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Hunter v. Baylor Health Care System

United States District Court, N.D. Texas, Dallas Division

July 9, 2019

KATHLEEN HUNTER, Plaintiff,
v.
BAYLOR HEALTH CARE SYSTEM, Defendant.

          MEMORANDUM OPINION AND ORDER

          David C. Godbey United States District Judge.

         This Order addresses Defendant Baylor Health Care System's (“Baylor”) motion to compel arbitration [21] and motion to bifurcate [24]. For the reasons stated below, the Court grants both motions.

         I. Origins of the Dispute

         Plaintiff, Kathleen Hunter, was an employee of Baylor when she was injured while assisting a patient to the restroom. Hunter alleges that when she saw a light fixture falling from the bathroom ceiling, she threw her body over the patient. Hunter alleges that the light fixture then struck her, causing injuries to her head, neck, and left shoulder. After Baylor denied benefits, Hunter filed a breach of contract and denial of ERISA benefits suit, alleging that Baylor should have paid for her shoulder surgery. Hunter also brings state law negligence, gross negligence, and fraud claims.

         Baylor now moves to bifurcate Hunter's state law claims from her denial of ERISA benefits and breach-of-contract claims. Baylor also moves to compel arbitration of the state law claims under the Federal Arbitration Act (“FAA”).

         II. The Court Grants Baylor's Motions to Bifurcate and Compel Arbitration

         Baylor alleges that Hunter agreed to arbitrate her state law claims against Baylor. As for Hunter's ERISA and breach-of-contract claims, Baylor states that these claims are specifically carved out from the arbitration agreement and are thus not subject to arbitration. Baylor also notes that before this action was removed to federal court, the state court judge stayed the case and granted an agreed motion to arbitrate. However, after almost a year in arbitration, the state court judge lifted the stay and remanded the case back to state court. Baylor, however, does not explain why the case was remanded. To fill in the gaps in Baylor's description of the procedural history, the Court reviewed the removal documents, including the attached state court documents.

         While this action was still pending in state court, the parties agreed to arbitrate the dispute after Baylor represented by affidavit that Hunter had signed an arbitration agreement that applied to all of her claims. But the state court judge lifted the stay and remanded the case once Hunter discovered that Baylor's representation was false. Baylor now admits that Hunter never actually signed any arbitration agreement. Instead, Baylor argues that the underlying arbitration agreement is enforceable, regardless whether Hunter signed it. While the Court does not approve of Baylor's conduct, the Court agrees that the underlying arbitration agreement is valid and enforceable.

         A. Legal Standard

         Section 2 of the FAA[1] provides that written agreements to arbitrate controversies arising out of an existing contract “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U .S.C. § 2.

         When considering a motion to compel arbitration, the Court must determine “whether the parties agreed to arbitrate the dispute.” Webb v. Investacorp, Inc., 89 F.3d 252, 257-58 (5th Cir.1996) (per curiam). “This determination involves two considerations: (1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls within the scope of that arbitration agreement.” Id. at 258. In deciding whether the parties agreed to arbitrate the dispute, “courts apply the contract law of the particular state that governs the agreement.” Wash. Mut. Fin. Grp., LLC v. Bailey, 364 F.3d 260, 264 (5th Cir.2004) (citation omitted). If there is a valid agreement to arbitrate, and there are no legal constraints that foreclose arbitration, the court must order the parties to arbitrate their dispute.

         “The party seeking to compel arbitration need only prove the existence of an agreement to arbitrate by a preponderance of the evidence.” Grant v. Houser, 469 Fed. App'x 310, 315 (5th Cir.2012) (per curiam). “[T]here is a ‘strong federal policy in favor of enforcing arbitration agreements.'” Texaco Exploration & Prod. Co. v. AmClyde Engineered Prods. Co., 243 F.3d 906, 909 (5th Cir.2001) (quoting Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 217 (1985)). And because of this strong presumption, “a party seeking to invalidate an arbitration agreement bears the burden of establishing its invalidity.” Carter v. Countrywide Credit Indus., 362 F.3d 294, 297 (5th Cir.2004).

         B. Hunter Agreed to Arbitrate

         Baylor alleges that Hunter agreed to arbitrate her state law claims against Baylor through an arbitration provision in the Baylor Health Care System Occupational Injury Benefit Plan. Def.'s App. B-1 [21-5]. As stated above, Baylor admits that Hunter never actually signed the arbitration agreement. The FAA, however, does not require that an arbitration agreement be signed; it only requires that it be in writing. Valero Refining, Inc. v. M/T Lauberhorn, 813 F.3d 60, 64 (5th Cir. 1987); 9 U.S.C. § 2. Moreover, Texas courts have held that the question of whether a written contract, including an arbitration agreement, must be signed to be binding is a question of the parties' intent. See, e.g., In re Bunzl USA, Inc., 155 S.W.3d 202, 209 (Tex. App.-El Paso 2004, no pet.); Valero ...


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