Doctor's Associates, Inc. v. Repins

Filing 27

RULING denying 17 Motion to Dismiss and granting in part and denying in part DAI's Motion to Compel Arbitration. Repins is ordered to arbitrate the claims that he raised or could have raised against DAI or any of its affiliates, including but not limited to SRE, in an arbitration against DAI in the manner provided by the franchise agreement. The case is closed. Signed by Judge Janet C. Hall on 1/22/2018. (Anastasio, F.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
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DOCTOR’S ASSOCIATES, INC.,
Plaintiff,
v.
IVARS REPINS,
Defendant.

CIVIL ACTION NO.
17-CV-323 (JCH)

JANUARY 22, 2018

RULING RE: MOTION TO COMPEL ARBITRATION (DOC. NO. 1) AND MOTION TO
DISMISS (DOC. NO. 17)
This case initially came before the court pursuant to a Motion to Compel
Arbitration (Doc. No. 1) filed by the plaintiff, Doctor’s Associates, Inc. (“DAI”), against
the defendant, Ivars Repins (“Repins”). DAI sought this court’s order compelling
arbitration of claims arising out of a franchise agreement entered into by DAI, the
franchisor of Subway™ restaurants, and Repins, a franchisee. On April 6, 2017, Repins
filed a document initially styled on the docket as “Answer to Complaint” (Doc. No. 17).
On May 4, 2017, this court issued a Ruling (Doc. No. 18) on DAI’s Motion to Compel as
well as a Motion for Permanent Injunction (Doc. No. 3) filed by DAI. That Ruling
granted DAI’s Motion to Compel and denied DAI’s Motion for Permanent Injunction.1
Pursuant to that Ruling, judgment entered in favor of DAI and the above-captioned case
was closed. See Judgment (Doc. No. 19).
On or about October 19, 2017, Repins contacted the District of Connecticut
Clerk’s Office to ascertain the outcome of this case, asserting that he had never

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The court does not revisit the aspect of its Ruling denying the Motion for Permanent Injunction
here. Therefore, the Motion for Permanent Injunction (Doc. No. 3) is denied as stated in the court’s May
4, 2017 Ruling. See Ruling (Doc. No. 18) at 15–18.

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received notice of the case’s outcome.2 The court mailed Repins the Ruling (Doc. No.
18) and Judgment (Doc. No. 19) on October 19, 2017. Subsequently, Repins filed a
Motion for Relief from Judgment (Doc. No. 20) on October 27, 2017, specifically
requesting that this court grant him leave to appeal despite the appeal deadline having
expired, in light of the fact that he did not receive notice of the Judgment entered in this
case.3 Mot. for Relief from Judgment (Doc. No. 20) at 2.
Upon receipt of Repins’s Motion for Relief from Judgment, the court reviewed the
filings and identified that docket number 17, styled on the docket as “Answer to
Complaint,” actually contains two separately styled documents: (1) “Defendant’s
Answer / Response to Doctor’s Associates, Inc. (‘Subway’) Petition to Compel
Arbitration” (Doc. No. 17) at 1; and (2) “Defendant’s Memorandum in Support of Motion
to Dismiss Plaintiff’s Petition for Lack of Subject Matter Jurisdiction / Alternately for
other relief” (Doc. No. 17) at 6. Upon discovering this error, the court issued an Order to
Show Cause (Doc. No. 22) to DAI why the Judgment should not be vacated to permit
the court to rule on Repins’s Motion to Dismiss. On November 17, 2017, DAI filed a
Response (Doc. No. 23) to the court’s Order to Show Cause stating that it had no
objection to the court vacating its Judgment and ruling on Repins’s Motion to Dismiss.
Absent objection, the court vacated its Judgment of May 4, 2017. See Order (Doc. No.

