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Thi of Nevada at Henderson Convalescent, LLC v. Wucinich

United States District Court, D. Nevada

July 30, 2014

THI OF NEVADA AT HENDERSON CONVALESCENT, LLC dba HENDERSON HEALTHCARE CENTER, et al., Plaintiff(s),
v.
ALGENE WUCINICH, as personal representative of the estate of RUBY HAPPEL-HOLTZ, Defendant(s)

ORDER

JAMES C. MAHAN, District Judge.

Presently before the court is a motion to compel arbitration filed by plaintiffs THI of Nevada at Henderson Convalescent, LLC and THI of Nevada, LLC. (Doc. # 5). Defendant Algene Wucinich, personal representative of the estate of Ruby Happel-Holtz, has filed a response (doc. # 9), to which plaintiffs replied (doc. # 29).

I. Background

On March 31, 2012, Happel-Holtz was admitted to the Henderson Healthcare Center ("HHC"), a facility owned and operated by plaintiffs, to rehabilitate following surgery on her right arm and collar bone. On April 28, 2012, Happel-Holtz was transferred to St. Rose Siena Hospital and diagnosed with sepsis. On May 12, 2012, Happel-Holtz went into septic shock and died.

On May 8, 2013, defendant filed a complaint in state court against plaintiffs, alleging abuse, neglect, and improper care of Happel-Holtz, which resulted in her death.

On November 1, 2013, plaintiffs filed the instant motion asserting that a provision contained in their agreement with Happel-Holtz requires that this matter be resolved through binding arbitration.

In response, defendant argues that the arbitration agreement is unenforceable and invalid because Happel-Holtz's signature is a fraud or forgery. In addition, defendant argues that plaintiffs waived their right to arbitrate because they waited over six months after the state action commenced before filing this motion.

II. Legal Standard

In deciding whether to compel arbitration under the Federal Arbitration Act ("FAA"), a district court's role is limited to "determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue." Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1119 (9th Cir 2008) (internal quotations and citation omitted). The FAA "places arbitration agreements on an equal footing with other contracts, and requires courts to enforce them according to their terms." Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67-68 (2010).

"To evaluate the validity of an arbitration agreement, federal courts should apply ordinary state-law principles that govern the formation of contracts." Ingle v. Circuit City Stores, Inc., 328 F.3d 1165, 1170 (9th Cir. 2003) (internal quotations and citation omitted). "Like other contracts, however, they may be invalidated by generally applicable contract defenses, such as fraud, duress, or unconscionability." Id. at 68 (citation omitted). "[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability." Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24-25 (1983).

"In enacting § 2 of the federal Act, Congress declared a national policy favoring arbitration and withdrew the power of the states to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration." Southland Corp. v. Keating, 465 U.S. 1, 10, (1984). "Despite this strong policy favoring arbitration, arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." Samson v. NAMA Holdings, LLC, 637 F.3d 915, 923 (9th Cir. 2010) (internal quotations and citation omitted).

FAA § 2 states in relevant part:

A written provision in... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction... shall be valid, irrevocable, and enforceable, save upon such grounds ...

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