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Erie Operating, LLC v. Foster

United States District Court, W.D. Pennsylvania

June 24, 2015

ERIE OPERATING, LLC, doing business as GOLDEN LIVING CENTER-WALNUT CREEK, ERIE ACQUISITION, LLC, et al.,
v.
TOM FOSTER, Administrator of the Estate of Kenneth W. Foster, Deceased, Defendant. Plaintiffs

MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

SUSAN PARADISE BAXTER, Magistrate Judge.

I. RECOMMENDATION

It is respectfully recommended that Plaintiffs' motion to stay proceedings in the Court of Common Pleas of Erie County, Pennsylvania [ECF No. 28] be denied.

II. REPORT

A. Relevant Procedural and Factual History

On or about January 28, 2014, Defendant initiated a general docket civil action in the Court of Common Pleas of Erie County, Pennsylvania, by filing a Praecipe for Writ of Summons at Docket No. 10203 of 2014, naming all Plaintiffs in the present action as potential Defendants in the state court case. (Id. at ¶ 1). An Amended Praecipe for Writ of Summons was subsequently filed by Defendant on or about February 11, 2014, naming Denise Curry ("Curry"), a Pennsylvania resident, as an additional potential Defendant in the state court action. (Id. at 1; Exhibit 1).

On March 4, 2014, Plaintiffs Erie Operating, LLC d/b/a Golden Living Center-Walnut Creek, Erie Acquisition, LLC; Golden Gate National Senior Care, LLC; GGNSC Equity Holdings, LLC; GGNSC Holdings, LLC; GGNSC Clinical Services, LLC; GGNSC Administrative Services, LLC: Spectra Healthcare Alliance VI, LLC; and Beverly Enterprises, Inc., filed this complaint to compel arbitration and stay proceedings in the Court of Common Pleas of Erie County, PA [ECF No. 1] against Defendant Tom Foster, Administrator of the Estate of Kenneth W. Foster, deceased, pursuant to 28 U.S.C. §1332(a)(1) and 9 U.S.C. §4 of the Federal Arbitration Act ("FAA").

According to Plaintiffs' complaint, the deceased, Kenneth W. Foster, was a resident at the Golden Living Center - Walnut Creek skilled nursing facility in Erie, Pennsylvania from May 4, 2012 through May 27, 2012. (ECF No. 1, Complaint, at ¶ 2). Upon his admission to the facility, Decedent executed, inter alia, an Alternative Dispute Resolution Agreement ("ADR Agreement"), which provides, in pertinent part:

This Agreement applies to any and all disputes arising out of or in any way relating to this Agreement or to the Resident's stay at the Facility or the Admissions Agreement between the Parties that would constitute a legally cognizable cause of action in a court of law sitting in the state where the Facility is located. Covered Disputes include but are not limited to all claims in law or equity arising from one Party's failure to satisfy a financial obligation to the other Party; a violation of a right claimed to exist under federal, state, or local law or contractual agreement between the Parties; tort; breach of contract, consumer protection; fraud; misrepresentation; negligence; gross negligence; malpractice, and any alleged departure from any applicable federal, state, or local medical, health care, consumer, or safety standards.

(Id. at ¶¶ 3, 28; Exhibit 3, p. 2). Plaintiffs allege that "any and all of Defendant's claims against Plaintiffs which might be raised in the underlying state court civil action are covered disputes within the scope of the ADR Agreement executed by Decedent" and, therefore, such claims must be pursued through arbitration in accordance with the ADR Agreement and Section 2 of the FAA, 9 U.S.C. § 2. Plaintiffs allege further that, on February 20, 2014, they made a written demand upon Defendant to arbitrate his claims, but Defendant "has refused to submit his disputes according to the ADR Agreement." (Id. at ¶ 31).

On May 2, 2014, Defendant filed a motion to dismiss Plaintiffs' complaint [ECF No. 7]. After oral argument was heard on Defendant's motion, this Court issued a Report and Recommendation ("R&R") on December 31, 2014, recommending that Defendant's motion to dismiss be granted, without prejudice, because there was no justiciable case or controversy before the Court due to the fact that Plaintiff had not yet filed a complaint in the state court action. [ECF No. 14].

On the same date as this R&R, Defendant filed his complaint in the state court action, which alleges claims against Plaintiffs and Curry pursuant to, inter alia, Pennsylvania's Survival Statute (42 Pa.C.S.A. § 8302) and Wrongful Death Act (42 Pa.C.S.A. § 8301) [ECF No. 25-1]. Plaintiffs and Curry filed preliminary objections to Defendant's state court complaint on January 16, 2015, arguing that the state court action should be compelled to binding arbitration pursuant to the same ADR Agreement at issue here. [ECF No. 25-2].

Plaintiffs subsequently filed a motion for leave to file a supplemental pleading in this case [ECF No. 15], which was granted by Order dated February 5, 2015. As a result, Plaintiffs filed an amended complaint on February 10, 2015 [ECF No. 21]. In light of Defendant's filing of the state court complaint and Plaintiffs' filing of an amended complaint in this action, District Judge Terrence F. McVerry issued a Memorandum Order on February 18, 2015, denying the R&R as moot and remanding the case for further proceedings [ECF No. 23]. On February 24, 2015, Defendant filed a motion to dismiss Plaintiff's amended complaint [ECF No. 24], to which Plaintiffs filed a response in opposition [ECF No. 26]. Said motion remains pending.

On or about May 21, 2015, Defendant moved the state court to set an argument date on the preliminary objections, including the arbitration issue. [ECF No. 28-1]. On May 28, 2015, Plaintiffs filed with this Court a motion to stay proceedings in the Court of Common Pleas of Erie County, Pennsylvania [ECF No. 28]. Defendant has since filed a response and brief in opposition to ...


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