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The Estate of Eleanor Hodges, Susan M. Schoch, Executrix v. Green Meadows

March 29, 2013

THE ESTATE OF ELEANOR HODGES, SUSAN M. SCHOCH, EXECUTRIX, PLAINTIFF
v.
GREEN MEADOWS, AND EMERITUS ASSISTED LIVING, DEFENDANTS



The opinion of the court was delivered by: James Knoll Gardner United States District Judge

OPINION

The matter before the court is Defendant's Rule 12(b)(6) Motion to Compel Arbitration and Dismiss Counts II, III, and IV of the Complaint ("Defendants' Motion") *fn1 , which was filed on April 10, 2012. *fn2 On August 10, 2012 Plaintiff's Opposition to Defendants' 12(b)(6) Motion to Compel Arbitration ("Plaintiff's Opposition") was filed. *fn3 On September 5, 2012 defendants filed their Reply Brief in Support of Defendant's 12(b)(6) Motion to Compel Arbitration ("Defendants' Reply Brief"). *fn4

For the following reasons, defendants' motion to compel arbitration is granted. Specifically, I conclude that plaintiff's claim is covered by a binding arbitration agreement between the parties.

JURISDICTION

Jurisdiction in this case is based on diversity jurisdiction pursuant to 28 U.S.C. § 1332.

Plaintiff Susan Schoch, executrix of the Estate of Eleanor Hodges is a citizen of the Commonwealth of Pennsylvania. At the time of her death plaintiff's decedent, Eleanor Hodges, was a citizen of the Commonwealth of Pennsylvania. *fn5

Defendants operate Green Meadows, the real property at 1545 W. Greenleaf Street, Allentown, Pennsylvania. Green Meadows is a fictitious name registered to Emeritus Corporation. Emeritus Corporation is a Washington corporation with its principal place of business in Seattle, Washington.

The real property at 1545 W. Greenleaf is owned by Emerichip Allentown, LLC. Emerichip Allentown, LLC is a limited liability company whose sole member is Emeritus Corporation. *fn6

Accordingly, plaintiff is a citizen of Pennsylvania and defendants are citizens of Washington.

Plaintiff alleges that the amount in controversy exceeds $75,000.00. *fn7

VENUE

Venue is proper pursuant to 28 U.S.C. § 1391 because a substantial part of the events giving rise to the plaintiff's claims allegedly occurred in Allentown, Lehigh County, Pennsylvania, which is within this district.

PROCEDURAL HISTORY

On March 15, 2012 plaintiff, Susan M. Schoch as the Executrix of the Estate of Eleanor Hodges, *fn8 filed a four-count Complaint *fn9 against defendants Green Meadows and Emeritus Assisted Living in the Court of Common Pleas in Lehigh County, Pennsylvania. *fn10 On April 4, 2012 defendants filed a Notice of Removal, which removed the action to this court.

On April 10, 2012 defendants filed their 12(b)(6) motion to compel arbitration alleging that all of plaintiff's claims were covered by a binding arbitration agreement. Defendants also sought dismissal of Counts II through IV for failure to state a claim. Plaintiff did not respond to defendants' motion.

Therefore, by Order dated June 4, 2012 and filed June 5, 2012, I granted defendants' motion to compel arbitration as unopposed to the extent it sought to compel arbitration. I dismissed the motion as moot to the extent that it sought dismissal of Counts II through IV on the merits. Accordingly, I dismissed plaintiff's complaint without prejudice for plaintiff to raise the issues within her complaint in arbitration.

On June 8, 2012 plaintiff and defendants filed a joint motion to vacate my June 4, 2012 Order. The parties indicated that, although they did not inform the court, they had previously agreed to dismiss Counts II through IV of plaintiff's Complaint and conduct limited discovery solely on the issue of the validity and enforceability of the arbitration agreement.

Therefore, by Order dated and filed June 20, 2012, I granted the joint motion to vacate my June 4, 2012 Order and reinstated defendants' motion to compel arbitration. Pursuant to the joint motion, Counts II through IV were dismissed.

Accordingly, the only remaining issue concerning defendants' motion to dismiss is the validity and enforceability of the arbitration agreement.

On August 10, 2012 plaintiff filed Plaintiff's Opposition to Defendant's 12(b)(6) Motion to Compel Arbitration. On September 5, 2012 defendants filed a reply brief.

