Sanders v. Allenbrooke Nursing and Rehabilitation Center, LLC

IN THE UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TENNESSEE

WESTERN DIVISION

)

CATHERINE SANDERS, surviving )

spouse of Charles E. Sanders, )

deceased, and on behalf of )

the wrongful death )

beneficiaries of Charles E. )

Sanders, )

)

Plaintiff, )

)

v. ) No. 2:20-cv-02001

)

ALLENBROOKE NURSING AND )

REHABILITATION CENTER, LLC, )

d/b/a ALLENBROOKE NURSING )

AND REHABILITATION CENTER; )

AURORA CARES, LLC; DTD HC, )

LLC; D&N, LLC; DONALD T. )

DENZ; and NORBERT A. BENNETT, )

)

Defendants. )

)

ORDER

This is a health care liability suit alleging wrongful

death. Before the Court is Defendants Aurora Cares, LLC (“Aurora

Cares”); DTD HC, LLC (“DTD”); D&N, LLC (“D&N”); Donald T. Denz;

and Norbert A. Bennett’s (collectively, the “Non-Facility

Defendants”) March 6, 2020 Motion to Dismiss. (ECF No. 16.)

Plaintiff Catherine Sanders (“Catherine” or “Sanders”),

surviving spouse of Charles E. Sanders, and on behalf of the

wrongful death beneficiaries of Charles E. Sanders, responded on

April 3, 2020. (ECF No. 27.) Non-Facility Defendants replied

on April 17, 2020. (ECF No. 32.)

For the following reasons, Non-Facility Defendants’ Motion

to Dismiss is DENIED.

I. Background

Allenbrooke Nursing and Rehabilitation Center, LLC

(“Allenbrooke”) is a nursing home facility in Memphis, Tennessee

and is a Tennessee limited liability company (an “LLC”). (ECF

No. 44 ¶ 6.) Aurora Cares is a New York LLC. (Id. ¶ 8.) The

members of Allenbrooke and Aurora Cares are DTD and D&N. (Id.

¶¶ 7, 9.) DTD and D&N are New York LLCs. (Id. ¶¶ 10, 13.)

Donald T. Denz is a member of DTD. (Id. ¶ 14.) Norbert A.

Bennett is a member of D&N. (Id. ¶ 11.)

Charles E. Sanders (“Charles”) was a resident of Allenbrooke

from about December 7, 2018, to January 2, 2019. (ECF No. 1

¶ 2.) On or around January 2, 2019, Charles was transferred

from Allenbrooke to St. Francis Hospital. (Id.) On January 4,

2019, Charles died at the hospital. (Id.)

On January 3, 2020, Catherine filed the Complaint in this

action. (ECF No. 1.) As Charles’s surviving spouse, and on

behalf of Charles’s wrongful death beneficiaries, Catherine

asserts claims against Defendants for statutory negligence under

the Tennessee Health Care Liability Act (“THCLA”), Tenn. Code

Ann. §§ 29-26-101, et seq.; common law negligence; and survival

and wrongful death. (See id. ¶¶ 40-63.)

On March 6, 2020, Non-Facility Defendants filed the Motion

to Dismiss. (ECF No. 16.) Non-Facility Defendants assert that

the Court does not have personal jurisdiction over them. (ECF

No. 16-1 at 7-13.) Non-Facility Defendants also assert that

Sanders fails to state a claim for which relief can be granted

because: (1) the THCLA prohibits Sanders from pursuing health

care liability claims against Non-Facility Defendants; (2) the

Tennessee courts have established that DTD, D&N, Denz, and

Bennett cannot be held directly or vicariously liable for the

actions of Aurora Cares or Allenbrooke; (3) there can be no

personal liability for an owner, officer, or member of a

Tennessee LLC; and (4) there can be no personal liability for a

member or agent of a New York LLC. (Id. at 13-20.)

II. Jurisdiction and Choice of Law

The Court has diversity jurisdiction. 28 U.S.C. § 1332.

The amount in controversy exceeds $75,000. Sanders seeks

compensatory and punitive damages for negligence and survival

and wrongful death claims against multiple defendants. (ECF No.

1 ¶¶ 46, 56, 58-66.)

The parties are completely diverse. Catherine Sanders is

a resident citizen of Tennessee. (ECF No. 44 ¶ 2.) None of the

Defendants is a citizen of Tennessee. Allenbrooke is a Tennessee

LLC. (Id. ¶ 6.) Aurora Cares is a New York LLC. (Id. ¶ 8.)

For purposes of diversity jurisdiction, LLCs have the citizenship

of each of their members. Americold Realty Tr. v. Conagra Foods,

Inc., 136 S. Ct. 1012, 1015 (2016) (citing Carden v. Arkoma

Assocs., 494 U.S. 185, 195-96 (1990)); accord Delay v. Rosenthal

Collins Grp., LLC, 585 F.3d 1003, 1005 (6th Cir. 2009). The

members of Allenbrooke and Aurora Cares are DTD and D&N. (ECF

No. 44 ¶¶ 7, 9.) DTD and D&N are New York LLCs. (Id. ¶¶ 10,

13.) DTD’s members are Donald T. Denz and the Donald T. Denz

Irrevocable Trust. (Id. ¶ 14.) Donald T. Denz is a resident

citizen of New York. (Id. ¶ 17.) The citizenship of a

traditional trust is that of its trustee. See GBForefront, L.P.

v. Forefront Mgmt. Grp., LLC, 888 F.3d 29, 38-40 (3d Cir. 2018).

The trustee of the Donald T. Denz Irrevocable Trust is Martin

Clifford, who is a resident citizen of New York. (ECF No. 44

¶ 15.) D&N’s members are Norbert A. Bennett, the Norbert A.

Bennett Children’s Trust, and the Norbert A. Bennett

Grandchildren’s Trust. (Id. ¶ 11.) Norbert A. Bennett is a

resident citizen of New York. (Id. ¶ 17.) The trustee of the

Norbert A. Bennett Children’s Trust and the Norbert A. Bennett

Grandchildren’s Trust is Ronald Bennett, who is a resident

citizen of New York. (Id. ¶ 12.)

The Court has diversity jurisdiction because the parties

are completely diverse and the amount in controversy exceeds

$75,000. 28 U.S.C. § 1332.

Federal courts sitting in diversity apply state law to

issues of substantive law and federal law to procedural issues.

Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78-80 (1938); see also

Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 427 (1996).

When there is no dispute that a certain state’s substantive law

applies, the court need not conduct a choice-of-law analysis sua

sponte. See GJB Corp. v. E. Ohio Paving Co., 139 F.3d 1080,

1085 (6th Cir. 1998). The parties assume that Tennessee

substantive law governs Sanders’s claims. The Court applies

Tennessee substantive law.

