Meskill v. GGNSC Stillwater Greeley LLC
2012 U.S. Dist. LEXIS 72798
| D. Minnesota | 2012Background
- Minnesota AG sued NAF for bias and law violations; NAF consented to stop handling such claims.
- Hundreds of contracts remaining with arbitration clauses referencing NAF or its rules after NAF exit.
- Plaintiff Bruce Meskill, as trustee for Howard Meskill, sues GGNSC Stillwater Greeley LLC d/b/a Golden Living Center—Greeley for negligence.
- Arbitration agreement signed September 9, 2009 includes broad scope to arbitrate claims arising from care provided, governed by FAA, and to be administered under NAF Code of Procedure.
- GLC moves to compel arbitration arguing the dispute falls within the arbitration clause; NAF unavailability is at issue.
- Court grants motion to compel arbitration and stay proceedings, with procedures to appoint an arbitrator within 30 days.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitration exists and covers this dispute | Meskill argues arbitration clause applies to broad claims as to NAF involvement. | GLC contends the dispute falls within the arbitration clause’s broad scope. | Yes; valid arbitration agreement covers the dispute. |
| Does NAF unavailability doom arbitration | If exclusive forum is unavailable, arbitration cannot proceed. | Unavailability does not defeat arbitration under FAA §5/appointment of substitute arbitrator. | Unavailability does not doom arbitration; substitute arbitration is warranted. |
| Is NAF necessarily integral to the agreement | Agreement implicitly designates NAF via Code and exclusive forum. | Designation of NAF Code is not the same as designating NAF as arbitrator; forum not integral. | NAF was not integral; substitute arbitrator permissible. |
| Should the court appoint a substitute arbitrator under FAA §5 | If the specific arbitrator is unavailable, the court should appoint a substitute. | Courts should avoid rewriting the agreement; similar to substitution framework applies. | Court may appoint substitute arbitrator; §5 applied. |
| Is the agreement void for unclean hands | Equity concerns due to NAF’s unavailability and biased perception | No improper motive shown; form contract; enforce arbitration. | Arbitration agreement not void for unclean hands. |
Key Cases Cited
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (U.S. 1983) (federal policy favoring arbitration)
- Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79 (U.S. 2000) (arbitrability standards and burden shifting)
- Express Scripts, Inc. v. Aegon Direct Mktg. Servs., Inc., 516 F.3d 695 (8th Cir. 2008) (scope and existence of arbitration agreements)
- CompuCredit Corp. v. Greenwood, 132 S. Ct. 665 (U.S. 2012) (arbitration policy and related considerations)
- In re Salomon Inc. Shareholders’ Derivative Litig., 68 F.3d 554 (2d Cir. 1995) (arbitration underscoring forum choice and applicable procedure)
- Stinson v. America’s Home Place, Inc., 108 F. Supp. 2d 1278 (M.D. Ala. 2000) (enforcement of arbitration agreements post-forum unavailability)
- Zechman v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 742 F. Supp. 1359 (N.D. Ill. 1990) (arbitration agreement and integral forum analysis)
- Wright v. GGNSC Holdings LLC, 808 N.W.2d 114 (S.D. 2011) (NAF Code and forum designation analysis)