PETITION FOR WRT OF MANDAMUS AN BRIEF IN SUPPORT by cdu16746

VIEWS: 27 PAGES: 74

									                           No.
;,

                                   THEIN

                         TENTH COURT OF APPEALS
                                WACO, TEXAS
                                 AT




                IN RE SENIOR LIVING PROPERTIES, L.L.C. d//a
                     CLAYSTONE HEAL THCAR CENTER
                                  Relator


                      On Appeal from the 40th Distrct Court
                             Ellis County, Texas
                               Cause No. 76808



                   PETITION FOR WRT OF MANDAMUS
                          AN BRIEF IN SUPPORT


                                           Lee L. Cameron, Jr.
                                           State Bar No. 03675380
                                           Rebecca M. Alcantar
                                           State Bar No. 00783525
                                           Amber R. Pickett
                                           State BarNo. 24058046
                                           WILSON, ELSER, MOSKOWITZ,
                                           EDELMAN & DICKER LLP
                                           4800 Bank of America Plaza
                                           901 Main Street
                                           Dallas, Texas 75202
                                           (214) 698-8000 (Telephone)
                                           (214) 698-1101 (Facsimile)

                                           ATTORNEYS FOR RELATOR
                                           SENIOR LIVIG PROPERTIES, L.L.c.
                                           d//a CLAYSTONEHEALTHCAR
                                           CENTER


                 RELATOR REQUESTS ORAL ARGUMNT

     481394.1
                                No.

                                       THE  IN

                             TENTH COURT OF APPEALS
                                    WACO, TEXAS
                                   AT




                  IN RE SENIOR LIVING PROPERTIES, L.L.C. d//a
                       CLAYSTONE HEAL THCAR CENTER
                                    Relator


                          On Appeal from the 40th Distrct Court
                                      Ells County, Texas
                                        Cause No. 76808



                       PETITION FOR WRT OF MAAMUS
                               AND BRIEF IN SUPPORT


        Relator Senior Living Propertes, L.L.C. d//a Claystone Healthcare Center

submits this petition for wrt of mandamus and supporting brief complaining of the order

dated July 27, 2009 of the Honorable Gene Knize, Judge of the 40th Judicial Distrct

Court of Ells, County, Texas whom presided over the proceedings. For clarity, the

Relator Senior Living Propertes, L.L.C d//a Claystone Healthcare Center is referred to

as "Relator" and/or "SLP"; the respondent, the Honorable Gene Knize is referred to as

the "Respondent" and/or "district cour;" and the Plaintiff Linsley Johnson in the case

below is referred to as "Plaintiff' and/or "Johnson."




                                                 1
481394.11
                         IDENTITY OF PARTIES AN COUNSEL

        In accordance with Texas Rule of Appellate Procedure 52.3(a), Relator Senior

Living Properties, LLC submits the following list of all parties to the distrct court's

judgment and the names and addresses of all tral and appellate counsel:

RESPONDENT                                      RESPONDENT'S MAING ADDRESS
The Honorable Gene Knize                        40th Judicial Distrct Court
40th Judicial Distrct Court                     Ells County Courthouse
                                                101 West Main
                                                Waxahachie, Texas 75165
                                                (972) 825-5060 (Telephone)
                                                (972) 825-5061 (Facsimile)

RELATO~EFENDANT                                 APPELLATE AN TRI COUNSEL
Senior Living Properties, L.L.C. d//a           Lee L. Cameron, Jr.
Claystone Healthcare Center                     State Bar No. 03675380
                                                Rebecca M. Alcantar
                                                State Bar No. 00783525
                                                Amber R. Pickett
                                                State Bar No. 24058046
                                                WILSON, ELSER, MOSKOWITZ,
                                                EDELMAN & DICKER LLP
                                                4800 Ban of America Plaza
                                                901 Main Street
                                                Dallas, Texas 75202
                                                (214) 698-8000 (Telephone)
                                                (214) 698-1101 (Facsimile)

REAL PARTY IN INTERESTIPLAIIFF                  TRI COUNSEL
Linsley Johnson                                 Roland G. Brown
                                                State Bar No. 03166500
                                                Law Offices of Roland G. Brown
                                                110 S. Ragsdale
                                                Jacksonville, Texas 75766
                                        -. ---- .-(903)-58ô.:i50-1-(Te1~plfuire)
                                                (903) 586-6000 (Facsimile)




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481394.11
                                                         TABLE OF CONTENTS

                                                                                                                             PAGE

IDENTITY OF PARTIES AN COUNSEL.................................................................ii

TABLE OF CONTENTS..............................................................................................iii

TABLE OF AUTHORITIES ......................................................................................... v

STATEMENT OF THE CASE.....................................................................................ix

STATEMENT OF JURISDICTION..............................................................................1

ISSUES PRESENTED ................................................................................................... 1

         Whether the distrct court abused its discretion by denying SLP's Motion to
         Stay Proceedings, Motion to Compel Arbitration, and Plea in Abatement
         pursuant to a valid arbitration agreement.

STATEMENT OF FACTS ............................................................................................1

SUMMARY OF THE ARGUMENTS ..........................................................................7

ARGUMENT & AUTHORITIES .................................................................................8

1. Standard of Review .................................................. .... .... .............. ..................... 8

         A. No Adequate Remedy by Appeal ...~........................................................9

         B. Abuse of                   Discretion Standard................................................................10

II. The Distrct Court Abused its Discretion in Denying SLP's Motion to Compel
         Arbitration. ................................................. ....................................................... 11

         A. Standard for the Enforcement of Arbitration Agreements .................... 11

         B.            A V alìd.:AbìtratîonAgreementExîsts andPlaintìftsClaìmsFallwìtlrinth-e-
                       Scope of        the Agreement.........................................................................12

                       1. There is a valid arbitration agreement .............................. ... ....... 12

                       2. Plaintifts claims fall within the scope of                         the Agreement ..........18

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481394.1 1
         c. Applicable Law Does not Support Denying the Motion to Compel
                   Arbitration......................,.......................................................................19

                   1. Execution of the Agreement post-injury is not a valid basis for
                             denying Arbitration.....................................................................19

                   2. The distrct court's findings regarding the terms of the Agreement
                            for selection of the arbitrator and payment of fees and expenses are
                            not sufficient to invalidate the Agreement........ .......... ...............24

                   3. The distrct court's remaining findings are not supported by the
                             evidentiary record and are therefore insufficient for denying
                            Arbitration...................................................................................25

CONCLUSION AN PRAYER .................................................................................26

CERTIFICATION........................................................................................................28

CERTIFICATE OF SERVICE ....................................................................................29

APPENDIX




                                                               iv
481394.11
                                              TABLE OF AUTHORITIES

 CASES                                                                                                                 PAGE

 AT&T Tech. Inc. v. Commc'ns Workers of Am.,
 475 U.S. 643 (1986).....................................................................................................18

 Cantella & Co., Inc. v. Goodwin,
 924 S.W.2d 943 (Tex. 1996) (per curiam) ...................................................................12

 First Options of Chi, Inc. v. Kaplan,
 514 U.S. 938 (1995) .....................................................................................................12

 Herndon v. First Natl Bank              of   Tulia,
 802 S.W.2d 396 (Tex. App. - Amarillo 1991, wrt denied) ........................................23

  In re AdvancePCS Health L.P.,
. 172 S.W.3d 603 (Tex. 2005) (per curiam) ................................................................... 11

 In re AIU Ins. Co.,
  148 S.W.3d 109 (Tex. 2004)........................................................................................10

 In re Alamo Lumber, Co.,
 23 S.W.3d577 (Tex. App. - San Antonio 2000, pet. denied) .....................................18

 In re Barber,
 982 S.W.2d 364 (Tex. 1998)..................................................................................11,24

 In re BP Prods. N. Am., Inc.,
 244 S.W.3d 840 (Tex. 2008)......................................................................................8,9

 In re Bruce Terminix Co.,
 988 S.W.2d 70~ (Tex. 1998)........................................................................................10

 In re Dallas Peterbilt, Ltd.,
  196 S.W.3d 161 (Tex. 2006)........................................................................................15

 In re December Nine Co., Ltd.,
 225 S.W.3d 693 (Tex. App. - EI Paso 2006, orig. proceeding) ............................13, 16

 In re Dilard Dep 't Stores, Inc.,
 186 S.W.3d 514 (Tex. 2006) (per curiam)...................................................................12


                                                                v
  481394.1 1
In re Dilard Dep 't Stores, Inc.,
198 S.W.3d 778 (Tex. 2006) (per curiam) ...................................................................11

In re FirstMerit Bank,
52 S.W.3d 749 (Tex. 2001).......................................................................................9,12

In re Haliburton,
80 S.W. 3d 566 (Tex. 2002).................................................................12, 13, 16, 17, 19

In re Labat! Food Serv., L.P.,
279 S.W.3d 640 (Tex. 2009) ....................................................................................9, 11

In re L&LKempowood Assocs., L.P.,
9 S.W.3d 125, 128 (Tex. 1999) (per curiam) .................................................................9

In re McAllen Med. Ctr., Inc.,
275 S.W.3d 458,2008 Tex. LEXIS 759, *12 ................................................................9

In re McKinney,
167 S.W.3d 833 (Tex. 2005) (writ denied) ..................................................................16

In re Oakwood Mobile Homes, Inc.,
987 S.W.2d 571 (Tex. 1999)........................................................................................11

In re Prudential Co. of Am.,
148 S.W.3d 124 (Tex. 2004)..................................................................................10, 11

In re Stanford Group Co.,
273 S.W.3d 807 (Tex. App. - Houston (14th Dist.) 2008, orig. proceeding)............... 18

In re Turner Bros. Trucking Co., Inc.,
8 S.W.3d 370 (Tex. App. - Texarkana 1999, orig. proceeding)........................ 8, 17,23

In re Wood,
140 S.W.3d 367 (Tex. 2004) (per curiam) .................................................................8,9

Jack B. Anglin, Co. v. Tipps,
842 S.W.2d266(Tex. 1992)....................................................................................9,10

J.M. Davidson, Inc. v. Webster,
128 S.W.3d 223 (Tex. 2003)........................................................................................12




                                                           VI
481394.11
Labor Ready Central IlL L.P. v. Gonzalez,
64 S.W.3d 519 (Tex. App. - Corpus Chrsti 2001, no pet.) ........................................13

Lester v. Advanced Envtl. Recycling Techs.,
248 Fed. Appx. 492 (5th Cir. 2007) ..............................................................................17

Martinez v. IBP, Inc.,
961 S.W.2d 678 (Tex. App. - Amarillo 1998, pet. denied)......................................... 21

Mohamed v. Auto Nation USA Corp.,
89 S.W.3d 830 (Tex. App. - Houston (1st Dist.) 2002, no wrt .................................. 12

Scherk v. Alberto-Culver Co.,
417 U.S. 506 (1974)..................................................................................................... 10

Searcy v. DDA, Inc.,
201 S.W.3d 319 (Tex. App. - Dallas 2006, no pet.)....................................................13

Shearson Lehman Bros., Inc. v. Kilgore,
871 S.W.2d 925 (Tex. App. - Corpus Chrsti 1994, orig. proceeding) .......................12

Tex. Gas Utils. Co. v. Barrett,
460 S.W.2d 409 (Tex. 1970)........................................................................................18

Vimar Seguros y Reaseguros, S.A. v. MIV Sky                                    Reefer, ,
515 U.S. 528 (1995) .....................................................................................................10

Walker v. Packer,
827 S.W.2d 833 (Tex. 1992)..............................................................................8, 11,24

Weekly Homes, Inc. v. Jennings,
936 S.W.2d 16 (Tex. App. - San Antonio 1996, wrt denied)...............................                           12, 13


STATUTES

TEX. CONST. ar. V, § 6 ..................................................................................................1

TEX. GOV. CODE                AN. § 22.22l(a) (Vernon 2004).......................................................1

TEX. GoV. CODE                AN. § 22.22l(b) (Vernon 2004).......................................................1




                                                                           V11
481394.11
REFERENCES TO THE RECORD AN APPENDIX

The mandamus record, consisting of the transcript of the evidentiary hearing that
occured on June 17, 2009, and certified/sworn copies of the documents relevant to this
mandamus proceedings, is filed contemporaneously with this petition. Copies of the
record also included as the appendix to this petition.

References to the record and appendix are formatted as follows:

        Certfied Court Record CR
        Citations to documents in the record wil be in the form "CR Tab (XX)."

        June 17, 2009 Hearing Transcript RR
        Citations to the transcript wil be in the form "RR (page):(line)."
        Citations to the exhibits wil be in the form "RR (PI.' s or Def.' s exh. #)."

        Appendix Apx.
             Citations to documents in the record wil be in the form "Apx Tab (XX)"




                                              vi11
481394.11
                                                STATEMENT OF THE CASE

Underlying proceeding: The underlying case is styled Linsley Johnson v. Senior
                       Living Properties, L.L. C. d/b/a Claystone Healthcare Center;
                                         Cause No. 76808; In the 40th Judicial Distrct Court, Ells
                                         County, Texas.

Respondent: The Honorable Gene Knize

Nature of   the case: This is a negligence case brought by Plaintiff                    Linsley Johnson
                                         against Relator Senior Living Propertes, L.L.C. d//a
                                          Claystone Healthcare Center for personal injuries she
                                          allegedly sustained while in SLP's employment. SLP
                                          contends that Plaintiff entered into a valid arbitration
                                          agreement, which covers the claims in this lawsuit. SLP fied
                                          a Motion to.Stay Proceedings, Motion to Compel Arbitration,
                                          and PleaIn Abatement in the distrct court. On June 17,2009,
                                          an evidentiary hearing was held on the motion to compel
                                          arbitration. After the hearing and submission to the court of
                                          additional briefing by both SLP and Plaintiff, the distrct
                                          court denied the motion and plea.

Rulings at issue: On July 2, 2009, the distrct court issued a letter to counsel
                       for both partes issuing its findings upon the Motion to
                       Compel Arbitration. On July 27, 2009, the distrct court
                                          issued its Order on SLP's Motion to Compel Arbitration, Plea
                                          in Abatement, and Motion to Stay Proceedings. The Order
                                          incorporated the district cour's July 2, 2009 findings. SLP
                                          seeks relief from the July 27, 2009 Order of the distrct court.

Relief sought: SLP seeks mandamus relief from this Court, requiring the
                                          distrct court to vacate its July 27, 2009 Order, enter an order
                                          granting SLP's Motion to Stay Proceedings, Motion to
                                          Compel Arbitration, and Plea and Abatement.




                                                                       ix
481394.11
                                      STATEMENT OF JURSDICTION

            This Court has jurisdiction to issue a wrt of mandamus under Aricle 5, Section 6

of   the Texas Constitution, and the Texas Government Code § 22.22l(a) and (b). TEX.

CaNST. ar. V, § 6; TEX. Gov. CODE AN. § 22.22l(a) and (b) (Vernon 2004).

                                            ISSUES PRESENTED

            Whether the distrct court abused its discretion by denying SLP's Motion to Stay

Proceedings, Motion to Compel Arbitration, and Plea in Abatement pursuant to a valid

arbitration agreement.

                                         STATEMENT OF FACTS

            On September 21, 2005, Plaintiff Linsley Johnson began working for SLP as a

dietary manager at the Claystone Healthcare Center. (RR 16:7-11; CR Tab F 0040; CR

Tab F 0070,9:10-14). At the time of           her employment, Plaintiff         received various company

materials and filled out a number of forms. (RR 16:12-15; RR Def.'s exhs. 1-10).