III. Legal Standards

A. Personal Jurisdiction

When a defendant challenges personal jurisdiction under

Rule 12(b)(2) of the Federal Rules of Civil Procedure, “[t]he

plaintiff bears the burden of making a prima facie showing of

the court’s personal jurisdiction over the defendant.” Intera

Corp. v. Henderson, 428 F.3d 605, 615 (6th Cir. 2005); see also

Malone v. Stanley Black & Decker, Inc., 965 F.3d 499, 504 (6th

Cir. 2020). A plaintiff “can meet this burden by ‘establishing

with reasonable particularity sufficient contacts between

[defendants] and the forum state to support jurisdiction.’”

Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 887 (6th

Cir. 2002) (quoting Provident Nat’l Bank v. Cal. Fed. Sav. Loan

Ass’n, 819 F.2d 434, 437 (3d Cir. 1987)). If the plaintiff meets

her burden, the motion to dismiss should be denied,

“‘notwithstanding any controverting presentation by the moving

party.’” Serras v. First Tenn. Bank Nat’l Ass’n, 875 F.2d 1212,

1214 (6th Cir. 1989) (quoting Marine Midland Bank, N.A. v.

Miller, 664 F.2d 899, 904 (2d Cir. 1981)). Because the Court is

relying solely on written submissions to resolve the Motion to

Dismiss, rather than an evidentiary hearing or jurisdictional

discovery, Sanders’s burden to establish a prima facie showing

of personal jurisdiction is “‘relatively slight.’” Air Prods.

& Controls, Inc. v. Safetech Int’l, Inc., 503 F.3d 544, 549 (6th

Cir. 2007) (quoting Am. Greetings Corp. v. Cohn, 839 F.2d 1164,

1169 (6th Cir. 1988)); see also Dean v. Motel 6 Operating L.P.,

134 F.3d 1269, 1272 (6th Cir. 1998) (“relatively light”). The

Court construes the facts in the light most favorable to Sanders.

See Air Prods., 503 F.3d at 549.

When considering a motion to dismiss for lack of personal

jurisdiction, a federal court looks first to the long-arm statute

of the state in which it sits to determine the state’s

limitations on personal jurisdiction. Aristech Chem. Int’l Ltd.

v. Acrylic Fabricators Ltd., 138 F.3d 624, 627 (6th Cir. 1998).

The court then assesses whether the exercise of personal

jurisdiction would be appropriate under the Due Process Clause

of the Fourteenth Amendment. Bird v. Parsons, 289 F.3d 865, 871

(6th Cir. 2002); CompuServe, Inc. v. Patterson, 89 F.3d 1257,

1262 (6th Cir. 1996). If the exercise of jurisdiction is not

appropriate under the Due Process Clause, the exercise of

jurisdiction is “foreclose[d] . . . even where a properly

construed provision of the long-arm statute would otherwise

permit it.” Theunissen v. Matthews, 935 F.2d 1454, 1459 (6th

Cir. 1991).

B. Failure to State a Claim

Rule 12(b)(6) of the Federal Rules of Civil Procedure allows

dismissal of a complaint that “fail[s] to state a claim upon

which relief can be granted.” A Rule 12(b)(6) motion permits

the “defendant to test whether, as a matter of law, the plaintiff

is entitled to legal relief even if everything alleged in the

complaint is true.” Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir.

1993) (citing Nishiyama v. Dickson Cnty., 814 F.2d 277, 279 (6th

Cir. 1987)). A motion to dismiss tests only whether the

plaintiff has pled a cognizable claim and allows the court to

dismiss meritless cases that would waste judicial resources and

result in unnecessary discovery. See Brown v. City of Memphis,

440 F. Supp. 2d 868, 872 (W.D. Tenn. 2006).

When evaluating a motion to dismiss for failure to state a

claim, the Court must determine whether the complaint alleges

“sufficient factual matter, accepted as true, to ‘state a claim

to relief that is plausible on its face.’” Ashcroft v. Iqbal,

556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly,

550 U.S. 544, 570 (2007)). The “‘[f]actual allegations must be

enough to raise a right to relief above [a] speculative level.’”

Ass’n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d

545, 548 (6th Cir. 2007) (quoting Twombly, 550 U.S. at 555).

A claim is plausible on its face if “the plaintiff pleads

factual content that allows the court to draw the reasonable

inference that the defendant is liable for the misconduct

alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at

556). A complaint need not contain detailed factual allegations.

However, a plaintiff’s “[t]hreadbare recitals of the elements of

a cause of action, supported by mere conclusory statements, do

not suffice.” Id.

“When reviewing a motion to dismiss, the district court may

not consider matters beyond the complaint.” Hensley Mfg. v.

ProPride, Inc., 579 F.3d 603, 613 (6th Cir. 2009). “If the

district court does consider evidence outside the complaint, it

effectively converts the motion to dismiss to a motion for

summary judgment.” Id. (quotation marks and citations omitted).

The Sixth Circuit generally takes “a liberal view of what matters

fall within the pleadings for purposes of” a motion to dismiss.

Armengau v. Cline, 7 F. App’x 336, 344 (6th Cir. 2001). That

does not mean that a court must or may consider any and all

materials the parties submit. Documents attached to a motion to

dismiss may be considered part of the pleadings if they are

“referred to in a complaint and central to the claim.” Id.

(citing Jackson v. City of Columbus, 194 F.3d 737, 745 (6th Cir.

1999)); see also Bassett v. NCAA, 528 F.3d 426, 430 (6th Cir.

2008).

IV. Analysis

A. Personal Jurisdiction

Non-Facility Defendants assert that the Court lacks

personal jurisdiction over them. (ECF No. 16-1 at 7-13.)

A federal court sitting in diversity must apply the law of

the forum state to determine whether it may exercise jurisdiction

over the person of a non-resident defendant. Welsh v. Gibbs,

631 F.2d 436, 439 (6th Cir. 1980). The jurisdictional limits of

Tennessee law and federal due process are coterminous. See

Parker v. Winwood, 938 F.3d 833, 839 (6th Cir. 2019); First Cmty.

Bank, N.A. v. First Tenn. Bank, N.A., 489 S.W.3d 369, 384 (Tenn.

2015). The Court need only decide whether exercising personal

jurisdiction over Non-Facility Defendants is consistent with

federal due process requirements. See Bridgeport Music, Inc. v.

Still N The Water Publ’g, 327 F.3d 472, 477 (6th Cir. 2003).

The Due Process Clause of the Fourteenth Amendment requires

that a non-resident defendant have “certain minimum contacts

with [the forum state] such that the maintenance of the suit

does not offend ‘traditional notions of fair play and substantial

justice.’” Youn v. Track, Inc., 324 F.3d 409, 417 (6th Cir.

2003) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316

(1945)). “There are two kinds of personal jurisdiction within

the Federal Due Process inquiry: (1) general personal

jurisdiction, where the suit does not arise from defendant’s

contacts with the forum state; and (2) specific jurisdiction,

where the suit does arise from the defendant’s contacts with the

forum state.” Conn v. Zakharov, 667 F.3d 705, 712-13 (6th Cir.

2012).

