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Lynch v. SSC Glen Burnie Operating Company, LLC

United States District Court, D. Maryland

April 17, 2018

GWENDOLYN LYNCH, AS PERSONAL REPRESENTATIVE OF THE ESTATE OF EARL MYERS Plaintiff
v.
SSC GLEN BURNIE OPERATING COMPANY, LLC d/b/a GLEN BURNIE HEALTH AND REHABILITATION Defendant.

          MEMORANDUM

          JAMES K. BREDAR CHIEF JUDGE

         Plaintiff Gwendolyn Lynch brought this action against SSC Glen Burnie Operating Company, LLC d/b/a Glen Burnie Health and Rehabilitation in this Court on May 15, 2017, and she amended her complaint on August 28. (Compl. ECF No. 1; Am. Compl. ECF No. 21.) Defendant answered the amended complaint on August 30 (ECF No. 23), and the case proceeded to discovery. Defendant has now moved to dismiss the case and compel arbitration. (Mot. Compel, ECF No. 36.) Plaintiff has responded in opposition (ECF No. 39) and Defendant has replied (ECF No. 40). No. hearing is necessary to resolve the matter. See Local Rule 105.6 (D. Md. 2016). The court finds that the purported arbitration agreement is valid, and the Defendant did not waive its right to enforce that agreement. Therefore, the Court will grant Defendant's motion, dismiss the case, and compel arbitration.

         I. Background [1]

         Plaintiff's step-father, Earl Myers, was admitted to a facility operated by the Defendant (“the facility”) on November 27, 2015, after a weeklong stay at a hospital. (See Expert Report Terrance L. Baker, M.D. 2, ECF No. 39-1 (“Baker Report”).) Mr. Myers had been in “apparent good health” but had experienced several falls prior to his hospitalization, “culminating in a rapid functional decline, with clinical deterioration to a stupor.” (Expert Report George Taler, M.D. 1, ECF No. 39-2 (“Taler Report”).) Upon leaving the hospital, he was “unable to care for himself, ” however, “[o]n admission to the nursing facility, he was noted to be fully alert, [albeit] weak and debilitated.” (Id.) According to Plaintiff “[h]is mental status was always good, ” and none of the expert reports in this case indicate that Mr. Myers suffered cognitive decline. (Lynch Dep. 51:13-52:18, ECF No. 40-1; see Baker Report; Taler Report.) Upon admission to the facility, Mr. Myers' cognition was assessed by the Defendant's staff. (See Nursing Admission Data Collection for Earl Myers, ECF No. 39-3.) Under “Orientation” the assessor checked “Person” and “Time, ” but did not check “Place” or “Confused.” (Id.) Under “Cognition” the assessor checked “Intact.” (Id.)

         According to Defendant, as well as Plaintiff in a sworn deposition, Mr. Myers signed an arbitration agreement (“Arbitration Agreement”) five days after being admitted to the facility. (See Dispute Resolution Program 7, ECF No. 36-4 (“Arb. Agreement”); Lynch Dep. 89:16-18.) Plaintiff stated in her deposition that “Daddy signed it, ” referring to the Arbitration Agreement, and, when asked if she recognized “[her] Dad's signature, ” she responded, “Yes.” (Lynch Dep. 89:16-18.) Under the terms of this agreement, Mr. Myers agreed to arbitrate any dispute arising out of his care at the facility if alleged damages were over $50, 000. (Arb. Agreement at 3.) The agreement contains a choice of law provision stating “This agreement is governed by the Maryland Uniform Arbitration Act, Md. Code Ann., Cts. And Jud. Proc. §§ 3-201 to 3-234.” (Id. at 5.)

         Mr. Myers was released from the facility on December 17, 2015, but his condition did not improve. (See Baker Report at 5-6.) Roughly one week later he signed a “Maryland Medical Order for Life-Sustaining Treatment” (“MOLST”). (MOLST, ECF No. 40-3.) After two more subsequent hospitalizations, Mr. Myers passed away on January 31, 2016. (Baker Report at 6-8.) Plaintiff alleges that Mr. Myers' death was the result of his stay at the facility.

         Plaintiff filed the instant action against Defendant on May 15, 2017. (Compl.) Defendant answered her complaint on June 12, 2017. (Ans. to Original Compl., ECF No. 5.) Defendant did not mention the Arbitration Agreement in its answer. (See id.) Her original complaint contained a claim for wrongful death, but Plaintiff is not Mr. Myers' biological or adopted child (a necessary prerequisite to bring a wrongful death claim under Maryland law) and she therefore amended her complaint on August 28, 2017, dropping that claim. (Am. Compl.); see Md. Code Ann., Cts. & Jud. Proc. § 3-904(a) (defining class of beneficiaries who may recover for wrongful death). Her amended complaint states a claim for negligence, which she is bringing on behalf of Mr. Myers. (See Am. Compl. pp. 6-7.) Defendant answered this complaint on August 30, 2017, and again did not raise the issue of arbitration in its answer. (See Ans., ECF No. 23.) The case then proceeded to discovery.

