Kelley v. Alabama Title Loans Inc
Filing
19
MEMORANDUM OPINION AND ORDER GRANTING 12 MOTION to Compel Arbitration. The Court DENIES the request for attorneys fees and expenses. Signed by Judge James H Hancock on 6/2/2015. (JLC)
FILED
2015 Jun-02 AM 09:40
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
YVETTE KELLY,
)
PLAINTIFF,
)
VS.
)
ALABAMA TITLE LOANS, INC.,
)
DEFENDANT.
2:14-cv-2464-JHH
)
MEMORANDUM OPINION AND ORDER
The court has before it the February 20, 2015 Motion (Doc. #12) to Compel
Arbitration filed by Defendant Bessemer Title Pawn, Inc. d/b/a Alabama Title Loans
(“Defendant”). The Motion (Doc. #12) has been fully briefed (Docs. #13, 17, 18) in
accordance with the court’s orders (Docs. #14, 16) of February 23, 2015 and March
12, 2015, and is now before the court for review.
I.
Relevant Background and Facts
A.
Procedural History
On December 23, 2014 Yvette Kelley (“Kelley” or “Plaintiff”) filed this lawsuit
against Bessemer Title Pawn, Inc. d/b/a Alabama Title Loans alleging violations of
42 U.S.C. § 1981, as amended. (See generally Compl.). Kelley alleges that her
employment at Alabama Title Loans was terminated and/or that she was refused a
transfer because of her race, African American.1 (See generally Compl.). On
February 20, 2015, the date Defendant’s Answer was due, Defendant filed the instant
Motion (Doc. #12) to Compel Arbitration. The Motion (Doc. #12), as supported by
the accompanying Memorandum of Law (Doc. #13), asserts that Plaintiff signed an
Agreement to Arbitrate agreeing that any dispute relating to her employment would
be resolved through arbitration. (See Doc. #13 at 1, Exh. A).
B.
The Arbitration Agreement
At the inception of her employment on August 4, 2011 with Alabama Title
Loans, Kelley and Defendant mutually executed a written Arbitration Agreement (the
“Agreement”). (Doc. #13, Exh. A). The Agreement provides:
Employer and Employee agree that all claims, controversies or
disputes, whether they be statutory claims (including claims
arising under federal, state, or local statutory claims for
discrimination, wage, family leave benefits or other statutory
employment law claims), or common law claims in contract
and/or tort which arise out of or are related in any way to the
employment relationship between the parties shall be resolved
through binding arbitration in accordance with the procedures
specified herein. Arbitration shall take place in the county of
employment unless otherwise agreed in writing. However, either
party may seek injunctive relief from a court of competent
jurisdiction.
On January 27, 2015, Kelley filed a First Amended Complaint (Doc. #6). The original
Complaint (Doc. #1) was amended to correct the name of the Defendant.
1
2
(Def. Exh. A). The Agreement further provides that “all questions regarding whether
an issue is subject to arbitration shall be determined by the arbitrator, not a court of
competent jurisdiction.” (Id.)
II.
Discussion
Defendant’s Motion (Doc. #13) to Compel Arbitration asserts the following
grounds for ordering the case to proceed under the terms of the Agreement: (1) that
the Federal Arbitration Act (“FAA”) governs the case; (2) that the Agreement is valid
and binding; (3) that Plaintiff’s claims are within the scope of the Agreement; and (4)
that discrimination claims are arbitrable statutory claims. (Doc. #13 at 3-9). Plaintiff
opposes the motion to compel arbitration and counters that the injunctive claims are
not arbitrable. (See Doc. #17 at 2). Plaintiff does not oppose arbitration of the noninjunctive damage claims. (See Doc. #17 at 2). As to the injunctive claims,
Defendant contends that the arbitrability of any claim is an issue for the arbitrator to
decide and not the court. (See Doc. # 18 at 3-5.)
A.
The Federal Arbitration Act Governs the Case
There is no dispute that the arbitration agreement in this case is subject to the
Federal Arbitration Act, 9 U.S.C. § 1 et seq. (“FAA”). (See Doc. #17 at 4) (citing the
FAA). The FAA carries with it certain standards applicable to this court’s review of
the pending motion.
3
“In enacting the FAA, Congress demonstrated a ‘liberal federal policy favoring
arbitration agreements.’” MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942, 947 (11th
Cir. 1999) (citation omitted). As such, “questions of arbitrability must be addressed
with a healthy regard for the federal policy favoring arbitration.” Franklin, 177 F.3d
at 947. “By its terms, the Act leaves no place for the exercise of discretion by a
district court, but instead mandates that district courts shall direct the parties to
proceed to arbitration on issues as to which an arbitration agreement has been
signed.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (emphasis in
original). Arbitration “should not be denied unless it may be said with positive
assurance that the arbitration clause is not susceptible of an interpretation that covers
the asserted dispute.” AT&T Techs., Inc. v. Communications Workers of America,
475 U.S. 643, 650 (1986). Pursuant to the FAA, a claim is arbitrable if the following
three criteria are satisfied: (1) there is a valid agreement to arbitrate; (2) the claim
falls within the scope of the agreement to arbitrate; and (3) the claim, if a statutory
one, must not be one which the legislative body enacting it intended to be precluded
from arbitration. See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26
(1991). Here, all three criteria are satisfied, and the claim is therefore arbitrable, for
the following reasons.
