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Davis v. GGNSC Administrative Services LLC

United States District Court, M.D. Georgia, Valdosta Division

November 22, 2017

ANGE DAVIS, individually and as Administrator of THE ESTATE OF JANIE MAE WASHINGTON, deceased, Plaintiffs,
v.
GGNSC ADMINISTRATIVE SERVICES LLC d/b/a GOLDEN LIVING CENTER TIFTON, Defendants.

          ORDER

          HUGH LAWSON, SENIOR JUDGE

         Before the Court is Defendant's Motion to Dismiss and Compel Arbitration. (Doc. 3). For the reasons discussed below, the motion is denied.

         I. FACTUAL BACKGROUND

         On January 5, 2011, Janie Mae Washington was admitted to Golden Living Center in Tifton, Georgia. Golden Living Center is a long-term care skilled nursing facility. Prior to Washington's admittance, her daughter, Plaintiff Ange Davis, met with a staff member of Golden Living Center (“the Facility”) on January 4, 2011. On that day, Davis signed an admissions package entitled “Admission and Alternative Dispute Resolution Agreements” that contained two separate agreements. (Doc. 9-1, p. 2). One agreement was a contract for the general terms of admission. The other was an arbitration agreement naming her mother and the nursing home as parties. Ange Davis signed the agreement on the line designated for the signature of the Resident's Legal Representative. Immediately below Davis's signature is an acknowledgment that states: “By my signature, I represent that I am a person duly authorized by Resident or by law to execute this Agreement and that I accept its terms.” (Doc. 3-4, p. 6). The agreement required the signatory to “Specify Capacity of Legal Representative (e.g. Power of Attorney, Agent, Next of Kin), ” but Davis left that line blank. Washington was not present when her daughter signed the arbitration agreement or other admissions paperwork, nor was it discussed with her by either her daughter or a representative of the Facility.

         On or about February 24, 2011, Ms. Washington executed a general power of attorney appointing Ms. Davis as her attorney-in-fact. Ms. Washington continued to reside at the Facility until December 2015. On January 15, 2016, Ms. Washington passed away.

         Davis filed this action in Tift County on April 26, 2017, alleging that the negligence and professional negligence of Defendants “in failing to prevent the injuries that Janie Mae Washington sustained while a resident at the Facility” resulted in her death. (Doc. 9-1, p. 3-4). Defendants removed the complaint to this Court and on June 9, 2017, filed a Motion to Dismiss and Compel Arbitration. (Doc. 3).

         II. ANALYSIS

         A. Enforceability of the Agreement

         Defendants allege that the arbitration agreement must be enforced because by signing the document Davis created an enforceable arbitration agreement between her mother and the Facility.

         i. Applicability of the FAA

         Defendants argue that the federal law governing the arbitration agreement mandates the parties submit to arbitration. Specifically, Defendants contend that because the arbitration agreement is part of a contract involving interstate commerce, it must be governed by the Federal Arbitration Act (“FAA”).[1] 9 U.S.C. §§ 1-16. Defendants state that under the application of the FAA, its “liberal policy favoring arbitration” requires that the parties submit to arbitration. (Doc. 3-1, p. 5). Additionally, Defendants contend that the FAA supersedes and preempts state law that may require a result contrary to arbitration.

         The FAA provides that agreements to arbitrate in contracts involving commerce are “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. Courts must conduct a two-step inquiry when deciding whether to compel arbitration. Klay v. All Defendants, 389 F.3d 1191, 1200 (11th Cir. 2004). First, the Court must determine whether the parties agreed to arbitrate the dispute. Id. The Court must make that determination “by applying the federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the [FAA].” Id. (alteration in original) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985)). The United States Court of Appeals for the Eleventh Circuit, however, has cautioned that “arbitration is a matter of contract [and] the FAA's strong proarbitration policy only applies to disputes that the parties have agreed to arbitrate.” Id. Second, the court must determine “whether ‘legal constraints external to the parties' agreement foreclosed arbitration.” Klay, 389 F.3d at 1200 (quoting Mitsubishi Motors Corp., 473 U.S. at 628).

         Defendants are correct in their assertions that the FAA governs the arbitration agreement and that federal law favors the enforceability of arbitration. However, courts only apply the presumption of arbitration “to the interpretation of contracts if we have already determined that, under [s]tate law, the parties formed a valid agreement to arbitrate.” Bickerstaff v. SunTrust Bank, 332 Ga.App. 121, 128 (2015). In order “[t]o satisfy itself that such agreement exists, ” courts must undertake to resolve any issues relating to the formation of the arbitration agreement. Granite Rock Company v. International Brotherhood of Teamsters, 561 U.S. 287, 297 (2010); Larsen v. Citibank FSB, 871 F.3d 1295, 1302-03 (11th Cir. 2017). Thus, even though the FAA applies, the threshold issue is whether, as a matter of contract formation, there was consent by the parties to enter into the agreement. See Hogsett v. Parkwood Nursing & Rehabilitation Center, Inc., 997 F.Supp.2d 1318, 1323 (2014) (“an arbitration agreement is still a contract and, as such, it requires consent by the parties to the agreement”).

         The Supreme Court has made clear that this inquiry is a matter of state contract law. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). (“[C]ourts generally ... should apply ordinary state-law principles that govern the formation of contracts” in determining whether the parties have agreed to arbitrate.); See also Burch v. P.J. Cheese, Inc., 861 F.3d 1338, 1346 (11th Cir. 2017) (confirming that state contract law governs the ...


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