Included in Plaintifts employee fie was a signed Arbitration Agreement dated

September 21,20051. (Apx. B; CR Tab F 0137-0139; RR Def.'s exh. 1).

           The Arbitration Agreement (the "Agreement") specifically provides that it shall be

governed and controlled by the Federal Arbitration Act ("FAA"). The Agreement also

provides the following language regarding claims covered by the Agreement:

           CLAIMS COVERED BY THIS AGREEMENT
           Claims and disputes covered by this Agreement shall include, but not be
           limited to claims by employee against the Company, its employees, agents,
           contractors, assignees, admnistrators, and receivers (whether in their
1 There is a dispute as to when Plaintiff signed the Arbitration Agreement. The Agreement is dated September 21,
2005. (CR Tab F 0137-0139; RR Dels exh. 1). Plaintiff alleges that she did not sign the Agreement until after her
injur in July 2006. (RR 29: 10-16).


                                                          1

481394.11
            individual or representative capacity), and all claims that Company may
            have against employee, including the following:

            6. Any other claim, direct or derivative for personal, emotional,
                        physical or economic injury or loss.

(Apx. B; CR Tab F 0137-0138; RR Dets exh. 1).

            According to the Agreement: "(i)f any party pursues a covered claim against the

other by any action, method, or proceeding other than the arbitration provided for herein,

the responding party shall be entitled to dismissal or injunctive relief regarding such

action, and recovery of all costs, losses, attorneys' fees and other losses relating to such

action." (Apx. B; CR Tab F 0139; RR Dets exh.l)

            Additionally, Plaintiff received and signed the Employèe Handbook
Acknowledgment Form, which provides that she understood "the Arbitration Agreement

contained herein is a mandatory term and condition of employment.2" (Apx. C; CR Tab

F 0141; RR Dets exh. 21). The acknowledgment form also provides that she received


2 Plaintiff fuer disputes that she signed the Employee Handbook Acknowledgment Form and gave contrdictory
testiony on whether she signed the form and whether the actual date she signed it was the correct date. Plaintif
offered the followig testiony:

            Q. I'm going to hand you what's been marked as Exhibit 21. It's the employee handbook
                        acknowledgment form dated 9/21/05. Is tht your signtue on that document?
           A. I don't believe so.
            Q. Okay. And you believe -do you believe that somebody else signed your signatue on tht
                        document?
           A. It does not look like what I signed, hut I could have. I know we done some audits
                        afterwards, and I went back and signed some papers afterwards tht were not. in my
                        folder. I mighthave signed them at that time, but I don't - I don't remember.
            Q. Okay. You can't remember one way or another if             that's -
           A. I know I did not sign them all at the tie of          hire. I don't thin that's my signatue, no.

(R 21:24-25; 22:1-14) (emphasis added).

Although Plaintiff disputes that this is her signatue on the Employee Handbook Acknowledgment Form, SLP's
retained forensic document examier offered testiony that the signtue on the Employee Handbook
Acknowledgement Form was the genuie and authentic signtue of                Plaintiff   Linley Johnon. (RR 51:22-25; 52:1-
12). Plaintif did not offer any contradictory expert testiony on ths issue.

                                                                2
481394.1 1
the Employee Handbook and by signing it, she understood it was her responsibility to

read and comply with the policies contained in the handbook. (Id.). The Employee

Handbook contains an explanation of the terms and requirements of arbitration, including

that the Agreement is a condition of employment with SLP. Specifically, the handbook

provides:

        BINDING ARITRATION OF DISPUTES AN CLAIMS
        The Company and employee do hereby voluntarily promise,
        irrevocably agree, understand, agree to abide by and to accept as a
        condition of             employment the provisions contained herein. . . . This
        provision does not in any way contradict, supplement or change the
        Company's adherence to the employment at wil doctrine previously set
         forth in this manuaL. This Agreement shall         be governed and controlled by
        the Federal Arbitration Act to the fullest extent allowed by law, and
         supplemented by state law when necessary.

        The Company and employee . . . hereby agree to voluntarily promise
         and irrevocably agree . . . to arbitrate any dispute or claim arising
        from or related to (i) employment, (ii) performance under or the
        interpretation of this Agreement. . . .

        CLAIMS COVERED BY THIS AGREEMENT
        Claims and disputes covered by this Agreement shall include, but not be
        limited to claims by employee against the Company, its employees, agents,
        contractors, assignees, administrators, and receivers (whether in their
        individual or representative capacity), and all claims that Company may
        have against employee, including the following:

                                                      ***

        6. Any other claim, direct or derivative for personal, emotional,
        physical or economic injury or loss.

(Apx. D; CR Tab F 0212; RR Def.'s exh. 25) (emphasis in original). As an employee of

SLP, Plaintiff had access to the Employee Handbook and other employment procedures.

(RR 70:18-71:20).


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481394.1 1
            On or about July 28, 2006, Plaintiff was injured while working for SLP. (RR

 15:25-16:1-2; Def.'s exh. 12; CR Tab F 0079, 23:2-10). After her injury, Plaintiff alleges

this is when she signed the Arbitration Agreement referenced in the Employee Handbook

so that she could receive medical benefits under SLP's Employee Welfare Benefit Plan

("the Plan"). (CR Tab F 0076, 20:1-9; RR 51:4-9; 51:10-15). The Agreement contained

the exact same provisions regarding arbitration as set fort in the Employee Handbook.

(Compare RR Def.'s exh. 1 with RR Def.'s exh. 25 p.2l2 - 214).

            After Plaintiff    signed the Agreement, SLP provided her with healthcare benefits

under the Plan. (RR 52:7-13). Plaintiff continued to work for SLP, and she received

healthcare benefits under the Plan for approximately two years until she resigned on May

28, 2008, relocating to Athens, Texas. (RR 26:5-21; CR Tab F, 0099-0100; 51:1-25;

52:1-19; CR Tab F 0107-0108, 59:21-25; 60:1-5; CR Tab FOlIO, 65: 3-13; CR Tab F

0111-0112, 67:25; 68:1-21; CR Tab F 0113, 69:4-12). SLP even paid for her benefits

under the Plan after resigning her position. (RR 26:14-18).

            Notwithstanding having signed the Agreement and her promise to arbitrate claims

thereunder, on July 8, 2008, Plaintiff filed this negligence suit against SLP for the injuries

she allegedly sustained while employed by SLP on July 28, 2006. (CR Tab B 0004-

0007). Accordingly, SLP filed a Motion to Stay Proceedings, Motion to Compel

Arbitration, and Plea in Abatement ("Motion to Compel Arbitration") in conjunction with

its Original Answer asking the tral court to enforce the terms of the Agreement, and

require arbitration of        the Plaintiffs claims. (CR Tab C 00009-0022).



                                                   4
481394.1 1
            In response to SLP's Motion to Compel, Plaintiff filed both a response and

amended response. (CR Tab D 0023-0025 and CR Tab E 0026-0039). Plaintiff denied

the Agreement was valid, alleged the Agreement was entered into under duress and by

fraud, contended the Agreement was unconscionable, lacked consideration, was ilegal,

and that SLP was estopped from benefiting from its allegedly ilegal, improper and

immoral actions. (CR Tab E 0027-0032). Plaintiff also asserted the affirmative defenses

of   waiver and laches. (CR Tab E 0027-0037). Plaintiff claimed that the Agreement was

not enforceable, because at the time of her employment she did not sign the Agreement;

and therefore, she was not required to agree to mandatory binding arbitration. (CR Tab D

0023; CR Tab E 0027).

            SLP fied a Reply to Plaintift s responses asserting that an evidentiar hearing was

warranted. (CR Tab F 0044-0045). SLP contended that an enforceable contract to

arbitrate exists, that Plaintiff agreed to arbitrate by signing the.Agreement, by continuing

her employment with SLP, and by accepting the medical benefits under SLP's employee

benefit plan. (CR Tab F 0045-0048). SLP also contended that there was valid
consideration for the Agreement based on the mutual promises by both partes to submit

all employment and personal injury disputes to arbitration. (CR Tab F 0048-0050). SLP

furter contended that additional consideration was provided to Plaintiff when she


accepted health care benefits under SLP's employee welfare benefit plan. (CR Tab F

0049-0050). SLP also asserted that arbitration provided a sufficient alternative remedy to

Plaintiff, and that none of the Plaintift s affrmative defenses to the Agreement were

applicable under the facts of    this case. (CR Tab F 0050-0059)

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481394.1 1
           A hearing was held on the Motion to Compel Arbitration on June 17,2009. (See

generally RR). After the hearing, both parties submitted letter briefs to the tral court to

supplement and support prior briefing on these issues. (CR Tab G 0222-0252; CR Tab H

0253-0255). SLP contended that under the Texas Supreme Court's holding in In re

Haliburton, 80 S.W.3d 566 (Tex. 2002), an arbitration agreement entered into after the

commencement of an at-wil employment contract was enforceable as long as the

employee had notice of the change and accepted the change. (CR Tab G 0222-0223).

Because Plaintiff signed the Agreement, she continued to work for SLP after knowtng the

company's policy on mutually binding arbitration, and because she accepted benefits

under the Plan, the elements under In re Haliburton were satisfied and the tral court was

required to compel arbitration. (CR Tab G 0223). Plaintiff       responded that the arbitration

agreement at issue in In re Haliburton was entered into prior to the event giving rise to

the dispute and that there was no legal precedent for "retroactive 'contract' formation."

(CR Tab H 0253-0254).

            On July 2, 2009, Respondent, the Honorable Gene Knize ("Respondent") issued

the court's finding in a letter. (CR Tab J 0259-0260). The court found that: (1) Plaintiff

refused to sign or agree to the arbitration agreement as a condition of employment and

SLP employed her despite the refusal; (2) after the injury, SLP demanded Plaintiff sign

the Agreement as a condition of providing medical treatment; (3) SLP represented to

Plaintiff that medical benefits would not be provided by SLP's insurance carier because

the carrer required an arbitration agreement be in place as a condition of coverage; (4)

someone, other than Plaintiff, backdated the agreement to coincide with the reported

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481394.11
injury; (5) an unconscionable outcome might arise should SLP be insolvent and the

carrer deny coverage; (6) the Plaintiff is not entitled to meaningful participation in the

selection of the arbitrator; (7) recovery of attorney's fees are precluded unless provided

for by statute; and (8) costs and expenses of arbitration are borne by the party incurrng

them or apportioned at the discretion of the arbitrator. (CR Tab J 0259-0260). In

accordance with these findings, on July 27, 2009, the distrct court entered an order


denying SLP's Motion to Compel Arbitration. (Apx. A; CR Tab A 0001-0003). The

order adopted and incorporated the findings issued in its July 2, 2009                        letter. (Apx. A; CR

Tab A 0001-0003).

                                                 SUMMY OF THE ARGUMNTS

            The distrct court abused its discretion by denying SLP's motion to stay

proceedings, motion to compel arbitration and plea in abatement because it acted without

reference to any guiding priciples or evidentiar support. Furer, the distrct cour's


refusal to enforce a valid arbitration agreement under the FAA provides no adequate

remedy at law, because the part seeking arbitration is deprived of the benefits of

arbitration it contracted for, i.e., providing a less costly and alternative method of

resolving employment disputes.

            In denying the Motion to Compel Arbitration, the distrct court disregarded the

fundamental principles of basic contract law that govern arbitration agreements under the

FAA. SLP established the existence of an arbitration agreement by showing that (1) a

valid arbitration agreement exists; and (2) the claims at issue fall within the scope of the

agreement. Further, SLP established that Plaintiff                           had notice of SLP's policy governing

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481394.1 1
arbitration prior to her injury and throughout her employment with SLP. Once SLP

established the existence of an arbitration agreement, the burden was on Plaintiff to raise

any affirmative defenses.

           In denying SLP's Motion to Compel Arbitration, the distrct court's findings

indicate a misapplication of    the law in this instance. Texas law does not support the tral

court's conclusion that arbitration should be denied because the Agreement was executed

after Plaintifts injur. Additionally, the terms of the Agreement regarding selection of


the arbitrator and payment of fees and expenses are not sufficient to invalidate the

Agreement. More importntly, in arrving at its conclusions denying arbitration, the

district cour's findings that someone other than Plaintiff backdated the Agreement, or

that an unconscionable result could occur if SLP became insolvent, are not supported by

the record. Accordingly, the Respondent should have entered an order compellng

arbitration and it was an abuse of discretion to deny SLP's Motion to Compel Arbitration.

                                    ARGUMENT & AUTHORITIES

I. STANAR OF REVIW
           Issuance of a writ of mandamus is appropriate to correct a trial court's abuse of

discretion where there is no adequate remedy at law. In re BP Prods. N Am., Inc., 244

S.W.3d 840, 845 (Tex. 2008); see also Walker v. Packer, 827 S.W.2d 833, 839 (Tex.

1992). "In a mandamus proceeding, the court must determine whether: (1) the relator has

an adequate remedy by appeal; and (2) the tral court abused its discretion in entering the

order of which the relator complains." In re Turner Bros. Trucking Co., Inc., 8 S.W.3d

370, 373 (Tex. App.- Texarkana 1999, wrt denied); see also In re Wood, 140 S.W.3d

                                               8
481394.11
367,370 (Tex. 2004) (per curiam). A part denied the right to arbitrate under the FAA is

entitled to mandamus relief. In re Wood, 140 S.W.3d at 370 (quoting In re L&L

Kempowood Assocs., L.P., 9 S.W.3d 125, 128 (Tex. 1999) (per curiam)); In re FirstMerit

Bank, 52 S.W.3d 749, 753 (Tex. 2001).

        A. No     ADEQUATE    REMEDY    BY APPEAL

        The issuance of a wrt of mandamus is appropriate in this case because there is no

adequate remedy by appeal from the distrct cour's order failng to enforce an arbitration

agreement. Whether an abuse of discretion can be adequately remedied by appeal

depends on an analysis of the costs and benefits of interlocutory review. In re McAllen

Med. Ctr., Inc., 275 S.W.3d 458, 2008 Tex. LEXIS 759, *12 (Tex. Aug. 29, 2008); see

also In re BP Prods. N. Am., Inc., 244 S.W.3d at 845. The most frequent use of

mandamus relief involves cases where the act of proceeding to tral, regardless of

outcome, would defeat the substantive right involved. In re McAllen Med. Ctr., Inc., 275

S.W.3d 458, 2008 Tex. LEXIS 759, *12. Indeed, the Texas Supreme Court has

consistently held, and it is well recognized under Texas law, that a part who is denied

arbitration pursuant to a valid arbitration agreement is irreparably harmed, because no

adequate remedy exists at law. See In re Labatt Food Serv., L.P., 279 S.W.3d 640, 642-

43 (Tex. 2009); In re Wood, 140 S.W.3d at 370; Jack B. Anglin, Co. v. Tipps, 842 S.W.2d

266,271-73 (Tex. 1992).