General jurisdiction allows a plaintiff to sue a defendant

“on any and all claims,” regardless of the connection (or lack

thereof) between the claim and the forum. Maxitrate Tratamento

Termico E Controles v. Super Sys., Inc., 617 F. App’x 406, 408

(6th Cir. 2015) (citing Daimler AG v. Bauman, 134 S. Ct. 746,

754 (2014)). Specific jurisdiction “exposes the defendant to

suit in the forum state only on claims that ‘arise out of or

relate to’ a defendant’s contacts with the forum.” Kerry Steel,

Inc. v. Paragon Indus., Inc., 106 F.3d 147, 149 (6th Cir. 1997)

(quoting Helicopteros Nacionales de Colombia S.A. v. Hall, 466

U.S. 408, 414-15 & nn.8-10 (1984)).

Sanders concedes that the Court does not have general

jurisdiction over Non-Facility Defendants. (See ECF No. 27 at

10-17.) To conform with the requirements of federal due process,

the Court must have specific jurisdiction over Non-Facility

Defendants. Conn, 667 F.3d at 712-13. Specific jurisdiction

“focuses on the relationship among the defendant, the forum, and

the litigation.” Walden v. Fiore, 571 U.S. 277, 283-84 (2014)

(quotation marks and citations omitted). The Sixth Circuit has

established a three-part test for determining whether there is

specific jurisdiction:

First, the defendant must purposefully avail himself

of the privilege of acting in the forum state or

causing a consequence in the forum state. Second, the

cause of action must arise from the defendant’s

activities there. Finally, the acts of the defendant

or consequences caused by the defendant must have a

substantial enough connection with the forum state to

make the exercise of jurisdiction over the defendant

reasonable.

S. Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th

Cir. 1968); see also AlixPartners, LLP v. Brewington, 836 F.3d

543, 549-50 (6th Cir. 2016). The Court must have personal

jurisdiction over each defendant as to each asserted claim. See

Rush v. Savchuk, 444 U.S. 320, 331-32 (1980); Hosp. Auth. of

Metro. Gov’t of Nashville v. Momenta Pharms., Inc., 353 F. Supp.

3d 678, 690 (M.D. Tenn. 2018) (citing Bd. of Forensic Document

Exam’rs, Inc. v. ABA, No. 16-cv-2641, 2017 WL 549031, at *3 (W.D.

Tenn. Feb. 9, 2017)).

The relationship among the Non-Facility Defendants is an

illustrative starting point. See Hatfield v. Allenbrooke Nursing

& Rehab. Ctr., LLC, No. W2017-00957-COA-R3-CV, 2018 WL 3740565,

at *30 (Tenn. Ct. App. Aug. 6, 2018) (detailing the relationship

among Non-Facility Defendants and Allenbrooke). DTD and D&N are

New York LLCs. (ECF No. 16-3 ¶ 28; ECF No. 16-4 ¶ 28.) Each

entity maintains a fifty percent membership interest in

Allenbrooke. (ECF No. 16-3 ¶ 29; ECF No. 16-4 ¶ 29.) Each

maintains a fifty percent membership interest in Aurora Cares,

a New York LLC. (ECF No. 1 ¶¶ 6-7; ECF No. 16-3 ¶ 9; ECF No.

16-4 ¶ 9.) Aurora Cares provides administrative support services

to nursing homes across the country, including Allenbrooke. (ECF

No. 16-3 ¶ 10; ECF No. 16-4 ¶ 10.) Neither DTD nor D&N has

employees or agents in Tennessee. (ECF No. 16-3 ¶ 34; ECF No.

16-4 ¶ 34.) Denz is the manager and majority member of DTD.

(ECF No. 1 ¶ 8; ECF No. 16-3 ¶ 27.) Denz is the Co-Chief

Executive Officer and Chief Financial Officer of Aurora Cares.

(ECF No. 16-3 ¶ 9.) Bennett is the manager and majority member

of D&N. (ECF No. 1 ¶ 9; ECF No. 16-4 ¶ 27.) Bennett is the Co-

Chief Executive Officer of Aurora Cares. (ECF No. 16-4 ¶ 9.)

1. Aurora Cares

To establish that the Court has personal jurisdiction over

Aurora Cares, Sanders must show that Aurora Cares “purposefully

avail[ed]” itself of “the privilege of acting in the forum state

or causing a consequence in the forum state.” Mohasco, 401 F.2d

at 381. An entity purposefully avails itself when it “create[s]

‘continuing obligations’ between [it]self and residents of the

forum.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985)

(citing Travelers Health Ass’n v. Virginia ex rel. State Corp.

Comm’n, 339 U.S. 643, 648 (1950)). Although a physical presence

is not required to assert jurisdiction, it “will enhance a

potential defendant’s affiliation with a State and reinforce the

reasonable foreseeability of suit there.” Id.

Sanders has pled that Aurora Cares is the management company

of Allenbrooke and that Aurora Cares conducts business related

to the “operation, management, and/or control of Allenbrooke.”

(ECF No. 1 ¶ 5.) Non-Facility Defendants submit declarations

from Denz and Bennett that state, in relevant part, that “Aurora

Cares provides administrative support services to more than 30

nursing homes around the country, including Allenbrooke . . .

pursuant to an administrative services agreement between

Allenbrooke and Aurora Cares.” (ECF No. 16-3 ¶ 10; ECF No. 16-

4 ¶ 10.) Two of the nursing homes Aurora Cares provides services

to are in Tennessee. (ECF No. 16-3 ¶ 10; ECF No. 16-4 ¶ 10.)

Denz, as Co-CEO and CFO of Aurora Cares, states that he “ha[s]

occasionally traveled to Tennessee . . . to ensure that all of

the services provided under the administrative services

agreement between Allenbrooke and Aurora Cares are performed to

the facility’s satisfaction.” (ECF No. 16-3 ¶ 13.) Bennett, as

Co-CEO of Aurora Cares, states the same for his part. (ECF No.

16-4 ¶ 13.)

Aurora Cares has purposefully availed itself of the

privilege of acting in Tennessee. Its “substantial connection”

with Tennessee is its “avail[ment] [] of the privilege of

conducting business” by creating “continuing obligations” with

Allenbrooke and another nursing home in Tennessee. Burger King,

471 U.S. at 475-76; see Air Prods., 503 F.3d at 551 (holding

that defendants purposefully availed themselves of a forum when

they entered into “a continuing business relationship that lasted

a period of many years”). Aurora Cares’ officers’ travels to

Tennessee to ensure that its contractual obligations were being

carried out were not “random,” “fortuitous,” or “attenuated”

contacts with Tennessee. Burger King, 471 U.S. at 475. Those

contacts increased the foreseeability that Aurora Cares would be

subject to suit in Tennessee. Id. The first Mohasco requirement

is satisfied. 401 F.2d at 381.

Sanders must show that her causes of action arose from

Aurora Cares’ activities in Tennessee. Id. A plaintiff’s causes

of action arise from a defendant’s activities in a forum if the

“causes of action were ‘made possible by’ or ‘lie in the wake

of’ the defendant’s contacts, or [if] the causes of action are

‘related to’ or ‘connected with’ the defendant’s contacts with

the forum state.” Air Prods., 503 F.3d at 553 (citations

omitted). “[T]his standard [i]s a ‘lenient standard’ and . . .

the cause of action need not ‘formally’ arise from defendant’s

contacts.” Id. (quoting Bird, 289 F.3d at 875).