2
The court notes that it is unclear why Repins did not receive notice of the Judgment in this case,
as the docket reflects that copies of the court’s May 4, 2017 Ruling (Doc. No. 18) and Judgment (Doc.
No. 19) were mailed to Repins at his address, which has not changed since the case was filed.
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Repins also asserted that the court’s Judgment of May 4, 2017, was entered in violation of a
stay pursuant to title 11, chapter 362(a) of the United States Code. See Motion for Relief from Judgment
(Doc. No. 20) at 1. This argument is now moot in light of the court’s decision to vacate its May 4, 2017
Ruling. The court notes that a stay pursuant to title 11, chapter 362(a) of the United States Code is no
longer in effect because the bankruptcy proceedings in question terminated on October 3, 2017. See In
re Repins, No. 17-23144-svk (E.D. Wis.).

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24). The court also directed to the Clerk’s Office to rename document number 17
“Motion to Dismiss / Answer to Complaint.”4
For the reasons that follow, Repins’s Motion to Dismiss (Doc. No. 17) is denied
and DAI’s Motion to Compel Arbitration (Doc. No. 1) is granted in part and denied in
part.
I.

BACKGROUND
On May 13, 2002, the parties signed Franchise Agreement Number 903 for the

operation of a Subway restaurant. Ex. A, Mot. to Compel (Doc. No. 1-1). Eight years
later, on September 22, 2010, they signed Franchise Agreement Number 25752 (Doc.
No. 1-2). Ex. B, Mot. to Compel (Doc. No. 1-2). Franchise Agreement Number 25752
states that it “has revised provisions regarding [topics including] dispute resolution,” and
that Repins “agree[s] to accept the provisions set forth in [sections including]
Paragraph[ ] 10” in Franchise Agreement Number 25752 “to the amendment of all of
[Repins’s] other existing Franchise Agreements with [DAI] to include these provisions.”
Id. at ¶ 14.
Paragraph 10 of Franchise Agreement Number 25752 governs arbitration, and
provides the following:
Any dispute, controversy or claim arising out of or relating to
this Agreement or the breach thereof shall be settled by
arbitration. . . .

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The court notes that Repins, proceeding pro se, did not include a document entitled “Motion to
Dismiss,” but only a document styled “Memorandum in Support of Motion to Dismiss.” The court
construes this document as both a motion and a memorandum. Through this Ruling, the court will refer
to pages 6–13 of document number 17 as Repins’s “Motion to Dismiss,” and will refer to pages 1–5 of
document number 17 as Repins’s “Answer.”