       Where, as here, the distrct court declines to enforce a mandatory and exclusive

arbitration agreement governed by the FAA, there is no adequate remedy by appeaL. See

In re FirstMerit Bank, 52 S.W.3d at 753; Jack B. Anglin, Co., 842 S.W.2d at 272-73. The

                                            9
481394.11
very purpose of arbitration is to avoid the time and expense of a tral and appeal, and to

resolve matters in an alternative and less costly forum. In re Prudential, 148 S.W.3d 124,

138 (Tex. 2004) (quoting Jack B. Anglin Co., 842 S.W.2d at 272-73) (even if                                       the refusal

were eventually corrected on appeal, the par seeking arbitration "would be deprived of

the benefits of the arbitration clause it contracted for, and the purpose of providing a

rapid, inexpensive alternative to traditional                                 litigation would be defeated."); see also In re

Bruce Terminix Co., 988 S.W.2d 702, 704 (Tex. 1998).

           Moreover, the Texas Supreme Court has recognized that an agreement to arbitrate

before a specified trbunal is, in effect, a specialized kind of forum-selection clause that


posits not only the situs of suit, but also the procedure to be used in resolving the dispute.

In re AIU Ins. Co., 148 S.W.3d 109, 115 n.28 (Tex. 2004) (citing Scherk v. Alberto-

Culver Co., 417 U.S. 506, 519, (1974); Vimar Seguros y Reaseguros, S.A. v. M/V Sky


Reefer, 515 U.S. 528, 534 (1995) (observing that arbitration provisions are a subset of

forum-selection clauses)). Subjecting a part to tral in a forum other than that agreed


upon and requiring an appeal to vindicate the rights granted in a forum selection clause is

clear harassment. In re AIU Ins. Co., 148 S.W.3d at 117. If required to litigate a matter

subject to FAA arbitration, SLP is deprived of a significant porton of the benefit of its

bargain with its employees. See In re Prudential, 148 S.W.3d at 138 (quoting Jack B.

Anglin Co., 842 S.W.2d at 272-73). As such, SLP's only remedy is to seek mandamus

from this Court.

           B. ABUSE OF DISCRETION STANAR

           Abuse of discretion is the proper standard of reviewing a tral courts refusal to

                                                                          10
481394.1 1
enforce an arbitration agreement under the Federal Arbitration Act ("FAA"). See In re

Labau Food Serv., L.P., 279 S.W.3d at 642-43. A tral court has no discretion in

determining what the law is or in applying the law to the facts. In re Prudential Co. of

Am., 148 S.W.3d at 135; Walker, 827 S.W.2d at 840. When it fails to analyze or apply

the law correctly, therefore, the tral court abuses its discretion. See In re Dilard Dep't

Stores, Inc., 198 S.W.3d 778, 781 (Tex. 2006) (per curiam); see also Walker, 827 S.W.2d

at 840. Additionally, with respect to the resolution of factual issues, the tral court abuses

its discretion when its decision is contrary to the only permissible view of the evidence.

See In re Dilard Dep't Stores, Inc., 198 S.W.3d at 780; see also In re Barber, 982


S.W.2d 364, 366 (Tex. 1998) (citing Walker, 827 S.W.2d at 840). As demonstrated


below, the trial cour's decision and fmdings denying arbitration under the facts of this

case are not supported by Texas law, or the evidentiary record. Accordingly, the tral

court abused its discretion, which merits reversal by this Court.

II. THE DISTRICT COURT ABUSED ITS DISCRETION IN DENYG SLP's MOTION TO
        COMPEL ARITRATION

        A. STANAR FOR THE ENFORCEMENT OF ARBITRATION AGREEMENTS

        In general, a part seeking to compel arbitration under the FAA must establish


only that: (1) there is a valid arbitration agreement, and (2) the claims raised fall within

the scope of the agreement. See In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571,

573 (Tex. 1999); see also In re AdvancePCS Health L.P., 172 S.W.3d 603, 605 (Tex.

2005) (per curiam). Doubts regarding an agreement's scope are resolved in favor of

arbitration, because there is a strong presumption favoring agreements to arbitrate under


                                             11
481394.11
the FAA. In re FirstMerit Bank, 52 S.W.3d at 753. This presumption arises after a part

seeking to compel arbitration proves that a valid arbitration agreement exists. J.M

Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003).

        Under the FAA, ordinary principles of state contract law determine whether a

valid agreement to arbitrate exists. See First Options of Chi,. Inc. v. Kaplan, 514 U.S.

938, 944 (1995); In re Hallburton, 80 S.W.3d 566, 568 (Tex. 2002). "Once a party

seeking to compel arbitration establishes that an agreement exists under the FAA, and

that the claims raised are within the agreement's scope (as SLP has done here), the

(distrct) court 'has no discretion but to compel arbitration and stay its proceedings


pending arbitration.'" Cantella & Co., Inc. v. Goodwin, 924 S.W.2d 943, 944 (Tex.

1996) (per curiam) (quoting Shearson Lehman Bros., Inc. v. Kilgore, 871 S.W.2d 925,

928 (Tex. App.-Corpus Chrsti 1994, orig. proceeding)).

        B. . A VALID ARITRATION AGREEMENT EXISTS AN PLAITIFF'S CLAIMS
             FALL WITHI THE SCOPE OF THE AGREEMENT

              1. There is a valid arbitration agreement


        "Whether an enforceable agreement to arbitrate exists is a legal question entitled

to de novo review." Mohamed v. Auto Nation USA Corp., 89 S.W.3d 830, 835 (Tex.

App.-Houston (1st Dist.) 2002, no wrt). An agreement to arbitrate is considered a

contract under Texas law. See In re Dilard Dep't Stores, Inc., 186 S.W.3d 514, 515


(Tex. 2006) (per curiam); Weekley Homes, Inc. v. Jennings, 936 S.W.2d 16, 18 (Tex.

App.-San Antonio 1996, wrt denied). To determine if an arbitration agreement is

enforceable, courts wil examine a clause providing for arbitration under contract


                                            12
481394.11
principles. Weekley Homes, 936 S.W.2d at 18. The elements of an enforceable contract

are: (1) offer, (2) acceptance, and (3) consideration supporting the contract. See Searcy v.

DDA, Inc., 201 S.W.3d 319, 322 (Tex. App.-Dallas 2006, no pet.); see also Labor

Ready Central IlL L.P. v. Gonzalez, 64 S.W.3d 519, 522 (Tex. App.-Corpus Chrsti

2001, no pet.).

            The record reflects that SLP established the existence of a valid arbitration

agreement. (Apx. B; CR Tab F 0137-0139; RR Dets exh. 1). Although the partes

dispute the exact date that Plaintiff signed the Agreement, there is no dispute that

Plaintiff actually signed the Agreement in order to enroll in SLP's employee welfare

benefit plan and to receive    health care benefits. (CR Tab F 0077, 21:11-24; CR Tab F

0099,4-15; RR 29:10-19).

           Further, Plaintiff admits to being aware of the Agreement when she began her

employment. (CR Tab F 0077, 21:2-7). Although Plaintiff alleges at the time of her

employment that she "had no clue what it was," an employee's claim that she does not

understand an arbitration program wil not defeat the enforceability of the arbitration

agreement. (RR 29:20-25, 30:1-2); See In re December Nine Co., Ltd., 225 S.W.3d 693,

700 (Tex. App.-El Paso 2006, orig. proceeding); see also In re Hallburton, 80 S.W.3d

566, 568-69 (Tex. 2002) (arbitration provision enforceable notwithstanding that

employee "briefly looked" at the documents). Upon signing the Agreement, Plaintiff

unconditionally agreed to submit her claims to arbitration as defined in the Agreement.

           Additionally, Plaintiff signed the Employee Handbook Acknowledgment Form

that referenced the Agreement, and which informed Plaintiff that arbitration is a
                                              13
481394.11
mandatory term and condition of her employment with SLP. (Apx. C; RR Def.'s exh.

21). Specifically, the Employee Handbook Acknowledgement Form provides:

            The employee handbook describes important information about the facility
            and I understand that I should consult the Business Office regarding any
            questions not answered in this handbook. I have entered into my
            employment relationship with the facility voluntarily and acknowledge that
            there is no specified length of employment.

                                                         ***
            I understand that the Arbitration Agreement contained herein is a
            mandatory term and condition of employment.


                                                         ***
            I have received the handbook and by signing below I also understand it is
            my responsibility to read and comply with the policies contained in this
            handbook...

(Apx. C; RR Def.'s exh. 21; CR Tab F 0187).

            As noted above, the Employee Handbook further explains the terms of arbitration

and provides that, "(t)he Company and employee do hereby voluntarily promise,

irrevocably agree, understand, and agree to abide by and accept as a condition of

employment the provisions contained here." (Apx. D; RR Def.'s exh. 25; CR Tab F

0180). In addition to the Employee Handbook, Plaintiff         acknowledge that she received a

copy SLP's Employee Injury Procedure Manual during her employment with SLP. (Apx.

E; RR 23:22-25; 24:1-12). This document outlnes the procedure for SLP's occupational

injury program. (Apx. E;RR Def.'s exh. 24). Included in the manual is a copy of the

SLP's Arbitration Agreement. (Apx. E; RR Def.'s exh. 24).




                                                         14
481394.11
            Another document Plaintiff received during her employment with SLP was SLP's

 Employee Injury Benefit Plan Summary Plan Description.3 (Apx. F; RR 24:22-25; 25:1-

 23; Def.'s exh. 23; CR Tab F 0106, 58:7-11). The Plan is a group medical, disability,

 death and dismemberment employee occupational injury welfare benefit plan. (Apx F;

RR Def.'s exh. 23 p. 36). The manual also provides notice of SLP's policy on mutual

binding arbitration. Specifically it provides:

            Company Policy: The Company has adopted a company policy, which
            requires that all legal disputes, differences or claims (other than ERISA
            issues, criminal proceedings and claims for unemployment benefits) that
            may arise between the Participant and the Company during or following the
            Paricipant's employment with the Company are subject to final binding
            arbitration.

            Mutual Binding Arbitration Requirement: All non-ERISA legal disputes,
            difference or claims (as defined below) between the Company and you are
            subject to final binding arbitration. The result of binding arbitration is the
            sole and exclusive remedy for resolving such claims or disputes and is
            mutually binding on the Company and you.

 (Apx. F; RRDef.'s exh. 23 p. 38)

At the time of            her employment on September 21,2005, Plaintiff enrolled in the Plan and

naming her beneficiaries under the Plan. (Apx. G; RR 8: 18-21; Def.'s exh. 9).

            In determning whether an employee received notice of a binding arbitration

agreement, Texas cases do not confine that "notice analysis" to the underlying agreement,

but to all communications between the employer and employee. See In re Dallas

Peterbilt, Ltd., 196 S.W.3d 161, 163 (Tex. 2006). As outlined above, during the course


3 It should be noted that Plaintiff was in possession of SLP's Employee Injur Procedure Manual and Employee
Injur Benefit Plan and Sum Plan Description Manual durg her employment at SLP. Upon being served with
wrtten discovery from SLP, Plaintiffproduced these documents. (RR 24:22-25; 25:1-23; De£'sexh. 23 and 24))
The bate numbered referenced on these documents begin with P for Plaintiff. (RR Dels exh. 23 and 24.)

                                                     15
481394.1 1
and scope of Plaintifts employment with SLP, Plaintiff was provided and/or signed the

following documents all of            which provide notice ofSLP's binding arbitration provisions:

            1. The Arbitration Agreement (Apx. B; RR Def.' s exh. 1)


           2. Employee Handbook Acknowledgment Form (Apx. C; RR Def.'s exh. 21);

           3. Employee Handbook (Apx. D; RR Def.'s exh. 25)

           4. Employee Injury Benefit Plan Summary of Plan Description (Apx. E; RR

                       Def. ' s exh. 23)

           5. Employee Injury Procedures (Apx. F; RR Def.'s exh. 24)

           More importntly, Plaintiff does not dispute that at the time of her injury she

signed the Agreement in order to receive health care benefits. (RR 17:3-8; 28:21-25;

29:1-9; Def.'sexh. 1). SLP offered the Agreement to Plaintiff as a condition of her

employment, which she accepted by (1) signing the document; (2) continuing her

employment after being notified of the Agreement's existence; and (3) after accepting

health care benefits under SLP's plan. (RR 17:3-8; 28:21-25; 29:1-19; 39:22-25; 40:1-10;

Def.'s exh. 1). See In re Hallburton, 80 S.W.3d at 568. A par's signature on a written

contract is "strong evidence" the par unconditionally agreed to the terms contained


therein. In re December Nine Co., 225 S.W.3d at 699; see In re McKinney, 167 S.W.3d

833, 835 (Tex. 2005) (orig. proceeding).

           It is undisputed that Plaintiff not only continued her employment with SLP after

she signed the Agreement, but she also accepted the terms of SLP's employee welfare

benefit plan in order to obtain medical care. (RR 17:3-8; 28:21-25; 29:1-19; 39:22-25;

40:1-10; Def.'s exh. 1; CR Tab F 0099, 51:4-15). Enrollment in the Plan also provided

                                                     16
481394.11
for mandatory arbitration of any non-ERISA disputes with the Company. (RR Def.'s exh.

23 p. 38) Because Plaintiff had notice of the Agreement, but continued her employment

and accepted the medical benefits, she accepted the terms of the Agreement. See In re

Halliburton, 80 S.W.3d at 568 ("when an employer.                                 notifies an employee of changes to

the at-wil employment contract and the employee 'continues working with knowledge of

the changes, he has accepted the changes as a matter oflaw."').


            Even though Plaintiff alleges that the Agreement is not supported by consideration

and that she was not. provided any other benefits other than medical benefits, SLP

contends that receipt of                 benefits under the Plan is adequate consideration. (RR: 3-13); see

In re Turner Bros. Trucking Co., Inc., 8 S.W.3d 370, 373 (Tex. App.-Texarkana 1999,

wrt denied) (consideration was legally sufficient where employee received increased

benefits because he participated in an alternative dispute resolution program).

            Under Texas law, SLP does not have a duty to provide Plaintiff with healthcare

benefits. Lester v. Advanced Envtl. Recycling Techs., 248 Fed. Appx. 492, 495 (5th Cir.

2007) ("an employer who opts out of                              Texas's workers' compensation system has no duty

to compensate an injured employee"). Despite Plaintifts claim of lack of additional

benefits, enrollment in SLP's employment benefit plan also meant Plaintiff                             was provided

with    disabilty, and death and dismemberment benefits. (R Def.'s exh. 23 p. 36; 18:18-

21; Det s exh. 9). As such, SLP offered additional consideration to Plaintiff when it

agreed to provide healthcare and other benefits to her in exchange for her signing the

Agreement. See ide



                                                                             17
481394.11
        Furthermore, the Agreement is supported by valid consideration in the form of

mutuality of obligations. See Tex. Gas Utils. Co. v. Barrett, 460 S.W.2d 409,412 (Tex.

1970). Mutual promises by an employer and employee to submit all employment

disputes to arbitration is sufficient consideration to support the validity of an arbitration

agreement. In re Hallburton Co., 80 S.W.3d at 569; see In re Alamo Lumber Co., 23

S.W.3d 577, 579 (Tex. App.~San Antonio 2000, pet. denied). As set forth above, the

Agreement provides that Plaintiff and SLP are to voluntarily submitto binding arbitration

any claim arising out of personal, emotional, physical or economic injury or loss. (RR

Def.'s exh. 25). Thus, the Agreement is supported by adequate and sufficient
. consideration based on mutuality of promises to arbitrate the claims described under the

Agreement, and the additional consideration of providing Plaintiff benefits under the

Plan.

