissal based on a contractual time bar defense, Professional Hospital opposed and, following appointment of an arbitrator, the arbitrator denied without prejudice the request for dismissal considering the “limited facts submitted [at the time]” (Docket No. 18, p. 2).

After various procedural events, the arbitrator held a final hearing on June 10-12, 18-21, 16-18, 23-25; December 11, 2019; and January 21, 2020. Id. at p. 5. He admitted into evidence 250 documents (id.) and provided the parties with the opportunity to submit post-hearing briefs - which they did.^[3]

On May 26, 2020, the arbitrator issued the award, dismissing Professional Hospital's claim as time barred (Docket No.1-1, p. 21). Quoting Article 9.3 of the HSA, the arbitrator concluded that the 60-day period set therein to submit the matter to arbitration began to run on December 5, 2016, expiring on February 3, 2017. Id. at p. 19 (“9.3 If Hospital is not satisfied with resolution of any matter in controversy submitted to the MSO, and/or the Executive Management of the MSO, the matter in controversy shall be submitted to binding arbitration in accordance with the Commercial Rules of the American Arbitration Association within sixty (60) days of the last attempted resolution . . .”) (emphasis in the original).

The arbitrator noted that subject to certain exceptions not applicable here, the issue of whether a demand for arbitration was timely filed according to the terms of the arbitration agreement was a matter of contract interpretation (Docket No. 1-1, pp. 16 and 18). The arbitrator stated that during the final hearing MSO proved that Professional Hospital was aware that the 60-day period to submit the controversy to arbitration was triggered on December 5, 2016. Id. at pp. 18-19. And none of the reasons proffered by Professional Hospital to justify the delay were valid or credible. Id. He added that some of those reasons were belied by the evidence presented. Id. In this way, the arbitrator reasoned that “there is no doubt that from December 5, 2016,

[Professional Hospital] had sixty (60) days to submit the controversy to arbitration and, consequently, the demand for arbitration was untimely filed with the AAA on December 18, 2017 and shall be dismissed.” Id. at ¶ 20.^[4] Professional Hospital asks the court to vacate the award.

II. DISCUSSION

Sections 9, 10 and 11 of the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 9, 10, 11 supply the means to obtain a “judicial decree” confirming, correcting, modifying, or vacating an arbitration award. Ortiz-Espinosa v. BBVA Securities of Puerto Rico, Inc., 852 F.3d 36, 42 (1st Cir. 2017). Upon an application to the court under § 9, the court must confirm the award unless it is vacated, modified or corrected as prescribed in §§ 10 and 11. Id. Sections 10 and 11 respectively provide the FAA's exclusive grounds for expedited vacatur and modification. Id. The FAA does not, however, confer federal jurisdiction but rather requires “an independent jurisdictional basis” to open the federal court's door. Oriental Financial Services Corp. v. Betancourt-Figueroa, __ Fed. Supp. 3d __, 2021 WL 1923720, *2 (D.P.R. Mar. 21, 2021). That being so, the focus is on whether, “save for [the arbitration] agreement, ” the court would have subject matter jurisdiction over a suit arising out of the controversy between the parties. Ortiz-Espinosa, 852 F.3d at 43-44. The court may “look through” the statement of claim to make this determination. Oriental Financial Services Corp., 2021 WL 1923720 at *3-*4.

Review of the demand for arbitration shows that Professional Hospital's claims involve Puerto Rico law, not federal law. In Professional Hospital's words, the dispute deals with “medical and hospitalization services which shall remain unpaid” (Docket No. 16, Exh. 1, p. 1 and Docket No. 16, ¶...