Hall v. Affordable Care, LLC

          MEMORANDUM OPINION AND ORDER

          AMOS L. MAZZANT, UNITED STATES DISTRICT JUDGE

         Pending before the Court are Defendant's Motion to Compel Arbitration and Motion to Stay Pending the Outcome of the Arbitration (“Motion to Compel”) (Dkt. #9) and Defendant's Opposed Motion to Stay Discovery (“Motion to Stay Discovery”) (Dkt. #17).

         Having considered the motions, the Court finds that Defendant's Motion to Compel should be GRANTED and its Motion to Stay Discovery should be DENIED as moot.

         BACKGROUND

         I. Factual Summary

         Plaintiff Eric J. Hall, Jr., DDS (“Dr. Hall”) is a dentist licensed to practice dentistry in Texas. Plaintiff Dr. Eric J. Hall Jr., DDS, PA (“the PC, ” and together with Dr. Hall, “Plaintiffs”) is Dr. Hall's professional association.

         Defendant Affordable Care, LLC f/k/a Affordable Care, Inc. (“ACI” or “Defendant”) is not licensed to practice dentistry but provides administrative and business support services to dental practices across the country, including several dental practices in Texas.

         In 2015, ACI allegedly solicited Dr. Hall and proposed to provide certain services for the PC. In particular, ACI allegedly promised to provide the PC with the following: (1) financial and accounting management; (2) human resources and benefits administration; (3) marketing and patient services; (4) recruitment and staffing; (5) centralized purchasing contracting; (6) education and training; (7) information technology; (8) operations support; and (9) real estate and facility management. Under this Services Contract, Dr. Hall would retain full control over all operational aspects of his dental practice. The Services Contract contains a mandatory arbitration clause that provides as follows:

Any controversy or dispute between ACI and the PC or the Practice Owner with respect to the application or interpretation of the terms of this Agreement, except claims by ACI for failure of the PC to pay ACI or its affiliate or the exercise of ACI's rights of eviction or equitable remedies, will, upon the request or demand of either party, be resolved exclusively by arbitration in Raleigh, North Carolina in accordance with the then-existing rules of the American Arbitration Association applicable to commercial arbitration. THE PARTIES IRREVOCABLY AND VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY DISPUTE RELATING TO OR ARISING OUT OF THIS AGREEMENT.

(Dkt. #8-1).

         On April 12, 2019, Plaintiffs' attorney sent a letter to ACI alleging the following:

ACI has breached the [Services] Contract by, among other things: (1) withholding compensation owed to Dr. Hall under the Contract; (2) charging unauthorized expenses to the PC; (3) charging the PC inflated and unauthorized “fees”; and (4) interfering with the administration of Dr. Hall's practice.

(Dkt. #9-5). In that letter, Plaintiffs demanded settlement or they would initiate legal action by April 26, 2019. On April 18, 2019, ACI provided Plaintiffs with 90 days' notice of its intent to terminate its relationship with Plaintiffs without cause pursuant to the Services Contract. On April 19, 2019, ACI filed a demand for arbitration with the American Arbitration Association. In response, Plaintiffs answered the arbitration demand and asserted counterclaims arising out of the Services Contract, including a claim for breach of the Services Contract. Specifically, Plaintiffs asserted counterclaims of breach of contract, exemplary damages, and attorneys' fees and indemnification. Plaintiffs then filed this lawsuit on May 7, 2019, asserting tortious interference and fraudulent inducement claims, which are based on substantially the same facts as those giving rise to Plaintiffs' claims currently in arbitration. That arbitration is pending in Raleigh, North Carolina, styled as Affordable Care, LLC v. Eric Hall, Jr., DDS and Eric Hall, Jr., DDS, PA, AAA Case No. 01-19-0001-2194.

         Tortious ...