              2. Plaintiffs claims fall within the scope of        the Agreement

        Whether a claim falls within the scope of an arbitration agreement is also a

question oflaw reviewed de novo. In re Stanford Group Co., 273 S.W.3d 807,813 (Tex.

App.-Houston (14th Dist.) 2008, orig. proceeding). Courts consider the facts alleged,

rather than the legal claims, and consider whether the facts touch upon matters covered

by the arbitration agreement. Id. "In the absence of any express provision excluding a

partcular grevance or complaint from arbitration, only the 'most forceful evidence ofa

purpose to exclude the claim from arbitration can prevaiL'" Id. (quoting AT&T Tech. Inc.

v. Commc 'ns Workers of Am., 475 U.S. 643, 650 (1986)). As set forth above, the

Agreement provides that "claims by employee against Company...including...any other

                                                              18
 481394.11
claim direct or derivative for personal, emotional, physical or economic injur or loss."

(RR Def.' s exh. 1). Plaintiff s alleges in her petition that while acting within the course

and scope of          her employment, she suffered a back injury. (CR Tab B 0005). There is no

provision in the Agreement which would exclude these claims. As such, Plaintiffs

allegations fall within the Agreement's provision for claims for physical injur and the

Agreement should be enforced with respect to Plaintifts claims in this suit.

           C. APPLICABLE LAW DOES NOT SUPPORT DENYG THE MOTION TO
                COMPEL ARBITRATION

                       1. Execution of                     the Agreement post-injury is not a valid basis for
                                      denying Arbitration


           The majority of               Respondent's findings were concerned with the fact that         Plaintiff

executed the Agreement after her injury. Specifically, the tral court found that Plaintiff

initially refused to sign or agree to the arbitration agreement and that after the injury, SLP

demanded Plaintiff sign the Agreement as a condition of providing medical treatment.

(CR Tab J 0259). However, under In re Hallburton, the timing of the execution of an
arbitration agreement is of no import, and subsequent agreements signed after an

employee begins their employment are enforceable.

           In In re Haliburton, the                      employee was an at-wil employee of Halliburton for

approximately 30 years, when Hallburton adopted an arbitration program and notified its

employees of the program by mail, stated its effective date, and explained that by

working after that date an employee would indicate that he or she accepted the

provisions. In re Hallburton, 80 S.W.3d at 568. After receipt of the notification, the

employee continued to work for Hallburton. Id. The Texas Supreme Court concluded

                                                                           19
481394.1 1
that: (1) the employee had notice of the changes to his at-wil employment contract and

accepted them by continuing to work; (2) the employee failed to show that the arbitration

program was unconscionable because all of the remedies the employee could have

pursued in court were available in arbitration, and (3) the arbitration provision was

otherwise enforceable under general contract principles a valid arbitration provision

existed.Id. at 572-73.

            In reaching its decision, the Supreme Court held that a party assertng a change to

an at-wil employment contract must prove two things: (1) notice of the change; and (2)

acceptance of the change. Id.at 568. To provide notice, an employer assertng a


modification must prove that he unequivocally notified the employee of the definite

changes in employment terms. Id. The Supreme Court further held that, when an

employer notifies an employee of changes to the at-wil employment contract and the

employee "continues employment with knowledge of the changes, he has accepted the

changes as a matter oflaw." Id.

            In this case, the Agreement was in effect at the time of Plaintifts hire, and there

was no "change" in the terms of Plaintifts employment. Plaintiffs signature on the

Employee Handbook Acknowledgment               Form provides notice that arbitration was a

condition ofPlaintifts employment with SLP. (Apx Tab C; RR Def.'s exh. 23). Even if

Plaintiff alleges that she refused to acknowledge or sign the Agreement at the time of her

employment, the Agreement became effective when Plaintiff executed it at the time of

her injury, when she signed the Agreement in order to receive occupational accident

benefits under SLP's employee welfare benefit plan. Plaintiff acknowledged and even

                                                20
481394.1 1
admitted that SLP provided her healthcare benefits in exchange for signing the

Agreement. (CR Tab F 0100,52:11-13; RR 51:1-25; 52:1-19). In fact, Plaintiff                                  received

and accepted healthcare benefits from the time of her alleged injury in July 2006 until

July 2008, for approximately 2 years. (RR 51:1-25; 52:1-19; 65: 3-13). Accordingly,

Plaintiff received notice of the change in the terms of her employment and accepted the

change. Under the Texas Supreme Court's ruling in In re Hallburton, Plaintiff                                 is bound

by the terms of            the Agreement as a matter oflaw.

           The case of Martinez v. IBP, Inc. also supports Relator's contention that any

demand that Plaintiff execute the Agreement after her injury is not a valid basis for

denying the Motion to Compel Arbitration. Martinez v. IBP, Inc., 961 S.W.2d 678 (Tex.

App.-Amarillo 1998, pet. denied). In Martinez, Ramona Martinez began working for

IBP, Inc., which was not a subscriber to a statutory workers' compensation plan. 961

S.W.2d at 680. Within a week, she was injured on the job. Id.

           Though IBP did not subscribe to any statutory workers' compensation plan, it had

its own plan for remediating job related injuries. Id. In exchange 0 for receiving benefits


under the plan, the employee had to sign a document relinquishing the right to sue IBP at

common law. Id. Martnez had been informed of the condition during her initial

orientation and prior to her injury. Id.


           After the injury            and after notifyng IBP of                the injury, IBP presented Martnez with

an "Acceptance and Waiver" form which read:

           I have been injured at work and want to apply for payments offered by IBP
           to me under its Workplace Injury Settlement Program. To qualify, I


                                                                          21
481394.11
         understand I must accept the rules of the Program. I have been given a
         copy of the Program summary. I accept the Program.

         I understand I am giving up the right to sue the Company and perhaps
         others because of my injury. I understand that the Company would not be
         able to use certain common law defenses against me, but that the Company
         would never pay anything until a court decided that the Company caused
         my injury since the Company does not provide benefits under the Texas
         Workers' Compensation laws. I am giving up any rights I or any family
         member have (sic) to sue either the Company or anyone for whom the
         Company is responsible in exchange for being able to participate in the
         Program.

Id. Martinez signed the waiver and received medical benefits at IBP's expense. Id.

         Notwithstanding the waiver, she   brought suit against IBP for damages based on

claims of negligence and gross negligence. Id. IBP filed summary judgment and the

motion was granted by the tral court. Id. at 679. Martnez appealed the grant of


summary judgment, assertng, among her points of error, that the waiver was void as a

matter of law because it violated public policy and because she signed it under duress.

Id. at 681.

         The court of appeals overrled both of these points of error. Id. at 681-84. The

court of appeals determined that the waiver was not void as contrary to public policy and

found that executed post-injury the waiver dealt with her existing conditions and claims

and served the valid purpose of liquidating her claim. Id. at 684. Further, the appellate

court found that the wavier was not objectionable or unenforceable even though it


released IBP from the threat of a law suit in tort in exchange for the immediate receipt of

benefits under ffP's plan. Id. Thus, the tral court was free to hold Martinez released her


claims or "otherwise elected her remedies." Id.


                                             22
481394.1 1
            Regarding the point of error based on duress, the court of appeals found that

Martinez failed to present evidence that IBP acted unlawfully. Id. Duress requires proof

of a threat to do something which the threatening party has no right to do. Id. (citing

Herndon v. First Natl Bank of Tulia, 802 S.W.2d 396, 399-400 (Tex. App.-Amarillo

1991, wrt denied)). The appellate court noted that an employer did not have to capitulate

to unadjudicated demands and claims of an injured employee and that an employer was

entitled to have a court adjudicate its liability before compensating for a purported wrong.

Id. Thus, demanding that Martnez execute the waiver was not unlawful and refusing to

pay until found liable by a court was not a threat to dö something for which IBP had no

right. Id.


            Similarly, Plaintiff was informed of the arbitration provision prior to her injury.

(CR Tab F 0141). She had access to the Employee Handbook and other personnel

materials which contained the express terms of the provision. (Apx C-F; RR 70:18-25;

71: 1-20). As stated above, SLP does not have a duty to provide Plaintiff with healthcare

benefits. Lester, 248 Fed. Appx. at 495; see also In re Turner Bros. Trucking Co., Inc., 8

S.W.3d at 373. Accordingly, after Plaintiffs injury, SLP was allowed under the law to

request that Plaintiff execute the Agreement in exchange for the payment of benefits

under SLP's employee welfare benefit plan. Plaintiff        was free to decline and file suit for

her injuries. However, Plaintiff chose to accept the terms of the Agreement in exchange

for payment of medical and other benefits under the Plan. Unlike Martinez, where the

plaintiff waived her claims post-injury, here Plaintiff merely agreed to an alternate



                                                       23
481394.11
remedy for dispute resolution. There is no authority to suggest that Plaintiff and SLP

canot agree to alternative dispute resolution after Plaintifts claims have                                  arisen.

            2. The district court's findings regarding the terms of the Agreement for
                       selection of the arbitrator and payment of fees and expenses are not
                       sufficient bases to invalidate the Agreement

           The implied findings by the distrct court that the Agreement's provisions warrant

the invalidation, or lack of enforcement, of the Agreement, are contrary to the evidence

and are not supported by the record. A tral cour abuses its discretion "when its decision

is contrar to the only permissible view of                                   the evidence." In re Barber, 982 S.W.2d 364,

366 (Tex. 1998) (citing Walker, 827 S.W.2d at 840). In denying SLP's Motion to

Compel Arbitration, the tral court relied upon its                                 findings that: Plaintiff is not entitled to

meaningful paricipation in the selection of the arbitrator; recovery of attorney's fees are

precluded unless provided for by statute; and costs and expenses of arbitration are borne

by the part incurrng them or apportoned at the discretion of the arbitrator. (CR Tab J

0260).

           However, the Agreement provides that the arbitration is to be conducted under the

rules of either the Judicial Arbitration and Mediations Service ("JAMS") or the American

Arbitration Association ("AA"). (CR Tab F 0138; RR Def.'s exh. 1). Further, the

Agreement provides that the defending part chooses the rules from those choices. (RR

Def.'s exh. 1). The agency chosen then selects the arbitrators and each part alternatively

strkes arbitrators from the list until one remains. (RR Def.'s exh. 1). These provisions

are not biased in favor of SLP, or alternatively, they are not sufficiently one-sided to

warrant invalidating the Agreement.

                                                                             24
481394.11
            Further, Plaintifts claims in this case are for personal injuries. (CR Tab B 0005-

0006; RR 15:22-24). There is no statutory law pled by Plaintiff that would warrant an

award of attorney's fees in this case. (CR Tab B 0005-0006). Thus, the distrct court's

basis for denying arbitration because Plaintiff is precluded from recovering attorney's

fees unless provided by statute, is not even an issue in these proceedings that would

warrant invalidating the Agreement.

            Additionally, the fact that the Agreement provides that recovery of attorneys' fees

and the costs and expenses of arbitration are borne by the party incurrng them are also

not sufficient to warant failing to enforce the Agreement. However, SLP agreed and

stipulated that it would bear all of the costs of arbitration, except for $250.00, which is to

be borne by Plaintiff. (RR 9:13-16). Furter, as explained in the reply regarding the


Motion to Compel Arbitration, the filing fee for this dispute with the AA amounts to

$150.00, which is greater than the                  fee paid by Plaintiff to initiate the suit. (CR Tab F

0053). As these findings are contrary to permissible views of the evidence, denying


SLP's Motion to Compel Arbitration on these bases was an abuse of discretion.

                       3. The district court's remaining findings are not supported by the.
                                     evidentiary record and are therefore insuffcient bases for denying
                                     Arbitration
            The distrct court also found that SLP represented to Plaintiff that medical benefits

would not be provided by SLP's insurance carier, because the carrer required an

arbitration agreement be in place as a condition of coverage, and someone, not the

Plaintiff, backdated the Agreement to coincide with the reported injury. (Apx. A; CR

Tab J 0259-0260). However, these findings are                   not supported by the record.

                                                           25
481394.11
        First, Plaintiff admitted to signing the Agreement and backdating it herself at the

request of one of SLP's managers. (RR 28:21-25, 29:1-14; 30:5-8; CR Tab F 0076,

20:19; CR Tab F 0077, 21:23-24). Second, the distrct court asserted that an insurance

carrer required an arbitration agreement as a condition of coverage. (Apx. A; CR Tab J

0259). However, based on the incorrect view that plan benefits were being provided by

an insurance carrer, the tral court suggested that an unconscionable outcome might arise

should the SLP be insolvent and the carrer deny coverage. (CR Tab J 0259-0260). But,

SLP is self-insured and it had been the entity paying Plaintift s healthcare benefits for

two years since her injury, including paying for some medical benefits after her injury.

(RR 26:14-21; Def.'s exh. 23, p.37; CR Tab F 0107, 59:7-20). There is no evidence that

SLP is insolvent. Even if SLP became insolvent and fied bankptcy as the distrct court

alleged, a bankptcy proceeding would stay a state tral court proceeding and bears no

relevance to the Arbitration Agreement. Notwithstanding, as there is no insurance carrer

paying Plaintiffs benefits, the concern that SLP's requirement that claims be arbitrated


before receipt of benefits impacted the provision of coverage by a third part is


unwarranted. Thus, these findings are insufficient to defeat the proven existence of an

arbitration agreement between SLP and Plaintiff.

                               CONCLUSION AN PRAYER

       Respondent ignored fundamental principles associated with enforcing an

arbitration provision under the Federal Arbitration Act by failing to abate the Plaintiffs

suit and denying SLP's Motion to Compel Arbitration. First, through out Plaintifts

employment with SLP, Plaintiff had notice of SLP's arbitration policy. Second, a valid

                                            26
481394.11
agreement to arbitrate exists; and third, the claims raised by Plaintiff fall within the terms

of the Agreement. Additionally, Respondent misapplied the facts and law in failing to

enforce the valid Agreement. The conclusion that arbitration should be denied because

the Agreement was executed after Plaintiffs injury is not supported by relevant case law,

as Plaintiff was aware and had notice of SLP's mutually binding arbitration policy

through out her employment and accepted those terms as a condition to receiving health

care benefits under SLP's Plan. A fact undisputed in this case. Further, the terms of the

Agreement are not sufficiently substantively objectionable to warrant invalidating the

Agreement or to conclude that it should not be enforced.

            For these reasons, Senior Living Propertes, LLC respectfully prays that this Court

grant a
               wrt of mandamus directing the Honorable Gene Knize of the 40th Judicial

Distrct Court of Ellis County, Texas to withdraw and vacate his order denying Senior

Living Properties, L.L.C. d//a Claystone Healthcare Center's Motion to Stay

Proceedings, Motion to       Compel Arbitration, and Plea in Abatement entered on July 27,

2009, to enter an order granting the Motion to Stay Proceedings, Motion to Compel

Arbitration, and Plea in Abatement, and abate the Plaintiff s suit in favor of arbitration.

Senior Living Properties also prays for such other relief to which it may be justly entitled.




