United States District Court, D. Colorado
WATERMARK HARVARD SQUARE, LLC a Delaware limited liability company, WATERMARK HARVARD SQUARE AP, LLC, a Delaware limited liability company, WATERMARK HARVARD SQUARE OWNER, LLC, a Delaware limited liability company, WATERMARK RETIREMENT COMMUNITIES, INC., an Arizona corporation, WATERMARK SERVICES I, LLC, a Delaware limited liability company, and WATERMARK SERVICES IV, LLC, a Delaware limited liability company, Plaintiffs,
WILLIE LEE CALVIN, Defendant.
RECOMMENDATION OF UNITED STATES MAGISTRATE
KATHLEEN M TAFOYA UNITED STATES MAGISTRATE JUDGE
case was initiated by way of a complaint filed on February
17, 2017. (See Doc. No. 1 [Compl.].) Embedded within
the complaint is a petition seeking relief, inter
alia, to compel arbitration. Defendant filed a response
to the complaint on April 21, 2017. (Doc. No. 17 [Resp.]).
Two replies were filed on May 5, 2017. Because several
parties have since been dismissed through stipulation,
only one reply remains relevant-i.e., the reply
filed by the Watermark Plaintiffs. (Doc No. 20 [Reply].) No
further briefing has been filed.
case involves arbitration arising from facts in state court
litigation. More specifically, on September 28, 2013, David
Calvin-as attorney in fact for Ms. Willie Lee Calvin-signed a
Resident Agreement for Ms. Calvin to be admitted to Watermark
Harvard Square nursing care facility. This agreement included
an arbitration clause (“Arbitration Agreement”)
(See Doc. No. 1, Ex. 2 [Arbitration Agreement]).
her stay at Watermark Harvard Square, Ms. Calvin suffered
injuries which led to her asserting claims in state court for
negligence and violations of the Colorado Consumer Protection
present case, Plaintiffs seek to compel arbitration and
enjoin Defendant from pursuing claims in state court.
(See Compl. ¶¶31-68.) Plaintiffs contend
that the Arbitration Agreement governs disputes between the
parties and that the Arbitration Agreement is valid and
enforceable under the Federal Arbitration Act
(“FAA”). Plaintiffs contend that the state court
claims arise out of the services provided to Ms. Calvin by
Plaintiffs and, as such, fall squarely within the scope of
the Arbitration Agreement-requiring Ms. Calvin to refer her
claims to mediation and binding arbitration.
disputes any notion that her claims are controlled by the
Arbitration Agreement and that, inter alia, state
court is the proper forum to reconcile all claims between the
challenges arbitration on two fronts-specifically: (1)
Defendant requests that this court abstain from ruling on the
complaint and allow the state court to address the
arbitration issue, and (2) if the court chooses not
to abstain, Defendant requests that the complaint still be
dismissed since the Arbitration Agreement is unenforceable
under state law. Tethered to this second issue is a complex
federal preemption analysis.
short, because abstention is not warranted-and because the
Arbitration Agreement is enforceable-the court recommends
that the District Judge hold in favor of Plaintiffs on both
issues. Given this result, the District Judge should also
compel Defendant to pursue her claims in accordance with the
Arbitration Agreement and grant any residual relief relevant
argues abstention in accordance with the doctrine laid out in
Colorado River Water Conservation District v. United
States, 424 U.S. 800 (1976).
allows “a federal court ... [to] stay or dismiss a
federal suit pending resolution of a parallel state court
proceeding.” THI of N.M. at Vida Encantada, LLC v.
Lovato, 848 F.Supp.2d 1309, 1318 (D.N.M. 2012) (citing
Colo. River., 424 U.S. at 817; Fox v.
Maulding, 16 F.3d 1079, 1081 (10th Cir.
“the pendency of an action in the state court is no bar
to proceedings concerning the same matter in the Federal
court having jurisdiction . . . .” Colo.
River, 424 U.S. at 817. The Supreme Court has emphasized
that the federal courts have a “virtually unflagging
obligation . . . to exercise the jurisdiction given them,
” including in cases involving parallel state
litigation. Id. Thus, abstention from the exercise
of federal jurisdiction is “the exception, not the
rule.” Id. at 813.
abstention analysis involves a two-step process. In declining
jurisdiction, there must first be a showing that
“the state and federal proceedings are parallel.”