Sanders has submitted evidence that Aurora Cares “provides

support services including purchasing, financial statement and

cost report preparation, payroll, accounts receivable and

payable functions for [Allenbrooke].” (ECF No. 27-4 at 13.) In

their declarations, Denz and Bennett assert that “Aurora Cares

does not hire or fire the administrator or other management

employees of Allenbrooke; it does not control or have control

over staffing levels at Allenbrooke; it does not control the

budget and expenditures of Allenbrooke; and it does not implement

and enforce the policies and procedures of Allenbrooke.” (ECF

No. 16-3 ¶ 11; ECF No. 16-4 ¶ 11.)

Sanders’s claims rely on the theory that Charles’s injuries

were due to Allenbrooke’s lack of staff, staff training, staff

monitoring, and resources; failure to adopt and follow proper

rules, regulations, policies, plans, and guidelines; and,

overall, Allenbrooke’s failure to provide a safe environment.

(See ECF No. 1 ¶¶ 44(a)-(w), 51(a)-(h).) Sanders has submitted

evidence that these failings could, in part, be due to the

services Aurora Cares provided to Allenbrooke. (See ECF No. 27-

4 at 13.) For example, Sanders has submitted evidence that

Aurora Cares handles “purchasing” for Allenbrooke. (Id.) In

the Complaint, Sanders alleges that Defendants “[f]ail[ed] to

administer the facility in such a manner so as to provide the

facility with adequate resources to ensure sufficient non-

medical (CNA) staffing and supplies, such as diapers, linens,

and towels, to care for all residents, including Charles E.

Sanders.” (ECF No. 1 ¶ 44(b).) Taking the allegations in the

Complaint as true, as the Court must at this stage, see Air

Prods., 503 F.3d at 549, Sanders has sufficiently pled that her

claims arose from Aurora Cares’ activities in Tennessee. The

second Mohasco requirement is satisfied. 401 F.2d at 381.

Sanders must show that “the acts of the defendant or

consequences caused by the defendant [] ha[d] a substantial

enough connection with the forum state to make the exercise of

jurisdiction over the defendant reasonable.” Id. “In

determining whether the exercise of jurisdiction is reasonable,

the court should consider, among others, the following factors:

(1) the burden on the defendant; (2) the interest of the forum

state; (3) the plaintiff’s interest in obtaining relief; and (4)

other states’ interest in securing the most efficient resolution

of the [controversy].” Air Prods., 503 F.3d at 554-55 (citing

Intera Corp., 428 F.3d at 618). “When the first two elements

[of Mohasco] are met, an inference arises that the third,

fairness, is also present; only the unusual case will not meet

this third criterion.” First Nat’l Bank of Louisville v. J.W.

Brewer Tire Co., 680 F.2d 1123, 1126 (6th Cir. 1982).

Sanders has satisfied the first two elements of Mohasco.

Aurora Cares presents no considerations that would render the

exercise of personal jurisdiction over it in Tennessee

unreasonable. “Tennessee has interests in resolving this case,

not the least of which is to provide a forum for the adjudication

of a dispute between a resident and a nonresident that has

purposefully availed itself of acting in and causing consequences

in Tennessee.” Third Nat’l Bank in Nashville v. WEDGE Grp. Inc.,

882 F.2d 1087, 1092 (6th Cir. 1989). The third Mohasco

requirement is satisfied. 401 F.2d at 381.

Sanders has satisfied her “relatively slight” burden. Air

Prods., 503 F.3d at 549. The Court has specific personal

jurisdiction over Aurora Cares. Aurora Cares purposefully

availed itself of conducting business in Tennessee, Sanders’s

claims plausibly arose from Aurora Cares’ actions in Tennessee,

and the exercise of jurisdiction over Aurora Cares is reasonable.

Non-Facility Defendants’ Motion to Dismiss Aurora Cares on

jurisdictional grounds is DENIED.

2. DTD and D&N

Sanders must show that the Court has personal jurisdiction

over DTD and D&N. Both DTD and D&N hold a fifty percent ownership

interest in Allenbrooke and Aurora Cares. (ECF No. 1 ¶¶ 6-7.)

Sanders argues that this Court has specific jurisdiction over

DTD and D&N because they “receive substantial revenue from

Allenbrooke.” (ECF No. 27 at 15) (citing Tenn. Code Ann. § 20-

2-223(4) for the proposition that jurisdiction is proper over

any person who derives substantial revenue from services rendered

in Tennessee).1 Sanders argues that the revenue DTD and D&N

received “depleted the resources available to provide staffing,

supplies, and care to residents, including Mr. Sanders, which

resulted in his injuries and death.” (Id.) Sanders also argues

that this Court has specific jurisdiction over DTD and D&N

because DTD and D&N indirectly own the real estate on which the

Allenbrooke facility is located. (Id. at 17) (citing Tenn. Code

Ann. § 20-2-223(a)(5) for the proposition that jurisdiction is

proper over a person who has an interest in Tennessee real

estate).

On their own, DTD and D&N do not have sufficient suit-

related contacts with Tennessee to justify the exercise of

personal jurisdiction over them under the Mohasco test. 401

1 Although satisfaction of § 20-2-223(4) might appear sufficient on

its face for the exercise of personal jurisdiction in Tennessee, the

jurisdictional limits of Tennessee law and federal due process are

coterminous. Both Tennessee and federal courts are constrained by

the Due Process Clause of the Fourteenth Amendment. See Theunissen,

935 F.2d at 1459 (stating that a defect in federal due process

considerations “would foreclose the exercise of personal

jurisdiction even where a properly construed provision of the long-

arm statute would otherwise permit it”).

F.2d at 381. Deriving revenue from a subsidiary that is subject

to the jurisdiction of courts in the forum state, without more,

is not enough to justify the exercise of personal jurisdiction

over the subsidiary’s parent. See World-Wide Volkswagen Corp.

v. Woodson, 444 U.S. 286, 299 (1980) (“[F]inancial benefits

accruing to the defendant from a collateral relation to the forum

State will not support jurisdiction if they do not stem from a

constitutionally cognizable contact with that State.”) (citing

Kulko v. Cal. Super. Ct., 436 U.S. 84, 94-95 (1978)).

DTD and D&N’s indirect ownership of the real estate on which

the Allenbrooke facility is located is not enough to justify the

exercise of personal jurisdiction. This is not a real estate

suit. Sanders does not establish or assert that her claims arose

from or relate to DTD and D&N’s ownership of the land on which

Allenbrooke is located. Cf. Brookfield Global Relocation Servs.,

LLC v. Burnley, No. 4:15-cv-2029, 2016 WL 500110, at *3 (N.D.

Ohio. Feb. 9, 2016) (exercise of personal jurisdiction comported

with due process where defendants owned real property in Ohio

and plaintiff alleged that defendant breached a contract to sell

that property to plaintiff free of title defects).