                                                27
481394.11
                                        Respectfully submitted,




                                        Lee L. ameron, Jr.
                                          State Bar No. 0367538
                                        Rebecca M. Alcantar
                                          State Bar No. 00783525
                                        Amber R. Pickett
                                          State Bar No. 24058046
                                        WILSON, ELSER, MOSKOWITZ,
                                        EDELMAN & DICKER LLP
                                        4800 Bank of America Plaza
                                        901 Main Street
                                        Dallas,   Texas 75202
                                        (214) 698-8000 (Telephone)
                                        (214) 698-1101 (Facsimile)

                                        ATTORNEYS FOR RELATOR
                                        SENIOR LIVING PROPERTIES, L.L.C. .
                                       . d//a CLAYSTONE HEAL THCAR CENTER


                                  . CERTIFICATION

         In accordance with Texas Rule of Appellate Procedure 52.3G), the undersigned
hereby certifies that he has reviewed the petition and concluded that every factual
statement in the petition is supported by competent evidence included in the appendix or
mandamus record.




                                             28
481394.1 1
                               CERTIFICATE OF SERVICE

       I hereby certify that a tre and correct copy of the foregoing document has been
served on the following parties, via certified mail, return receipt requested, in accordance
with the Texas Rules of Appellate Procedure on the 28th day of August 2009.

Via CM RR No. 71603901984858114441
The Honorable Gene Knize
40th Judicial Distrct Court
Ellis County Courthouse
101 West Main
Waxahachie, Texas 75165

Via CM RR No. 71603901984858114458
Roland G. Brown
Law Offices ofRoland G. Brown
no S. Ragsdale
Jacksonvile, Texas 75766




                                    ~     Attorney




                                            29
481394.11
                                    No.

                                             THE  IN


                                   TENTH COURT OF APPEALS
                                          WACO, TEXAS
                                          AT




              IN RE SENIOR LIVIG     PROPERTIES, L.L.C. d//a
                        CLA YSTONE HEAL THCAR CENTER
                    , ~, '. Relator

                           On Appeal from the 40th District Court
                                           Ells County, Texas
                                               Cause No. 76808


      APPENDIX IN SUPPORT OF PETITION FOR WRIT OF MANDAMUS


                                                         Lee L. Cameron, Jr.
                                                         State Bar No. 03675380
                                                         Rebecca M. Alcantar
                                                         State Bar No. 00783525
                                                         Amber R. Pickett
                                                         State   BarNo. 24058046
                                                         WILSON, ELSER, MOSKOWITZ,
                                                         EDELMAN & DICKER LLP
                                                         4800 Ban of America Plaza
                                                         901 Main Street
                                                         Dallas, Texas 75202
                                                         (214) 698-8000 (Telephone)
                                                         (214) 698-1101 (Facsimile)

                                                         ATTORNYS FOR RELATOR
                                                         SENIOR LIVIG PROPERTIES, L.L.C.
                                                         d//a CLAYSTONE HEAL THCAR
                                                         CENTER




480029.1
                                                         INDEX OF DOCUMENTS

A July 27,2009 Order on Defendant's Motion to Compel Arbitration, Plea in
            Abatement, and Motion to Stay Proceedings.

B. Senior Living Properties' Arbitration Agreement signed by Plaintiff                           Linsley
            Johnson.

c. Senior Living Properties' Employee Acknowledgment Form.

D. Excerpts from Senior Living                                 Properties' Employee Hand Book.

E. Excerpts from Senior Living Properties' Injury Procedure ManuaL.


F. Excerpts from Senior Living Properties' Employee Injury Benefit Plan Summary
            of Plan Description.

G. Enrollment Form signed by Plaintiff                                   Linsley Johnson.




 480029.1
A
                              ..                                                 'W

                                 1 I .!,. '. c.L _, .' ".' .
                         F ~ i.F~--i ~_. r; "".J ,: ;:ì1Á.U. SE NO 7680.8


 LINSLEY JOHNsoÑ009 JUL 27 PM~: S~                                     IN THE DISJRICT COURT OF
                                                        §
           Plaintiff,       , .:~.:.r'~ :¡L~: i~EED
                          ". OJ.; i F:/C;T CLEfU,       §
                         ,., I ò;; rn.: ;'.1",.' ì"'v
                         . .~i_.v ...""~ll¡l 1... 1\    §-
VS.                                                     §"
                                                        §                   ELLIS COUNTY, TEXAS
SENIOR LIVING PROPERTIES, L.L.C.                        §
d//a CLAYSTONE HEALTH CARE                              §
CENTER,                                                 §
                                                        §
           Defendant.                                   §                   40TH JUDICIAL DISTRICT

             ORDER ON DEFENDANT'S MOTION TO COMPEL ARBITRATION,
              PLEA IN ABATEMENT, AND MOTION TO STAY PROCEEDINGS

           On this day Defendant's Motion to Compel Arbitration, Plea in Abatement, and Motion

to Stay Proceedings came to be heard by the Court. The Cour having considered the Motions,

the Responses, and Replies, the arguments of counsel, the evidence, and the papers on fie, and


being otherwise fully apprÎsed, is of the opinion and finds that Defendant's Motion is Denied. It

is, therefore,

           ORDERED, ADJUDGED AND DECREED that Defendant's Motion to Compel
Arbitration, Plea in Abatement, and Motion to Stay Proceedings is DENIED. It is further,

           ORDERED, ADJUDGED AND DECREED that the Cour issued its. findings in this

matter on July 2,2009. The Court adopts and incorporates in this Order its July 2, 2009 findings,

which are attched hereto.

           SIGNED this.¿ day of July, 2008.



                                                             ~~2HONOB~IZE

ORDER ON DEFENDANT'S MOTION TO COMPEL ARBITRATION,
PLEA IN ABATEMENT. AND MOTION TO STA YPROCEEDINGS - Solo Page                    CERTIFIED A TRUE COpy.
474498.1                                                                                  MELANIE REED "
                                                                                  District Clerk, Ells CountY. texas
                                                                                ATTEST: 2\~\oCi pgs 3
                                                             CROOOI.
                                                                                      ~. Deputy
..
                                                     --.                                                         ..
                                         40TH JUDICIAL DISTRICT COURT
                                                               ELLIS COUNY, TEXAS
                                                                               GENE KNZE
           DONNATAY                                                      DISTRICT JUDGE                                     ELLIS COUNTY COtJRTHOUSE
       COURT COORDINATOR                                                                                                         iot WEST MAIN
          (972) 825-5060                                                                                                     WAXAHACHIE, TX 75165
        FAX (972) 825-5061
                                                                           July   2, 2009
     MICHELE McMANUS, CSR
     OFFICIAL COURT REPORTER
          (972) 825-5064




           Mr. Roland G. Brown
           Roland Brown Law Offices
           P.O. Drawer279
           Jacksnville, TX 75766

           Ms~Rebea M. Alcata
           Wilson, Elser, Moskowitz;
              Edelman & Dicker, LLP
           Ban of America Plaz
           90 i Main St, Ste 4800
           I)allas, 1J. 75202

           Re: LinsleyJohnson vs. Senior Living Properties, LLC d//a Clayton Heathcare Center
                  Cause #76808

           The caes cited by Defendat are distinguishable from the instat cae in a number of respects.

           In aU of the caes, the pricipal. distiguishing. featu is that in each of those cas the Plaintiff
           agled to be bound by ai aritrtion agment before a cause of action occur.
           In this cae, it is uncontrdicted that .upon employment the Plaiti spificaly refued to sign or
           agr to an arbitron agreement as a condition of employment and the Defendat neverteless
           employed Plaintiff despite the refusal. Only aftr the occurnce of                                  the injui upon which ths suit
           is based, did the Defendant demad Plaiti sign an arbitrtion agement as a condition of
           providig medca trtment for an injui which had aldy ocur.

           It is uncontrdicted tht the Defendat represented to Plaitiff tht uiess Plaintiff signed the
           arbitrtion agment medcal benefits would not be provided by the Defendat's insurce caer
          beus the Defendant's insurce compay requi tht an arbitrtion agrment be in place as a
          condition of coverage under               the policy. It is also uncontrcte that "someone", other                   th Plaiff
          backdated the arbitration agreement to coincide with the reort injui. It wa not develope in ths
          heag; however, if indee th is the ca. the insurce caer may refue coverae because an




                                                                                    ~-




                                                                                                                                     CR0002
                                         '-                                  ."


  arbitrtion agrment had not been signed or agreed to by Plaintiff prior to the injur which could
  be an unconscionable outcome for Plainti depending on the solvency of Defendant


  Additional distinguishing factors are the provisions in the cited caes for meanngful paricipation
  of   Plaintiff in the selection ofthe arbitrtor. In the instat case the Defendant selects the agency frm
  which arbitrators are provided or actully selects the list of arbitrators with the Plaintif being
  allowed a limited number of strikes. Also, the cited caes provided the Plaintiff compenstion for
  attorney fees, regardless of the aritrator1s decision, and in the instant cas, such fees ar only
 .-'8llòwer ifprovided by statute. The Cour is unwar of any sttute providing for attorney fees in ths
   ty of cas. The cited cas provided for limited expense to be borne by Plaintiff. The instat case
  provides that the apportonment of expenses are either to borne by the par incurng sae or are
  to be apportioned at the discretion of the aritrator.


  The Defendant's Motionto Compel Arbitrtion,        Plea in Abatemènt and Motion to Stay Proceedings
  are DENIED.




.~..
  Sinrely,


 ~::~.
 GK/dt




                                                                                                  CR (J003~'
B
                                                       ... . ll ... ./"'-l
      LAtfITRATION AGREEMENT
                                                      ~ ~¿ ~!t
                                                      PR~I ES,
      It is the policy of the Company to try to amicably resolve all employer/employee disputes. However, we
      acknowledge sometimes this is impossible and the need for third party intervention is required. In order to
     insure quick, fair, and impartial resolution of disputes, the Company enacts the following provisions for binding
     arbitration.

     BINDING ARBITRATION OF DISPUTES AND CLAIMS
     The Company and employee do hereby voluntarily promise, irrevocably agree, understand, agree to
     abide by and to accept as a condition of employment the provisions contained herein.. Further, the
    Company and employee understand that if any other provision of this manual is deemed to violate any local,
    state, or federal law or regulation, this provision stands by itself and is fully enforceable to the fullest extent
    provided by law. This provision does not iii any way contradict, supplement or change the Company's
   .adherence to the            employment at wiU doctrine previously set fol1h in this manuaL. This Agreement shall be
   governed and controlled by the Federal Aritratinn Út to aie fullest extent allowed by law, and supplemented
   by state law when necessary.


   Tfie Company and employee (also known as the "Parties") hereby agree to voluntarily promise and
   irrevocably agree (after completing the facilties Problem Resolution Procedure) to arbitrate any dispute
  orc.laim ar-ising. from or rehited to (i) employment, (ii) performance .under or the

                                                                                    interpretation ofthis
. . Ägreement, or (ii) any account, credif or ownership in.terest employee asserts or mai~talns with the
  C iany. The Paries further agree that arbitration pursuant to this Agreement shall be the final, sole, and
 ' ei ,l,i ve ,.medy ronesol viog any such claims 0' dispule and that a jUdgment on, the award shall be enter,
  upon- application within. one year of the aw:ard, by a party, to the county court having appropriate jurisdiction
 . W'hereüi the Company is located... .

   CLAMS COVERED BY THIS AGREEMENT.



  allowing: . .
" :Iaims and dispntes coveie by tlû Agreement shaii inclnde, hut not be limited to claims hy emloye agat
  he Company, its employees, agents, contractors~ assignees,. administrators, and receivers (whether in their
  ndividuai. or representative capacity), .and all claims. that .company may

                                                                                         have against employee, including Ute

           Any alleged violation. of federal, state or)o~~.U~.ws,o,rdinances,regulationsor.statutes prohibitingãdverse
       or disparatè-.£tëätfueïit;-lioStile -working environment, or other statutorily protected right, because of a
       protected. status, such as and without limitation to, race, sex, national origin, pregnancy, age, disability,
       eligibility for or participation in benefit plans, religion or other protected category, retal~ation or
       harassment
      Any alleged or actual agreement, promise or covenant, whether oral, written or implied, between employee
      and facility.
      Any federaL, state or local laws, ordinances, regulations, or

      of    unpaid wages, minimum wage or overtime pay, or prohibiting retaliation for making a wage claim,
                                                                 statutes providing for
                                                                                         the collection or recovery
      Any faciliy insurance policy or compensation or benefit plan, unless the dispute or claim is over a matter
     administered by an entity other than the facility.


                                                                                              DEFENDANTS
 .. Hin P:i.¡
 OM 2A,..Ii..~ooi.                                                                                ~HI8IT

                                                                                            ~
                                                           ~\¿
                                                       ~ ~ ~.., ~
                                                       .;t
                                                       PR~'ES,~W
       ~. Any alleged violation of public policy or claim, action, cause of action, whether at law or in equity, based
            on or related to an alleged violation of public policy.
       6. Any other claim, direct or derivative for personal, emotional, physical or economic injury or loss.

      DISPUTES NOT COVERED
      The only disputes between employee and Facility not covered by this agreement to arbitrate are:
      1. Any claim by employee for wor/wr j. compensation benefits, except for claims ./òr retaliatmy discharge.
           wrongful discharge, retaliation, or other claim jòr personal irrjury, which are subject to arbitration iind
               not specifcally covered I~F the Worker:v Compensation Act of this State. ****R.evise Jar SLP- TX?
      2. Any claim              by employee for benefits under a fàcility sponsored plan that provides its own a~bitration
               procedure.
     3. . Any claim by facility, its
                                           agents, employees, contractors, administrators, trustees, assignees or receivers,
              for injunctive relief for employee's violation of contract, common law or statute relating to trade seCrets.

    ARBITRATioN LIMITATIONS AND PROCEDURES
    This Agreement establishes limitations on the time for claims to be made, procedures to be followed and
    damages. A. written request for arbitration hereunder shall be served on the other party within one hundred
   eighty (180) days from the date a final resolution is made under the facility's PROBLEM RESOLUTION
   procedure contained in section 7 I 0 of this employee manuaL. The written request must be made iü person ~t the
   Business Office, by certified mail to the Vice Presideilt. oIOperations, or the last known address of the
   erP~'')yee. This limitation period is without regard to whether any agency with apparent .jurisdiction has
  00 jeted any investigation or processing ora statutorily mandated charge or complaint. This agreement ofa
  oiÌè:liundred eighty (180) day time limit

                                                               that a timely request for arbitration shall be
                                                                    "is also an agreement
  pteeèd without the nee for comptetiou or teruaon of an agecy's investigaton or procsing Th
  faiJityánd employee agree accrued claims arising frOm acts thát occurred more than one year before the
  JegiinR of the facilÎty's problem resolution procedure shall he waived for all purposes. .

