Memorandum in Reponse to Motion to Compel Arbitration

Carmean v. Storey, et al.

Description: This case involves a medical malpractice lawsuit filed by Chris Carmean over the death of his wife, Sharon Jo Carmean. The lawsuit was filed against L. Kevin Vance, M.D. and Laura Stanley, CFNP, a doctor and nurse practitioner at the Comprehensive Pain Center of Mississippi, where the deceased was a patient. Vance and Stanley filed a motion to compel Carmean to arbitrate his claims against them based on an arbitration clause in a document his wife had signed while a patient. Heygood, Orr & Pearson, who represented Mr. Carmean, opposed the motion arguing that the Defendants had waived the right to force arbitration, and this brief was filed in support of their opposition.

IN THE 1ST JUDICIAL CIRCUIT COURT OF HINDS COUNTY
STATE OF MISSISSIPPI
CHRIS CARMEAN, Individually and ON
BEHALF of the OTHER WRONGFUL DEATH
HEIRS OF SHARON JO CARMEAN, Deceased,

Plaintiff,

v.

JOHN STOREY, R.Ph., L. KEVIN VANCE, M.D.,
LAURA STANLEY, CFNP, JOHN DOES 1-10,
AND XYZ CORPORATIONS 1-10,

Defendants.

CAUSE NO. 251-13-353CIV

Plaintiff Chris Carmean (“Plaintiff”), individually and on behalf of the wrongful death beneficiaries of Sharon Jo Carmean (“Decedent”), files this response to Defendants L. Kevin Vance, M.D. (“Vance”), and Laura Stanley, CFNP (“Stanley”)’s Motion to Compel Arbitration and to Stay Proceedings Pending Arbitration. In support thereof, Plaintiff respectfully states as follows:

PRELIMINARY STATEMENT

Under controlling Mississippi Supreme Court case law, a defendant waives the right to compel arbitration when he or she actively participates in a lawsuit by: (1) failing to assert arbitration as an affirmative defense, (2) demanding a jury trial, (3) participating in discovery, and (4) failing to promptly move to compel arbitration. In this case, Vance and Stanley waived any right to arbitration by doing every single thing that constitutes a waiver of the right to arbitration under Mississippi law, including:

  • Failing to invoke their right to arbitration during the four-month period between the time they were served with Plaintiff’s notice of claim and the time Plaintiff filed his complaint;
  • Failing to move to compel arbitration when the Complaint was filed;
  • Filing answers without asserting arbitration as an affirmative defense;
  • Filing answers that demanded a trial by jury;
  • Serving Plaintiff with written discovery requests and obtaining discovery in response to those requests;
  • Failing to amend their answers, which still do not include arbitration as an affirmative defense and still request a trial by jury; and
  • Waiting approximately 280 days from the time they were served with the pre-suit notice letter to move to compel arbitration (approximately 140 days from the time the complaint was filed).

Having waived any right to arbitration, Vance and Stanley ask the Court to excuse their active participation in the lawsuit and long delay in asserting the arbitration clause because their lawyers were allegedly unaware of the alleged arbitration agreement. The date that their lawyers became aware of the arbitration agreement is totally irrelevant because the evidence shows that Vance and Stanley were aware of the alleged agreement. The arbitration agreement is a form agreement printed on Comprehensive Pain Management of Mississippi letterhead and was part of its files. Vance is the owner and president of the Comprehensive Pain Center of Mississippi and its only doctor. Stanley is one of Comprehensive Pain Center of Mississippi’s two nurses. Not surprisingly, Vance and Stanley have made no attempt to argue that they themselves were unaware of their own form arbitration agreement.

The Court should also deny the motion because Defendants have not submitted an affidavit stating that the arbitration agreement attached to their motion is a true and correct copy of the arbitration agreement and that Decedent signed it. Thus, there is no evidence of a valid arbitration agreement at all.

Finally, Vance and Stanley’s motion should be denied because the only case cited in their motion, Cleveland v. Mann (cited below), is inapposite to the waiver issue before the Court. Cleveland stands for the proposition that a wrongful death beneficiary can be compelled to arbitrate his wrongful claim when the deceased patient signed a valid arbitration agreement. But the case contains no discussion of the waiver issue, which is governed by another controlling Mississippi Supreme Court case holding that a defendant waives any right to arbitration by actively participating in a lawsuit by doing exactly the same things that Vance and Stanley have done in this case.

Therefore, this Court should deny their motion.

RELEVANT FACTS AND PROCEDURAL HISTORY

1. This is a wrongful death case in which Plaintiff alleges that Vance and Stanley’s negligent treatment of Decedent, Plaintiff’s wife, caused Decedent’s death.

