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The Estate of Elsie Louise Adair, et al v. Thi of Kansas

February 20, 2013

THE ESTATE OF ELSIE LOUISE ADAIR, ET AL., PLAINTIFFS,
v.
THI OF KANSAS, LLC, DEFENDANT.



The opinion of the court was delivered by: Kathryn H. Vratil United States District Judge

MEMORANDUM AND ORDER

Carolyn Reimer, individually and as administrator of the Estate of Elsie Louise Adair, brought this action against THI of Kansas, LLC ("THI") in the District Court of Reno County, Kansas. Under Kansas law, plaintiff asserts claims for negligence and wrongful death arising from the death of Elsie Louise Adair. Defendant removed the case to federal court based on diversity jurisdiction. This matter comes before the Court on Defendant THI of Kansas At Golden Plains, LCC's Motion To Stay Proceedings And Compel Arbitration (Doc. #21) filed November 16, 2012. For reasons set forth below, the Court sustains defendant's motion.

Facts

On June 16, 2010, THI admitted Elsie Adair as a resident of its nursing facility in Hutchinson, Kansas. That same day, Carolyn Reimer, who had power of attorney to act on Adair's behalf, signed an "Admission Agreement" and a "Facility-Resident/Representative Arbitration Agreement" ("the Arbitration Agreement" or "the Agreement"). The Arbitration Agreement provided in relevant part as follows:

It is the intention of the parties to the Agreement to bind not only themselves, but also their successors, assigns, heirs, personal representatives, guardians or any persons deriving their claims through or on behalf of Resident. . . .

It is further understood that in the event of any controversy or dispute between the parties . . . arising out of or relating to Facility's Admission Agreement, or breach thereof, or relating to the provisions of care or services to Resident, including but not limited to any alleged tort, personal injury, negligence or other claim; or any federal or state statutory or regulatory claim of any kind; or whether or not there has been a violation of any right or rights granted under State law (collectively "Disputes") . . . the parties agree that such Dispute(s), shall be resolved by arbitration, as provided by the National Arbitration Forum Code of Procedure or other such association.

The parties agree that only one (1) arbitrator is required to resolve any Dispute(s) and the arbitrator shall be selected from a panel having experience and knowledge of the health care industry. The place of arbitration shall be where Facility is located, or, if that is not practical, then as close to Facility as practical. The arbitrator's compensation and administrative fees related to the arbitration shall initially be paid by Facility and if Facility prevails, then the arbitrator may order that Resident/Representative reimburse it for any compensation or administrative fees paid. . . .

The parties acknowledge and agree that, because the services and reimbursement thereof effects a transaction that involves interstatecommerce, the enforcement of this Arbitration Agreement shall be governed by the Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any contrary provision of this Agreement or contrary state law. Doc. #21-4.

Plaintiff alleges that as a result of THI negligence, Elsie Adair fell on July 30, 2010, fracturing her right humerus and pelvis. On August 3, 2010, Adair died as a result of the injuries she sustained in the fall.

On June 28, 2012, plaintiff filed this action against THI, seeking damages for negligence and wrongful death. THI filed an answer which raised the arbitration agreement as an affirmative defense. Plaintiff has declined THI's request to voluntarily submit to arbitration. THI seeks an order compelling plaintiff to arbitrate the claims and staying this case pending arbitration under the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq.

Legal Standard

The FAA provides that a written agreement to arbitrate disputes arising out of a contract 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 4 of the FAA authorizes a federal district court to compel arbitration when it would have jurisdiction over a suit on the underlying dispute. See generally Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-27 (1983) (discussing scope and operation of FAA). Section 3 of the FAA obliges courts to stay litigation on matters that the parties have agreed to arbitrate. 9 U.S.C. § 3. The purpose of the Act is "to place an arbitration agreement upon the same footing as other contracts and to overturn the judiciary's longstanding refusal to enforce agreements to arbitrate." Hill v. Ricoh Ams. Corp., 603 F.3d 766, 771 (10th Cir. 2010) (citing Glass v. Kidder Peabody & Co., Inc., 114 F.3d 446, 451 (4th Cir. 1997)). The FAA is a "congressional declaration of a liberal federal policy favoring arbitration agreements." Moses H. Cone, 460 U.S. at 24.

Despite its liberal policy, the FAA "does not require parties to arbitrate when they have not agreed to do so." Volt Info. Scis., Inc. v. Bd. of Trs., 489 U.S. 468, 478 (1989). Rather, courts must enforce agreements to arbitrate, like other contracts, in accordance with their terms. Id. (enforcing arbitration agreement according to its terms gives effect to contractual rights and expectations of parties, without doing violence to policies behind FAA). Before the FAA can be invoked, a court must determine whether the parties reached an agreement to arbitrate. Avedon Eng'g, Inc. v. Seatex, 126 F.3d 1279, 1287 (10th Cir. 1997).

Interpretation of arbitration agreements is generally a matter of state law, and as with any other contract, the parties' intentions control. Stolt-Nielsen S.A. v. Animal Feeds Int'l Corp., 559 U.S. 662, __, 130 S.Ct. 1758, 1773 (2010). The Court looks to state law principles of contract formation to tell whether an agreement to arbitrate has been reached. Avedon, 126 F.3d at 1287. The party seeking judicial enforcement of an arbitration agreement bears ...


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