Monserrate et al v. Hartford Fire Insurance Company
Filing
85
ORDER granting 68 motion to dismiss and to compel arbitration; granting 12 motion to dismiss and to compel arbitration. This case is STAYED as to Plaintiffs Farrell Prudent, Susan O'Hearn, and Carmen Flores. The parties are DIRECTED to jointly notify the Court of the status of the arbitration proceedings on November 19, 2014, and every ninety (90) days thereafter Signed by Judge Roy B. Dalton, Jr. on 8/19/2014. (VMF)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
DEBRA MONSERRATE; KELLY
BIRCHELL; SHAWN CRAFT; VIVIAN
EDWARDS; BILL FABER; REID
MAYBECK; SUSAN O’HEARN;
FARRELL PRUDENT; PAMELA WARD;
LAURA M. SMITH; and AMY
FERNANDEZ,
Plaintiffs,
v.
Case No. 6:14-cv-149-Orl-37GJK
HARTFORD FIRE INSURANCE
COMPANY,
Defendant.
ORDER
This cause is before the Court on the following:
1.
Defendant Hartford Fire Insurance Company’s Motion to Dismiss and
Compel Arbitration of Plaintiffs Farrell Prudent and Susan O’Hearn’s Claims
and Incorporated Memorandum of Law (Doc. 12), filed March 28, 2014;
2.
Plaintiffs’ Response in Opposition to Defendant’s Motion to Dismiss and
Compel Arbitration (Doc. 35), filed April 11, 2014;
3.
Defendant Hartford Fire Insurance Company’s Motion to Dismiss and
Compel Arbitration of Plaintiff Carmen Flores’ Claims and Incorporated
Memorandum of Law (Doc. 68), filed June 25, 2014; and
4.
Plaintiff Carmen Flores’s Response in Opposition to Defendant’s Motion to
Dismiss and Compel Arbitration (Doc. 69), filed July 9, 2014.
Upon consideration, the Court finds that Defendant’s motions are due to be granted.
BACKGROUND
Plaintiffs Farrell Prudent, Susan O’Hearn, and Carmen Flores formerly worked as
claims analysts for Defendant Hartford Fire Insurance Company.1 (See Doc. 44; Doc. 51,
¶¶ 11–12.) Upon termination of their employment, each entered into a separation
agreement whereby they agreed to individually arbitrate any employment-related claims
in exchange for severance payments. (See Docs. 12-1, 12-2, 68-1.)
Despite their agreements, Prudent and O’Hearn brought this unpaid-overtime
collective action against Defendant under the Fair Labor Standards Act (“FLSA”),
29 U.S.C. § 201, and Flores opted in. (Doc. 51, ¶¶ 19, 15–32; Doc. 44.) Defendant moves
to compel individual arbitration. (Docs. 12, 68.) Plaintiffs oppose. (Docs. 35, 69.) The
matter is now ripe for the Court’s adjudication.
STANDARDS
Under the Federal Arbitration Act (“FAA”) “courts must rigorously enforce
arbitration agreements according to their terms.” Am. Express Co. v. Italian Colors Rest.,
133 S. Ct. 2304, 2309 (2013) (citation and internal quotation marks omitted). Upon the
motion of any party to a valid arbitration agreement, courts must stay litigation of all claims
that fall within the agreement’s scope and compel arbitration according to the agreement’s
terms. See 9 U.S.C. §§ 3–4. Arbitration agreements are presumptively valid and
enforceable. See id. § 2.
Notwithstanding the FAA’s presumption in favor of arbitration, courts may
invalidate arbitration agreements that “prevent the ‘effective vindication’ of a federal
For purposes of this Order, the term “Plaintiffs” refers only to Prudent, O’Hearn,
and Flores and not to any other named or opt-in Plaintiff.
1
2
statutory right.” Italian Colors Rest., 133 S. Ct. at 2310. The party seeking invalidation of
an arbitration agreement bears the burden of showing that the doctrine of effective
vindication applies. Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 92 (2000).
DISCUSSION
Plaintiffs do not contest that their FLSA claims fall within the scope of their
separation agreements’ arbitration provisions. (See Docs. 35, 69.) Instead, they argue
that the arbitration provisions are unenforceable because they require the parties to split
the cost of arbitration, an arrangement which Plaintiffs contend prevents the effective
vindication of their rights under the FLSA. (Doc. 35, pp. 1–4; Doc. 69, pp. 1–4.) The Court
disagrees.
