NOT RECOMMENDED FOR FULL
- TEXT PUBLICATION File Name: 16a0247n.06
Case No. 15

- 1793
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

SCOTT ROWAN , next friend of George Rowan , Plaintiff

- Appellant ,

v.
BROOKDALE SENIOR LIVING COMMUNITIES, INC., dba Wynwood of Portage , Defendant

- Appellee

. ) ) ) ) ) ) ) ) ) ) ) ) ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MICHIGAN

BEFORE: KEITH, COOK, and Mc KEAGUE, Circuit Judges. COOK, Circuit Judge. George Rowan, by Scott Rowan, his son and next friend, appeals the district court’s order granting Brookdale Senior Living Communities, Inc. ’s motion to compel arbitration and dismissing the case . Rowan contends the district court erred in discerning no genuine issue of material fact regarding the val idity or the enforceability of the arbitration clause. Disagreeing, w e AFFIRM.
I. After a stroke diminished his physical and mental functioning, Rowan Sr. moved into an assisted

- living facility operated by Brookdale. He s t ruggled with this new living arr angement and one evening wandered from the facility to a nearby residential subdivisio n. He tripped andCase No. 15

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- fell on a resident’s driveway , leaving him unable to move . Later that night, the resident pulled out of the driveway and ran him over , causing severe injuries. Rowan, his father’s next friend , sued Brookdale for negligence, gross negligence, and fraud. Brookdale moved to compel arbitration, citing the Residen cy Agreement that Rowan Sr. signed when he moved in. Rowan opposed arbitration, contest ing the validity of the Residency Agreement on grounds that his father lacked mental competence to contract. And even if his father were competent when signing, Rowan said that various contract defenses would prevent enforcement of the arbitration clause

. T he district court granted Brookdale’s motion to compel
arbitration and dismissed the case , finding the evidence insufficient to raise a genuine issue of material fact regarding the validity or enforceability of the arbitration clause . This appeal followed.
I I. As applicable here, before compelling arbitration a court must determine whether a val id arbitration agreement exists and whether the dispute falls within that agreement’s scope. See Fazio v. Lehman Bros., Inc. , 340 F.3d 386, 392 (6th Cir. 2003) ( citin g Stout v. J.D. Byrider , 228 F.3d 709, 714 (6th Cir. 2000) ). The Federal Arbitration Act (FAA) guides us in determining the validity of an arbitration agreement , reading in relevant part: The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreemen t . . . . If the making of the arbitratio n agreement . . . be in issue, the court shall proceed summarily to the trial thereof. 9 U.S.C. § 4

. “T he party opposing arbitration must show a genuine issue of material fact as to the validit y of the agreement to arbitrate”

— a standard “mirror[ing] that required to withstandCase No. 15

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- summary judgment in a civil suit.” Great Earth Cos. v. Simons , 288 F.3d 878, 889 (6th Cir. 2002) (citing Docto r’ s Assocs., Inc. v. Distajo , 107 F.3d 126, 129

– 30 (2d Cir. 1 997) ). The nonmoving party , here Rowan, may challenge an arbitration agreement “upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2

. Rowan raises on appeal the same two arguments he presented to the district court

. We review de novo an orde r compelling arbitration, viewing all facts in the light most favorable to the nonmoving party and determining whether a reasonable fact finder could conclude from the presented evidence that no valid agreement to arbitrate exists. See Great Earth Cos. , 288 F.3d at 889 (citing Aiken v. City of Memphis , 190 F.3d 753, 755 (6th Cir. 1999) ). A. Contract Formation
Rowan asserts that his father lacked mental capacity to contract citing : his father’s short

term memory problems before signing the Residency Agreement , his emotional and mental state after signing, and t he circumstances of his wandering

- off.
Rowan bears the burden of proving his father ’s lack of mental capacity to contract. See Klein v . Kent , 95 N.W.2d 864, 867 (Mich. 1959)

. To possess mental capacity to contract, Michigan law evaluates whether: [T]he person in question possesses sufficient mind to understand, in a reasonable manner, the nature and effect of the act in which he is enga ged. However, to avoid a contract it must appear not only that the person was of unsound mind or insane when it was made, but that the unsoundness or insanity was of such a character that he had no reasonable perception of the nature or terms of the contr act.
Howard v. Howard , 352 N.W.2d 280, 282 (Mich. Ct. App. 1984) (quoting Van Wagoner v. Van Wagoner , 346 N.W.2d 77, 81