2. On December 7, 2012, Plaintiff initiated his medical malpractice claim against Vance and Stanley by serving them with proper written notice of intention to file this action in compliance with Miss. Code Ann. § 15-1-36. (Aff. of Philip Carby ¶ 3 (Exhibit A).) Vance and Stanley had the notice of claim for over four months before Plaintiff filed his complaint. (Id.) During the four-month period between the time they were served with the notice of claim and the date Plaintiff filed his Complaint, Vance and Stanley did not demand that Plaintiff’s claim against them be resolved through arbitration. (Id.) Nor did they inform Plaintiff’s counsel about the arbitration agreement. (Id.)

3. On April 26, 2013, Plaintiff filed his Complaint, which included medical malpractice claims against Vance and Stanley. (Aff. of Philip Carby ¶ 4 (Exhibit B.) Vance and Stanley each filed answers to the Complaint. (Id. ¶ 5 (Exhibits C (Vance’s Answer) and Exhibit D (Stanley’s Answer).) Their answers did not raise contractual arbitration as an affirmative defense or otherwise seek to have Plaintiff’s claims resolved through arbitration. (Id.) Instead, Vance and Stanley demanded a jury trial on Plaintiff’s claims. (Id.)

4. On June 12, 2013, Vance and Stanley served Plaintiff with interrogatories and requests for production of documents. (Aff. of Philip Carby ¶ 6-7 (Exhibit E) (Vance’s interrogatories), Exhibit F (Vance’s requests for production), Exhibit G (Stanley’s interrogatories), Exhibit H (Stanley’s requests for production.) Vance and Stanley’s discovery requests to Plaintiff expressly state that the requests were served pursuant to Mississippi Rules of Civil Procedure. (Id.) On July 29, 2013, Plaintiff served his responses to Vance and Stanley’s discovery requests. (Id. (Exhibit I (responses to Vance’s interrogatories), Exhibit J (responses to Vance’s requests for production), Exhibit K (responses to Stanley’s interrogatories), Exhibit L (responses to Stanley’s requests for production).)

5. On September 15, 2013, Vance and Stanley filed the instant motion to compel arbitration. But they did not amend their answers to include arbitration as an affirmative defense or seek leave to do so. (Id. ¶ 8.)

6. On October 16, 2013, the parties agreed to postpone the hearing on the motion to compel arbitration and do some limited discovery to prepare for mediation. (Aff. of Philip Carby ¶ 9 (Exhibit N).) In the agreement, the parties acknowledged that there was a dispute about whether Vance and Stanley had already waived their right to contractual arbitration by failing to raise arbitration as an affirmative defense and participating in discovery. The parties further agreed that Plaintiff would not use Defendants’ Vance and Stanley’s participation in discovery or mediation after October 16, 2013 as additional support for his argument that Vance and Stanley waived their right to contractual arbitration. But nothing in the agreement limited Plaintiff’s right to use Defendants’ conduct before October 16, 2013 in support of his argument that Vance and Stanley waived their right to compel contractual arbitration.

7. On March 28, 2014, the parties mediated the case. It did not settle. So Vance and Stanley have renewed their motion to compel Plaintiff to arbitrate his claims against them.

ARGUMENT AND AUTHORITIES

A. Vance and Stanley waived any right to contractual arbitration by actively participating in the lawsuit.

In Mississippi, a party waives the right to arbitrate when it “actively participates in a lawsuit or takes other action inconsistent with the right to arbitration.” Cox v. Howard, Weil, Labouisse, Friedrichs, Inc., 619 So.2d 908, 913-14 (Miss.1993). “Taking advantage of pre-trial litigation such as answers, counterclaims, motions, requests, and discovery obviates the right to arbitration.” Id. at 914. As set forth in the timeline above, Vance and Stanley have actively participated in this lawsuit and taken actions that are inconsistent with the right to arbitration, including:

  • Failing to invoke their right to arbitration during the four month period between the time they were served with Plaintiff’s notice of claim and the time Plaintiff filed his complaint. (Aff. of Philip Carby ¶ 3 (Exhibit A.);
  • Failing to move to compel arbitration when the Complaint was filed. (Id. ¶¶ 4-5);
  • Filing answers without asserting arbitration as an affirmative defense, as required by Miss. R. Civ. P. 8(c). (Id. ¶ 5(Exhibits C and D.);
  • Filing answers that demanded a trial by jury, a position that is totally inconsistent with their alleged right to contractual arbitration. (Id.)
  • Serving Plaintiff with written discovery requests and obtaining discovery in response to those requests. (Id. ¶¶ 6-7 (Ex F, G, H, I, J, K, and L).);
  • Failing to amend their answers, which still do not include arbitration as an affirmative defense and request a trial by jury. (Id. ¶ 8); and
  • Waiting approximately 280 days from the time they were served with the pre-suit notice letter to move to compel arbitration (approximately 140 days from the time the complaint was filed). (Id.)

