McNeal v. Glazman et al
MEMORANDUM OPINION. Signed by Judge Richard G. Andrews on 8/29/2018. (nms)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
PETER GLAZMAN , et al. ,
: Civil Action No. 17-1397-RGA
: Superior Court of the State of
: Delaware in and for New Castle County
: Case No. N1 ?C-08-303 F\/INI/
Erin McNeal, Wilmington , Delaware. Pro Se Plaintiff.
Eric Michael Sutty, Esquire , and Jonathan M. Stemerman , Esquire, Elliott Greenleaf,
Wilm ington , Delaware . Counsel for Defendants.
August} t 2018
Plaintiff Erin McNeal , who appears prose , filed this action in the Superior Court
of the State of Delaware in and for New Castle County. It was removed to this Court on
October 6, 2017 , by Defendants Peter Glazman and US Pack Logistics . (D.I. 1). The
Court has federal question jurisdiction pursuant to 28 U.S.C. § 1331 . Pending is
Plaintiff's motion for removal of Defendants' attorney (D .I. 16), Defendants' motion to
compel arbitration and dismiss (D .l. 35) , Defendants' motion to strike sur-reply, or
alternatively, for permission to file a response to Plaintiff's sur-reply (D.l. 35) , and
Plaintiff's motion to remain in district court, not to participate in arbitration , and to
dismiss certain defense counsel (D .I. 45) . The matters have been fully briefed .
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff brings this action against Defendants Peter Glazman and US Pack
Logistics. 1 The Complaint provides New York addresses for both Defendants and
seeks more than seven million dollars in damages. (D .I. 1-1 at p.3). Plaintiff seeks
recovery relating to "Debt/Breach of Contract[,] . .. Age and Sex Discrimination , APEA
[sic], Title VII , Civil Rights , Equal Rights Pay, Equal Pay Act, Equal Rights Amendment
ERA, Comparable Worth , Breach of Covenant, Implied Promises, Breach of Good Faith
and Fair Dealing , Retaliation , Whistle Blowing , Wrongful Termination , Theft by
Deception, Back Pay, Withholding of Pay, Front Pay, Defamation , Fraud ,
Employee/Contractor Law with IRS and DOL, Compensatory Damages , Work Injury,
Financial Loss , Emotional [and] Mental Stress." (Id.). Defendants removed the case
US Pack Logistics is based in New York, New York. Glazman is its founder and
chief executive officer. See https://www.bloomberg .com/research/stocks/private
/snapshot.asp (last visited Aug. 10, 2018) .
pursuant to 28 U.S.C. § 1331 (federal question jurisdiction) , and note that the Court has
supplemental jurisdiction over Plaintiff's state law claims. (0.1. 1 at p.2) .
On November 5, 2013 , Plaintiff "was supposedly hired as an independent
contractor for Ark Logistics under US Pack Logistics ... to pick up parcels, sort and
load them into the van , at the OHL warehouse in Elkridge , MD , and deliver the parcels
to the post offices in the Philadelphia Region ." (0 .1. 1-1 at p.6) . Plaintiff alleges that
she, Glazman , and US Pack entered into a five-year contract/agreement. (Id.). In
December 2013 , Plaintiff spoke with Glazman about issues with Ark Logistics'
performance . (Id.). On February 24 , 2014, Plaintiff was recognized for her skills and
hard work. (Id) . In March 2014 , Plaintiff was given two more routes , but her pay was
reduced . (Id. at p.7) . In addition , she was not treated equally or fairly, and she did not
receive monies owed her. (Id.)