– 82 (Mich. Ct. App. 1983) ). Though capacity is determined at contract formation, a contracting party can rely on his condition before and after formation toCase No. 15

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- prove incapacity, and a “prior or subsequent condition may be presumed to exist at the time [ of
contract formation ].” Beatti e v. Bower , 287 N.W. 900, 903 (Mich. 1939)

. First, Rowan argues that the sh ort

- term memory problems his father experienced before he signed the Residency Agreement demonstrate his incapacity to contract . But the evidence Rowan offers in support falls s hort . While Rowan’s sister described her father’s memory as “compromised,” she also attested that she had no reservations regarding his contractual capacity around the time that he signed the Residency Agreement . Similarly, though a cog nitive therapist doubted that Rowan Sr. “ would have been able to recall the entire [Residency Agreement]” and “may have had some difficulty” interpreting its interrelated provisions, the therapist also expressed confidence in Rowan Sr.’s ability to “compre hend each section [ of the Residency Agreement ].” Neither the daughter’s nor the therapist’s testimony supports the proposition that Rowan Sr.’s memory deficiency was “of such a character that he had no reasonable perception of the nature or terms of the [ Residency Agreement].” See Howard , 352 N.W.2d at 282

. Next, Rowan cites Dr. Kameswara Tatineni’s conclusion that, after moving in to the Brookdale facility , his father suffered from anxiety, depression, and limited insight / judgment as a result of either mi ld vascular dementia or delirium. Dr. Tatineni, however, did not assess competence. In fact , Dr. Tatineni expressed no opinion on Rowan Sr.’s ability to read and understand the Residency Agreement

. Finally, Rowan contends that because his father wander ed from Brookdale’s facility previously and needed extra supervision the day prior to his injury, a fact finder could infer incapacity to contract

. Yet the Michigan Department of Human Services reported that the incident “could not have [been] reasonably expected , ” and grounded its conclusion in part on an
assessment finding Rowan Sr. “capable of independent decision making,” “oriented to person,Case No. 15

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- place and time,” and able to communicate effectively

. In any event, Rowan’s conclusory assertion t hat the circumstances of his father’s injury evidence incapacity is insufficient to withstand summary judgment. See , e.g. , Lewis v. Philip Morris Inc. , 355 F.3d 515, 533 (6th Cir. 2004) (noting that “mere speculation, conjecture, or fantasy” cannot overco me a summary judg ment motion ). That Rowan Sr. executed at least five legal documents in the month before he moved into the Brookdale facility also counsels against finding incapacity. For example, he signed a durab le power of attorney for health

- care purp oses

— a single

- spaced, nine

- page documen t

— and another for financial purposes

— a single

- spaced, twelve

- page document. Plus, he also signed two personal protection orders as well as a verified complaint for divorce. N o one has challenged his mental capacity regarding these signings . Indeed, one of the documents include s an attorney’s and a doctor’s sworn declarations that Rowan Sr. appeared to be of sound mind. Accordingly, drawing all reasonable inferences in Rowan’s favor, we discern no genuine issue of material fact regarding whether Rowan’s father lacked a reasonable perception of the nature or terms of the Reside ncy Agreement.
B. Enforceability of the Arbitration Clause
E ven if his father possessed contractual capacity , Rowan continues , the arbitration clause is unenforceable because it: (1 ) violates publ ic policy, (2) lacks mutual assent, (3) needs consideration, (4 ) fails to provide a knowing and volunt ary waiver of his father’s jury

- trial right, and (5 ) imposes a financial burden. St ate law “governs ‘generally applicable contract defenses
to an arbitration clause. ’” Great Earth C os. , 288 F.3d at 889 (quoting Doctor’s Assoc s . v. Casarotto , 517 U.S. 681 , 687 (1996) ) (brackets omitted ) . W e address each defense in turn.Case No. 15