This case is virtually identical to Pass Termite & Pest Control, Inc. v. Walker, 904 So.2d 1030, 1035 (Miss. 2004). In that case, the defendant attempted to compel contractual arbitration after actively participating in the lawsuit by doing the following things:

  • Failing to move to compel arbitration when the complaint was filed;
  • Filing answers without asserting arbitration as an affirmative defense, as required by Miss. R. Civ. P. 8(c); and
  • Filing answers that demanded a trial by jury. Id. at 1035.

Given these facts, the Mississippi Supreme Court held that the defendant waived its right to arbitration. The court explained:

In the instant case, Pass not only failed to file a motion to compel arbitration and failed in its answer to allege the affirmative defense of arbitration, it went so far in its answer as to request that the dispute be tried before a jury. A jury trial is characteristic of the judicial process, not arbitration. That request is inconsistent with asserting a right to arbitration. This coupled with the fact that Pass invoked the discovery process indicates its intent to forgo its right to arbitration.

Id. The court also held as a matter of law that failure to observe Rule 8 by asserting arbitration as an affirmative defense raised a presumption of prejudice to the plaintiff. Id. Vance and Stanley actively waived their right to arbitration by engaging in exactly the same conduct in this case. If anything, the waiver argument is even stronger in this case because Vance and Stanley failed to demand arbitration during the four-month pre-suit notice period and Plaintiff was not a party to the arbitration agreement and was not aware of it. (Aff. of Chris Carmean.)

B. The date that Vance and Stanley’s counsel became aware of the arbitration agreement is irrelevant.

Vance and Stanley ask this Court to excuse their active participation in the lawsuit and long delay in moving to compel arbitration because their lawyers allegedly just became aware of the arbitration agreement. The date that their lawyers became aware of the arbitration agreement is totally irrelevant. Not surprisingly, Vance and Stanley have not cited a single case holding that a defendant can actively participate in a lawsuit without waiving the right to arbitration because his or her lawyer was allegedly not aware of the arbitration agreement.

In this case, there is no evidence that Vance and Stanley were not aware of the arbitration clause. The evidence shows that the opposite is true. The arbitration agreement is a form agreement printed on Comprehensive Pain Management of Mississippi letterhead and was part of Decedent’s medical file. (See Exhibit A to Mot. to Compel Arbitration.) Vance is the president of the Comprehensive Pain Center of Mississippi and its only doctor. (Aff. of Philip Carby ¶ 10 (Exhibit O) (Mississippi Secretary of State website.), Exhibit P (portion of Comprehensive Pain Center of Mississippi’s website listing the staff).) Stanley is one of Comprehensive Pain Center of Mississippi’s two nurses. (Id. (Ex P).) Not surprisingly, Vance and Stanley do not contend that they were unaware of their own form arbitration agreement that patients are required to sign.

C. Defendants have not submitted any evidence of a valid arbitration clause.

Defendants have not submitted an affidavit stating that the arbitration agreement attached to their motion is a true and correct copy of the arbitration agreement and that Decedent signed it. Instead, they simply attached an uncertified copy of the arbitration agreement to their motion. Therefore, there is no evidence that Decedent signed a valid arbitration agreement and the Court should deny the motion on that basis alone.

D. The case cited by Defendants is irrelevant to the waiver issue.

Vance and Stanley’s motion is based on Cleveland v. Mann, an inapposite case. See Cleveland v. Mann, 942 So. 2d 108 (Miss. 2006). In that case, the Mississippi Supreme Court held that a wrongful death beneficiary can be compelled to arbitrate his wrongful claim when the deceased patient signed a valid arbitration agreement. There is no discussion of waiver. The facts of Cleveland are very different from this case and clearly illustrate what Vance and Stanley should have done to avoid waiving the right to contractual arbitration. In Cleveland, the defendants moved to compel arbitration as soon as they were served with the complaint. And, unlike in this case, the Cleveland defendants did not fail to raise arbitration as an affirmative defense, demand a jury trial, or serve the plaintiff with written discovery. Not surprisingly, waiver was not an issue in Cleveland, but is the dispositive issue here.

CONCLUSION

For the reasons discussed above, the motion to compel arbitration and to stay the proceedings pending arbitration should be denied.

Respectfully Submitted,

JAMES CRAIG ORR, JR.

Texas Bar No. 15313550

CHARLES W. MILLER

Texas Bar No. 24007677

HEYGOOD, ORR & PEARSON

2331 W. Northwest Highway, 2nd Floor

Dallas, TX 75220

214 237 9001 Telephone

214 237 9002 Facsimile

ATTORNEYS FOR PLAINTIFF