Although DTD and D&N do not have sufficient suit-related

contacts with Tennessee on their own, the Court has personal

jurisdiction over them under another theory. It is compatible

with due process for a court to exercise personal jurisdiction

over an entity that would not ordinarily be subject to personal

jurisdiction when the entity is substantively legally related to

another entity that is subject to personal jurisdiction. See 4A

Charles A. Wright et al., Federal Practice and Procedure § 1069.4

(4th ed. 2020) (collecting cases in which federal courts have

exercised personal jurisdiction over defendants through

subsidiaries, partnerships, alter egos, related and unrelated

companies, successors-in-interest, and companies acting as

agents); see generally Lea Brilmayer & Kathleen Paisley, Personal

Jurisdiction and Substantive Legal Relations: Corporations,

Conspiracies, and Agency, 74 Cal. L. Rev. 1 (1986).

The relevant theory here, which the Sixth Circuit and

Tennessee have adopted, is the “alter-ego theory of personal

jurisdiction,” which “‘provides that a non-resident parent

corporation is amenable to suit in the forum state if the parent

company exerts so much control over the subsidiary that the two

do not exist as separate entities but are one and the same for

purposes of jurisdiction.’” Carrier Corp. v. Outokumpu Oyj, 673

F.3d 430, 450-51 (6th Cir. 2012) (quoting Estate of Thomson ex

rel. Estate of Rakestraw v. Toyota Motor Corp. Worldwide, 545

F.3d 357, 362 (6th Cir. 2008)); accord Gordon v. Greenview Hosp.,

Inc., 300 S.W.3d 635, 652 (Tenn. 2009). If a subsidiary’s parent

company’s “separate corporate status is formal only and without

any semblance of individual identity, then the subsidiary’s

business will be viewed as that of the parent and the latter

will be said to be doing business in the jurisdiction through

the subsidiary for purposes of asserting personal jurisdiction.”

4A Wright et al., supra, § 1069.4.

When analyzing whether the alter-ego theory of personal

jurisdiction is satisfied in diversity actions, the Court looks

to the forum state’s substantive law. See Thomson, 545 F.3d at

362 (applying Ohio law in analyzing personal jurisdiction under

alter-ego theory in diversity action); Hilani v. Greek Orthodox

Archdiocese of Am., 863 F. Supp. 2d 711, 720-21 (W.D. Tenn. 2012)

(same, applying Tennessee law); Gordon, 300 S.W.3d at 653

(“Determining whether one corporation is an alter-ego of another

for jurisdictional purposes is controlled by state law.”) (citing

Jemez Agency, Inc. v. CIGNA Corp., 866 F. Supp. 1340, 1343

(D.N.M. 1994)).

The alter-ego theory applies to LLCs as well as

corporations. Allenbrooke, Aurora Cares, DTD, and D&N are LLCs.

In Tennessee, an LLC is “a hybrid of partnerships and

corporations.” State v. Thompson, 197 S.W.3d 685, 692 n.6 (Tenn.

2006) (citing Tenn. Code Ann. §§ 48-201-101, et seq.). The case

law governing corporations is equally applicable to the analysis

here. See Hatfield, 2018 WL 3740565, at *36-44.

Under Tennessee law, a court has personal jurisdiction over

an entity defendant under the alter-ego theory if the plaintiff

demonstrates: (1) “that the subsidiary corporation is a sham or

dummy”; (2) “that the two corporations are, in fact, identical

and indistinguishable”; or (3) “that the subsidiary corporation

is merely an instrumentality, agent, conduit, or adjunct of the

parent corporation.” Gordon, 300 S.W.3d at 653. The key inquiry

is whether “the parent corporation ‘exercises complete dominion

over its subsidiary, not only of finances, but of policy and

business practice in respect to the transaction under attack, so

that the corporate entity, as to that transaction, had no

separate mind, will or existence of its own.’” Id. (citing

Cont’l Bankers Life Ins. Co. of the S. v. Bank of Alamo, 578

S.W.2d 625, 632 (Tenn. 1979)); see also Restatement (Second) of

Conflict of Laws § 52 cmt. b (1971) (“Judicial jurisdiction over

a subsidiary corporation will [] give the state judicial

jurisdiction over the parent corporation if the parent so

controls and dominates the subsidiary as in effect to disregard

the latter’s independent corporate existence.”).

Non-Facility Defendants concede that the Court has personal

jurisdiction over Allenbrooke. (ECF No. 16-1 at 12.) The Court

has personal jurisdiction over Aurora Cares. Personal

jurisdiction over DTD and D&N comports with due process if

Sanders has adequately pled that DTD and D&N are alter egos of

either Allenbrooke or Aurora Cares. See In re Commodity Exch.,

Inc., 213 F. Supp. 3d 631, 680 (S.D.N.Y. 2016).

DTD and D&N have no employees. (ECF No. 16-3 ¶ 34; ECF No.

16-4 ¶ 34.) Denz and Bennett are respective managers and members

of each LLC. (ECF No. 1 ¶¶ 8-9.) Sanders has pled that DTD,

through its manager Denz, “is responsible for maintaining

[Allenbrooke’s] finance department, which includes accounts

payable, payroll, accounts receivable, general ledger, and

financial statement preparation for Allenbrooke.” (Id. ¶ 6.)

Sanders has pled that D&N, through its manager Bennett, “is

responsible for providing continuous oversight regarding the

direct care, contract negotiations, purchasing, capital

improvements, employee and resident safety, and human resources

for Allenbrooke.” (Id. ¶ 7.) Sanders has pled that Denz and

Bennett “actively manage[] Allenbrooke” and are “manager[s] of

Allenbrooke.” (Id. ¶¶ 8-9.) Sanders has pled that, “at all

time[s] material to this lawsuit,” Denz and Bennett together

“retained exclusive control over the operations of Allenbrooke.”

(Id.)

Denz is Co-CEO and CFO of Aurora Cares. (ECF No. 16-3 ¶ 9.)

Bennett is Co-CEO of Aurora Cares. (ECF No. 16-4 ¶ 9.) As

officers of Aurora Cares, Denz and Bennett have “occasionally

traveled to Tennessee . . . to ensure that all of the services

provided under the administrative services agreement between

Allenbrooke and Aurora Cares are performed to the facility’s

satisfaction.” (ECF No. 16-3 ¶ 13; ECF No. 16-4 ¶ 13.)

Denz and Bennett submit affidavits in which they

specifically deny Sanders’s assertions. (See ECF No. 16-3 ¶¶ 11,

14-22, 26, 30-32, 38; ECF No. 16-4 ¶¶ 11, 14-22, 26, 30-32, 38.)

Richie Anderson, Allenbrooke’s executive director, and Perry

Tidwell, Allenbrooke’s former executive director, submit

affidavits in which they deny some of Sanders’s assertions. (See

ECF No. 16-2 ¶¶ 3, 5, 7-8, 10, 14-18, 26; ECF No. 16-5 ¶¶ 3, 5,

7-8, 10, 14-18, 26.)

