Court Opinion

ID: 1041373
Source: CourtListenerOpinion
Date Created: 2013-09-19 19:46:53.536057+00
Date Added: 2024-06-11T12:31:01.615736
License: Public Domain

This memorandum opinion was not selected for publication in the New Mexico Appellate Reports.
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 1        IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

 2   WANDA EZELL, deceased,
 3   by the personal representative
 4   for the wrongful death estate,
 5   F. MICHAEL HART,

 6          Plaintiff-Appellee,

 7 v.                                                                    NO. 31,993

 8   SHULL MANAGEMENT, INC.
 9   d/b/a, SUNRISE HEALTHCARE
10   MANAGEMENT, THE EVANGELICAL
11   LUTHERAN GOOD SAMARITAN SOCIETY,
12   GOOD SAMARITAN SOCIETY, INC., and
13   STEPHEN J. FRANKLIN,

14          Defendants-Appellants.

15 APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
16 Carl J. Butkus, District Judge

17   Harvey Law Firm, LLC
18   Dusti D. Harvey
19   Jennifer J. Foote
20   Albuquerque, NM

21 for Appellee

22 Modrall, Sperling, Roehl, Harris & Sisk, P.A.
23 Martha G. Brown
 1 Deana M. Bennett
 2 Allison L. Biles
 3 Albuquerque, NM

 4 for Appellants
 5                              MEMORANDUM OPINION

 6 HANISEE, Judge.

 7   {1}   This case presents a dispositive issue that has been recently addressed by this

 8 Court: whether the unavailability of a stipulated arbitrator renders an arbitration

 9 agreement wholly unenforceable. In Wrongful Death Estate of Clifford Cooper v.

10 Evangelical Lutheran Good Samaritan Society, No. 31,100, mem. op. (N.M. Ct. App.

11 June 19, 2013) (non-precedential), we determined that the same arbitration agreement

12 as to that at issue in this case was invalidated because the National Arbitration Forum

13 (NAF) “[was] integral to the parties’ agreement to arbitrate and . . . its unavailability

14 . . . renders the entire Agreement unenforceable.” Id. ¶ 14.1 Adhering to our

15 conclusion in Cooper, we affirm the district court’s denial of the motion to compel

16 arbitration.

17 I.      BACKGROUND

18   {2}   Because the parties are familiar with the facts of this case, we only discuss those

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17         We note that Cooper was issued in the form of a non-precedential,
18 memorandum opinion. We rely on Cooper not as binding authority, but to maintain
19 consistence within this Court as to the specific question of NAF unavailability in the
20 context presented herein and in Cooper.

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 1 that are essential to establish the basis for our holding. In 2007, Wanda Ezell was a

 2 resident of a nursing home in Artesia, New Mexico. The facility was administered by

 3 Defendants The Evangelical Lutheran Good Samaritan Society, Shull Management

 4 Inc., Good Samaritan Society, Inc., and Stephen J. Franklin (collectively, Defendants).

 5 After less than a two-month stay, Ms. Ezell died and her estate, through its court-

 6 appointed representative, F. Michael Hart (Plaintiff), filed a lawsuit against

 7 Defendants pursuant to the New Mexico Wrongful Death Act (WDA), NMSA 1978,

 8 §§ 41-2-1 to -4 (1882, as amended through 2001). Whether the claim could be

 9 brought in district court, however, depended on the applicability and interpretation of

10 a single page of the nursing home Admission Agreement (the Agreement) signed by

11 Ms. Ezell’s representative at the time of Ms. Ezell’s placement in the nursing home.

12   {3}   Specifically, the page of the Agreement that immediately preceded the signature

13 page bore a heading that read “Resolution of Legal Disputes.” While Section (B) of

14 that page established resolution of disputes through binding arbitration, Section (C)

15 required that such arbitration “shall be conducted . . . in accordance with the [NAF]

16 Code of Procedure for Arbitration” and the payment of a “filing fee” and “other

17 expenses” to NAF will be borne by the claimant. That page also provided NAF’s

18 phone number and address for signatories who wished to learn more about “NAF’s

19 arbitration service and its rules and procedures for arbitration[.]”