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The parties agree that Bridgeport, Connecticut shall be the
site for all arbitration hearings held under this Paragraph 10
....
If you breach the terms of your Sublease, the Sublessor,
whether us or our designee, may exercise its rights under the
Sublease, including your eviction from the franchised location.
Any action brought by the Sublessor to enforce the Sublease
(which provides that a breach of the Franchise Agreement is
a breach of the Sublease), is not to be construed as an
arbitrable dispute. . . .
You agree that our Affiliates, shareholders, directors, officers,
employees, agents and representatives, and their affiliates,
shall not be liable nor named as a party in any arbitration or
litigation proceeding commenced by you where the claim
arises out of or relates to this Agreement. You further agree
that the foregoing parties are intended beneficiaries of the
arbitration clause; and that all claims against them that arise
out of or relate to this Agreement must be resolved with us
through arbitration . . . .
Any disputes concerning the enforceability or scope of the
arbitration clause shall be resolved pursuant to the Federal
Arbitration Act, 9 U.S.C. § et seq. (“FAA”), and the parties
agree that the FAA preempts any state law restrictions
(including the site of the arbitration) on the enforcement of the
arbitration clause in this Agreement. . . . If, prior to the
Arbitrator’s final decision, either we or you commence an
action in any court of a claim that arises out of or relates to
this Agreement (except for the purpose of enforcing the
arbitration clause or as otherwise permitted by this
Agreement), that party will be responsible for the other party’s
expenses of enforcing the arbitration clause, including court
costs, arbitration filing fees and other costs and attorney’s
fees.
If a party [ ] commences action in any court, except to compel
arbitration, or except as specifically permitted under this
agreement, prior to an arbitrator’s final decision . . . then that
party is in default of this Agreement. . . . The defaulting party
will be responsible for all expenses incurred by the other party,
including lawyers’ fees.
Id. ¶ 10.
On August 12, 2015, a Wisconsin court granted a judgment of eviction to Subway
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Real Estate, LLC (“SRE”) against Repins, in a case entitled Subway Real Estate, LLC,
v. Repins, Case No. 15SC017457 (“the Wisconsin Lawsuit”). See Ex. C, Mot. to
Compel (Doc. No. 1-3) at 2. SRE is DAI’s leasing affiliate. See Motion to Compel at ¶
10; Answer at ¶ 10.
Also on August 12, 2015, Repins, via counsel, filed a document in the Wisconsin
Lawsuit, in which Repins asserted what he referred to as “affirmative defenses/claims.”
See Ex. D, Mot. to Compel (Doc. No. 1-4). Repins “affirmatively state[d]” that DAI “is an
indispensable party which must be joined in” the Wisconsin Lawsuit. Id. at ¶ 1. Repins
also argued that SRE, by filing the Wisconsin Lawsuit, “has waived the arbitration
provision of the agreements between” Repins, SRE, and DAI. Id. at ¶ 5. On October 2,
2015, Repins, via counsel, sent DAI an email stating that Repins “intends to join [DAI]
into the [Wisconsin Lawsuit] likely as an involuntary plaintiff.” See Ex. F, Mot. to
Compel (Doc. No. 1-6) at 2.
In response, DAI filed its first lawsuit against Repins in this court (“the First
Federal Lawsuit”), seeking to compel arbitration. See Doctor’s Associates, Inc. v.
Repins, Case No. 3:15-cv-1450 (JCH). In a Memorandum in Support of a Motion to
Dismiss the First Federal Lawsuit, Repins stated that he “ha[d]n’t decided whether to
join [DAI] in [the Wisconsin Lawsuit].” Mem. in Supp. of Mot. to Dismiss First Federal
Lawsuit (Doc. No. 14-1, Case No. 15-cv-1450) at 2. Thereafter, DAI filed a Notice of
Voluntary Dismissal in the First Federal Lawsuit. In that Notice, DAI represented that
“given the current limbo state of Repins’s claims and his apparent indecisiveness, DAI
does not believe that continued prosecution of the Petition [to Compel Arbitration]
warrants further use of the Court’s, or the parties’, time and resources.” Notice of

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Voluntary Dismissal (Doc. No. 16, Case No. 15-cv-1450) at 2. DAI reserved the right to
move to compel arbitration in the future “if Repins takes any steps to assert claims
against DAI or based on DAI’s conduct.” Id.
On February 13, 2017, Repins filed a document entitled “Defendant’s Witness
List and Itemization of Damages” in the Wisconsin Lawsuit. Ex. G, Mot. to Compel
(Doc. No. 1-7). In that document, Repins listed witnesses who would testify as to topics
involving both SRE and DAI. See id. at 2–3. Under the section entitled “Itemization of
Damages,” Repins lists (1) “losses associated with the lost sale of [Repins’s] business
and restaurant equipment . . . . $60,000 plus interest,” (2) “lost future profits resulting
from the forced closing of [Repins’s] business due to it being made unprofitable but for
the leasing of adjacent Subway Restaurants by [SRE]. . . . $300–450,000 plus interest,”
(3) “Loss of [Repins’s or Repins’s company’s] investment improvements made to the
leased space. $155,000, plus interest,” (4) “Damages associated with [SRE’s] infliction
of emotional distress, including expense for counseling, out-of-pocket expenses for
medication, collectively approx. $4,000, plus pain & suffering,” and (5) costs and
attorney’s fees. Id. at 3.
On February 23, 2017, DAI brought the present lawsuit.
II.