In July 20 14 , OHL leaders/owners came from another country to examine the
operations in Elkridge, Maryland , and questioned Plaintiff "on how everything runs ." (Id.
at p.8) . Plaintiff alleges that Glazman was angry because he did not like her "speaking
the truth ." (Id.). On August 25 , 2014 , Glazman sent two of his employees to take
Plaintiff's ID, keys , van , routes , bank cards , scanners , bungees, and EZ Pass
transponders . (Id.). Plaintiff alleges that "out of nowhere , [she] was wrongfully
terminated . No warning . No reason. " (Id. at p.7) . Plaintiff alleges that US Pack
Logistics breached the contract and wrongfully terminated her without cause. (Id. at
Plaintiff spoke to Glazman several times seeking her pay. (Id.) . She alleges that
he refused to pay her and then "bad mouthed" her to Ark Logistics not to hire her and
stay away from her because she was bad news . (Id.) . Plaintiff last spoke to Glazman in
early September 2014. (D .I. 1-1 at p.4) .
Plaintiff commenced this action on August 24 , 2017 in Superior Court and
Defendants removed it to this Court on October 6 , 2017.
Following the case's removal ,
Plaintiff filed a motion for removal of Defendants' attorneys. (D.I. 16). On November
13, 2017 , Defendants filed a motion to compel arbitration and dismiss the case.
MOTION FOR REMOVAL OF DEFENDANTS' ATTORNEYS
Plaintiff moves for removal of defense counsel Peter P. Perla , Erin L. Henderson ,
and Pete Fidopiastis on conflict of interest grounds. (D.I. 16). She also makes a
request for Defendants to choose only one of their attorneys, either Eric M. Sutty or
Jonathan M. Stemerman , to represent them. (Id.). Plaintiff contends that Perla and
Henderson must be removed as attorneys due to their previous representation of
Defendants. (D .I. 24 at
(D.I. 18). Defendants oppose on the grounds that
there are no grounds for their removal.
Plaintiff relies upon ABA Model Rule 1.9 to support her position .2 It provides , as
Rule 1.9 - Duties to Former Clients
(a) A lawyer who has formerly represented a client in a matter shall not
thereafter represent another person in the same or a substantially related
matter in which that person 's interests are materially adverse to the
interests of the former client unless the former client gives informed
consent, confirmed in writing .
The District of Delaware Local Rules provide that attorneys "shall be governed
by the Model Rules of Professional Conduct of the American Bar Association. " D.Del.
LR 83 .6(d) .
(b) A lawyer shall not knowingly represent a person in the same or a
substantially related matter in which a firm with which the lawyer formerly
was associated had previously represented a client
(1) whose interests are materially adverse to that person ; and
(2) about whom the lawyer had acquired information protected by
Rules 1.6 and 1.9(c) that is material to the matter; unless the former
client gives informed consent, confirmed in writing.
(c) A lawyer who has formerly represented a client in a matter or whose
present or former firm has formerly represented a client in a matter shall
(1) use information relating to the representation to the
disadvantage of the former client except as these Rules would
permit or require with respect to a client, or when the information
has become generally known ; or
(2) reveal information relating to the representation except as these
Rules would permit or require with respect to a client.
Model Rules of Prof'I Conduct R. 1.9.
Other Model Rules that come into play are Rules 1.7 and 1.13. Rule 1.13(g)
provides that a lawyer representing an organization may also represent any of its
directors, officers , employees , members, shareholders or other constituents subject to
the provisions of Rule 1.7. Id. at R. 1.13(g). Rule 1.7 provides that that a lawyer shall
not represent a client if the representation involves a concurrent conflict of interest. Id.
at R.1 .7. A concurrent conflict of interest exists if: (1) the representation of one client
will be directly adverse to another client; or (2) there is a significant risk that the
representation of one or more clients will be materially limited by the lawyer's
responsibilities to another client, a former client or a third person or by a personal
interest of the lawyer. Id. at R.1.7(a). However, even if there is a concurrent conflict of
interest as described above , a lawyer may represent a client if the lawyer reasonably
believes that the lawyer will be able to provide competent and diligent representation to
each affected client. Id. at R.1.7(b) .