Courts have asserted jurisdiction over parent companies in

situations similar to that here. See, e.g., Third Nat’l Bank in

Nashville, 882 F.2d at 1090-92 (court had jurisdiction over

parent company when, among other things, parent company was 100%

owner of subsidiary, had officers serving on subsidiary’s board,

subsidiary’s board met regularly in Tennessee to review and

direct subsidiary’s operations, and parent was involved in

multiple contracts involving subsidiary); Carrier Corp., 673

F.3d at 450-51 (similar); Brown v. Quince Nursing & Rehab. Ctr.,

LLC, No. 2:18-cv-2740, 2020 WL 4873670, at *7-10 (W.D. Tenn.

Aug. 19, 2020); Hardaway v. Quince Nursing & Rehab. Ctr., LLC,

No. 2:19-cv-2464, 2020 WL 4106440, at *7-10 (W.D. Tenn. July 20,

2020), reconsideration denied, 2020 WL 4507327 (W.D. Tenn. Aug.

5, 2020); Jones v. Arcadia Nursing & Rehab. Ctr., L.L.C., No.

15-cv-2910, 2017 WL 1193735, at *3-4 (W.D. La. Mar. 29, 2017),

reconsideration denied, 2017 WL 6816738 (W.D. La. May 24, 2017)

(finding exercise of personal jurisdiction over DTD and D&N

appropriate in circumstances similar to those here).

There is sufficient evidence in the record for Sanders to

meet her “relatively slight” burden to establish an alter-ego

theory of personal jurisdiction over DTD and D&N. See Air

Prods., 503 F.3d at 549; Gordon, 330 S.W.3d at 652; see also

Malone, 965 F.3d at 504-05 (where court decided motion to dismiss

for lack of jurisdiction on written submissions alone, plaintiffs

“needed only to make a prima facie showing, which . . . they did

through their complaint”). That finding is appropriate even

given the contradicting evidence Non-Facility Defendants submit.

See Serras, 875 F.2d at 1214 (where plaintiff meets her burden

to make a prima facie showing of personal jurisdiction, “the

motion to dismiss should be denied, notwithstanding any

controverting presentation by the moving party”) (quotation

marks and citation omitted); Theunissen, 935 F.2d at 1464 (same).

The Court has personal jurisdiction over DTD and D&N under the

alter-ego theory of personal jurisdiction. 2 Non-Facility

Defendants’ Motion to Dismiss DTD and D&N on jurisdictional

grounds is DENIED.

2 Because Sanders has met her burden to make a prima facie showing of

personal jurisdiction under the alter-ego theory, the Court need not

reach her argument that personal jurisdiction is appropriate under

the “conspiracy” theory of jurisdiction. (See ECF No. 27 at 12-13.)

In their jurisdictional arguments, both parties rely on the

Tennessee Court of Appeals’ decision in Hatfield. See 2018 WL

3740565. The same Non-Facility Defendants were defendants in

Hatfield. See id. at *1. After the trial court had denied Non-

Facility Defendants’ motions to dismiss, the case went to trial

and a jury awarded the plaintiff substantial damages. Id. at

*1-3. On appeal, Non-Facility Defendants asked the appellate

court to determine, inter alia: (1) whether the trial court erred

in failing to dismiss DTD, D&N, Denz, and Bennett for lack of

personal jurisdiction; and (2) whether the trial court erred in

considering Allenbrooke, Aurora Cares, DTD, D&N, Denz, and

Bennett as alter egos by allowing the jury to pierce the

corporate veil and disregard corporate formalities among the

separate individuals and entities. Id. at *4-5.

Addressing personal jurisdiction, the trial court in

Hatfield found that DTD, D&N, Denz, and Bennett had sufficient

minimum contacts with Tennessee to justify the exercise of

personal jurisdiction. Id. at *5-7. The trial court

alternatively found that DTD, D&N, Denz, and Bennett had waived

their jurisdictional defense “when [they] sought affirmative

relief from the Court” by filing several motions and orders

unrelated to jurisdiction. Id. The appellate court affirmed

the trial court’s finding on the waiver issue and did not reach

the trial court’s finding that DTD, D&N, Denz, and Bennett had

minimum contacts with Tennessee. Id. at *6-8. The Tennessee

Court of Appeals’ opinion in Hatfield dealt with different issues

in a different posture than the issues here. It does not inform

the Court’s evaluation of Non-Facility Defendants’

jurisdictional arguments.

Addressing alter ego and veil-piercing issues, the Hatfield

appellate court considered the sufficiency of the jury’s findings

on liability. See id. at *36-42. Standards of review and

analyses of personal jurisdiction differ from issues of

liability. Although illustrative, Hatfield does not assist the

Court in evaluating the alter ego arguments presented here in

the context of personal jurisdiction.

3. Denz and Bennett

The Court has personal jurisdiction over Denz and Bennett

under the Mohasco test. 401 F.2d at 381. Denz and Bennett state

they have traveled to Tennessee to “ensure that all of the

services provided under the administrative services agreement

between Allenbrooke and Aurora Cares are performed to the

facility’s satisfaction.” (ECF No. 16-3 ¶ 13; ECF No. 16-4

¶ 13.) Sanders has pled that the services Aurora Cares provided,

and the decisions Denz and Bennett made about those services,

led to the injuries that Charles sustained. (See ECF No. 1

¶ 44(a)-(w).) Sanders has pled that other administrative

decisions Denz and Bennett made about the management of

Allenbrooke led to the injuries that Charles sustained. (Id.

¶¶ 47-56.) Sanders makes a prima facie showing that Denz and

Bennett have purposefully availed themselves of the privilege of

acting in Tennessee, that Sanders’s claims arise from their

actions in Tennessee, and that the exercise of personal

jurisdiction over Denz and Bennett is reasonable. See Mohasco,

401 F.2d at 381.

Non-Facility Defendants argue that the Court cannot

exercise jurisdiction over Denz and Bennett in their individual

capacities because they are protected from suit by the fiduciary

shield doctrine. (ECF No. 16-1 at 12-13.) The Tennessee Court

of Appeals has recognized the fiduciary shield doctrine, which

precludes jurisdiction over individuals who act exclusively as

corporate officers on behalf of a bona fide corporation. See

Boles v. Nat’l Dev. Co., 175 S.W.3d 226, 251 (Tenn. Ct. App.

2005) (citing Stuart v. Spademan, 772 F.2d 1185, 1197 (5th Cir.

1985)); accord Balance Dynamics Corp. v. Schmitt Indus., Inc.,

204 F.3d 683, 697 (6th Cir. 2000). Non-Facility Defendants

contend that the contacts Denz and Bennett had with Tennessee

were carried out solely in their corporate rather than their

individual capacities and that they are protected from suit by

the fiduciary shield doctrine. (ECF No. 16-1 at 12-13.)