.. Ji amitroÌi will De conducted with the then currnt rules of either the ludicial Arlitrtion and Mediation
  :.Ce, IIc. (l.A.M.S.) or the Ameica Mitraton Association (A.AA.), uni"'s those rules specificaly
i onfict with provisions of this agreement. The pary against whom a claim is made ("Defending Pary") shall
  :lect the rules to be used from the choices previously listed. The Arbitrator shall be selected by each pary
  :temately strking from a list offive (5) employment law arbitràtors supplied by the ArJ?rti:atjQa.agency.chosen_
  f the Defeiiding Pary until only one (1-) remains. Tñë Employee shaH -6àve the first right to

  ospective aritrator and the Facility the last. The ArbitratOr must be an attorney licensed to practice law in the
                                                                                                            strike a
  risdiction where the facility is located. The Arbitration will beheld within

. ::ilty"Unless otherwise agreed to by the parties.                                                          seventy-five (75) miles of the


  I fee and expenses of
                                       the arbitration will be borne by the parties equally, including the fee for the Arbitrator.
  iy. pary requesting a transcript of the proceeding shall be responsible for the costs of the transcript. Each
  1y wil pay for               the fees and expenses of its own attorneys, expert, witnesses, and preparation and
  sentation of evidence. Each pary may prepare pre-hearing and post-hearing briefs. Each party shall serve
  ' pre-hearng or post-hearng briefs on the other pary and each pary shall be entitled to ten (i 0) days to draft
. "'ult orief. Before the heang, eah party shall have the right to take one depsition of the other par as
  I . Jie deposition of any exper witnesses designted by the other ¡'ary. The paries may reuest


, .H"'Pacbgc
  ië' - 2:00U002"'.                           .~---''----''-,-----=...--~..-.-...----_.._....-....--= ~....._ _.._____-._..._ .___.._____.._____._.._...___


                                                                                                                                                (.
                                                  ~¿.
                                      ~... R t rES, L L~
                                      ..........~..........áJihiÑ
                                      P R 6 PË
     pennission from the Arbitrator to take the deposition of not more than two other persons not previously listed.
     The parties may serve on each other one set of Interrogatories, not more than five (5) in number including
     subpart, and not more than three (3) requests for production of documents, including subparts. The parties
    shall be entitled to all damages provided for by state, federal, or local statute, ordinance, or regulation, with the
    exception of punitive and/or exemplary damages, including attpmey's fees where those fees are provided by
    statute.

    Any action to enforce or Vacate the Arbitrator's award shall be govemed by the Federal Arbitration Act to the
    fullest extent possible, if applicable, and state law when necessary.

    MISCELLANEOUS PROVISIONS_
   The tenn "employee" means the person identified above as "employee" and every other person who claims by
   or through, such as and .without limitation, heirs, assigns, spouses, children, insurers, trustees, receivers,
   administrators, executors and personal representatives.

   If either party pursues acovered claim against the. other by any action, method, or proceeding other.than the
   arbitration provided for' herein, the responding party shall be entitled to dismissal or injunctive relief regarding
  such action, and recovery of     all costs, losses,. attorneys fees, and other losses relating to sti~h action.

  Ti.:~ is the complete agreement of the paries on the subject of employment and arbitration of disputes and
  (;. ¡is. These provisions shall surive employee's separation from employment. If any provision of tlús
  Agreement is ruled invalid, the rest and remainder shall survive and be enförced~ The tenus of this Agreement
  may not be altered, amended, or modified except by the. Chief Operaiùig Offcêr of Senior Living Properties.
 Sernor Living Propertes LtC reserves thé nght to alter, amençi, eliminate, or modify this agreement prior tu the
 initiatio of         any proceeding controlled or faIrng uncier the terms.ofthis Agreement.'. . .




.wimM.~
D.h /



, ~ HÕR I'xk;ie
ii /)e - i.iui-ioo!
c
                  EMPLOYEE.HANDBOOK ACKNOvVLEDGÑ1FNT FOR~J1
    ihe employee tiandbook describes important iniorri.ation about the facility and! understand that I ,:+ould
    con~ult the !3usiñess Oiiice regarding any questions not answered in this handbook. I have entered into ~y
    employrhentreiationship with the facility voluntarily an~d acknowledge that there is no speciied lëngth of
    employment. Accordingly, either the facility or l can terminate the relationsh¡p at" wil. with or '.v:a!Gut ,;äuse.
    at any tim.e. so 100g as there is no violation.of applicableJederal or state law.

   . Since .the information, policies, and benefits (jes¿li'bed herein are. necessarily subject to change, I
    acknowledge that revisions to the handbook may occur. except to theiacilitýs policy of emplovmenl..at.will
                                                                                      understand that revised
    All such chÇ3nges will be communicated through regu!ar, internal communïcation channels suc"h. as, bilt not
    rimited to, in-service meetings, memos or other. inritten. communications and I



                                             . . . ~
    information may supersede, modify, or eliminate existì~§.policies. Only the Chief Operating Officer" of Senior
    liing Properties LL.C has the ability to adopt any reyisi~iis to the policies in~ this handböok. .
                                                                                                                       all c.ö~,.ts and
    I hereby understand and agree that I will be responsiije for and will reimburse the facility tor
                                                           any and all debts.;ánd/or the return of all propert due thefacilÜv ::.ü the
    ~ees associated with the collection of

    time o( my ter,mination, whether voluntary or involúntary. including. but not.. limited to costs, attorrieý's fees
    and expenses to the fullest extent allowed by law. . _. .
   Under.certain situations, I acknowledge that I may. b.e asked to submit to .a drug/alcohol.screening to
    åeterrnin~ the us~ of dr.ugs and. alc.oi:0l.. Refusat to submit:. to dru~~lcohol. testing ~il.1 result in disdp¡¡nary
   .action; up.to and including termination of employment. Testing. positive for ,lIega.1 or IlIlCltdrugs, cr being "in.
 ,
    .; ùnmediate terminatìon. . . result
. posse$sion of drug paraphernalia while at the faciliy, with (Jut a properly written prescription, wil.. in .
    l hereby understand the resufts 9T. iiy.. drug. ånd" a!~ohol.tests are confidential medical records. V'Vithout
    Yliving any privileges that may be assoèlated with these records, l.herebY-.R-cknowiedge, aütllorii:e. and
    alfow the faGilty to copy. provide, and distributethe.se records,-along with any.facility investigative recl".làstci
  . all state.. and féd~ral agencies, divisions, entities, departments. and/or their niipresentatives, at the s~l~
   discretion of the facility. .

  . I acknowledge that this handbook is not a contract .of empioyment.

                 ." ... . . . .
   i understànd the Arbitration Agreement contai.ned h~réin is a mandatory term. and condition of emp1oyrrient.

   .1 r.ave receh/ed the handbòok and by signing below I. ç.lso understan.d it is my responsibility ù) read and
. cooly with 1I1e policies contained in this handbook and any subsequent revisions.




._&J.~~r~~Q~~_ o:J¡i l05
          -.._---._.._--.      . -----_. _._----
                                                                                          -_.. . "%"_.-




   Supervi~o r Signature




                       -------.- --- -- ------ --_.._------_._--._-                                                                       \~:-
                                                                                                                                             .",
D
      Senior Living Properties

       Employee
      .Handbook




. DEFENDANT'S
i' . ..s
¡P EXHIBIT
                          ~
                          EXHIBIT NO..L


  ~
                           SLP/JOHNSON oi7~
                                       TABLE OF CONTENTS
           NO.            POLICY TITLE

                          Employee Welcome Message

                          INTRODUCTION
        010               Introductory Statement
        020               Resident and Family Relations

                         EMPLOYMENT
        101              Nature of Employment
         102             Employee Relations
         103             Equal Employment Opportunity
        104              Personal Relationships in the Worklace
        105              Employee Health Status
        106              Immigration Law Compliance
        107              Conßicts of Interest
        108.             Outside Employment
        109              Non-Disclosure
        110              Disability AccommOdation
        111              Job Posting

                         EMPLOYMENT STATUS AND RECORDS
       201               Employment Categones
       202              Access to Peronnel Files .
       203              Employment Reference Checks.
       204              Personnel.Data Changes
      ..205             Introductory Penod. .                                .. ~~ :

       206              Employment Applications
       207              Penormance Evaluations

                        .EMPLOYEE BEÑEFIT PROGRAMS
      301               Employee Benefits
      302               Benefis Continuation. (COBRA)
      303              .Senionty
                                                                      .,
                        TIMEKEEPING/PAYROLL
      401               Timekeeping
     402                Comp.TIme
     403               PayDays
     404               Administrative Pay Corrections
     405               Pay Deuctions
     406               Pay Advances .
     407               Employment Termination
     408               Resignation

                       WORK CONDITONS AND HOURS
     501               Safety
     502               Work Schedules
     503               Use of Phone and Mail Systems
     504               Use of Cellular Phones, Pagers and Other Porable Communiction Devices
     505               Smoking and Tobacco Use
     506               Rest and Meal Penods
!l   507               Overtime

     TX-revised 5/06
                                                                                       SLP/JOHNSON 0176
.',,- -. -:-~~-




                  508          Use of Equipment and Vehicles
                  509          Emergency Weather Conditions
                  510          Visitors in the Workplace
                  511          Business Travel Expenses
                  512          Computer and E-mail Usage
                  513          Workplace Monitoring
                  514          Security Inspections
                  515         Workplace Violence Prevention
                  516          Suggestion Program

                               LEAVES OF ABSENCE
                  601          Medical Leave
                  602         Family Leave
                  603         Personal Leave
                  604         Military Leave
                  605         Jury Duty Leave
                  606         Bereavement Leave
                  607         Pregnancy-Related. Àbsences

                              EMPLOYEE CONDUCT AND DISCIPLINARY ACTION
                  701         Disciplinary Action .
                  702         Attendance and Tardiness
                  703         No Call1No Show
                  704         Drug and A1èohol Use
                  705         Drug and Alcohol Testing
                  706         Sexual Harassment and   Other Unlawful Discrimination
                  107         Personal Appearance and Uniforms
                  708         Return of Property
                  709.        Solicitation and Distribution of Literature.
                  710         Problem Resolution
                  711         Arbitration Agreement

                              Employee Handbook Acknowedgment Form




            TX-reVIsed 5106
                                                                                      SLP/JOHNSON 0177
   711                     ARBITRATION AGREEMENT

   It is the policy of the company to try to amicably resolve all employer/employee disputes. However, we
   acknowledge sometimes this is impossible and the need for third party intervention is required. In order to
   insure quick, fair, and impartial resolution of disputes, the Company enacts the following provisions for binding
   arbitration.

   BINDING ARBITRATION OF DISPUTES AND CLAIMS
  The Company and employee do hereby voluntarily promise, irrevocably agree, understand, agree to
  abide by and to accept as a condition of employment the provisions contained herein. Further, the
  Company and employee understand that if any other provision of this manual is deemed to violate any local,
  state, or federal law or regulation, this provision stands by itself and is fully enforceable to the fullest extent
  provided by law. This provision does not in any way contradict, supplement or change the Companyls
  adherence to the employment at wil doctrine previously set forth in this manuaL. This Agreement shall be
  governed and controlled by the Federal ArbitrationAct to the fullest extent allowed by law, and supplemented
  by state law when necessary.

  The Company and employee (also known as the "Parties") hereby agree to voluntarily pråmise and
 . i....evocably agree (afte.. completing the facilties Problem Resolution Procedure) to arbitrate any
  dispute or claim arising from or related to (i) employment, (ii) performancè under or the interpretation
  of this Agreement, or (ii) any account, credit or ownership interest employee asserts or maintains
  with the Company. The Parties further
                                           agree that arbitration pursuant to this Agreement shall be the final. .
 .sole, and exclusive remedy for resolving any such claims or disputes and that a judgment on the award shall
  be entered, upon application within one year of the award, by
                                                                                          a party, to the county court having appropriate
 jurisdiction wherein the Company is locted. .

 CLAIMS COVERED BY THIS AGREEMENT
 Clai~s and disputes covered by this Agreement shall include, but not be limited to claims by
                                                                                            employee
 against the Company, its employees, agents, contractors, assignees, administrators, and receivers (whether
. in.their individual or representative capacity), and all claims that Company may have
                                                                                                                 against employee,
 .including the following: .
       1. Any alleged violation of federal, state or local laws, ordinances., regulations or st;:tutes prohibiting
             adverse or disparate treatment, hostile working environment,
                                                                                or other statutorily protected right,
             beùse of a protected status, such as and without limitation to, race, sex; national
                                                                                                         origin,
             pregnancy, age, disabilty, eligibility of or participation in benefi plans, religion or other protected
            category, retaliation or .harassment. - -
       2. Any alleged or actual agreement, promise or covenant, whether oral, written or implied, between
            employee and facilty.
      3. Any federal, state or local laws, ordinances, regulations, or statutes providing for the collection or
           . recovery of unpaid wages, minimum wage or overtime pay; or prohibiting retaliation for making a
          wage  claim. .
      4. Any facilty insurance policy or compensation or benefi plan, unless the dispute or claims is over a
          matter administered by an entity other than the facility.
      5. Any alleged violation of public policy or claim, action, cause of action. whether at law or in equity,
          based on or related to an alleged violation of public policy.
      6. Any other claim, direct or derivative for personal. emotional, physical or economic injury or loss.
      7. Whe~her is Arbitration Agreement is just, valid, or binding upon the parties.

DISPUTES NOT COVERED
The only disputes between employee and Facility not covered by this agreement to arbitrate are:
           1. Any claim by employee for worker's compensation benefis, except for claims for retaliatory
               discharge, wrongful discharge, retaliation, or other claims for personal injury, which are subject to
               arbitration and not specifically covered ~y the Workers' Compensation Act of this State.
           2. Any claim by employee for benefits under a facility sponsored plan that provided its own
               arbitration procedure.

TX-revised 5/06
                                                                                                                           SLP/JÖHNSON 0212
                3. Any claim by facility, its agents, employees, contractors, administrators, trustees, assignees or
                      receivers, for injunctive relief for employee's violation of contract, common law    or statute relating
                      to trade secrets.

     ARBITRATION LIMITATIONS AND PROCEDURES
     This Agreement establishes limitations on the time for claims to be made, procedures to be followed and
     damages. A written request for arbitration hereunder shall be served on the other party within one hundred
     eighty (180) days from the date a final      resolution is made under the facility's PROBLEM RESOLUTION
     procedure contained in section 710 of this employee manuaL. The written request must be made in person at
     the Business Offce, by certified mail to the Vice President of Operations, or the last known address of the
     employee. This limitation period is without regard to whether any agency with apparent junsdictions has
     completed any investigation or processing of a statutorily mandated charge or complaint. This agreement of
     a one hundred eighty (180) day time limit is      also an agreement that a timely request for arbitration shall be
     processed without the need for completion or termination of an agency's investigation or processing. The
     facility and employee agree accrued claims arising from acts that occurred more than one year before the
     beginning of the facility's problem resolution procedure shall be waived for all purpses.

     The arbitration will be conducted with the then current rules of either the Judicial Arbitration.and Medication
     Service. Inc. (J.A.M.S.) or the American Arbitration Association (A.A.A), unless those rules specifically
     conftct with provisions of this agreement. The part against whom a claim is made ("Defending Party") shall
     select the rules to be used from the choices previously listed. The Arbitrator shall be selected by each party
     alternately striking from a list of five (5) employment law arbitrators supplied by the          Arbitration agency chosen
     by the Defending Party until only one (1) remains. The Defending Part may select as the Arbitration Agency
     either the AAA, J.A.M.S., or arbitrator/mediators supplied by the state Or              federal Clerk of the D.istnct Court
     as part of the Court's alternative dispute resolution program. In areas where nO alternative dispute resolution
     program exists, then the Defending Party may select from a panel of aUorneyspracticing iii the area of
     employment law. The Employee shall have the first right to strike a prospective arbitrator and the Facility the
     last. The Arbitrator must be an attorney licensed to practice law in the jurisdiCtion where the facility i~ .
~.

     the parties. ..
     located. The Arbitration wil be held within seventy-five (75) miles of the facilitY unless otherWise agrCe to by


     All fees and expenses of the arbitration will be paid in accordance with the order of for the Arbitrator. The
     Arbitrator shall have the right to apportion all fees and expenses in any manner.the Aritrator deems just-and
     equitable to the extent the order does not conflct with the remaining provisions of this agreement. Any party
     requesting a transcnpt of the proceeding shall be responsible for the costs of the transcnpt. Each party wil
     pay for the fees and expenses. of its own attorneys, experts, witnesses., and preparatiOn and presentation of .
     evidence: Each party may prepare pre-heanng and post-hearing bnefs. Each party shalL.                serve any pre- .
     hearing or post-heanng briefs on the other party and each party shall be entitled to ten (10) days to draft a
     rebuttal bnef. Before the hearing, each part shall have the nght to take one deposition of the other part as
     well as the deposition of any expert witnesses designated by the other part. The parties may request
     permission from the Arbitrator to take the deposition of not more than two other persons .not previously listed.
     The parties may serve on each other one set of Interrogatories. not more than five (5) in number including
     subparts, and not more than three (3) requests for production of documents, including subparts. The parties
     shall be entitled to all damages provided for by state, federal,or local statute, ordinance, or regulation, with
     the exception of punitive and/or exemplary damages, including attorney's fees where those fees are provided
     by statute.