Perla and Henderson appear pro hac vice . (D.I. 13, 14). Fidopiastis has
withdrawn from this matter. (0.1. 19 at ,I 11). Neither Perla nor Henderson have ever
represented Plaintiff. (D .I. 19 at ,I 13; D.I. 20 at ,I 4) . Their firm , Jasinski, P.C. has
represented US Pack Logistics in the past, but has never represented Glazman . (D .I.
19 at ,I 12; 0 .1. 20 at ,I 3). U.S. Pack Logistics' and Glazman's interests are aligned in
this action. (D .I. 20 at ,I 5) . In addition , neither Sutty, Stemerman, or their law firm
Elliott Greenleaf, P.C ., have ever represented Plaintiff or either Defendant. (D.I. 21 at
,I,I 13;3-5 ; 0.1. 22 at ,J,J 3-5) .
There is no evidence that any of the defense attorneys have a conflict of interest
in this matter. None of them have ever represented Plaintiff. Moreover, Henderson's
and Perla's prior representation of US Pack Logistics does not disqualify their
representation of it or Glazman, its CEO. Finally, US Pack Logistics' and Glazman's
interests are aligned . There is no basis for removal of any defense attorney or a basis
to require Defendants to pick only one attorney to represent them. Therefore , the
motion will be denied.
MOTION TO COMPEL ARBITRATION AND DISMISS
Defendants move to compel arbitration under the Federal Arbitration Act and to
dismiss the proceedings. Defendants contend that Plaintiff is required to submit her
claims to arbitration pursuant to an Owner/Operator Agreement she entered into with
SCI , LLC , a New York limited liability company. Defendants argue that they are thirdparty beneficiaries of the Agreement. (D .I. 29 at p.2) . Defendants note that the
Agreement contains an arbitration clause and directs that the document must be
interpreted using New York law. (See 0.1. 29-1 at Ex. A at pp .5-7). According to
Defendants, by entering into the Agreement, Plaintiff agreed to provide independent
contractor delivery services to various logistics brokers who are customers of SCI , such
as US Pack Logistics. (D .I. 29 at p.2) . Defendants contend that the Agreement
contemplates their role in the independent contractor relationship with Plaintiff and as a
beneficiary of the Agreement's conditions and terms . (Id.).
Plaintiff does not dispute that she signed the Agreement or that Defendants are
third party beneficiaries of the Agreement. She opposes arbitration on the grounds that
the Agreement was not renewed and , therefore , it is no longer valid and binding . In
addition , she contends that only Delaware law applies.3
Plaintiff and SCI , LLC , a New York limited liability company, executed an
Owner/Operator Agreement on February 24 , 2014 . (D.I. 29 at p.2; D.I. 29-1 at pp .2-8) .
Plaintiff signed and/or initialed each page of the Owner/Operator Agreement. (D .I. 291).
SCI is a third-party administrator for independent owner operators in the courier
and transportation business . (D .I. 29 at p.1). It contracts with courier and logistics
companies that use independent owner operators to offer payment processing and
other back-office services on their behalf and with independent owner operators to
provide additional services and products including payment processing . (Id.). Plaintiff
provided delivery services on behalf of US Pack Logistics. (Id. at p.2) .
Plaintiff filed a sur-reply. (D .I. 33) . Defendants move to strike the sur-reply or, in
the alternative , to file a response to the sur-reply. (D.I. 35) . Given Plaintiff's prose
status and the fact that Defendants' motion for arbitration will be granted , the Court will
dismiss the motion to strike as moot. The Court will also dismiss as moot Plaintiff's
duplicative motion to remain in district court, not to participate in arbitration , and to
dismiss certain defense counsel. (D .I. 45) .
