Dykes v. Cleveland Nursing & Rehabilitation Center

          ORDER

          DEBRA M. BROWN, UNITED STATES DISTRICT JUDGE.

         This medical malpractice action is before the Court on the renewed motion to compel arbitration of Cleveland Nursing & Rehabilitation Center. Doc. #40.

         I

         Procedural History

         On April 20, 2015, Danny Dykes filed a complaint in the Circuit Court of Bolivar County, Mississippi, “individually and on behalf of the Estate and wrongful death beneficiaries of James A. Dykes, deceased.” Doc. #2. In his complaint, Danny alleges that James A. Dykes^[1]died as a result of negligence while a patient at a nursing home facility operated by Cleveland Nursing & Rehabilitation Center, LLC (“Cleveland Nursing”). Id. at ¶¶ 7-8, 12, 20.

         On June 11, 2015, Cleveland Nursing removed the state action to this Court on the grounds of diversity jurisdiction. Doc. #1 at ¶ 4. One week later, on June 18, 2015, Cleveland Nursing filed a motion to compel arbitration. Doc. #4. In the memorandum brief accompanying its motion, Cleveland Nursing argued that at the time of James' admission to the Cleveland Nursing facility, Billy Dykes, James' son, signed an enforceable arbitration agreement as James' healthcare surrogate and that this action falls within the scope of the agreement. Doc. #5. As support for this argument, Cleveland Nursing submitted a note from James' treating physician, dated approximately a month after James' admission, stating that James was incapacitated at the time of admission. Doc. #4-2. Danny responded to the motion to compel arbitration within the time allowed, Doc. #8, and Cleveland Nursing filed a timely reply, Doc. #10.

         On February 3, 2016, this Court entered an order denying the motion to compel arbitration. Doc. #13. In denying the motion, the Court held that under Mississippi law, “in order for one to act as a health care surrogate, there must first be a determination of a lack of capacity by a patient's primary physician” and that because James' primary physician had not made a determination of incapacity at the time Billy signed the arbitration agreement, Billy could not have acted as James' healthcare surrogate. Id. at 11 (emphasis omitted).

         Approximately three months later, on May 6, 2016, Cleveland Nursing filed a motion titled as a “Motion to Amend, ” Doc. #26, but argued as a Rule 60(b) motion for reconsideration of the order denying the motion to compel, Doc. #27 at 3. On October 31, 2016, this Court entered an order granting in part and denying in part the motion for reconsideration. Doc. #39. The order denied reconsideration as to the holding regarding Billy's status as a healthcare surrogate but granted Cleveland Nursing leave to file a renewed motion to compel arbitration addressing the issue of Billy's actual authority to execute the arbitration agreement. Id. at 9-10.

         Cleveland Nursing filed a renewed motion to compel arbitration on November 14, 2016. Doc. #40. The memorandum accompanying the motion requests an evidentiary hearing on the issue of the validity of the arbitration agreement. Doc. #41. Danny responded in opposition on November 28, 2016. Doc. #43. Cleveland Nursing replied on December 5, 2016. Doc. #45.

         On May 2, 2017, this Court entered an order granting a period of arbitration-related discovery and leave to file supplemental briefs addressing such discovery. Doc. #47. On June 26, 2017, Cleveland Nursing, at the close of the discovery period, filed a supplemental memorandum in support of its renewed motion. Doc. #54. Danny filed a supplemental memorandum on July 10, 2017. Doc. #55.

         II

         Standard of Review

         The Federal Arbitration Act (“FAA”) “permits an aggrieved party to file a motion to compel arbitration when an opposing party has failed, neglected, or refused to comply with an arbitration agreement.” Am. Bankers Ins. Co. of Fl. v. Inman, 436 F.3d 490, 493 (5th Cir. 2005) (internal quotation marks omitted) (citing 9 U.S.C. § 4). “On a motion to compel arbitration by an aggrieved party, the Court shall decide the issue of arbitrability summarily.” Marsh v. First USA Bank, N.A., 103 F.Supp.2d 909, 914 (N.D. Tex. 2000) (citing 9 U.S.C. § 4). Thus, “evidence on the motion may be received by the Court.” Id.

         The FAA directs that “[i]f the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof. If no jury trial be demanded by the party alleged to be in default, … the court shall hear and determine such issue.” 9 U.S.C. § 4. Where a jury trial has not been demanded, a district court may satisfy its duty under § 4 by holding an evidentiary hearing. See Chester v. DirecTV, L.L.C., 607 F. App'x 362, 365 (5th Cir. 2015). However, the Fifth Circuit has observed that, notwithstanding § 4's language, a “district court is not required to conduct a hearing on this threshold determination.” Armstrong v. Assocs. Intern. Holdings Corp., 242 F. App'x 955, 959 (5th Cir. 2007) (citing U.S. Titan, Inc. v. Guangzhou Zhen Hua Shipping Co., 241 F.3d 135, 145 (2d Cir. 2001)); see Marks 3 Zet-Ernst Marks GmBh & Co. KG v. Presstek, Inc., 455 F.3d 7, 14 (1st Cir. 2006) (“Marks has assumed that the ‘shall hear the parties' statement in 9 U.S.C. § 4 refers to a live evidentiary hearing. That may not be so. Rather, a ‘hearing' on the papers may be all that is required.”). Even when the making of an arbitration agreement is in issue, a district court may determine the existence of an arbitration agreement based on a paper record when either: (1) the evidentiary record reveals no genuine issue of material fact;^[2] or (2) the parties were afforded a sufficient opportunity to argue and develop the evidentiary record.”^[3]

         Consistent with this authority, this Court has determined the validity of an arbitration agreement without a hearing when: (1) the parties were granted leave to conduct arbitration-related discovery and submitted a thorough evidentiary record, see Cotton v. GGNSC Batesville, LLC, No. 3:13-cv-169, 2015 WL 1310034, at *1-2 (N.D. Miss. Mar. 24, 2015); and (2) there was no factual dispute and the sole issue before the Court was one of law, see Dykes v. Cleveland Nursing & Rehab. Ctr., No. 4:15-cv-76, 2016 WL 426546, at *6 (N.D. Miss. Feb 3. 2016).

         Here, while Cleveland Nursing requested an evidentiary hearing, Danny has not. Furthermore, as explained above, the parties have been granted leave to conduct arbitration-related discovery and have submitted a thorough evidentiary record. ...