     Any  action to enforce or vacate the Arbitrator's award shall be governed by the Federal Arbitration Act to the
     fullest extent possible, if applicable, and state law when necessary.

     MISCELLANEOUS PROVISIONS
     The term "employee" means the person identified above as "employee" and every other person who claims by
     or through, such as and without limitation, heirs, assigns, spouses, children; insurers, trustees, receivers,
     administrators, executors and person representatives.



     TX-revised 5/06                                                                                            SLP/JOHNSON 0213
      If either party pursues a covered claim against the other by any action, method, or proceeding other than the
      arbitration provided for herein, the responding party shall be entitled to dismissal or injunctive relief regarding
      such action, and recovery of all costs, losses, attorney's fees, and other losses relating to such action.

      This is the complete agreement of the parties on the subject of employment and arbitration of disputes and
      claims. These provisions shall survive employee's separation from employment. The Arbitrator shall have
      the nght to invalidate or stnke any provision of this agreement that the Arbitrator deems in violation of law as
      decided by the U,S. Court of Appeals for the Distnct where the facility is located. If any provision of this
      Agreement is ruled invalid, the rest and remainder shall survive and be enforced. The terms of this
      Agreement may not be altered, amended, or modified except by the Chief Operating Offcer of Senior Living
      Properties. Senior Living Properties LLC reserves the nght to alter, amend, eliminate, or modify this
      agreement pnor to the initiation of any proceeding controlled or fallng under the terms of this Agreement




      EMPLOYEE'S SIGNATURE                                                 DATE


      Supervisor Signature




..




     TX-revised 5106                                                                                 SLP/JOHNSON 0214
E
 ,
.o.




       Senior Living Properties, L.L.C.




      Employee Injury Procedures




                                                          't .




            Standard Financial General Adjustment, Ioc.
                         P.O. Box 740307
                     Dallas, Texas 75374-0307

                          Darla Mendoza
                   Tel: 1-800-568-0393, Ext. 229
                         Fax: 972/437-1477




                                                          DEFENDANT'S

                                                                 nlBIT
                                                          -5             P13
                                                     ~... ~¿
                                                      :....~. ...... .. .....iv~.~............
                                                     p. R -0- PER TI E $ , . L L C.......
      5. Any alleged violation of public policy or claim, action, cause of action, whether at law or in equity, based
              on or related to an alleged violation of public policy.
      6. Any other claim, direct or derivative for personal, emotional, physical or economic injury or loss.

      DISPUTES NOT COVERED
     The only disputes between employee and Facility not covered by tils agreement to arbitrate are:
     1. Any claim by emploJiee Jor worker's compensation benefits. except for claims for retaliatory discharge,
          wrongful discharge, retaliation, or other clazm for personal injmy. which are subject to arbiiration and
              not specìjìcally covered by the Worker's Compensation Act of this Siate. * * *- *Revise for SLP- TX?
      2. Aiiy claim by               employee for benefits under a facility sponsored plan that provides its own a~bitration
          procedure. _
      3. Any claim by facility, its agents, employees, contractors, administrators, trustees, assignees or receivers,
          for injunctive relief for employee's violation of contract, common law or statute relating to trade secrets.

     ARITRATIONLIMITATIONS AND PROCEDURES
     This Agreement establishes limitations on the time for claims to be made, procedures tö be followed and
 .   damages. A written request for arbitration hereunder shall be served on the other party within one hundred
     eighty
                (180) days from the date a final resolution is made under the facility's PROBLEM                       RESOLUTION
     procedure cöntained in section 710 of                      this employee manuaL. The wrtten request must be made in person ~t the
      1usiness Office, by certified mail to the Vice President .of Operations, or the last known address of the
. , employee. This limitation period is without regard to whether any agency with apparent jurisdiction has
 ' completed any investigation or processing of a statutorily mandated charge or complaint. Tls agreement of a
   one hundred eighty (180) day time limt is also an agreeinent that a timely request for arbitration shall be
   processed without the need for completion or termination of an .agency's investigation or processing. The
   facility and employee agree accrued claims arising from acts that occurred more than one year before the _
     beginning of the facility's problem resolution procedure shall be waived for all purposes.

  The arbitration will.be conducted with the then current rules of either the Judicial Arbitration and Mediation
  Service, Inc. (1.A.M.S.) or the American Arbitration Association (A.A.A.), unless those rules specifically
  conflict with provisions of this agreement. The pary against whom a claim is made C'Defending Pary") shall
 .select the rules to be used from the chöices previously listed. The Arbitrator shall be selected by each pary
  alternately strikiig from a list of five (5) employment law arbitr~tors supplied by the Arbitration agency chosen
 -by the Defending Paiiy until only one (1) remains. The Employee shall have the first right to strike a
     prospective arbitrator and the Facility the last. The Arbitrator must be an attorney licensen to practice law in the
 junsdiction where the facility is located. The Arbitration will be held within seventy-five (75) miles of the
  facility unless otherwise agreed to by the parties.

 All fees and expenses of                    the arbitration will be borne by the parties equally, including the fee for the Arbitrtor.
 Iiy party requesting a transcript of the proceeding shall be responsible for the costs of the transcript. Each
 party will pay for the fees and expenses of its own attorneys, experts, witnesses, and preparation and
 presentation of evidence. Each party may prepare pre-hearing and post-hearing briefs. Each party shall serve
  ny pre-hearing or post-hearing briefs on the other pary and each party shall be entitled to ten (10) days to draft
 d rebuttal brief. Before the heaiing, each party shall have the nght to take one deposition of the other party as
 well as the deposition of any expert witnesses designated by the other party. The parties may request


SLP Nc..I1;.~ P;ik:ie
Build n,.e - i'JUll002

                                                                                                                                  P31
                                              5~~¿ivin/Ñ
                                               PR"opERTlES, LLytt
permission from the Arbitrator to take the deposition of not more than two other persons not previously listed.
The paities may serve on each other one set of Interrogatories, not more than five (5) in number including
subpart, and not more than three (3) requests for production of documents, including subpar. The paries
shall be entitled to all damages provided for by state, federal, or local statute, ordinance, or regulation, with the
 exception of punitive and/or exemplary damages, including attprney's fees where those fees are provided by
statute.

 Any action to enforce or vacate the Arbitrator's award shall be governed by the Federal Arbitration Act to the
 fullest extent possible, if applicable, and state law wilen necessary.

 MISCELLANEOUS PROVISIONS
The tenn "employee" means the person identified above as "employee" and every other person who claims
                                                                                                                  by
 or through, such as and .without limitation, heirs, assigns, spouses, children, insurers, trustees, receivers,
 administrators, executors and               personal representatives.

 If either party pursues a covered claim against the other by any action, method, or proceeding other.than the
 arbitr~tion provided for- herein, the responding part shall be entltled to dismissal or injunctive relief regarding
 such action, and recovery of all costs, losses, attorneys fees, and other losses relating to such action.

Ths is the complete agreement of the parties on the subject of employment and arbitration of disputes and
claims. These provisions shall survive employee's separation from employment. If any provision of this
 Agreement is ruled invalid, tlle rest and remainder shall survive and be enforced. The terms (jf this Agreement
 may not be altered,   amended, or modified except by the Chief Operating Offcer oj Senior Living Properties.
 Senior Living Properties LLC reserves the right to alter, amend, eliminate, or modify this agreement pnor to the
- initiation of any proceeding controlled or falling under the terms'oftlùs Agreement.



Employee Signature


 Witness Signature


Date




SLP Nc:"" Hire PJcbge
Oiiild Di,ie - ?4JUL2001
                                                                                                               P32
F
         SENIOR LIVING PROPERTIES, L.L.C.
                 Employee Injury Benefit Plan
                  Siimmary Plan Description


                     Revised Effective January 21,2003




DEFENDANT'S
     EXHIBIT .
     z.j;
~
.-
                                                         P33
      Table of Contents
      1. Introduction..........................................................................................................................1

                 A. Your Senior Living Properties, L.L.c. Occupational Injury Benefits .....................1
                 B. How Do You Get Information About Your Benefits?............................................l
                 C. Amendment or Termination of Plan ........................................................................2
                 D. The Cost of and Funding of the Plan .......................................................................2
                 E. Plan year..................................................................................................................2

      n. Eligibility and Enrollment....................................................................................................2

                 A. Effect of Benefit Election Under a Prior Plan ............__...........................................2
                 B. Eligibility to Participate in the Plan .........................................................................3
                 C. Loss of Eligibility Status..................................................................................~.......3
                 D. Mutual Arbitration of All Non-ERISA Disputes.....................................................3
                 E: Other Important Information...... ....... .................................................. ......................8

       in~ How a Participant Obtains Plan Benefits.............................................................................9
                  A. Reporting An Occupational Accident or Disease ............................................. .......9

       IV. Covered and Non-Covered Occupational Injuiies .............................................................10
                  A. Covered Occupational Injuries ................. ................. ............................................10
                  B. Injuries Not Covered by the Plan........................................................................:..11

       V. Explanation of                 Plan Benefits Available to Participants.....................................................13

                  A.         Medical Benefits ..................................................................................................;..13
                             1. Your Medical Benefits - In General..................................................................................13
                             2. What Is Covered Under the Plan? .....................................................................................13
                             3. What Is Excluded?.............................................................................................................14
                             4. Procedures for Filing An Emergency Medical Benefit Claim .......................................... 15
                             5. Procedures For Filing a Pre-Service Medical Benefit Claim............................................ 16
                             6. Procedures For Filing a Post-Services Medical Benefit Claim......................................... 17
                             7. What Happens When You Fail To Follow the Plan's Claim Filing Procures? .............18
                  B.         Wage Replacement Disability Benefit..................................................................19
                             _i. YClurDisability Benefit - In General ....................................................................,...........19
                             2. What Is A ~.Òisa¡jility;; Covered        Under-the Pfan? ....................................:.....:~..................19-
                             3. How Your Wage Replacement Disability Benefit Is Computed....................................... 20
                             4. Procedures For Filing A Disability Benefit Claim............................................................20
                             5. When Your Wage Replacement Disability Benefit Ends .................................................21
~ .
                             6. Disability Benefits Reduction ...........................................................................................22
                   c.         Death Benefit .........................................................................................................22
                              1. The Death Benefit - In General .........................................................:..............................22
                              2. Procedures For Filing a Death Benefit.........................................:....................................23
                   D.         Dismemberment Benefit ........................................................................................24
                              1. Schedule of Dismemberment Benefits ._............................................................................24
                              2. Limitations and Conditions ................................._.............................................................24
                              3. Procedures For Filing A Dismemberment BenefitClaim................................:................ 2S




 \                                                                                                                                                                 P34
 ¡
 i
Vi. Conditions on Receiving Any Benefits or Continuing Benefits Under the Plan...............26

         A. Continuing Benefits - In General.................................................... ......................26
         B. Denial of Liability and Offset to Any Alleged Liability of the Company.............26
         C. Discharge for Benefit Paid.....................................................................................26
         D. Maximum Benefits.................................................................................................27
         E. Coordination With and Offset For Other Benefits Received By Participant........27
         F. Acceleration of Benefits and Final Comproii.se and Settlement..........................27
         G. No Alienation of Plan Benefits ..............................................................................28
         H. Recovery of Benefits..............................................................................................28
         i. Reduction for Prior Injuries .................................................. ............ ....... ..............29
         J. No COBRA Continuing Coverage.........................................................................29

VII. Denial of Benefits or Claim for Benefits ................................. ........................ ..................29

         A. The Role of the Plan's Commttee.........................................................................29
         B. Appeal Procedures For Commttee's Denial Of Emergency Medical Benefit
                    Claim......................................................................................................................32
         C. Appeal Procedures For Commttee's Denial of                                     Pre-Service and           Post-Service
                    Medical Benefit Claims .........................................................................................34
         D. Appeal Procedures For Commttee's Denial of Disability Claim .........................35
         E. Appeal Procedures For Commttee's Denial of Death and Dismemberment
                    Benefit Claim...........................................................................................................36

VII. General Provisions of the Plan...........................................................................................37

                    A. . Plan Does Not Create An Employment Contraet Or Alter Your "At Wil"
                               Employment Status .....................................................................................................37
                    B. Confidentiality and Privacy ..............................................................,.......................37
                    C. Overpaid Benefits ..........................,.........................~....................................................38
                    D. Contact Information......................................................................................................39

IX. Your Rights Under the Law ..............................;.................................................................39


x. Key Word Reference..........................................................................................................42




                                                                        1l



                                                                                                                                                           P35
sustained from an Occurrence on or after 12:01 A.M. on the Effective Date_ A priorversion of
this Plan may apply for those Bodily Injuries sustained by Paricipants before the Effective Date.

B. Eligibilty to Participate in the Plan
           An Employee hied after the Effective Date shall be automatically covered under the
Plan at i 2:0 i A.M. on his or her first day of active duty for the Employer.


c. Loss of Eligibilty Status

        Certain events can cause loss of your eligibility to partcipate in the Plan. An Employee
ceases to be a Paricipant in the Plan as of the earlier of (i) the date and time on which the Plan
terminates, or (ii) the date and time on which a Partcipant's stanis as an Employee termnates for
any reason, including without liiitation, termination of. employment, leave of absence,
suspension, layoff, etc.

D. Mutual Arbitration of All Non-ERISA Disputes

           Company Policy: The Company has adopted a company policy which requires that all
 legal disputes, differences or' claims (other than ERISA issues, crirnal proceedings and claims
 for unemployment benefits) that may arise between the Paricipant and the Company during or
 following the Paricipant's employment with the Company are subject to final binding
 arbitration.

          Mutual Binding Arbitration Requirement: All non-ERISA legal disputes, differences or
.. claims (as defined below) between the Company and you are subject to final binding arbitration.
  The result of the binding arbitration isthe sole and exclusive remedy for.esolving suchclaimi¡ or
  disputes and is mutually binding on the Company and you.

            Claims Subject to Arbitration:             Claims and disputes covered by    ths requirement include:


 (a) all non- ERISA claims and disputes that you may now have or may in the funire have
                                                  subsidiaries and affiiates and/or any of their


 and .
 against the Company and/or against its successors,

 officers, directors, shareholders, partners, owners, employees and agents, or against any
 Company employee benefit                    plan (including the Plan) or the plan's adiinistrators or fiducip.ries,


 (b) all non-ERISA claims and disputes that the Company and/or its successors, subsidiaries
 and affiiates and/or any of their officers, directors, shareholders, partners; owners and any
 Company employee benefit plans (including the Plan) may now have or may in the future have
 against you, your spouse, children, heirs, parents and/or legal representatives.