The Agreement provides , "The Owner/Operator agrees to maintain throughout
the term of this Agreement, and , for so long as services are furnished herein , insurance
that will hold SCI and Owner/Operator's Customers harmless from any and all liabilities,
losses, damages, injuries , claims, expenses or the like . .. ". (0 .1. 29-1 at ,I Twelfth) . It
provides , "For insurance purposes , the Owner/Operator agrees to notify SCI and its
Customer of any and all accidents in which the Owner/Operator's drivers are involved ,
and of any loss or damage to property transported. " (Id. at
,I Thirteenth) . "The Owner/Operator agrees to indemnify, defend , and hold harmless
SCI and/or Owner/Operator's Customers for any and all liability, damage, cost and
expense incurred by SCI and/or its Customers ." (Id. at ,I Eighteenth) . The Agreement
grants Defendants, as "Logistics Brokers" or "Customers", subrogation rights and
indemnification by Plaintiff. (Id. at ,I Nineteenth) .
The Owner/Operator Agreement also includes the following provisions relevant to
the arbitration issue:
In the event of any dispute, claim , question , or disagreement arising from
or relating to this agreement or the breach thereof, or service arrangement
between Owner/Operator and SCl 's clients , the parties hereto shall use
their best efforts to settle the dispute, cla im, question , or disagreement.
To this effect, the parties shall consult and negotiate with one another in
good faith , in an attempt to reach a just and equitable solution , satisfactory
to both parties. If resolution of the dispute, claim , question , or
disagreement is not reached within a period of 60 days, then upon notice
by either party, disputes that are within the jurisdictional maximum for
small claims will be settled in the small claims court where the
Owner/Operator resides .
All other disputes, claims , questions, or differences beyond the
jurisd ictional maximum for small claims courts within the locality of the
Owner/Operator's residence shall be finally settled by arbitration in
accordance with the Federal Arbitration Act. . ... The arbitrators' decision
shall be final and legally binding and judgment may be entered thereon.
0 .1. 29-1 at~ Twenty-Sixth .
Relevant to choice of law, the Agreement provides :
This Agreement shall constitute the entire Agreement between the parties
and shall supersede any other written or oral agreement between the
parties with respect to the subject matter hereof. This Agreement may not
be altered or amended except by a writing signed by both parties. This
Agreement shall be governed by the laws of the State of New York. If any
provision of this Agreement or portion thereof is held to be unenforceable
by a court of law or equity, said provision or portion thereof shall not
prejudice the enforceability of any other provision or portion of the same
provision , and instead such provision shall be modified to the least extent
necessary to render such provision enforceable while maintaining the
0 .1. 29-1 at~ Twenty-Third .
There is an "evergreen provision, " which provides :
The term of this Agreement shall commence on the date of execution of
this document by SCI and the Owner/Operator, and shall continue for a
period of ninety (90) days, subject to renewals , unless either party desires
to cancel this Agreement. Notification of a party's intent not to renew this
Agreement must be in writing and served upon the other party at least ten
(10) days before the upcoming expiration date and shall be delivered by
US Mail , Certified or Registered , return receipt requested , or by hand with
receipt by the party to be served , acknowledged . If the Owner/Operator
terminates this contract without 10 days' notice and not on the anniversary
of the 90 day renewal , the Owner/Operator may be required to pay a
penalty for said cancellation .... In addition , this Agreement may be
canceled by SCI upon the failure of the Owner/Operator to follow generally
accepted rules of conduct, . . .. Such cancellation shall be immediate
upon notice from SCI , or may occur at some later date, at the sole election
of SCI specified in its notice of cancellation .
0.1. 29-1 at~ Twenty-First.
Legal Standards. "The Federal Arbitration Act .. . creates a body of federal
substantive law establishing and governing the duty to honor agreements to arbitrate
disputes. " Century lndem. Co. v. Certain Underwriters at Lloyd's, 584 F.3d 513 , 522
(3d Cir. 2009) . Section 3 of the FAA requires that "If any suit .. . [is] referable to
arbitration under an agreement in writing for such arbitration , the court in which such
suit is pending , upon being satisfied that the issue involved in such suit or proceeding is
referable to arbitration under such an agreement, shall on application of one of the
parties stay the trial of the action until such arbitration has been had in accordance with
the terms of the agreement. ... " 9 U.S.C . § 3.