         After Plaintiff responded to interrogatories and Defendant subpoenaed some documents in anticipation of a deposition, Defendant moved this Court for a “protective order, ” on October 24, 2017. (Mot. Protective Order, ECF No. 26; see Pl.'s Ans.'s to Interrogs., ECF No. 39-7; Subpoenas, ECF No. 39-9.) On December 14, 2017 Defendant took Plaintiff's deposition. (See Lynch Dep.) On December 19, 2017, the Court issued an order granting in part and denying in part Defendant's motion for a “protective order.” (ECF No. 32.) Essentially, Defendant had requested a “disclosure order” permitting qualified health care providers to speak with Defendant ex parte; discussions which would ordinarily be in violation of the Health Insurance Portability and Accountability Act. (See Mem., ECF No. 31.) The Court denied Defendant's request, but granted the motion in part and issued a “Disclosure and Qualified Protective Order” that permitted Defendant to access Mr. Myers' protected health information via subpoena. (See ECF No. 33.) Defendant remained free to interview Mr. Myers' health care providers with the authorization of Plaintiff or in the presence of Plaintiff's attorneys.

         Roughly three weeks after the Court's order, on January 12, 2018, Defendant informed Plaintiff that it was “electing to enforce the arbitration agreement, ” and requested that Plaintiff dismiss this lawsuit. (Arbitration Letter, ECF No. 36-5.) Plaintiff did not voluntarily dismiss the suit, and Defendant filed a motion to compel arbitration on February 9, 2018. (Mot. Compel, ECF No. 36.) Plaintiff responded in opposition on February 23, 2018 (ECF No. 39) and Defendant replied on March 2, 2018 (ECF No. 40). This motion is therefore ripe for consideration.

         II. Applicable Law and Standard

         Below the seemingly clear surface of this case lies a rather murky question of choice of law. The parties seem to believe that the Federal Arbitration Act (“FAA”), and thus Federal law interpreting it, apply to this case.[2] And at first blush they appear to be correct. Any contract “evidencing a transaction involving [interstate] commerce, ” is within the scope of the FAA, and the contract here evidences such a transaction. 9 U.S.C. § 2; cf. GGNSC Louisville St. Matthews v. Madison, 254 F.Supp.3d 901, 910 (W.D. Ky. 2017) (noting that “[i]t blinks reality to say that, in the aggregate, the nursing home industry does not affect interstate commerce, ” and finding that, in part because a nursing home plaintiff did business in multiple states, contract between nursing home resident and nursing home was a “transaction involving interstate commerce.”). Even when a contract with an arbitration provision contains a choice of law provision that chooses non-Federal law, the presumption is that Federal law will still apply to the question of arbitrability. See Rota-McLarty v. Santander Consumer USA, Inc., 700 F.3d 690, 697 n.7 (4th Cir. 2012) (citing Porter Hayden Co. v. Century Indem. Co., 136 F.3d 380, 382 (4th Cir. 1998)).

         The contract at issue here, however, is not a contract that contains an arbitration clause; it is itself a contract to arbitrate, and the choice of law clause does not broadly select “Maryland law, ” but rather explains that the arbitration contract will be governed by the Maryland Uniform Arbitration Act (“MUAA”) specifically. It would seem, then, that the contracting parties chose Maryland law as the law of arbitrability, and not simply as the law to be applied within arbitration. The Fourth Circuit has not addressed the issue of whether parties can select the law governing the arbitrability of a contract, but other circuits have and generally agree that, “[c]learly, they can.” Ford v. NYLCare Health Plans of Gulf Coast, Inc., 141 F.3d 243, 247 (5th Cir. 1996); see Motorola Credit Corp. v. Uzan, 388 F.3d 39, 50-51 (2d Cir. 2004).

         So, despite the apparent agreement of the parties, it is not entirely clear that the FAA applies to this case. Luckily, the nature of the issues presented renders the choice of law question largely unimportant. Plaintiff challenges the arbitration agreement on two grounds: 1) that it was not validly entered into by Mr. Myers, and 2) that Defendant has waived its right to enforce its contractual right to arbitrate. Even under the FAA, both issues are decided under state law. See Hightower v. GMRI, Inc., 272 F.3d 239, 242 (4th Cir. 2001) (“To determine whether the parties agreed to arbitrate [under the FAA], courts apply state law principles governing contract formation.”); Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1121 (9th Cir. 2008) (“[C]ontract-based challenges [such as waiver] are governed by applicable state law.”). Therefore, the outcome of this case would be the same whether the contract was considered under the FAA or the MUAA. Still, the Court will proceed under the presumption that the contract to arbitrate is governed by the MUAA, as its terms clearly state.

         “When a party moves to compel arbitration and the validity of the purported arbitration agreement between the parties is disputed, the motion is treated as one for summary judgment.” Roach v. Navient Solutions, Inc., 165 F.Supp.3d 343, 347 (D. Md. 2015) (quoting Whitten v. Apria Healthcare Grp., Inc., Civ. No. PWG-14-3193, 2015 WL 2227928, at *2 (D. Md. May 11, 2015). “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The burden is on the moving party to demonstrate the absence of any genuine dispute of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). If sufficient evidence exists for a reasonable jury to render a verdict in favor of the party opposing the motion, then a genuine dispute of material fact is presented and summary judgment should be denied. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). However, the “mere existence of a scintilla of evidence in support of the [opposing party's] position” is ...


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