The fiduciary shield doctrine does not provide blanket

protection to corporate officers. “In a diversity action, the

law of the forum state dictates whether personal jurisdiction

exists, subject to constitutional limitations.” Intera Corp.,

428 F.3d at 615. Because Tennessee’s long-arm statute is

coterminous with federal due process, Parker, 938 F.3d at 839;

First Cmty. Bank, 489 S.W.3d at 384, federal due process

limitations govern the fiduciary shield analysis. See Simplex

Healthcare, Inc. v. Marketlinkx Direct, Inc., 761 F. Supp. 2d

726, 730-33 (M.D. Tenn. 2011). Courts have questioned whether

the Due Process Clause of the Fourteenth Amendment -- a

“constitutional limitation[]” -- implicates the fiduciary shield

doctrine. See id. (collecting cases); see also Johnson v. Gray,

No. 2:10-cv-0163, 2011 WL 13228171, at *6 (E.D. Tenn. Sept. 16,

2011) (rejecting the application of the fiduciary shield doctrine

as applied to a Tennessee breach-of-contract claim); MCA Recs.,

Inc. v. Highland Music, Inc., 844 F. Supp. 1201, 1203 (M.D. Tenn.

1993) (“Where the forum state’s long-arm statute is coextensive

with the full reach of due process, the fiduciary shield doctrine

is inapplicable.”); 3A William M. Fletcher, Fletcher Cyclopedia

of the Law of Corporations § 1296.20 (2019) (“The fiduciary

shield doctrine is not available where the forum state’s long-

arm statute is coextensive with the full reach of due process.”)

(collecting cases).

The Sixth Circuit has, as a practical matter, read the

fiduciary shield doctrine out of existence for purposes of

personal jurisdiction:

While it is true that jurisdiction over the individual

officers of a corporation cannot be predicated merely

upon jurisdiction over the corporation, we hold that

the mere fact that the actions connecting defendants

to the state were undertaken in an official rather

than personal capacity does not preclude the exercise

of personal jurisdiction over those defendants.

Hence, where an out-of-state agent is actively and

personally involved in the conduct giving rise to the

claim, the exercise of personal jurisdiction should

depend on traditional notions of fair play and

substantial justice; i.e., whether she purposely

availed herself of the forum and the reasonably

foreseeable consequences of that availment.

Balance Dynamics, 204 F.3d at 698 (quotation marks and citations

omitted). The Supreme Court’s prior holdings comport with this

understanding. See Calder v. Jones, 465 U.S. 783, 790 (1984)

(“[Defendants’] status as employees does not somehow insulate

them from jurisdiction. Each defendant’s contacts with the forum

State must be assessed individually.”); Keeton v. Hustler

Magazine, Inc., 465 U.S. 770, 781 n.13 (1984) (citing Calder for

“reject[ing] the suggestion that employees who act in their

official capacity are somehow shielded from suit in their

individual capacity”). This reading is consistent with the

practical application of the doctrine in Tennessee state courts.

See Simplex, 761 F. Supp. 2d at 731 (“No Tennessee state court

has ever applied the doctrine to bar jurisdiction.”).

Denz and Bennett’s assertions that they were acting solely

in their official capacities is not determinative for purposes

of jurisdiction. The question is whether they were “actively

and personally involved in the conduct giving rise to the

claim[s],” regardless of the capacity in which they were acting.

Balance Dynamics, 204 F.3d at 698. Because Denz and Bennett

were plausibly “actively and personally involved in the conduct”

giving rise to Sanders’s claims, and because asserting

jurisdiction over them would comport with the “traditional

notions of fair play and substantial justice,” they are not

protected by the fiduciary shield from the assertion of

jurisdiction. Balance Dynamics, 204 F.3d at 698; see Nat’l Can

Corp. v. K Beverage Co., 674 F.2d 1134, 1137 (6th Cir. 1982)

(finding jurisdiction over defendant in his individual capacity

when he was president of corporation, traveled to forum state

once a month to oversee company business, and executed

contractual agreement in forum state); see also Flynn v. Greg

Anthony Constr. Co., 95 F. App’x 726, 740-41 (6th Cir. 2003)

(holding that the vice-president and the president of two

corporations were subject to jurisdiction in their individual

capacities because of “their involvement in orchestrating the

affairs” of the companies’ business in forum state). Non-

Facility Defendants’ Motion to Dismiss Denz and Bennett on

jurisdictional grounds is DENIED.

B. Failure to State a Claim

Non-Facility Defendants argue that Sanders fails to state

a claim for which relief can be granted because: (1) the THCLA

prohibits Sanders from pursuing health care liability claims

against Non-Facility Defendants; (2) the Tennessee courts have

established that DTD, D&N, Denz, and Bennett cannot be held

directly or vicariously liable for the actions of Aurora Cares

or Allenbrooke; (3) there can be no personal liability for an

owner, officer, or member of a Tennessee LLC; and (4) there can

be no personal liability for a member or agent of a New York

LLC. (ECF No. 16-1 at 13-20.)

1. THCLA

Non-Facility Defendants argue that the THCLA prohibits

Sanders from pursuing health care liability claims against them.

(ECF No. 16-1 at 13-14; ECF No. 32 at 3-5.) They argue that the

THCLA allows health care liability actions only against a

“‘licensee, the licensee’s management company, the licensee’s

managing employees, or an individual caregiver who provided

direct health care services, whether an employee or independent

contractor.’” (ECF No. 16-1 at 13) (quoting Tenn. Code Ann.

§ 29-26-102(a)). Non-Facility Defendants argue that they do not

meet any of those definitions. (Id.) Non-Facility Defendants

argue that they are “passive investors” who cannot be sued under

the THCLA. (Id.) Sanders argues that she has properly pled

that Non-Facility Defendants are amenable to suit under the THCLA

or, alternatively, that she has sufficiently pled common law

negligence claims against them. (ECF No. 27 at 22-25.)

Sanders’s first argument is sufficient.

Non-Facility Defendants submit four declarations with their

Motion to Dismiss and rely on them to support their arguments.

(ECF Nos. 16-2, 16-3, 16-4, 16-5.) Although dismissal for lack

of personal jurisdiction is governed by Rule 12(b)(2), dismissal

for failure to state a claim for which relief can be granted is

governed by Rule 12(b)(6). Under Rule 12(b)(6), a court normally

“may not consider matters beyond the complaint.” Hensley Mfg.,

579 F.3d at 613. A court may consider such matters if they are

“referred to in [the] complaint and central to the [plaintiff’s]

claim.” Armengau, 7 F. App’x at 344. The declarations Non-

Facility Defendants submit were not referred to in the Complaint

and are not central to Sanders’s claims. The Court will not

consider them in evaluating Non-Facility Defendants’ arguments

about whether Sanders has stated claims upon which relief can be

granted.