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 1   {4}   On July 24, 2009, the NAF ceased participating in newly initiated consumer

 2 disputes. Plaintiff filed the WDA against Defendants in district court on August 10,

 3 2010, to which Defendants responded by filing motions to compel arbitration. The

 4 district court denied the motions, and Defendants appealed.

 5 II.     DISCUSSION

 6   {5}   In Cooper, we held that the determination of a pre-selected arbitrator’s

 7 unavailability “renders the entire Agreement unenforceable.” Cooper, No. 31,100,

 8 mem. op. ¶ 14. Cooper analyzed the New Mexico Supreme Court’s ruling in Rivera

 9 v. American General Financial Services., Inc., 2011-NMSC-033, ¶ 9, 150 N.M. 398,

10 259 P.3d 803, which dealt with the enforceability of an arbitration agreement that

11 designated the no-longer-available NAF as arbitrator. Id. ¶ 1. In determining the

12 effect of NAF’s unavailability, our Supreme Court noted that the Federal Arbitration

13 Act provides that an agreement is “not enforceable where grounds . . . exist at law or

14 in equity for the revocation of any contract.” Id. ¶ 17 (omission in original) (internal

15 quotation marks and citation omitted). In Cooper, we reasoned that because “the

16 parties intended for the NAF to be the exclusive arbitrator in any out-of-court dispute

17 resolution . . . [,] the unavailability of NAF as arbitrator . . . threatens to eviscerate the

18 core of the parties’ agreement.” Rivera, 2011-NMSC-033, ¶ 38 (second omission in

19 original) (alterations, internal quotation marks, and citation omitted). “[Our] Supreme

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 1 Court established [in Rivera] that when the designation of NAF is integral to an

 2 arbitration agreement, then NAF’s unavailability renders the entire arbitration

 3 agreement unenforceable.” Cooper, No. 31,100, mem. op. ¶ 7 (citing Rivera, 2011-

 4 NMSC-033, ¶¶ 26-27).

 5   {6}   Notably, the Cooper arbitration agreement is essentially the same arbitration

 6 agreement at issue in the present case. We concluded in Cooper that the arbitration

 7 agreement “uses mandatory language to refer to the NAF as in the Rivera agreement.”

 8 Cooper, No. 31,100, mem. op. ¶ 10. Like the Rivera arbitration clause, the Cooper

 9 arbitration clause included the term “shall” in reference to NAF arbitration and “will”

10 in reference to the payment of fees and expenses by the person requesting arbitration.

11 Cooper, No. 31,100, mem. op. ¶ 10. We concluded that “[a]lthough the arbitration

12 clause did not expressly designate NAF as the arbitrator, . . . the use of mandatory

13 language, and several references to NAF indicate that designation of NAF [was]

14 integral to the arbitration clause.” Id. ¶ 12.

15   {7}   As the arbitration clause in this case uses language identical to that in Cooper

16 and we see no compelling reason to reach a different conclusion about that same

17 clause’s enforceability in this case, we likewise hold that “the designation of NAF is

18 integral to the parties’ agreement to arbitrate and that its unavailability therefore

19 renders the entire Agreement unenforceable.” Id. ¶ 14; see State ex rel. Martinez v.

                                               5
 1 City of Las Vegas, 2004-NMSC-009, ¶ 24, 135 N.M. 375, 89 P.3d 47 (“Based on the

 2 importance of stare decisis, we require a compelling reason to overrule one of our

 3 prior cases.” (internal quotation marks and citation omitted)). We therefore affirm the

 4 district court’s denial of Defendants’ motion to compel arbitration.

 5 III.    CONCLUSION

 6   {8}   We remand to the district court for further proceedings associated with

 7 Plaintiff’s WDA claim. Because we affirm the district court’s denial of Defendants’

 8 motion to compel, we need not address Plaintiff’s remaining issues.

 9   {9}   IT IS SO ORDERED.

10                                                _________________________________
11                                                J. MILES HANISEE, Judge

12 WE CONCUR:

13 _________________________________
14 JAMES J. WECHSLER, Judge

15 _________________________________
16 JONATHAN B. SUTIN, Judge

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