Under Section 4 , "A party aggrieved by the .. . refusal of another to arbitrate
under a written agreement for arbitration may petition any United States district court
which , save for such agreement, would have jurisdiction under Title 28 , in a civil action .
. . arising out of the controversy between the parties , for an order directing that such
arbitration proceed in the manner provided for in such agreement. Id. at § 4.
Accordingly, "upon being satisfied that the issue involved . . . is referable to arbitration ,"
a district court must, upon "application of one of the parties stay proceedings and
compel arbitration ." Id. at§ 3. However, "district courts may dismiss an action if all the
issues raised are arbitrable and must be submitted to arbitration ." Ebner v. Financial
Architects, Inc., 763 F. Supp. 2d 697 , 699 (D. Del. 2011).
"[A]rbitration is a matter of contract and a party cannot be required to submit to
arbitration any dispute which he has not agreed so to submit. " AT & T Technologies,
Inc. v. Communications Workers of Am., 475 U.S. 643 , 648 (1986). "[W]hether or not [a
party is] bound to arbitrate , as well as what issues it must arbitrate , is a matter to be
determined by the Court on the basis of the contract entered into by the parties." Id. at
649. Therefore, "[b]efore compelling a party to arbitrate pursuant to the FAA, a court
must determine that (1) there is an agreement to arbitrate and (2) the dispute at issue
falls within the scope of that agreement. " Century lndem. Co., 584 F.3d at 523.
"In resolving the arbitrability of particular claims , however, a court is not to rule on
the potential merits of the underlying claims. " Painewebber Inc. v. Hofmann , 984 F.2d
1372, 1377 (3d Cir. 1993). In addition , "there is a presumption of arbitrability in the
sense that an order to arbitrate the particular grievance 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. Doubts should be resolved in favor of
"In determining if parties have agreed to arbitrate, [courts] apply
ordinary state-law principles that govern the formation of contracts ." lnvista S.A.R.L. v.
Rhodia, S.A. , 625 F.3d 75, 84 (3d Cir. 2010).
Discussion . Courts that have reviewed the Owner/Operator Agreement at issue
have enforced its arbitration clause, noting that the "provision broadly applies to 'any
dispute, claim , question , or disagreement arising from or relating to [the Agreement] or
the breach thereof. "' Greene v. Subcontracting Concepts, L. L. C. , 2014 WL 1087999, at
*2 (S .D.N.Y. Mar. 19, 2014) ; see also Ouedraogo v. A-1 lnt'I Courier Serv. , Inc. , 2014
WL 1172581 , at *3 (S.D.N .Y. Mar. 21, 2014) . In a similar case where the plaintiffs and
SCI were the only signatories , the court determined that, based upon the provisions of
the Owner/Operator Agreement, the defendant (a company for whom the plaintiff
delivered packages) was a third-party beneficiary and , thus, the agreement applied and
covered the claims the plaintiffs brought against the defendant. See Ege v. Express
Messenger Systems, Inc., 2017 WL 87841 (W.D. Wash . Jan . 10, 2017) .
Plaintiff does not contest the arbitration clause. Nor does she contend that
Defendants are not third-party beneficiaries to the Owner-Operator Agreement.
Instead , she contends that the Agreement is no longer valid and binding and that only
Delaware law applies. To the extent Plaintiff contends there is no Agreement, the Court
turns first to the choice of law dispute.
Choice of Law Provision . Plaintiff raises federal claims and supplemental state
law claims in her Complaint. Despite the choice of law provision that provides that the
Agreement shall be governed by the laws of New York, Plaintiff contends that Delaware
law applies given that she resides in Delaware , she filed the action in Delaware , and the
"case is held in a Delaware Court under the Delaware Laws only. " Plaintiff cites no
authority for her position .
"[U]nder the [FAA, arbitration] is a matter of consent, not coercion , and parties
are generally free to structure their arbitration agreements as they see fit. " Volt Info.
Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468 , 479
(1989) . "That freedom extends to choice-of-law provisions governing agreements,
including agreements to arbitrate. " Gay v. Creditlnform, 511 F.3d 369 , 389 (3d Cir.
2007) ; see also Trippe Mfg. Co. v. Niles Audio Corp ., 401 F.3d 529 , 532 (3d Cir. 2005)
(applying New York law pursuant to choice-of-law provision in determining whether to
enforce arbitration agreement) ; General Elec. Co. v. Deutz AG , 270 F.3d 144, 155 (3d
Cir. 2001) ( "In general , we respect the choice of law that parties agree upon to resolve
their private disputes. ").
"When an agreement contains both a choice-of-law clause and an arbitration
clause, the reviewing court will apply the substantive law of the state named in the
choice of law clause. " Ebner, 763 F. Supp . 2d at 700. In this case, New York is the
named state. However, even if the Court were to apply Delaware law, the analysis
would be the same .
Under New York law, where a contract has a choice of law provision , "a court is
to apply the law selected in the contract so long as the state selected has sufficient
contacts with the transaction ." Aramarine Brokerage, Inc., v. OneBeacon Ins. Co., 307
F. App 'x 562 , 564 (2d Cir. 2009) . Similarly, Delaware courts routinely apply§ 187 of the
Restatement (Second) of Conflict of Laws to choice-of-law provisions. See Total
Holdings USA, Inc. v. Curran Composites, Inc., 999 A.2d 873 , 881 (Del. Ch. 2009)
Under§ 187, a choice-of-law provision will be enforced unless either: (a) the chosen
state has no substantial relationship to the parties or the transaction and there is no
other reasonable basis for the parties' choice , or (b) application of the law of the chosen
state would be contrary to a fundamental policy of a state which has a materially greater
interest than the chosen state in the determination of the particular issue and which ,
under the rule of§ 188, would be the state of the applicable law in the absence of an
effective choice of law by the parties . Restatement (Second) of Conflict of Laws §
187(2) (1971 ). "[l]t is only in rare circumstances that Delaware courts do not honor the
choice-of-law provisions agreed to by parties in a binding contract." Coface Collections
N. Am. Inc. v. Newton , 430 F. App 'x 162, 166 (3d Cir. 2011) .
Plaintiff resides in Delaware . The Complaint alleges that she picked up parcels
in Maryland and delivered the parcels in the Philadelphia region . The office of US Pack
Logistics is in New York, where it was served with process . Also , the Complaint refers
to numerous telephone conversations between Plaintiff and Glazman , who is also
located in New York. Under these circumstances , New York has sufficient contacts with
the matter such that the New York choice-of-law provision governs the Agreement.
Moreover, Plaintiff does not provide, and the Court does not find, any reason why
Delaware "has a materially greater interest" than New York in the determination of this
issue. See Creditlnform, 511 F.3d at 390 (finding that "[t]hough it certainly is true that
Pennsylvania has an interest in protecting its consumers, we cannot say that Virginia
has a lesser interest in protecting businesses located in it").
Thus, applying the choice of law provision , the Court finds that New
York law governs the inquiry into whether claims must be arbitrated .
While not explicit, it may be that Plaintiff suggests that the arbitration
provision is unconscionable. Under New York law, a contract is
unconscionable when it is so grossly unreasonable or unconscionable in
the light of the mores and business practices of the time and place as to
be unenforceable [pursuant] to its literal terms. Generally, there must be a
showing that such a contract is both procedurally and substantially
unconscionable. The procedural element of unconscionability concerns
the contract formation process and the alleged lack of meaningful choice;
the substantive element looks to the content of the contract, per se .
Ragone v. Atlantic Video at Manhattan Ctr., 595 F.3d 115, 121-22 (2d Cir. 2010)
(alterations and citations omitted) . Here, there is no basis to find that the arbitration
provision is unconscionable, either procedurally or substantively.
