Larsen v. Pine Ridge Operator, LLC, 2:14-cv-12101

Background

Plaintiff Michael Kurt Larsen sued Pine Ridge Operator, LLC and Spectrum Retirement Community of Michigan, LLC for negligence under Michigan wrongful-death law after his father drowned while a resident.
Larsen had signed a Residency Agreement for Independent Senior Living on April 19, 2013, signing as holder of a power of attorney for his parents. The Agreement contains a broad arbitration clause requiring arbitration of “all claims” arising out of or relating to the Agreement or services provided while a resident.
Defendants moved to compel arbitration and stay the action under the Federal Arbitration Act (FAA). Larsen opposed, raising multiple defenses to arbitration (lack of knowing waiver, ambiguity, lack of consideration, public policy, fraud in the inducement, unconscionability).
The court applied the FAA’s four-step framework: (1) whether parties agreed to arbitrate, (2) scope of the agreement, (3) arbitrability of federal claims (not implicated), and (4) whether to stay remaining proceedings.
The court found Larsen signed the Agreement, the arbitration clause covers negligence claims like those pleaded, and rejected Larsen’s challenges. The court granted the motion to compel arbitration, stayed and administratively closed the case, and retained jurisdiction to confirm/vacate any award.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Enforceability of arbitration clause	Larsen claims clause unenforceable as he did not knowingly waive jury rights	Agreement is valid; Larsen signed it as POA and waived jury by agreeing to arbitration	Enforceable — signature and clause language show mutual agreement to arbitrate all claims
Knowing waiver of jury trial	Larsen glanced at the Agreement and lacked adequate notice; waiver not knowing	Larsen has college education, had time to review; no special coercion	Waiver knowing — no undue circumstances; no requirement for explicit jury-waiver language outside collective-bargaining context
Clause ambiguity (second paragraph permitting suits to enforce or vacate)	Second paragraph conflicts with broad arbitration directive, rendering clause ambiguous	First paragraph unambiguously covers claims for negligence; second paragraph pertains to limited enforcement/vacatur rights	No ambiguity as applied to this negligence suit; arbitration clause governs Larsen’s claims
Consideration / unilateral modification	Larsen argues lack of consideration and defendant’s right to modify arbitration rules	Bilateral duty to arbitrate constitutes consideration; both sides waive jury trial	Rejected — bilateral arbitration obligation supplies consideration; modification argument insufficient
Public policy defense	Larsen contends arbitration void on public-policy grounds	FAA preempts state rules forbidding arbitration; federal policy favors arbitration	Rejected — strong federal policy enforces arbitration agreements
Fraud in the inducement / unconscionability	Larsen says he was tricked, didn’t know rights given up, lacked bargaining power	No pleaded broader fraudulent scheme; signing and initials negate claim; bilaterality defeats unconscionability	Rejected — Prima Paint and Sixth Circuit precedent require specific claim of fraud directed at the arbitration clause; unequal bargaining power alone insufficient
Motion to strike defendant’s late reply brief	Larsen moved to strike as untimely/over-length/new arguments	Defense admitted late filing; argued plaintiff also violated conferral rule; reply addressed response arguments and added no new evidence	Denied — court exercised discretion to consider late reply; no prejudice to Larsen

Key Cases Cited

Stout v. J.D. Byrider, 228 F.3d 709 (6th Cir.) (strong federal policy favoring arbitration and resolving ambiguities for arbitration)
Cooper v. MRM Investment Co., 367 F.3d 493 (6th Cir.) (bilateral arbitration obligation supplies consideration; no express jury-waiver required outside collective bargaining)
Walker v. Ryan’s Family Steak Houses, Inc., 400 F.3d 370 (6th Cir.) (context for knowing waiver analysis in procedural/coercive settings)
Burden v. Check Into Cash of Kentucky, LLC, 267 F.3d 483 (6th Cir.) (mere pleading of fraud in inducement as part of broader scheme insufficient to avoid arbitration)
Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (Sup. Ct.) (threshold question of fraud in inducement of the contract is for arbitrator unless challenge is to the arbitration clause itself)
Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (Sup. Ct.) (FAA’s coverage and limits)
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (Sup. Ct.) (arbitrability of statutory claims and FAA policy)
Marmet Health Care Center v. Brown, 132 S. Ct. 1201 (Sup. Ct.) (state public-policy rules cannot categorically prohibit arbitration of certain claims)
KPMG LLP v. Cocchi, 132 S. Ct. 23 (Sup. Ct.) (reinforces emphatic federal policy favoring arbitration)
Salehpour v. Univ. of Tenn., 159 F.3d 199 (6th Cir.) (district court discretion over motion practice and acceptance of late filings)