Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-01682/USCOURTS-azd-2_12-cv-01682-0/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1446 Petition for Removal- Personal Injury

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Marilyn Kutner, a single person,

 Plaintiff, 

v. 

Emeritus Corporation, a Washington 

corporation; Black & White Corporation IV, 

Defendants.

No. CV-12-01682-PHX-GMS

ORDER 

 Pending before the Court is Defendants’ Motion to Compel Enforcement of an 

Arbitration Agreement. (Doc. 10.) For the reasons discussed below, the motion is 

granted. 

FACTUAL BACKGROUND

 On June 13, 2011, Plaintiff Marilyn Kutner fell and allegedly suffered an injury on 

the premises of Chris Ridge Village. (Doc. 1 (Kutner Compl.) ¶¶ 5-8.) She was a resident 

at the Village, which appears to be an “elder community” that has both assisted and 

independent living units. 

 On March 17, 2012, Kutner signed an “Agreement to Resolve Disputes by 

Binding Arbitration.” (Doc. 11 at 14-15; Doc. 12 at 18-19.) The agreement was part of a 

larger packet of Chris Ridge policies that Kutner received when her monthly fee was 

adjusted. (Doc. 12 at 6-19.) The arbitration agreement provides that 

any action, dispute, claim or controversy of any kind, whether in contract or 

in tort, statutory or common law, personal injury, property damage, legal or 

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equitable or otherwise, arising out of the provision of assisted living 

services, healthcare services, or any other goods or services provided under 

the terms of any agreement between the Parties, . . . or any other dispute 

involving acts or omissions that cause damage or injury to either Party . . . 

shall be resolved exclusively by binding arbitration and not by lawsuit or 

resort to the judicial process. 

(Doc. 11 at 14; Doc. 12 at 18) (emphasis in original). The arbitration agreement provided 

that the resident had a right to legal counsel at the proceedings. In addition, the agreement 

contained an opt-out provision allowing revocation by written notice within 15 days of 

signing. The agreement concluded with the following paragraph in italics: 

The Resident understands that the result of this Arbitration Agreement is 

that claims, including personal injury claims that the Resident may have 

against the Community cannot be brought in a lawsuit in court before a 

judge or jury, and agrees that all such claims will be resolved as described 

in this Arbitration Agreement. Admission to the Community is not 

contingent upon signing this Agreement. 

(Doc. 11 at 15; Doc. 12 at 19.) 

 Kutner filed a Complaint against Defendant Emeritus Corporation in Maricopa 

County Superior Court on June 19, 2012. (Doc. 1.) Emeritus removed to this Court on 

August 8, 2012. (Id.) It has now moved to compel enforcement of the March 2012 

arbitration agreement and stay this action. 

DISCUSSION

The arbitration agreement between Kutner and Emeritus provides that “any action, 

dispute, claim or controversy of any kind . . . shall be resolved exclusively by binding 

arbitration.” (Doc. 11 at 14; Doc. 12 at 18.) On August 22, 2012, Emeritus requested that 

Kutner dismiss this action and submit to arbitration. (Doc. 11 at 12-13.) Kutner declined. 

Emeritus now asks the Court to stay this action and compel arbitration pursuant to the 

parties’ contract and the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq. 

 The FAA broadly provides that written agreements to arbitrate disputes arising out 

of transactions involving interstate commerce “shall be valid, irrevocable, and 

enforceable” except upon grounds that exist at common law for the revocation of a 

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contract. 9 U.S.C. § 2 (2006); see Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 113-

19 (2001). Absent a valid contract defense, the FAA “‘leaves no place for the exercise of 

discretion by a district court, but instead mandates that district courts shall direct the 

parties to proceed to arbitration on issues as to which an arbitration agreement has been 

signed.’” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 

2000) (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218 (1985)) (emphasis 

in original). The district court’s role under the FAA is “limited to determining 

(1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement 

encompasses the dispute at issue.” Id. 

I. Validity of the Agreement 

Kutner does not contest her signature on the agreement; instead, she challenges the 

validity of the arbitration agreement on three grounds. First, she claims that her counsel 

had contacted Emeritus previous to her signing the arbitration agreement, and that the 

agreement was therefore an attempt to circumvent inevitable litigation. Other than the 

bare assertion by her counsel in the Response, however, Kutner has not produced any 

evidence of communications by her attorney to Emeritus that predate the agreement. The 

Response references a letter sent by Kutner’s attorney on March 29, 2012, that requested 

compensation for the injury. (Doc. 12 at 2.) Yet Kutner has not attached the letter. The 

Court cannot rely on unsupported statements by counsel in legal memoranda. And in any 

event, the alleged letter was sent 12 days after the agreement had been signed, and is 

consequently not evidence that Emeritus was trying to cut off litigation. There is no 

evidence of fraud or duress. 