DISCUSSION
In his Motion to Dismiss, Repins argues that DAI’s Motion to Compel Arbitration

should be denied for five reasons: (1) this court lacks subject matter jurisdiction
because the amount in controversy is less than $75,000, Mot. to Dismiss (Doc. No. 17)
at 8–9; (2) the arbitration clause is unenforceable because the entire franchise
agreement is unconscionable, id. at 10–12; (3) DAI is not a party to the Wisconsin
Lawsuit and therefore the Wisconsin Lawsuit does not violate the arbitration agreement,
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id. at 7; (4) DAI waived its right to enforce the arbitration agreement by attempting to
litigate the matter initially, id. at 12; and (5) the defense of laches bars the abovecaptioned suit because DAI waited too long to bring suit and, in so doing, prejudiced
Repins, id. DAI filed a Memorandum in Opposition to Repins’s Motion to Dismiss (“Pl.’s
Response”) (Doc. No. 26) on December 12, 2017.
As a threshold matter, the court notes that it is unclear what, if any, legal
significance there is to attacking a Motion to Compel Arbitration with a Motion to
Dismiss as opposed to an Answer.5 With respect to the subject matter jurisdiction issue
in particular, the court has analyzed Repins’s arguments within the framework of a
motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) (lack of subject
matter jurisdiction), as described in the following subsection, infra Section II(A).
However, with respect to Repins’s remaining claims, the court concludes that the
appropriate analytical framework is governed by the standard for motions to compel
arbitration, not the standard for motions to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6) (failure to state a claim upon which relief can be granted).6
Therefore, while the court has reviewed and considered the arguments as raised in
Repins’s Motion to Dismiss, not his Answer (as well as DAI’s Response to Repins’s
Motion to Dismiss), the court notes that this Ruling is largely consistent with its Ruling of

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Indeed, aside from styling pages 6–13 of document number 17 as a “Memorandum in Support
of Motion to Dismiss” and introducing his arguments as “reasons” why DAI’s “petition should be
dismissed,” Repins does not cite Federal Rule of Civil Procedure 12 or otherwise distinguish the
arguments raised in his Motion to Dismiss from those raised in his Answer. Mot. to Dismiss at 6.
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In fact, the court was unable to find any other case in which a motion to dismiss was filed in
response to a motion to compel arbitration, with the exception of Repins’s previous Motion to Dismiss
filed in the First Federal Lawsuit, where he was similarly proceeding pro se. See Motion to Dismiss (Doc.
No. 14, Case No. 15-cv-1450).

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May 4, 2017, as described in more detail in the discussion that follows.
A.

Subject Matter Jurisdiction

This court has diversity jurisdiction in “all civil actions where the matter in
controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is
between[ ] citizens of different States.” 28 U.S.C. § 1332(a)(1). In its Memorandum in
Support of its Motion to Compel Arbitration (“Pl.’s Mem.”), DAI states that this court has
diversity jurisdiction because the parties are citizens of different states and the amount
in controversy exceeds $75,000 because “Mr. Repins alleges in the Wisconsin Litigation
. . . that he suffered losses of at least $500,000.” Pl.’s Mem. (Doc. No. 1-9) at 6; see
also Mot. to Compel (Doc. No. 1) at ¶ 4 (alleging diversity jurisdiction as the sole basis
for this court’s subject matter jurisdiction). In his Motion to Dismiss, Repins does not
dispute that the parties have diversity of citizenship, but asserts that the amount in
controversy does not exceed $75,000 because “even though I’ve made a damages
claim which is greater, if you look at the facts, I’ll probably not be able to prove much
more than $50,000.” Mot. to Dismiss at 9.
At the pleading stage, the burden for a plaintiff to satisfy the amount-incontroversy requirement is low: courts “recognize ‘a rebuttable presumption that the
face of the complaint is a good faith representation of the actual amount in
controversy.’” Scherer v. Equitable Life Assurance Soc’y of U.S., 347 F.3d 394, 397 (2d
Cir. 2003) (quoting Wolde-Meskel v. Vocational Instruction Project Cmty. Servs. Inc.,
166 F.3d 59, 63 (2d Cir. 1999)). In order to overcome this presumption, Repins must
show “to a legal certainty” that the amount recoverable does not meet the jurisdictional
threshold. Id. (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283,
288–89 (1938)).
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Repins has not met that burden here. To the contrary, Repins’s own statements
of damages in the Wisconsin Lawsuit amount to approximately $670,000. See Ex. G,
Mot. to Compel (Doc. No. 1-7) at 3. Far from showing “to a legal certainty” that the
amount in controversy is less than $75,000, Repins has provided no specific facts or
exhibits to support his vague argument that he’ll “probably not be able to prove much
more than $50,000.”7
The Second Circuit considered and rejected virtually the same argument that
Repins is raising in a different case involving DAI, Doctor’s Associates, Inc. v. Hamilton.
150 F.3d 157, 160–61 (2d Cir. 1998). In that case, the defendant brought suit in New
Jersey claiming damages of over $1,000,000. Id. at 160. When DAI moved in the
District of Connecticut to compel arbitration, the defendant argued that the amount in
controversy did not exceed $75,000 because the franchise agreement capped damages
at $50,000. Id. The Second Circuit rejected that argument, reasoning as follows:
Should the parties proceed to arbitration and DAI prevail, DAI
would have defeated a claim in excess of $1 million in
damages. Therefore, the district court properly concluded
that notwithstanding the liability cap in the contract, the
amount-in-controversy requirement had been met as it oculd
not be said to a ‘legal certainty’ that the award resulting from
Hamilton’s claims would not exceed the $75,000 jurisdictional
minimum.
Id. at 161.
The Second Circuit’s reasoning in Hamilton is directly applicable to this case.
The court therefore concludes that DAI has satisfied the amount-in-controversy