4
1.
The Valid Agreement to Arbitrate
Where the FAA applies, the district court’s next step is to determine whether
a valid agreement to arbitrate exists. Prima Paint Corp. v. Flood & Conklin, 388 U.S.
395 (1967). Judicial determinations on the validity of an agreement to arbitrate are
to be decided as a matter of contract. See AT&T Techs., Inc. v. Communs. Workers
of Am., 475 U.S. 643, 648-649 (1986). Under Alabama law, “[t]he elements of a
valid contract include: an offer and an acceptance, consideration, and mutual assent
to terms essential to the formation of a contract.” Shaffer v. Regions Financial
Corp., 29 So.3d 872, 880 (Ala. 2009) (citations and internal quotations omitted). The
burden is on the party opposing arbitration to proffer evidence demonstrating that the
agreement is invalid. Gilmer, 500 U.S. at 26.
When she was hired by Defendant, Plaintiff signed the above-quoted
Arbitration Agreement. Plaintiff was required to sign the Agreement as a condition
of her offer of employment, and she was an at-will employee of Defendant.
Plaintiff’s at-will employment establishes the acceptance and consideration necessary
to form a binding contract. See Maeriquest Mortg. Co. v. Bentley, 851 So.2d 458,
464 (Ala. 2002). Therefore, under Alabama law, the Agreement was valid and
binding.
5
2.
Plaintiff’s Claim Are Within the Scope of the Agreement or
Should be Determined by the Arbitrator Whether the Claim
is Arbitrable
Under the Agreement, Plaintiff agreed to arbitrate “all claims . . . which arise
out of or are related in any way to the employment relationship . . . .” (Def. Exh. A.)
Plaintiff’s Complaint states a claim for a violation of 42 U.S.C. § 1981 based on the
termination of her employment and/or the refusal to transfer because of her race.
Such a claim clearly “arises out of” and “related to” her employment relationship with
Defendant.
Plaintiff concedes that the non-injunctive claims for damages are covered under
the Arbitration Agreement, but insists that she does not have to arbitrate her claim
regarding injunctive relief. (See Doc. #17 at 2.) Plaintiff advocates to “dual
proceedings” where the parties would litigate the injunctive claims in federal court
and arbitrate the non-injunctive (damages) claims.2 (Id. at 5.) Plaintiff’s argument
is unpersuasive.
The law is clearly established that Plaintiff cannot avoid arbitration by
asserting that the injunctive relief portions of her Complaint are not subject to the
Arbitration Agreement. Plaintiff’s concession that she agreed to arbitrate the “non-
This argument is misleading as there is only one claim in the Complaint - a violation of
Section 1981 arising out of her termination. There are no separate injunctive claims and
damages claims. Instead, Plaintiff prays for multiple forms of relief for the same claim.
2
6
injunctive claims” provides the court with a strong reason to compel arbitration. As
stated by the Supreme Court in Granite Rock Co v. International Broth. of Teamsters:
Where, as here, parties concede that they have agreed to
arbitrate some matters pursuant to an arbitration clause, the
law’s permissive policies in respect to arbitration counsel
that any doubts concerning the scope of arbitral issues
should be resolved in favor of arbitration.
561 U.S. 287, 298 (2010) (emphasis in original) (citations and internal quotation
marks omitted). Therefore, because the parties agree that the Arbitration Agreement
covers parts of the relief portions of the Complaint, but disagree as to the scope,
“arbitration should be compelled ‘unless it may be said with positive assurance that
the arbitration clause is not susceptible of any interpretation that covers the asserted
dispute.” Campbell v. Verizon Wireless, LLC, 2015 U.S. Dist. LEXIS 10707, at *2325 (S.D. Ala. Jan. 29, 2015) (quoting AT&T Techs., Inc. v. Commc’ns Workers of
Am., 475 U.S. 643, 650 (1986)).
Further, the Eleventh Circuit addressed a similar issue in Given v. M & T Bank
Corp. (In re Checking Account Overdraft Litig.), 674 F.3d 1252 (11th Cir. 2012). In
Given, the arbitration agreement between the parties provided as follows: “If any part
of the relief request is not expressly stated as a dollar amount, the dispute or
controversy will not be . . . subject to arbitration.” 674 F.3d at 1254. Because the
plaintiff sought, in part, injunctive relief, the district court held that the plaintiff’s
claims were not within the scope of the arbitration agreement. Id. at 1255. The
7
Eleventh Circuit vacated the decision of the district court , noting that the arbitration
agreement specifically provided that “[a]ny issue regarding whether a particular
dispute or controversy is . . . subject to arbitration will be decided by the arbitrator.”