            The ~ of claims covered by this arbitration requu-ement include, but are not limited
 to, any and all:




                                                                     "
                                                                     .J


                                                                                                                       P38
· claims for wages or other compensation; claims for breach of any contract, covenant or
           warranty (express or implied);
.. tort claims, including negligence, negligence per se and gross negligence claims
           (including claims for personal or bodily injury or physical, mental or psychological
           injury, without regard to whether or not such injury was siistained on the job);
. claims for wrongful tennination (including retaliatory discharge claims under Chapter
           451 of the Texas Labor Code);
. claims of harassment or discrimiriation (including claims based on race, sex, religion,
           national origin, age, medical condition or disability);
· all non-ERISA claims for benefits under the Plan or any other employee benefit plan or
           program sponsored by the Company (after exhausting administrative remedies under the
           terms of such plans);
· claims for a violation of any other federal (other than ERISA), state or other
           governmental law, statute, regulation or ordinance; and
· claims challenging the validity or enforceability of this arbitration requirement (in whole
       or in part) or challenging the applicability of this arbitration requirement toa particular
           dispute or claim.

           Claims Not Subject to Arbitration: However, the following matters are expressly not
covered by this arbitration requirement: (i) any criminal complaint or proceedings, (ii)        claims
before the Texas Workforce Commssion for employment benefits, and (iü) ERISA based
claim.
           Arbitration Procedures: The following procedures are contained in the Plan and apply to
all arbítrations conducted pursuant to the arbitration process. The arbitration         procedures
mutuaLLy apply to the Participant (referred to throughout tls Section as "I") and to the Company.

           a) Notice for Claims: I and the Company agree that the pary seeking arbitration
           must give wntten notice of any claim: to the other part within the applicable    statute of
           limitations. Wntten notice to the Company, or an Employer or one or more of their
           officers, directors, shareholders, employees, agerits, affiliates or benefit plans shall be
           sent to Senior Living Properties, L.L.c., Attention: Human Resources Department, 12900
           Meridian Street, Sùite 180, CaneL, In. 46032 (or such other person or address as the
           Company may specify). If the Company wishes to invoke arbitration, it wil give written
           notice to me at the last address recorded in my personnel file. This notice shall be sent to
           the    other party (or parties) by certified or registered mail,. return receipt requested.
           Neither filing nor serving a lawsuit stops the applicable statute. of limitations from
           continuing to run.

           b) Representation: Any party may be represented during pre-hearing procedures (as
           defined below), at the arbitration hearing and/or during the arbitration appeal (as defined
           below) by an attorney or other representative selected by the party.

           c) Mediation: The Company and I agree that the arbitration procedures described
           here (and in Section II, Paragraph B of the Plan) shall not be invoked unless the party
           seeking arbitration has first. mediated the dispute with the other party or paries with a


                                                                        4

                                                                                                          P39
      mediator either agreed upon by all parties or, if agreement by all paries cannot be
      reached, by a mediator provided by J.A.M.SÆNDISPUTE, Inc., 8410 North Central
      Expressway, Suite 6100, Dallas, Texas 75225. This mediation requirement may be
      waived by written agreement signed by all parties or their counseL. The cost of the
      mediation shall be split evenly between the two sides to the dispute.

      d) General Procedures:

             1. The Company and I agree that the arbitration hearing will be conducted
             under the American Arbitration Association's National Rules for the Resolution
             of Employment Disputes (as amended or revised from time to time by the
             American Arbitration Association) (hereinafter the "American Arbitration
             Association Rules"), before one       arbitrator from the American Arbitration
             Association (hereinafter the "hearing arbitrator"). The Company and I recognize
             that the American Arbitration Association Rules and the terms and procedures of
             Section II, Paragraph B of the Plan may conflct. on certain issues and agree that to
             the extent that the procedures set forth in Section II, Paragraph B conflct with the
             American Arbitration Association Rules, the procedures of ~ection II, Paragraph
             B shall control and be applied by the hearing arbitrator and the appellate
             arbitrators (as defined below).

             2. The hearing arbitrator shall apply the substantive law (and the laws of
             remedies, if applicable), in the state in which the claim arose, or federal law, or
             both, depending upon the claims assei1ed. The heang arbitrator shall also
             strictly apply the Federal Rules of Evidence, except that deposition testimony of a .
              witness may be used at the arbitration hearing without regard to whether the
              witness is unavailable. The hearing arbitrator shall provide brief written findings
              of fact and conclusions of law. All arbitration decisions and awards rendered
              pursuant to the arbitration provisions shall be kept strictly confidential and shall
              not be disclosed to anyone not a witness, attomey, party representative, or pary
              who actually attended the arbitration hearing. .

              3. The hearing arbitrator shall have jurisdiction to hear and rule on pre-
              hearing disputes and is authorized to hold pre-hearing conferences by telephone
              or in person, as the arbitrator deems necessary_ The hearing arbitrator wil have
              the authority to hear a motion to disiiss and/or a motion for summary judgment
              by any party and in doing so shall apply the standards governing such motions
              under the Federal Rules of Civil Procedure. The hearing arbitrator shall dismiss
              any claim for arbitration where the person or pai1y seeking arbitration has not first
              mediated the dispute with the other part or parties unless mediation has been
              waived by written agreement signed by all parties or their counseL.

      e) Pre-Hearing Procedures: Each party will have the right to take depositions of
      individuals and any expert witnesses designated by another party. Each party will have
      the right to subpoena witnesses in accordance with the Federal Arbitration Act, Title 9, of
      the United States Code. Additional discovery may be had only where the heaiing
, ,




                                                5

                                                                                                      P40
           arbitrator so orders, upon a showing of substantial need. At least 30 days before the
           arbitration, the paries must exchange lists of witnesses, including any expeits, and copies
           of all exhibits intended to be used at the arbitration hearing.

           f) Arbitration Fees and Costs: The Company and I acknowledge that there will be
           fees and expenses associated with an arbitration hearing under the arbitration process for
           the hearing arbitrator's services. The parties agree that the filing fee, included in the
           administrative fees, for the arbitration hearing will be paid $100.00 hy me and $400.00
           by the Company. The paities agree that unless I choose to pay all or part of them, all
           other adnustrative fees and all of the hearing arbitrator's compensation wil be         paid by
           the Company. Arbitrator compensation is subject to allocation in the award, but
           administrative fees are not subject to allocation in the award. The party causing the
           postponement will pay  any fees for postponements. Either pary, at its expense, may
           arrange for and pay the cost of a court reporter to provide a stenographic record of the
           proceedings at the hearing.

           g)         Attorney's Fees: The Company and I further agree as follows:

                      1. Each party shall be responsible for their own attorney's fees, if any;
                      however, if any part prevails on a statutory claim which allows the wimung party
                      to be awarded attorney's fees, or if there is a written agreement providing for fees,
                      the hearing arbitrator shall award reasonable fees to the prevailing party. The
                      hearing arbitrator shall determe the prevailg pary in accordance with the
    .: '              meaning of "prevailing pary" under the Civil Rights Attorney's Fees Awards Act
                      of 1976.


                      2. The hearing arbitrator shall assess attorney's fees against a party upon a
                      showing that such party's claim, defense or position is frivolous, or unreasonable,
                      or factually groundless.

                      3. If either party pursues a claim covered by this arbitration procedure by any
                      means other than those set forth in this Plan, the responding party shall be entitled
                      to dismissal of such action, and the recovery of all costs and attorney's fees and
l
i
                      losses related to such action.

           h)         Appeal Procedure; The Company and I further agree as follows:

                      1. Any party may appeal any arbitration award that has been rendered and
                      become final under the American Arbitration Association Rules. The written
                      appeal must be served in writing on the other party or parties to thearbitration and
                      on the American Arbitration Association by certified mail withn thirty (30) days
                      after the hearing arbitrator caused the arbitration award to be mailed to the parties
                      or to their representatives. The writing evidencing the appeal must specify those
                      elements of the arbitration award that are being appealed and must contain a short
                      statement of the appeal's basis. Once an appeal is timely served, the arbitration
                      award by the hearing arbitrator shall no longer be considered final for purposes of



                                                                        6

                                                                                                              P41
seeking judicial enforcement, modification or vacation under the Federal
Arbitration Act.


? Witlun fifteen (15) days after receipt of the appeal, the other pary or
partes may serve a written cross-appeal by serving it by certifed mail on the
other party. or parties to the arbitration and on the American Arbitration
Association. The writing evidencing the cross-appeal must specify those
elements of the arbitration award that are being appealed and must contain a short
statement of the cross-appeals basis. Once a cross-appeal is timely served, the
arbitration award by the hearing arbitrator shall                      no longer be considered   final for

puroses of seekig judicial enforcement, modification or vacation under the
Federal Arbitration Act even if the appeal is subsequently withdrawn..

3. Within forty-five (45) days after receipt of the appeal, the parties to the
appeal shall select a panel of three arbitrators (hereinafter the "appellate
arbitrators") utilizing the procedures to select arbitrators set forth in the Amencan
Arbitration Association Rules. The heaiing arbitrator shall not be eligible to serve
as an appellate arbitrator.

 4. The fees and expenses of the appellate arbitrators shall be shared equally if
 both an appeal and a cross-appeal are served. If only an appeal is served, the fees
. and expenses of the appellate arbitrators shall be paid by the appellant pary (or
parties). Each pary serving an appeal or cross-appeal shall deposit funds or post
other appropnate security for the appellate arbitrators' fees, in an amount and
roaiier deternnoo by the American Arbitration Association, within thirty (30)
days after that paity's service of an appeal or cross-appeal or when so directed by
the Amencan Arbitration Association.

5. . The record on appeal to the appellate arbitrators shall consist                              of any
stenographic record or other record of the heanng before. the heanng arbitrator
and shall include all exhibits ánd deposition transcnpts admitted into the record
by the hearing arbitrator. The parties to an appeal shall assist and cooperate with
the Amencan Arbitration Association in providing the record, exhibits and
deposition transcripts to the appellate                  arbitrators.

6. Tl1e appellate arbitrators stiall establish a.. briefing schedule, page
lirrtations for briefs and a date and duration for oral argument; . provided,
however, that prior to the appellate arbitrators' rulings on these subjects, the
parties to the appeal may agree to waive briefing and/or oral argument and may
agree to their own page lirrtations for briefs. .

7. The appellate arbitrators shall apply the same standard of review as the
 first-level appellate court would apply to the cause of action or defense on appeal
in sirrlar circumstances. If both federal and state-law causes of action (and/or
defenses) are before the appellate arbitrators (either in a single appeal or as the
result of a cross-appeal), the appellate arbitrators shall apply only the standards of



                                                    7

                                                                                                             P42
                  review utilized by the United States Couit of Appeals for the Fifth Circuit in
                  similar circumstances.

                  8. By majority vote, the appellate arbitrators may affirm, reverse, render or
                  modify an arbitration award. The appellate arbitrators may remand, but they may
                  not remand to the original hearng arbitrator. In the event of a remand, the paities
                  shall select a new hearing arbitrator under the procedures set forth in the
                  American Arbitration Association Rules, and the paries to the re-heang shall
                  share the fees and expenses of the new hearng arbitrator equally. The appellate
                  arbitrators' decision shall include a brief, written opinion addressing the issues
                  before them, and such opinion shall be delivered to the paries and the American
                  Arbitration Association within tlu (30) days after the conclusion of any briefing
                  schedule or any oral argument or as the parties may agree. Fifteen US) days       after
                  receipt of the appellate arbitrators' opinion setting forth their decision, any award
                  by them shall be considered final for                               purposes of judicial enforcement,
                   modification or vacation under the Federal Arbitration Act.

        i) Interstate Commerce and the Federal Arbitration Act: I understand and
                                                                                                              agree that
        the Company is involved in transactions involving interstate commerce (e.g., purchasing
        goods and services from outside Texas wluch are slupped to Texas; utilizing the
        interstate mail, telephone and lughway systems; operatig facilities serving people from
        various states; and recruiting and advertsing outside Texas) and that my employment
        with my Employer and parcipation in the Plan involve such commerce. The Federal
        Arbitration Act, Title 9 of the United States Code, wil govern the interpretation,
        enforcement, and all judicial proceedings under and/or with respect to Section II,
        Paragraph B of the Plan and Section XI of the Plan. .

 E. Other Important Information

         Benefits May Continue After Eligibility Ends: Subject to the terms of the Plan, a
_ Parcipant's right to receive Benefits previously awarded under the Plan for a Bodily Injury or
 Disease that occurred wlule the Participant was. eligible for Benefits, wiIl not be discontinued
 due to the termnation of employment or placement on leave of absence unless the termination or
.leave of absence was For Cause.

      _ Reinstatement of Former Parcipant. _ A fOlmer Partcipant may become eligible to
 participate in the Plan when he/she again satisfies all Plan eligibility and participation
 requirements.

         The Plan Does Not Discriminate: All Participants are treated on a non-discriminatory
 basis by the Commttee's administrative procedures and actions without regard to their race,
 color, religion, national origin, ancestr, sex, disability or veteran status.

         Claim Audits: The Commttee or its designee periodically conducts claim audits to help
 ensure that (i) benefit claim adrnnistration and determinations are made in conformance with the




                                                                      8

                                                                                                                           P43
G
                                                                                                                        ~.




1. ,lrnent Form
iup preriiuman d Enrollment Services

rerv ri:te; by: U nitedoi Omaha Ute Insurance Coriipany
                             Mutual ot Omaha !nsuranc0 Co~pany- :
Be Corrirfeted By Employer

 royets Comp'a ny NamE: ;~!"D¡2!~l¡:tjr!i~r'2~§ili~~
lity Name                              . ----- --'- -_.__._-.. --- ---- - -                 - ; :"-



:0 t1                             Coverage Division                   _ _ ciais #_



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fi~.;;. tor Òea"fh Be~fits- ¡;:ig¡t-~-;~f.g~ f~¡iü~!!sial) -;=-::';e-~;d t~~.:
. 'than one benef1cia"ry is namèè( the 6iúiëfidañes nariéd shall sha,e ¡
 .Beneficiary .                                                                            Se~
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.enisorHevv Yor/-:

.ef~e f£e-?:''"oog-r-?fr;-.V'.#l~~~-eli!t~.~"t5.~
  is no addi1:ionalpremiuni charge associated with
                                                                       the Living Care?
of Ling Care (Accelerated Death Benefit) may affect eliç¡!:il¡~y fer; .
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 i-Apfiéatrrrrt1e riãâe Witlir"fdaýrom the date in:: m,-                                                                           .-._---_._-_._.._._------..
:ontrbutCr. form MUST be sign.ed and dat~d)a: authb"r¡žë payrol! di
;)U decline lïfe: insuranceco~erage:.on..yoursei(you mu:;t i:orn¡
     that the information lhaveprovidedin tllis ënrollmznt ¡-.;rm
               ., -c,~~~-"..~.'S~~-:o ._..c:m_.....,.."'......~p.:.~.

  fEm"OYe.~~-th~ (Vat/os                                                                                                      DEFENDANTS
                                                                                                                                   EXHIBIT

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