The THCLA provides that only certain individuals and

entities may be sued under it:

(a) Except as provided in this section, a health care

liability action against a licensee may be brought

only against the licensee, the licensee’s management

company, the licensee’s managing employees, or an

individual caregiver who provided direct health care

services, whether an employee or independent

contractor. A passive investor shall not be liable

under this part. A health care liability action

against any other individual or entity may be brought

only pursuant to subsection (b).[3]

Tenn. Code Ann. § 29-26-102(a). A “licensee” is defined by the

statute as “a health care provider licensed, authorized,

certified, registered, or regulated under title 33, 63, or 68

that is legally responsible for all health care services

provided.” Id. § 29-26-101(a)(3). “Management company” is

defined as:

[A]n individual or entity that contracts with, or

receives a fee from, a licensee to provide any of the

following services to or for a licensee:

(A) Directly hiring or firing the administrator

or other managing employees of the licensee;

(B) Directly controlling or having control over

the staffing levels at the licensee;

(C) Directly controlling the budget and

expenditures of the licensee; or

(D) Directly implementing and enforcing the

policies and procedures of the licensee.

Id. § 29-26-101(a)(4)(A)-(D). A “passive investor” is “an

individual or entity that has an ownership interest in a licensee

but does not directly participate in the day-to-day decision

making or operations of the licensee.” Id. § 29-26-101(a)(5).

A licensee’s “managing employee” is not defined in the statute.

Non-Facility Defendants argue that Sanders has not pled

3 Subsection (b) is not relevant here.

sufficient facts to sustain her claims against them under the

THCLA.4 (ECF No. 16-1 at 13-14; ECF No. 32 at 3-5.)

Sanders has pled that Aurora Cares is Allenbrooke’s

“management company” and that her claims arose out of “business

conducted by Aurora Cares, LLC in the operation, management,

and/or control of Allenbrooke.” (ECF No. 1 ¶ 5.) She has pled

that DTD, through its manager and majority member Denz, “is

responsible for maintaining the nursing home’s finance

department, which includes accounts payable, payroll, accounts

receivable, general ledger, and financial statement preparation

for Allenbrooke.” (Id. ¶ 6.) She has pled that D&N, through

its manager and majority member Bennett, “engaged in contact

with facilities, made on-site visits, and is responsible for

providing continuous oversight regarding the direct care,

contract negotiations, purchasing, capital improvements,

employee and resident safety, and human resources for

Allenbrooke.” (Id. ¶ 7.)

Sanders has pled that Denz “actively manages Allenbrooke

. . . and is the manager of Allenbrooke”; “retain[s] exclusive

control over the operations of Allenbrooke”; and “is responsible

for maintaining the finance department, which includes accounts

4 The parties do not dispute that Allenbrooke is a “licensee” as

defined by the THCLA. (See ECF No. 16-1 at 13-14; ECF No. 32 at 3-

5.)

payable, payroll, accounts receivable, general ledger, and

financial statement preparation for Allenbrooke.” (Id. ¶ 8.)

She has pled that Bennett “actively manages Allenbrooke . . .

and is the manager of Allenbrooke”; “retain[s] exclusive control

over the operations of Allenbrooke”; and “is responsible for

maintaining contact with Allenbrooke . . . and performing on-

site visits, providing continuous oversi[ght] of the operations

of the facility . . . and controlled the financial operations of

Aurora Cares LLC, Allenbrooke Nursing and Rehabilitation Center,

and D&N, LLC.” (Id. ¶ 9.)

Sanders has pled that Non-Facility Defendants’ failure to

adequately perform their duties led to Charles’s injuries. (See

id. ¶¶ 44(a)-(w), 51(a)-(h).) Sanders’s pleading is sufficient.

Taking her factual allegations as true, as the Court must at

this stage, see Iqbal, 556 U.S. at 678, Sanders has adequately

pled that Non-Facility Defendants fall within the THCLA’s

definition of “management company” and/or “managing employees.”

Tenn. Code Ann. § 29-26-101(a)(4)(A)-(D). Non-Facility

Defendants’ Motion to Dismiss on this ground is DENIED.

2. Hatfield

Non-Facility Defendants argue that DTD, D&N, Denz, and

Bennett must be dismissed because they cannot be held directly

or vicariously liable given the Tennessee Court of Appeals’

decision in Hatfield, 2018 WL 3740565. (ECF No. 16-1 at 15-17.)

Hatfield is inapposite at this stage. In Hatfield, the court

held that DTD, D&N, Denz, and Bennett could not be held directly

liable for injuries the plaintiff sustained at Allenbrooke

because the evidence presented to the jury was insufficient to

support a finding of liability. See 2018 WL 3740565, at *31

(“We cannot agree that the jury had material evidence to find

direct liability against Mr. Denz, Mr. Bennett, DTD, or D&N in

this case.”). That holding has no bearing at the motion-to-

dismiss stage, where the decision turns on the pleadings. The

record in this case is not fully developed. Evidence presented

at summary judgment or at trial may be sufficient to support a

finding of direct liability against DTD, D&N, Denz, or Bennett.

See id. at *31 (“[I]n order to be directly liable . . . each

[Non-Facility Defendant] must have been involved in the day-to-

day operations of the facility.”). Sanders has adequately pled

facts sufficient to survive a motion to dismiss.

In Hatfield, the court also held that DTD, D&N, Denz, and

Bennett could not be held vicariously liable for injuries caused

by Allenbrooke or Aurora Cares because, under the alter-ego

theory on which the jury was instructed, there was insufficient

evidence to support a finding of liability. See id. at *39-42.

That holding has no bearing at this stage. Evidence presented

at summary judgment or at trial may be sufficient to support a

finding of vicarious liability against DTD, D&N, Denz, and

Bennett. See id. at *36-39 (holding that shareholders and

parents of subsidiaries may be held vicariously liable where the

corporate veil is pierced). Sanders has adequately pled facts

sufficient to survive a motion to dismiss. Non-Facility

Defendants’ Motion to Dismiss on this ground is DENIED.

3. Limited Liability

Non-Facility Defendants argue that DTD, D&N, Denz, and

Bennett must be dismissed because there can be no personal

liability for an owner, officer, or member of a Tennessee LLC or

for a member or agent of a New York LLC. (ECF No. 16-1 at 18-

22.) That argument fails. LLC members may be held liable where

the corporate veil is pierced. See Underwood v. Miller, No.

M2019-00269-COA-R3-CV, 2020 WL 730881, at *3 (Tenn. Ct. App.

Feb. 13, 2020) (citing Edmunds v. Delta Partners, L.L.C., 403

S.W.3d 812, 829 (Tenn. Ct. App. 2012)); Adams v. Adient US LLC,

No. 1:18-cv-1179, 2019 WL 1569353, at *3 (W.D. Tenn. Apr. 11,

2019); Grammas v. Lockwood Assocs., LLC, 944 N.Y.S.2d 623, 625

(N.Y. App. Div. 2012) (“A party may seek to hold a member of an

LLC individually liable despite this statutory proscription by

application of the doctrine of piercing the corporate veil.”).

Sanders has adequately pled facts that, taken as true, could

support application of the veil-piercing doctrine. Non-Facility

Defendants’ Motion to Dismiss on this ground is DENIED.

V. Conclusion

For the foregoing reasons, Non-Facility Defendants’ Motion

to Dismiss is DENIED.

So ordered this 22nd day of September, 2020.

/s/ Samuel H. Mays, Jr.

SAMUEL H. MAYS, JR.

UNITED STATES DISTRICT JUDGE