The arbitration clause is broad and encompasses all the claims raised by Plaintiff
in her complaint. See Greene, 2014 WL 1087999, supra . In addition , the Agreement
contains provisions that allows Plaintiff to choose an arbitrator to serve on the
arbitration, provides for discovery, and binds the parties to arbitration . By its terms , it is
not unfair toward Plaintiff. In sum, the Court concludes that Plaintiff agreed to an
enforceable arbitration agreement when she executed the Owner/Operator Agreement.
The claims in her Complaint are subject to arbitration.
Evergreen Provision . Plaintiff's claim that there is not a valid Agreement rests
upon the "evergreen provision" found at the Twenty-First Paragraph. As discussed
above , the arbitration clause is broad. It expressly refers to "any dispute, claim ,
question , or disagreement arising from or relating to this agreement. " (D .I. 29-1 at ,I
Plaintiff seeks to avoid arbitration claiming that the Agreement is no longer in
effect. In Plaintiff's view, her alleged wrongful termination on August 24 , 2014 occurred
long after the 90-day period and , the "motion to compel to arbitration, therefore , does
not exist and does not fall within the timelime. " (D .I. 31) . The "evergreen clause"
provides that, after the "expiration" date , the Agreement shall continue , "subject to
renewals" unless either party desires to cancel the agreement through notification of a
party's intent not to renew in writing and served upon the other party at least ten days
before the upcoming expiration date.
Whether the arbitration clause covers the "evergreen provision" is a matter of
contract interpretation , as is the question of when the "evergreen clause" terminates.
See New York Typographical Union No. 6 v. Bowne of New York City, Inc., 1990 WL
170352, at *8 (S.D . NY Oct. 31 , 1990). Although courts typically decide the issue of
whether the parties have entered into an agreement to arbitrate , the issue of expiration
or termination of an agreement is a different dispute that ordinarily involves other
clauses of the agreement. See Abram Landau Real Estate v. Bevona , 123 F.3d 69, 7273 (2d Cir. 1997). Where an agreement "contains a sweeping arbitration clause
covering all disputes involving the meaning of terms and provisions of the agreement
and where the arbitration clause does not expressly exclude disputes over the
termination provision or the 'evergreen ' clause , disputes over these matters should be
submitted to arbitration ." Id. at 73. Thus, whether the "evergreen clause" has expired is
for an arbitrator to weigh .
The record does not disclose any written notice of cancellation . While Plaintiff
asserts that the Agreement has formally expired , the effect of the "evergreen clause" on
the continued operation of the Agreement is, under the broad arbitration clause at issue
here, a matter for the arbitrator. See Abram Landau Real Estate , 123 F.3d at 74 ; 4200
Ave. K LLC v. Fishman , 164 F. Supp. 2d 339 , 342 (S .D.N.Y. 2001) . Plaintiff's claim that
there is no long a valid and binding agreement is not a basis for denial of Defendants'
There is no dispute that Plaintiff entered into an agreement to arbitrate , that
Plaintiff's claims are encompassed by the broad arbitration clause, and that Defendants
are third-party beneficiaries to the Agreement. Therefore , the Court will grant
Defendants' motion to compel arbitration . The Court will not now dismiss the complaint.
Rather, the case will be stayed. The parties are to file a status report in six months, or
within one week of the arbitration decision, whichever comes first.
For the above reasons , the Court will : (1) deny Plaintiff's motion for removal of
Defendants' attorney (D.I. 16); (2) grant Defendants' motion to compel arbitration and
stay the case (D .I. 26) ; (3) dismiss as moot Defendants' motion to strike sur-reply, or
alternatively, for permission to file a response to Plaintiff's sur-reply (D .I. 35) ; and
dismiss as moot Plaintiff's motion to remain in district court, not to participate in
arbitration , and to dismiss certain defense counsel (D .I. 45).
An appropriate Order will be entered.
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