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The court notes that, as previously stated with respect to Repins’s argument that his claims
were likely worth less than the amount he alleged in the Wisconsin Lawsuit, this argument is troubling, as
it suggests that Repins has been disingenuous with either the Wisconsin state court or with this court.
See Ruling (Doc. No. 22) at 6–7.

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requirement for diversity jurisdiction.8
B.

Unconscionability

Pursuant to the Federal Arbitration Act (“FAA”), title 9, sections 1 through 16 of
the United States Code, courts are required “to enforce privately negotiated agreements
to arbitrate . . . in accordance with their terms.” Volt Info. Scis., Inc. v. Bd. of Tr. of
Leland Stanford Junior Univ., 489 U.S. 468, 478 (1989). Section four of the FAA states
that a court must compel arbitration where (1) the dispute is arbitrable, pursuant to a
valid agreement to arbitrate, and (2) “one party to the agreement has failed, neglected
or refused to arbitrate.” LAIF X SPRL v. Axtel, S.A. de C.V., 390 F.3d 194, 198 (2d Cir.
2004). See 9 U.S.C. § 4.
Repins argues that he should not be compelled to arbitrate because “the Subway
franchise agreement is procedurally or substantively unconscionable.” Mot. to Dismiss
at 10. In support of that argument, Repins cites both the terms of the agreement––
which states that arbitration must take place in Connecticut despite the franchise itself
being located in Wisconsin––and DAI’s alleged misconduct of locating competing
franchises in close proximity to his franchise. Id.
First, the Supreme Court has explicitly held that challenges to a contract (such as
the franchise agreement) as a whole as unconscionable are irrelevant “to a court’s
determination whether the arbitration agreement at issue is enforceable.” Rent-ACenter v. Jackson, 561 U.S. 63, 70 (2010). In other words, if a challenge is made to a
contract that includes an arbitration provision, but not to the arbitration provision

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As noted above, Repins does not dispute that the parties are citizens of different states. See
Answer at ¶¶ 2–3 (admitting that DAI is a Florida corporation with its principal place of business in
Connecticut and that Repins is a Wisconsin resident).