STANDARD OF REVIEW

The Federal Arbitration Act, 9 U.S.C. §§ 1 - 16, authorizes the enforcement of contractually valid and enforceable arbitration agreements. Id. § 4. A court's analysis of a motion to compel arbitration is "limited to a narrow scope of inquiry...such as whether an arbitration agreement applies to a particular controversy, or whether the parties are bound by the arbitration clause." In re Pharmacy Benefit Managers Anti-Trust Litigation, (MDL 1782), 700 F.3d 109, 116 (3d Cir. 2012). A district court shall order arbitration of the parties dispute if it is "satisfied that the making of the agreement for arbitration...is not in issue." Par-Knit Mills, Inc. v. Stockbridge Fabrics Company, LTD., 636 F.2d 51, 54 (3d Cir. 1980), citing 9 U.S.C. § 4.

However, if a factual dispute concerning the validity of the agreement to arbitrate is in issue, a trial shall be commenced solely on the validity of the arbitration agreement. The party allegedly in default of a binding arbitration clause may request to have the issue heard by a jury. 9 U.S.C. § 4; Par-Knit Mills, 636 F.2d at 54.

Traditionally, a motion to compel arbitration is analyzed using the same standard of review as a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Palcko v. Airborne Express, Inc., 372 F.3d 588, 597-98 (3d Cir. 2004). However, when a party challenges the validity and enforceability of the arbitration agreement, the parties may conduct limited discovery on that issue. See Parilla v. IAP Worldwide Services VI, Inc., 368 F.3d 269, 284 (3d Cir. 2004). In cases allowing limited discovery, courts apply the standard of review applicable to motions for summary judgment brought pursuant to Rule 56 of the Federal Rules of Civil Procedure. Id.

Accordingly, when applying the standard of review for summary judgment to a motion to compel arbitration, the district court "must determine whether a factual dispute exists as to the validity of the Agreement." Hopkins v. New Day Financial, 643 F.Supp.2d 704, 714 (E.D.Pa. 2009)(Slomsky, J.). If none is found, the court need not conduct a trial on that issue. Id.

In determining whether a factual dispute exists, the court must determine whether "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact." See Fed.R.Civ.P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Federal Home Loan Mortgage Corporation v. Scottsdale Insurance Company, 316 F.3d 431, 433 (3d Cir. 2003); Somerset Consulting, LLC v. United Capital Lenders, LLC, 832 F.Supp.2d 474, 478 (E.D.Pa. 2011)(Dalzell, J.). Only facts that may affect the outcome of a case are "material". Moreover, all reasonable inferences from the record are drawn in favor of the non-movant. Anderson, supra.

Although the movant has the initial burden of demonstrating the absence of genuine issues of material fact, the non-movant must then establish the existence of each element on which it bears the burden of proof. See Watson v. Eastman Kodak Co., 235 F.3d 851, 858 (3d Cir. 2000). Plaintiff cannot avert summary judgment, or in this case defeat a motion to compel arbitration, with speculation or by resting on the allegations in his pleadings, but rather he must present competent evidence from which a jury could reasonably find in his favor. See Ridgewood Board of Education v. N.E. for M.E., 172 F.3d 238, 252 (3d Cir. 1999); Woods v. Bentsen, 889 F.Supp. 179, 184 (E.D.Pa. 1995)(Reed, J.).

FACTS

Upon consideration of the pleadings, record papers, exhibits, affidavits, and depositions, and drawing all reasonable inferences in favor of plaintiff as required by the forgoing standard of review, the pertinent facts are as follows.

On approximately March 23, 2010 *fn11 Eleanor Hodges was diagnosed with dementia. Susan Schoch, Mrs. Hodges' daughter with power of attorney, *fn12 was advised that because of dementia her mother would need to be placed in a special care facility providing locked units in order to protect Mrs. Hodges from wandering off or harming herself. *fn13

Mrs. Schoch compiled a list of twelve facilities in the greater Lehigh Valley area of Pennsylvania which met her mother's requirements. However, the only facilities with available beds in secured units were Green Meadows, in Allentown, and Lehigh Commons, in Macungie. *fn14

On March 25, 2010 Mrs. Schoch and her sister visited Green Meadows and spent roughly one-and-one-half hours touring the facility. During the tour, Mrs. Schoch advised the facility's representative *fn15 of her mother's "imminent need" for a special care facility and that the safety and security of her mother was very important. *fn16 Mrs. Schoch was satisfied with the "assurances of security by the representative" and chose Green Meadows as the facility for her mother. *fn17

Upon conclusion of the tour, the Green Meadows' representative presented Mrs. Schoch and her sister with an 87-page admission packet, including a stand-alone two-page arbitration agreement. The relevant ...


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