 Second, Kutner asserts that the arbitration agreement lacks mutual consent 

because Kutner is “an 84 year old woman with [a] serious case of osteoporosis and 

Parkinson’s disease [and] believe[d] that she was merely signing papers related to 

continuing her tenancy in Chris Ridge Village.” (Id.) Once again, this statement does not 

come from the allegations of the Complaint or a supporting affidavit, but is an assertion 

by Kutner’s counsel in a legal memorandum. Facts—or even formal allegations—“cannot 

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be created by a party simply making assertions in its legal memoranda.” Cumis Ins. Soc., 

Inc. v. Merrick Bank Corp., 480 F. Supp. 2d 1077, 1083 (D. Ariz. 2010) (citing S.A. 

Empresa De Viacao Aerea Rio Grandense v. Walter Kidde & Co., 690 F.2d 1235, 1238 

(9th Cir. 1982)). That failure is reason enough to reject the argument. Even assuming the 

statements in the memorandum are true, the argument fails on the merits. That Kutner is 

84 years old does not demonstrate that she lacks mental capacity. Nor does the assertion 

that she did not understand the agreement support her defense. Kutner appears to suggest 

that, because the arbitration agreement was part of a larger packet of materials given to 

her (like pet or parking policies), she did not know what she was signing. Arizona law, 

however, strictly adheres to the maxim that “a person who is competent is held as a 

matter of law to know the contents of an agreement [s]he signs.” In re Henry’s Estate, 6 

Ariz. App. 183, 186, 430 P.2d 937, 940 (1967). The signature “demonstrates beyond 

question that she had knowledge of . . . the agreement at the time it was signed.” In re 

Estate of Cortez, 226 Ariz. 207, 212, 245 P.3d 892, 898 (Ct. App. 2010). The lack of 

evidence that Kutner was mentally incompetent at the time she signed the agreement 

defeats her claim that she lacked capacity to contract. 

 Kutner’s third defense is that the agreement lacks consideration because (1) she 

has resided at the Village for ten years and (2) the new agreement involved an increase in 

her monthly fee. These two facts do not demonstrate a lack of consideration. 

Furthermore, the arbitration agreement is mutual—Emeritus is also bound by its terms. 

That mutuality is sufficient consideration. Malcoff v. Coyier, 14 Ariz. App. 524, 526, 484 

P.2d 1053, 1055 (1971) (“We agree that it is essential to an enforceable contract that 

there be a consideration or a mutuality of obligation . . . .”). 

Consequently, Kutner has failed to raise a valid defense to enforcement of the agreement 

she entered with Emeritus to arbitrate all claims. II. The Agreement Encompasses 

Kutner’s Claim 

 The Supreme Court has made clear that “any doubts concerning the scope of 

arbitrable issues should be resolved in favor of arbitration[.]” Moses H. Cone Mem’l 

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Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983); see EEOC v. Waffle House, Inc., 

534 U.S. 279, 289 (2002). There is thus a “liberal federal policy favoring arbitration.” 

Lozano v. AT&T Wireless Servs., Inc., 504 F.3d 718, 725 (9th Cir. 2007). The language 

“any action, dispute, claim or controversy of any kind” arising out of the relationship 

between Kutner and Emeritus encompasses the personal injury claims she raises in her 

Complaint. The fact that Kutner’s injury allegedly occurred prior to her entering the 

arbitration agreement does not remove it from the scope of the agreement. See Zink v. 

Merrill Lynch Pierce Fenner & Smith, 13 F.3d 330, 333 (10th Cir. 1993) (rejecting 

argument that broad arbitration clause did not cover disputes that occurred prior to the 

execution of the agreement). Again, “‘questions of arbitrability must be addressed with a 

healthy regard for the federal policy favoring arbitration’ with ‘any doubts concerning the 

scope of arbitrable issues . . . resolved in favor of arbitration.’” Bennett v. Liberty Nat. 

Fire Ins. Co., 968 F.2d 969, 971 (9th Cir. 1992) (quoting Cone Hospital, 460 U.S. at 24-

25 (1983)). Kutner does not contest that her claim would otherwise fall within the scope 

of the agreement. Because her common law defenses to enforcement of the agreement 

fail, her claim must proceed to arbitration. 

IT IS THEREFORE ORDERED:

 1. Defendants’ Motion to Compel Arbitration (Doc. 11) is GRANTED. 

 2. The parties are directed to submit this matter to arbitration consistent with 

the terms of their agreement and the provisions of the Federal Arbitration Act, 9 U.S.C. 

§§ 1 et seq. 

 3. Upon completion of the arbitration proceedings, the parties are directed to 

comply with the provisions of 9 U.S.C. §§ 9-13, as applicable. 

 4. This action is STAYED pursuant to 9 U.S.C. § 3. 

/ / / 

/ / / 

/ / / 

/ / / 

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 5. The parties shall file a joint status report concerning their arbitration on or 

before March 4, 2013, and every 90 days thereafter until the stay has been lifted. 

Dated this 4th day of December, 2012. 

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