John DeRosa v. J. P. Walsh & J. L. Marmo Ent.

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 1:10-cv-00287-CMH-TRJ Copies to all parties and the district court/agency. [999202157].. [13-1423]

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 13-1423

JOHN L. DEROSA,
Plaintiff - Appellee,
v.
J. P. WALSH & J. L. MARMO ENTERPRISES, INC., a Delaware
Corporation,
Defendant – Appellant.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria.
Claude M. Hilton, Senior
District Judge. (1:10-cv-00287-CMH-TRJ)

Submitted:

August 16, 2013

Decided:

September 26, 2013

Before MOTZ, AGEE, and THACKER, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Thomas P. Pavelko, Daniel P. Mullarkey, NOVAK DRUCE CONNOLLY
BOVE & QUIGG, LLP, Washington, D.C., for Appellant. William E.
Hassan, Fairfax, Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
Appellant, J.P. Walsh & J.L. Marmo Enterprises, Inc.
(“Marmo”),

appeals

the

district

court’s

order

denying

with

prejudice its motion to lift stay and reinstate the case to the
active docket.

Finding no abuse of discretion, we affirm.
I.

By agreement dated November 9, 1998, Appellee, John L.
DeRosa (“DeRosa”), assigned the exclusive patent rights to his
“DeRosa Chuck” invention to Marmo.

In exchange, Marmo agreed to

manufacturer and sell the invention

and to pay DeRosa a certain

percentage of the sales.

In March 2010, apparently unsatisfied

with

manufacture

Marmo’s

efforts

to

and

sell

his

invention,

DeRosa filed a complaint in Virginia state court alleging breach
of

contract

and

seeking

rescission

of

the

contract.

complaint alleged, in relevant part:
[T]he failure by [Marmo] to abide by its contractual
and financial obligations under the contract have
denied [DeRosa] the bargained for benefit thereof,
that is the steady flow of manufacturing business and
the timely payment for the product by [Marmo] which
may be remedied only by rescission or cancellation of
the contract and the restoration of ownership of the
patent rights in [DeRosa]’s intellectual property, his
invention, the DeRosa Chuck.

2

The

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Compl. ¶ 20. 1

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On March 25, 2010, Marmo removed this action to

the United States District Court for the Eastern District of
Virginia.
Marmo

filed

its

Answer

on

April

10,

2010,

which

included a counterclaim for patent infringement against DeRosa.
DeRosa

thereafter

filed

a

motion

to

stay

the

case

pending

binding arbitration and to select an arbitrator.

The parties

had

subject

previously

agreed

that

their

dispute

was

to

arbitration pursuant to paragraph five of the contract, but they
could not agree on an arbitrator.
the

extent

that

it

believed

Marmo opposed the motion to

its

counterclaim

for

infringement should go forward in the district court.

patent
After a

hearing, the district court granted DeRosa’s motion and ordered
“that this case is STAYED pending arbitration and is REMOVED
from the active docket of the court.”

J.A. 142.

After several months of inaction by the parties, Marmo
filed a motion to hold DeRosa in contempt for its failure to
comply with the district court’s order of arbitration.
also

“suggested

that

the

Court

fashion

a

remedy

Marmo
whereby

[Marmo]’s counterclaim for patent infringement will be severed
from [DeRosa]’s claim for arbitration and be permitted to move
1

The Complaint is found at J.A. 16-20.
Citations to the
“J.A.” refer to the Joint Appendix filed by the parties in this
appeal.

3

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forward.”

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J.A. 153.

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The district court denied Marmo’s motion

to hold DeRosa in contempt and instead appointed an arbitrator
and directed counsel to “proceed forthwith with arbitration.”
Id. at 156.
After the district court’s second order directing the
parties to arbitrate, DeRosa prepared a “Short Form” Agreement
to

Arbitrate,

specifying,

“Mr.

DeRosa

seek[s]

damages

and

rescission for breach of contract for assignment of a patent;
[Marmo] counter sue[s] for patent infringement and injunctive
relief.”

J.A. 247.

Marmo responded with its own statement of

arbitratable issues, indicating that patent infringement should
not be included in arbitration and “will be pursued in the court
by [Marmo] once the Arbitration is completed.”

Id. at 250.

In

response, DeRosa’s counsel stated, “[w]ithout agreeing to the
allegations or legal assertions made in [Marmo]’s statement of
issues or waiving the right to make submissions pursuant to a
schedule established by the arbitrator, [DeRosa] consent[s] to
allowing [Marmo]’s attachment to the agreement to arbitrate.”
Id.

at

253.

statement

of

The

parties

arbitratable

then

submitted

issues,

which

a

proposed

did

not

joint

include

references to patent infringement.
The parties proceeded to arbitration.

The arbitrator

found Marmo in breach of the assignment contract and awarded
damages to DeRosa.

However, the arbitrator declined to rescind
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the contract.

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DeRosa subsequently filed a motion to confirm the

arbitration award, which Marmo joined.