First, contrary to Plaintiffs’ contention, the arbitration provisions in this case are not
per se unenforceable merely because they involve cost-splitting. See Musnick v. King
Motor Co. of Fort Lauderdale, 325 F.3d 1255, 1259 (11th Cir. 2003). The effect of any
cost-allocation requirement on a plaintiff’s ability to effectively vindicate her rights is a
fact-intensive inquiry requiring a case-by-case analysis. See id.
Second, while the effective vindication doctrine permits courts to invalidate
arbitration agreements where the “filing and
arbitration . . . are so high as to make
administrative
fees
access to the forum
attached
to
impracticable,”
Italian Colors Rest., 133 S. Ct. at 2310–11, Plaintiffs have not demonstrated that
arbitration costs would be impracticably high in this case. The party seeking to avoid
arbitration on the ground that it is prohibitively expensive “has an obligation to offer
evidence of the amount of fees he is likely to incur, as well as of his inability to pay those
fees.” Musnick, 325 F.3d at 1260; see also Green Tree, 531 U.S. at 92 (holding that the
3
party arguing that arbitration is cost-prohibitive “bears the burden of showing the
likelihood of incurring such costs”). Here, Plaintiffs have not come forward with any such
evidence (see Docs. 35, 39), and their failure to do so is fatal to their effective vindication
argument. See Anders v. Hometown Mortg. Servs., Inc.,
346 F.3d 1024,
1028
(11th Cir. 2003) (rejecting a plaintiff’s effective vindication argument for lack of evidence
as to arbitration costs).
Plaintiffs alternatively argue that if the Court does not find that the cost-splitting
requirement renders the arbitration provisions entirely unenforceable, it should at least
strike the cost-splitting language itself and require Defendant to bear the entire cost of
arbitration. (See Doc. 35, pp. 4–5; Doc. 69, pp. 4–5.) In support, Plaintiffs cite several
cases in which defendants independently offered to cover all arbitration expenses or
agreed to waive an agreement’s cost-allocation provision. See, e.g., Carter v.
Countrywide Credit Indus., Inc., 362 F.3d 294, 300 (5th Cir. 2004) (declining to address
the enforceability of a “Fee and Costs” provision in an arbitration agreement because the
defendant agreed to pay all arbitration costs). That the defendants in those cases
voluntarily agreed to cover arbitration costs does not provide a basis for compelling
Defendant to do so here. Defendant has not offered to cover arbitration expenses, and
the Court declines to order otherwise. (See Docs. 12, 68.) Moreover, the Court cannot
strike the cost-splitting language for the same reason it cannot invalidate the arbitration
provisions because of its inclusion—Plaintiffs have not provided any evidence that
splitting the cost of arbitration would be prohibitively expensive in this case. See
Musnick, 325 F.3d at 1260 (requiring evidence of prohibitive costs before permitting
modification of an arbitration agreement).
4
Thus, Plaintiffs have not demonstrated any basis for invalidating the arbitration
provisions in their separation agreements, Defendant’s motions to compel are therefore
due to be granted.
CONCLUSION
Accordingly, it is hereby ORDERED AND ADJUDGED:
1.
Defendant Hartford Fire Insurance Company’s Motion to Dismiss and
Compel Arbitration of Plaintiffs Farrell Prudent and Susan O’Hearn’s Claims
and Incorporated Memorandum of Law (Doc. 12) is GRANTED.
2.
Defendant Hartford Fire Insurance Company’s Motion to Dismiss and
Compel Arbitration of Plaintiff Carmen Flores’ Claims and Incorporated
Memorandum of Law (Doc. 68) is GRANTED.
3.
Plaintiffs Farrell Prudent, Susan O’Hearn, and Carmen Flores are
COMPELLED to arbitrate their claims against Defendant individually
pursuant to the terms of their respective separation agreements
(Docs. 12-1, 12-2, 68-1).
4.
This case is STAYED as to Plaintiffs Farrell Prudent, Susan O’Hearn, and
Carmen Flores.2 The parties are DIRECTED to jointly notify the Court of the
status of the arbitration proceedings on November 19, 2014, and every
ninety (90) days thereafter. The parties are further DIRECTED to
immediately notify the Court upon conclusion of the arbitral proceedings.
Defendant requests dismissal of Plaintiffs’ claims in lieu of staying them. (Doc. 68,
p. 14.) However, “[u]pon finding that a claim is subject to an arbitration agreement, the
court should order that the action be stayed pending arbitration,” not dismissed. Bender
v. A.G. Edwards & Sons, Inc., 971 F.2d 698, 699 (11th Cir. 1992).
2
5
DONE AND ORDERED in Chambers in Orlando, Florida, on August 19, 2014.
Copies:
Counsel of Record
6
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?