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- 1. Void for Public Policy Rowan claims that the arbitration clause violates Michigan public policy by waiving jury

trial rights secured by Michigan’s Truth in Renting Act, Mich. Comp. Laws § 554.633(1)(f) , and by limiting liability for gross negligence, thereby promot ing elder abuse. Though Michigan invalidates contracts that violate public policy, Michelson v. Voison , 658 N.W.2d 188, 190 (Mich. Ct. App. 2003) , Rowan’s argument fail s for two reasons. First, to the extent Rowan contends that provisions in the Residenc y Agreement aside from the arbitration clause violate Michigan law , those issues are reserved for arbitration. See Masco Corp. v. Zurich Am. Ins. Co. , 382 F.3d 624, 628 (6th Cir. 2004) (“One seeking to challenge an arbitration clause must make an argument that is specific to the arbitration clause . . . and . . . does not simply challenge the contractual obligation to which the arbitration clause applies.” (citing Burden v. Check Into Cash of Ky., LLC , 267 F.3d 483, 491 (6th Cir. 2001)) ). Second, though Rowan argues that the arbitration clause violates Michigan’s prohibition on arbitration in the residential context, the Federal Arbitration Act emphatically favors arbitration and disp laces conflicting state statutes or polic i es. Marmet Health Care Ctr., Inc. v. Brown , 132 S. Ct. 1201, 1203 (2012) (per curiam) (citations omitted).

2. Lack of Mutual Assent Next, Rowan alleges that th e arbitration clause lacked mutual assent because Brookdale failed to allow his father an opportunity t o read the agreement at signing

. True, c ontract formation requires mutual assent on all essential terms. See Quality Prods. & Concepts Co. v. Nagel Precision, Inc. , 666 N.W. 2d 251, 258 (Mich. 2003)

. B ut Michigan law “presumes that one who signs a written agreement knows the nature of the instrument,” Watts v. Polaczyk , 619 N.W.2d 714, 717 (Mich. Ct. App. 2000) , and a signatory “will not be heard to say, whenCase No. 15

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- enforcement is sought, that he did not read it, or that he suppose d it was different in its terms.”
Farm Bureau Mut. Ins. Co . v. Nikkel , 596 N.W.2d 915, 920 (Mich. 1999) (quoting Komraus Plumbing & Heating, Inc. v. Cadillac Sands Motel, Inc. , 195 N.W.2d 865, 868 (Mich. 1972) ). In any event, Rowan fails to counter Brookdale ’s evidence that it provided his father a copy of the Residency Agreement in advance of signing. Indeed, Rowan Sr. toured a number of residential facilities with his ex

- wife prior to selecting the Brookdale facility

. When potential residents v isit, Brookdale provides them an informational packet that includes a copy of the Residency Agreement along with a physician’s plan of care. Rowan Sr. had a physician complete the plan of care three days before signin g the Residency Agreement , suggesting that he received the packet with the Residency Agreement in advance of signing

.

3. Want of Consideration Pushing on, Rowan argues t hat t he arbitration clause lacks consideration . But “the basic
rule of contract law is that whatever consideration is paid for all the promises is consideration for each one.” Rowady v. K Mart Corp. , 428 N.W.2d 22, 25 (Mich. Ct. App. 1988) . Here, there was a bargained

- for exchange: Rowan Sr. paid money to Brookdale for housing and other services, and both agreed to arbitrate disputes.

4. Waiver of Jury

- Trial Right Rowan further challenges the enforceability of the arbitration clause because it lacks comprehensible language, and urges the court t o apply Morrison v. Circuit City Stores, Inc. ’s test to evaluate whether his father knowingly and voluntarily waived his jury

- trial right. 317 F.3d 646, 668 (6th Cir. 2003) (en banc)

. Morrison is inapplicable , however, because it is limited “to the validity of arbitration clauses in employment agreements where an employee’s statutorily
created federal civil rights are at issue.” Stutler v. T.K. Constructors Inc. , 448 F.3d 343, 345 (6thCase No. 15

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- Cir. 2006)

. Regardless , the arbitration clau se here is clear: it twice states in bold , “The parties to this Agreement further understand that a jury will not decide their case, ” a nd t he immediately following section reads

— using capital letters, bolding, and underlining

— “ waiver of trial by jury .”
5. Imposition of Financial Burden Finally, Rowan argues against enforceability on the grounds that the arbitration clause imposes an impermissible financial burden upon his father and others similarly situated in violation of Morrison , 317 F.3d at 646

. Morr ison , again, is inapposite. Furthermore , Rowan fails to explain how the arbitration clause imposes i ntolerable costs

. III. For these reasons, we AFFIRM the district court’s order

.