Id. at 1255-56. Based on this delegation provision, the court held that “the decision
of whether [the plaintiff’s] claims are within the scope of the arbitration agreement
is a decision for an arbitrator, and the district court erred in making that decision
itself.” Id. at 1256-57.
Given controls the outcome here.
While it is true that the Arbitration
Agreement between Plaintiff and Alabama Title Loans contains a provision that
“either party may seek injunctive relief from a court of competent jurisdiction”,
however, much like in Given, the Arbitration Agreement also provides that “all
questions regarding whether an issue is subject to arbitration shall be determined by
the arbitrator, not a court of competent jurisdiction.” (Def. Exh. A.) Because the
delegation provision encompasses “all questions,” it encompasses Plaintiff’s claim
for relief. Accordingly, under the guidance of Given, “[a]n arbitrator, not the district
court, must decide whether those claims are within the scope of the arbitration
agreement.” See Given, 674 F.3d at 1256.
3.
Discrimination Claims are Arbitrable Statutory Claims
The last issue the court must decide is whether the statutory claims involve
rights which Congress did not intend to be subject to arbitration. See Gilmer, 500
8
U.S. at 26. The burden is on Plaintiff to prove that the legislature intended to
preclude a waiver of judicial remedies for the statutory right asserted. Id.
Case law clearly establishes that claims arising under the federal discrimination
statutes are subject to arbitration. See id. at 29-30 (ADEA claims are arbitrable);
Bender v. A/G/ Edwards & Sons, Inc., 971 F.2d 698, 700 (11th Cir. 1992) (Title VII
claims are arbitrable); Kelly v. UHC Mgmt. Co., 967 F. Supp. 1240, 1250 (N.D. Ala.
1997) (Section 1981 claims are subject to arbitration with a valid agreement to
arbitrate). The well-established case law precludes Plaintiff from successfully
arguing that the legislature intended to preclude a waiver of judicial remedies for the
statutory rights asserted here.
B.
Alabama Title Loans has not Waived its Right to Arbitrate
Plaintiff argues in the alternative that Defendant has “waive[d] the argument
that the matter is exclusively for arbitration” as a result of seeking reasonable
attorneys’ fees and costs in bringing the Motion to Compel Arbitration. (Doc. # 17
at 2 n.1.) Defendant contends that this argument does not have legal or factual
support.
Waiver does not occur unless, under the totality of the circumstances, the party
has acted inconsistently with the arbitration right and another party has been
prejudiced. See IVAX Corp. v. B.P. Braun of Am., Inc., 286 F.3d 1309, 1315-16 (11th
9
Cir. 2002).
Waiver occurs when a party seeking arbitration “substantially”
participates in litigation to a point “inconsistent with an intent to arbitrate and this
participation results in prejudice to the opposing party.” Morewitz v. West of England
Ship Owners Mut. Protection & Indem. Assoc. (Luxembourg), 62 F.3d 1356, 1365
(11th Cir. 1995). As such, the question is necessarily one of degree. See S&H
Contractors, Inc. v. A.J. Taft Coal Co., 906 F.2d 1507, 1514 (11th Cir. 1990). The
test for waiver is not whether a party has taken any one action inconsistent with its
right to arbitration but whether the party has acted inconsistently with its right on the
whole. Other district courts in this circuit have found that the right to arbitration was
not waived even though the parties had engaged in limited litigation before
demanding arbitration. See, e.g., Marubeni Corp. v. Mobile Bay Wood Chip Center,
2003 WL 22466215, *16-17 (S.D. Ala. June 16, 2003) (finding no waiver where
litigation spread over most of a year and where the party moving to compel litigated
for almost a year and included the affirmative defense of arbitration in its answer);
Goff Group Inc. v. Greenwich Ins. Co., 231 F. Supp.2d 1147, 1154 (M.D. Ala. 2002)
(finding no waiver where party moving to compel arbitration removed case to federal
court and filed pretrial motions).
In this case, the court finds that Alabama Title Loans’ actions are not
inconsistent with its right to arbitration. Before filing its Motion to Compel, counsel
10
for Defendant provided counsel for Plaintiff a copy of the Agreement and requested
that the case be dismissed in favor of arbitration. Plaintiff’s counsel refused, and in
response, counsel for Defendant provided Plaintiff with authority from the Eleventh
Circuit supporting Defendant’s position. Still, Plaintiff insisted that Defendant bring
the Motion to Compel before the court for decision on the issue. Further, the Motion
to Compel was brought before the court entered a scheduling order or any discovery
was exchanged between the parties. Under the totality of the circumstances,
therefore, the court concludes that Defendant has not acted inconsistently with the
arbitration right nor had Plaintiff been prejudiced. See IVAX Corp., 286 F.3d at
1315-16. The court finds that Alabama Title Loans did not waive its right to
arbitration.
III.
Conclusion
For the reasons stated above, the Motion (Doc. # 12) to Compel Arbitration is
GRANTED. The court DENIES the request for attorneys fees and expenses. A
separate order will be entered dismissing the case without prejudice.
DONE this the
2nd
day of June, 2015.
SENIOR UNITED STATES DISTRICT JUDGE
11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?