Paskenta Band of Nomlaki Indians et al v. Crosby et al

Filing 79

ORDER signed by Judge Garland E. Burrell, Jr on 7/9/15 ORDERING for the stated reasons, Defendants' motion for a stay pending arbitration is DENIED and Plaintiffs' counter-motion to stay the arbitration is GRANTED. (Becknal, R)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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PASKENTA BAND OF NOMLAKI
INDIANS; and PASKENTA
ENTERPRISES CORPORATION,

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Plaintiffs,
v.
INES CROSBY; JOHN CROSBY;
LESLIE LOHSE; LARRY LOHSE;
TED PATA; JUAN PATA; CHRIS
PATA; SHERRY MYERS; FRANK
JAMES; UMPQUA BANK; UMPQUA
HOLDINGS CORPORATION;
CORNERSTONE COMMUNITY BANK;
CORNERSTONE COMMUNITY
BANCORP; JEFFERY FINCK; GARTH
MOORE; HARTH MOORE INSURANCE
AND FINANCIAL SERVICES, INC.;
ASSOCIATED PENSION
CONSULTANTS, INC.; HANESS &
ASSOCIATES, LLC; ROBERT M.
HANESS; THE PATRIOT GOLD &
SILVER EXCHANGE, INC. and
NORMAN R. RYAN,

No. 2:15-cv-00538-GEB-CMK

ORDER DENYING DEFENDANTS’ MOTION
FOR A STAY, OR IN THE
ALTERNATIVE, DISMISSAL OF
PLAINTIFFS’ AMENDED COMPLAINT
PENDING ARBITRATION; AND
GRANTING PLAINTIFFS’ COUNTERMOTION TO STAY ARBITRATION

Defendants,
SILVER QUICKEN LOANS, INC.;
CRP 111 WEST 141ST LLC;
CASTELLAN MANAGING MEMBER
LLC; CRP WEST 168TH STREET
LLC; and CRP SHERMAN AVENUE
LLC,
Nominal
Defendants.

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Defendants Ines Crosby, John Crosby, Leslie Lohse, and

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Larry Lohse (collectively, the “Employee Defendants”), and Ted

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Pata,

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Patriot

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(collectively with Employee Defendants, “Defendants”) move for an

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order

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alternative for dismissal of Plaintiffs’ First Amended Complaint

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(“FAC”)

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Federal

Juan

Pata,

Gold

and

staying

Chris
Silver

further

pending

Sherry

Exchange,

Act

in

Frank

and

this

(“FAA”).

or

claims

Ryan

in

the

under

Employee

the

Defendants

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Nomlaki Indians (the “Tribe”), in which they assert the Tribe

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breached

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Employment

Agreement

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Defendant’s

employment

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since each EEA contains an arbitration clause, the FAA requires

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Plaintiffs to arbitrate the claims in their FAC.

terms

of

each

Employee

(“EEA”)

Plaintiffs

with

oppose

Plaintiff

R.

The

initiated

the

against

The

Norman

case,

Plaintiffs’

James,

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arbitration

of

Myers,

Inc.,

proceedings

arbitration

Arbitration
an

Pata,

by

the

Paskenta

Defendant’s

terminating

Tribe;

Defendants’

motion

of

Executive

each

Defendants

Band

Employee

argue

and

that

filed

a

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counter-motion to stay the arbitration, in which Plaintiffs argue

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no

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Employee

Defendants

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forged,

and

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Plaintiffs support their forgery argument citing, inter alia, a

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declaration in which a purported EEA signee named Andrew Freeman

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declares

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signature. (A. Freeman Decl. ¶ 5, ECF No. 67-5.) Plaintiffs also

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present the opinion of a handwriting expert who determined each

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individual whose name appears on an EEA “probably did not write”

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the purported signature. (Mohammed Decl. Ex. A, ECF No. 67-7.)

arbitration

he

agreement

because

therefore

did

exists

not

the

sign

the

between
signatures

purported

the

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the

EEA

Tribe

on

EEAs

the
are

purporting

to

and
EEAs

the
were

nullities.

bear

his

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Defendants

respond

that

Plaintiffs’

signature

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authenticity assertions need not be resolved because this dispute

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has been rendered moot since the Tribe agreed to arbitration with

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the Employee Defendants when it adopted Tribal Resolution No.

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2014-9-8 (“the Resolution”), which states: “the Tribal Council

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hereby

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Executive Employment Contracts between the Tribe and John Crosby,

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Ines Crosby, Larry Lohse, and Leslie Lohse, respectively.” (G.

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Freedman Decl. Ex. 3.) Defendants support this argument with the

ratifies,

three

approves

former

Tribal

and

adopts

Council

all

members

existing

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declarations

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declare that on September 8, 2014, “four of the five members of

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the Tribal Council duly passed [the Resolution].” (G. Freeman

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Decl. ¶¶ 7-8; D. Swearinger ¶¶ 7-8, ECF No. 55-3; A. Swearinger

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¶¶ 7-8, ECF No. 55-4.)

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of

confirms,

who

each

Plaintiffs disagree, arguing the Resolution could not

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create

an

arbitration

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Employee

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Plaintiffs

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arbitration

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ratified. Plaintiffs cite in support of their position Samuel

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Williston, 12 Williston on Contracts, which states, “[a]lthough

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there is some authority that a principle may ratify an instrument

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forged by an agent, the great weight of authority at common law

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denied the possibility of ratification of a forgery.” § 35:29

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(4th ed.).

Defendants
contend

agreement

because
governs

agreement

under
the

exists,

between
federal

dispute
a

the

forged

Tribe

common

and

law,

the
which

concerning

whether

an

agreement

cannot

be

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Defendants argue federal common law “does not speak to

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the issue of whether a forged agreement can be validly ratified”

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and because of “the dearth of federal common law on the topic,
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California law applies” to the question whether the Resolution

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ratified

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principal can ratify a forged agreement. (Defs.’ Reply 2:19, ECF

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No. 70.)

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each

EEA.

Defendants

Defendants

have

contend

not

shown

under

what

California

principles

law

a

govern

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determination of what constitutes federal common law, nor that

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federal

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Resolution

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signatures on the EEAs are forgeries. See GECCMC 2005-C1 Plummer

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St. Office Ltd. P’ship v. JPMorgan Chase Bank, Nat’l Ass’n, 671

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F.3d 1027, 1033 (9th Cir. 2012) (holding that “[u]nder federal

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common

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interpreting contracts’”); and

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O’Hare, 27 F.3d 259, 260 (7th Cir. 1994) (recognizing Williston

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on Contracts as one recognized source of “general principle[s] of

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contract law”); see also U.S. v. Cal., 507 U.S. 746, 756 (1993)

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(favorably citing Williston). The party seeking arbitration “has

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the burden of proving the existence of an agreement to arbitrate

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by a preponderance of the evidence.” Knutson v. Sirius XM Radio

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Inc., 771 F.3d 559, 565 (9th Cir. 2014). Defendants have not

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satisfied this burden since they have not presented any evidence

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from which a reasonable inference could be drawn that the EEA

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signatures are authentic, and have not shown that the Resolution

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resolves this dispute.

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///

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///

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///

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///

common

law

renders

law,

is

silent

on
a

irrelevant

[courts]

look[]

the
claim

to

issue
that

‘general

of

whether

the

the

purported

principles

for

Fleming v. U.S. Postal Serv. AMF

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For the stated reasons, Defendants’ motion for a stay

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pending arbitration is DENIED and Plaintiffs’ counter-motion to

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stay the arbitration is GRANTED.

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Dated:

July 9, 2015

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