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specifically, the challenge to the contract as a whole must be reserved for the arbitrator.
See id. (“[A] party’s challenge to another provision of the contract, or to the contract as a
whole, does not prevent a court from enforcing a specific agreement to arbitrate.”).
Because Repins’s unconscionability argument attacks “the Subway franchise
agreement,” as opposed to the arbitration provision specifically, this court has no
authority to reach the issue of unconscionability. Mot. to Dismiss at 10.
Second, even if this argument could be construed as an attack on the arbitration
provision specifically, the parties have agreed that the unconscionability of the
arbitration provision is a matter for the arbitrator to determine. See Ex. B, Mot. to
Compel at ¶ 10(f); see also Rent-A-Center, 561 U.S. at 68–70 (recognizing the validity
of delegation provisions in arbitration agreements under the FAA). The delegation
provision in the parties’ franchise agreement expressly provides that “[a]ny disputes
concerning the enforceability or scope of the arbitration clause shall be resolved
pursuant to the [FAA], and the parties agree that the FAA preempts any state law
restrictions (including the site of the arbitration) on the enforcement of the arbitration
clause in this Agreement.” Ex. B, Mot. to Compel (Doc. No. 1-2) at ¶ 10(f). In the May 4,
2017 Ruling, this court concluded that unconscionability of the arbitration clause was
among the questions delegated to the arbitrator in the franchise agreement’s delegation
provision. See Ruling (Doc. No. 18) at 9–10 (declining to reach the question of whether
the arbitration clause is procedurally or substantively unconscionable because “there is
clear and unmistakable evidence from the arbitration agreement” that the parties
intended to delegate the question of unconscionability to the arbitrator). Upon review of
Repins’s Motion to Dismiss, the court reaches the same conclusion that it reached with

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respect to Repins’s Answer and, therefore, incorporates its legal analysis and
conclusions from the May 4, 2017 Ruling on this issue. See id.
C.

Repins’s Additional Claims

Repins raises three additional arguments in his Motion to Dismiss: (1) he
(Repins) is not attempting to litigate claims against DAI, Mot. to Dismiss at 7; (2) DAI
waived its right to enforce the arbitration agreement by attempting to litigate the matter
initially, id. at 12; and (3) the defense of laches bars the above-captioned suit because
DAI waited too long to bring suit and, in so doing, prejudiced Repins, id.
The court addressed each of these arguments in its May 4, 2017, Ruling and
concluded, as to each of them, that they were matters delegated to the arbitrator by the
delegation provision in the parties’ franchise agreement. See Ruling (Doc. No. 18) at 11
(“[I]t is for the arbitrator to decide whether the arbitration provision is properly interpreted
to include or exclude Repins’s claims against SRE.”); id. at 12–13 (concluding that
waiver and laches are “arguments for the arbitrator”). The court has reviewed the
Motion to Dismiss and its Ruling of May 4, 2017, and concluded that its prior Ruling
applies with equal force to these arguments as stated in the Motion to Dismiss as it did
to these arguments as stated in the Answer. Therefore, the court affirms and
incorporates in full its legal analysis and conclusions as to Repins’s additional claims.
See id. at 11–13.
D.

Fees and Costs

In its Motion to Compel arbitration, DAI asked this court for an order directing
Repins to “pay all of DAI’s and its affiliates’ expenses, including costs and attorneys’
fees, incurred in connection with compelling arbitration.” Mot. to Compel at ¶ 25.
Repins, appearing pro se, did not address the question of fees and costs in either his
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Answer or his Motion to Dismiss. See generally Motion to Dismiss / Answer (Doc. No.
17). In the Ruling of May 4, 2017, this court concluded that the question of fees and
costs could not properly be addressed until an arbitrator had determined the
applicability of the arbitration clause to Repins’s claims. Ruling (Doc. No. 18) at 13–14.
In its Response to Repins’s Motion to Dismiss, filed after the court vacated its Judgment
of May 4, 2017, DAI did not address the matter of fees and costs. See generally Pl.’s
Response (Doc. No. 26). Therefore, the court addresses the issue of costs and fees
only to adopt its conclusion in its Ruling of May 4, 2017, that it cannot make a
determination as to costs and fees absent a ruling from an arbitrator as to the
applicability or enforceability of the arbitration clause.
III.

CONCLUSION
For the foregoing reasons, Repins’s Motion to Dismiss is DENIED and DAI’s

Motion to Compel Arbitration is GRANTED IN PART AND DENIED IN PART. Repins is
ordered to arbitrate the claims that he raised or could have raised against DAI or any of
its affiliates, including but not limited to SRE, in an arbitration against DAI in the manner
provided by the franchise agreement. The case is closed.
SO ORDERED.
Dated at New Haven, Connecticut this 22nd day of January, 2018.

/s/ Janet C. Hall
Janet C. Hall
United States District Judge

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