In addition, Marmo filed

a motion to lift stay and reinstate the case to the active
docket, arguing that the issue of patent infringement was not
submitted to the arbitrator and should therefore be decided by
the court.
The district court denied Marmo’s motion, concluding
that patent infringement was “a matter that should have gone
before the arbiter and should have been resolved by him.”
291.

J.A.

The court reasoned that the parties “went to arbitration

on anything involved in [the] contract or arising out of [the]
contract” and that “[a]ny damages that come from the use of
those

patents

arose

out

of

[the]

damages for patent infringement.

contract,”

Id. at 290.

including

any

Accordingly, on

April 6, 2012, the district court denied with prejudice Marmo’s
motion to lift stay and reinstate the case to the active docket.
Marmo appeals the denial of this motion.
II.
“[T]he power to stay proceedings is incidental to the
power inherent in every court to control the disposition of the
causes on its docket with economy of time and effort for itself,
for counsel, and for litigants.”
248, 254 (1936).

Landis v. N. Am. Co., 299 U.S.

Therefore, we review the exercise of this

power under an abuse of discretion standard.
5

See Maryland v.

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Universal Elections, Inc., –-- F.3d –––-, 2013 WL 3871006, at *2
(4th Cir. 2013) (citing United States v. Ga. Pac. Corp., 562
F.2d 294, 297 (4th Cir. 1977)). 2
III.
Marmo contends the district court erred by refusing to
lift the stay because patent infringement was not an issue that
was subject to arbitration.
either

of

the

district

between the parties.

However, Marmo has not appealed

court’s

orders

compelling

arbitration

Marmo cannot now take issue with the scope

of arbitration by appealing the district court’s refusal to lift
the stay.
A
particular

district
dispute

court
only

“may

when

the

compel

arbitration

parties

have

of

agreed

a
to

arbitrate their disputes and the scope of the parties’ agreement
permits

resolution

of

the

dispute

at

issue.”

Muriithi

Shuttle Express, Inc., 712 F.3d 173, 179 (4th Cir. 2013).

v.

When

a court anticipates that some of the claims in the litigation
2

Marmo urges us to review the district court’s denial of
the motion to lift stay under a de novo standard. However, the
cases Marmo cites in support of its position are inapposite.
Additionally, while it is true that the “determination of the
arbitrability of a dispute is subject to de novo review,” Kansas
Gas & Elec. Co. v. Westinghouse Elec. Corp., 861 F.2d 420, 422
(4th Cir. 1988), Marmo does not appeal either of the district
court’s orders directing the parties to arbitrate.
Instead,
Marmo appeals only the district court’s denial of the motion to
lift stay.
Therefore, we find it appropriate to review the
district court’s action for abuse of discretion.

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might

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not

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be

arbitratable,

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“the

court

must

sever

and

compel

arbitration of all arbitratable claims and reserve jurisdiction
of any non-arbitratable claims.”

B & R Assocs. v. Dependable

Ins. Co., 835 F.2d 526, 528 (4th Cir. 1987).
Here,
contention

that

arbitration,
including

the

district

patent

thereby

patent

court

twice

infringement

defining

the

infringement.

rejected

was

scope
First,

not

Marmo’s

the

to

arbitration

of

subject

as

district

court

considered and rejected Marmo’s argument that its counterclaim
for patent infringement should proceed when it stayed all claims
in

the

case

pending

resolution

of

the

binding

arbitration.

Second, by denying Marmo’s motion to hold DeRosa in contempt,
the district court did not adopt Marmo’s “suggest[ion] that the
Court fashion a remedy whereby [Marmo]’s counterclaim for patent
infringement

will

be

severed

from

[DeRosa]’s

arbitration and be permitted to move forward.”
By

rejecting

Marmo’s

attempts

claim

for

J.A. 153.
to

exclude

from

arbitration its patent infringement claim, the district court
thus defined the scope of arbitration—namely, all claims in the
case, including Marmo’s counterclaim for patent infringement—and
it declined to reserve jurisdiction over any non-arbitratable
claims.

To the extent Marmo now takes issue with the scope of

arbitration, it should have sought review of the arbitration
orders themselves.

Because Marmo failed to do so, we cannot
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reach

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the

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issue

of

whether

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Marmo’s

counterclaim

for

patent

infringement was outside the scope of the contract’s arbitration
clause.
Marmo’s counterclaim for patent infringement was one
that, under the district court’s orders compelling arbitration,
Marmo

should

have

pursued

at

arbitration.

Therefore,

the

district court did not abuse its discretion by denying Marmo’s
motion to lift stay and reinstate the case to the active docket
after having already concluded that patent infringement was a
matter that should have been presented at arbitration.
Accordingly,

we

affirm

the

district

court’s

order

denying with prejudice Marmo’s motion to lift stay and reinstate
the case to the active docket.

We dispense with oral argument

because the facts and legal contentions are adequately presented
in the materials before this court and argument would not aid in
the decisional process.
AFFIRMED

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