Fox v. Maulding, 16 F.3d 1079, 1081 (10th Cir.
1994). Under Tenth Circuit law, a court will “examine
the state proceedings as they actually exist to determine
whether they are parallel to the federal proceedings.”
Id. If the cases are not parallel, the
court must exercise jurisdiction. But if the cases
are parallel, a second step is
required-i.e., a court “must . . . determine
whether deference to state court proceedings is
appropriate.” Id. at 1082.
determine deference, the following factors are considered:
“(1) whether either court has assumed jurisdiction over
property; (2) the inconvenience of the federal forum; (3) the
desirability of avoiding piecemeal litigation; and (4) the
order in which the courts obtained jurisdiction.”
Id. Other factors the court may consider include
“the vexatious or reactive nature of either the federal
or the state action, whether federal law provides the rule of
decision, ... the adequacy of the state court action to
protect the federal plaintiff's rights, ... [and] whether
the party opposing abstention has engaged in impermissible
forum shopping.” Id. (internal citations
omitted). The court is to balance all the factors as they
apply to this particular case, and “any doubt should be
resolved in favor of exercising jurisdiction.”
Parallelism of State and Federal Proceedings
are parallel, for purposes of Colorado River
abstention, if substantially the same parties litigate
substantially the same issues in different forums.
Fox, 16 F.3d at 1081-1082. Put differently, suits
are parallel if the state court litigation will be an
“adequate vehicle for the complete and prompt
resolution of the issue between the parties, ” such
that “the federal court will have nothing further to do
in resolving any substantive part of the case.”
Id. at 1081-1082.
Defendant satisfies the first step of the abstention
analysis-parallelism. Most of the parties are the same,
litigating substantially the same issues. The fact that one
of the parties in the state action is not present in the
federal action is
“inconsequential.” THI of New Mexico at Vida
Encantada, LLC v. Archuleta, No. CIV. 11-0399 BB/ACT,
2012 WL 8169886, at *4 (D.N.M. Jan. 12, 2012)
(“Asymmetry of parties is inconsequential especially
where the parties are united by identical legal
interests.”); see D.L. v. Unified Sch. Dist.
No. 497, 392 F.3d 1223, 1230 (10th Cir. 2004).
critically, the core claims in each case conform-namely the
federal arbitration claim. Moses H. Cone, 460 U.S.
at 28. Still, Plaintiffs challenge such conformity,
contending that the negligence and CCPA claims in the state
action purportedly provide points of distinction- creating
asymmetry between the claims. But the argument misses the
mark. It ignores the fact that the arbitration issue is
squarely before the state court and the federal
court, respectively. Indeed, because the arbitration claim is
the only claim before federal court, there is sufficient
symmetry for parallelism purposes. See Day v. Union
Mines, Inc., 862 F.2d 652, 656 (7th Cir. 1988) (In
determining if suits are parallel, a court looks “not
for formal symmetry between the two actions, but for a
substantial likelihood that the state litigation will dispose
of all claims presented in the federal case.”).
because the threshold issue favors Defendant, the Court must
next turn to the Colorado River factors to assess
whether deference and abstention are warranted.
Colorado River Factors - Exceptional
that the claims are parallel at step one does not win the day
for Defendant. The court must proceed to the second step and
consider a non-exclusive list of factors to decide if
“exceptional circumstances” exist to warrant
abstention. Fox, 16 F.3d at 1082. No factor is
dispositive, and the weight given to each factor is left to
the court's discretion. Id.
initial matter, and to support the second step of the
analysis, Defendant placed much emphasis on a Sixth Circuit
decision: Preferred Care of Delaware, Inc. v.
VanArsdale, 676 F. App'x 388, 391 (6th Cir. 2017).
While this case supports Defendant's position on the
issue of parallelism, it is found wanting with respect to the
step two of the abstention analysis. Significantly, in
VanArsdale there is a critical factual distinction
that undercuts Defendant's position-i.e., in
VanArsdale, the state court disposed of the
arbitration issue in advance of the federal court litigation.
In this case, however, the arbitration issue is still in
play-neither the state, nor federal forum has yet to make a
decision on the Arbitration Agreement. With regard to several
factors (e.g., third/fourth), the distinction is
to the first factor, the parties are in fierce
agreement that that there is no property in suit. This ...