In Richmond Health Facilities – Kenwood, LP v. Nichols, a man signed a residency agreement that included a binding arbitration clause when he entered a long term care facility. About eight months later, the man filed a lawsuit in Madison Circuit Court alleging he was mistreated by employees at the facility where he resided. Approximately one year after entering the nursing home, the man died. Following his death, the administratrix of the man’s estate filed an amended complaint alleging the facility committed negligence, violated the man’s rights, and was responsible for his wrongful death.
In response, the long term care facility and other named defendants filed a motion to compel arbitration and enjoin the state proceedings with the U.S. District Court for the Eastern District of Kentucky. The man’s estate then filed a motion to dismiss the federal case. According to the man’s estate, the federal court lacked subject matter jurisdiction to consider the dispute, certain necessary parties were not joined, and the alternative dispute resolution agreement the man signed was unenforceable.
First, the federal court addressed the question of subject matter jurisdiction. The court stated that 28 U.S.C. § 1332(a) provides a federal court with subject matter jurisdiction where the parties hail from different states and the amount in controversy is at least $75,000. In addition, the Eastern District of Kentucky said the burden of demonstrating federal jurisdiction based upon diversity of citizenship was on the plaintiffs. Although the man’s estate argued complete diversity was lacking in the case, the federal court disagreed because the plaintiff corporations were based in Texas, no members of the corporations were Kentucky citizens, and the man was a Kentucky resident. The court also found that the plaintiffs successfully demonstrated the amount at issue in the case exceeded $75,000.
Next, the federal court held there was no reason to consider the claims made in the underlying state court lawsuit in order to determine whether jurisdiction was appropriate because the arguments offered by the man’s estate only applied to federal question jurisdiction. Federal question jurisdiction normally exists only where a plaintiff alleges another party violated federal law, the United States Constitution, or a treaty the U.S. is a party to. Similarly, the Eastern District of Kentucky examined the facts of the case before determining that the nursing home’s administrator was not an indispensable party to the federal action. This is important because the facility’s administrator was a Kentucky citizen, and adding her to the case would have defeated federal diversity jurisdiction. The court also held that choosing to abstain from exercising jurisdiction over the case was not appropriate.
Finally, the Eastern District of Kentucky stated many courts have held similar nursing home agreements involved interstate commerce sufficient to trigger jurisdiction of the Federal Arbitration Act, the agreement to arbitrate was not one-sided, and the arbitration provision at issue did not go against public policy. Since the federal court had jurisdiction to hear the case, the proper parties were joined in the lawsuit, and the arbitration provision included in the residency agreement was valid and enforceable, the Eastern District of Kentucky denied the administratrix’s motion to dismiss the federal case.
If you or someone close to you was the victim of abuse or neglect at a Kentucky long term care facility, you need an experienced nursing home abuse lawyer on your side. To discuss your rights with a knowledgeable nursing home abuse attorney, please call English, Lucas, Priest & Owsley, LLP at (270) 781-6500 or contact us through our website.
Richmond Health Facilities – Kenwood, LP v. Nichols, Dist. Court, ED Kentucky 2014
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