Mankin v. Hair Therapy for Women, LLC et al
Filing
21
ORDER denying 18 Motion to compel arbitration. See Order for details. Signed by Judge Virginia M. Hernandez Covington on 10/29/2015. (DRW)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
ASHLEY JORDAN MANKIN
Plaintiff,
v.
Case No. 8:15-CV-2071-T-33JSS
HAIR THERAPY FOR WOMEN, LLC,
ET AL.,
Defendants.
_____________________________/
ORDER
This matter comes before the Court on Defendants Hair
Therapy for Women, LLC and Bobbi Russell’s Motion to Stay
Proceedings and Compel Arbitration (Doc. # 18), filed on
October 14, 2015. Plaintiff Ashely Jordan Mankin filed a
response in opposition on October 26, 2015. (Doc. # 20). Being
otherwise fully advised, the Court denies the Motion Compel
Arbitration for the following reasons.
I.
Background
Mankin filed the instant action on September 8, 2015.
(Doc. # 1). The one-count Complaint alleges that Hair Therapy
and Russell violated the Fair Labor Standards Act, 29 U.S.C.
§ 216(b), (FLSA) by failing to pay overtime compensation for
hours worked over 40 in any given workweek. (Id. at ¶¶ 12-
1
15). Hair Therapy and Russell filed a Motion to Dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6) for
failure to state a claim on October 7, 2015 (Doc. # 12), which
was denied by this Court on October 13, 2015 (Doc. # 15).
Thereafter, Hair Therapy and Russell filed their Answer and
the pending Motion to Compel Arbitration on October 14, 2015.
(Doc. ## 17-18).
Attached to the Motion to Compel Arbitration is a copy
of an employment Agreement, which was entered into by Hair
Therapy and Mankin. (Doc. # 18-1). The Agreement contains the
following clause:
17. Mediation and Arbitration. Any disputes
between the parties hereto, whether arising under
this Agreement or otherwise, which the parties
cannot resolve between themselves using good faith
shall be:
17.1 Referred to a court certified mediator of
the Circuit Court in the County of the
principal office of the Employer, and any
mediation shall be held in the County of the
principal office of the Employer. The parties
shall share equally in the cost of said
mediation.
17.2 In the event that said dispute is not
resolved in mediation, the parties shall
submit the dispute to a neutral arbitrator
residing in the County of the principal
address of the Employer. The arbitration shall
be held in the County of the principal office
of the Employer. The Employer shall recover
all fees and costs of said arbitration. In the
event that the parties are unable to agree
2
upon an arbitrator within 15 days of the date
on which either party requests arbitration of
a matter, the arbitrator shall be provided by
the American Arbitration Association. The
parties further agree that full discovery
shall be allowed to each party to the
arbitration and a written award shall be
entered forthwith. Any and all types of relief
that would otherwise be available in Court
shall be available to both parties in the
arbitration. The decision of the arbitrator
shall be final and binding. Arbitration shall
be the exclusive legal remedy of the parties.
Judgment upon the award may be entered in any
court of competent jurisdiction pursuant to
Florida Statutes Chapter 682, as amended, The
Arbitration Code.
(Id. at 4-5).
However, this is not the first suit between Hair Therapy
and Mankin. On March 2, 2015, Hair Therapy filed suit against
Mankin and Lavish Locks by Jordan, LLC, a non-party to the
instant action, in the 13th Judicial Circuit, in and for
Hillsborough County, Florida, Case Number 15-CA-001943. (Doc.
# 20 at 5). In the earlier-filed state court action, Hair
Therapy seeks relief for an alleged violation of a non-compete
provision in the Agreement between Hair Therapy and Mankin.
(Id.). A review of the state court’s docket shows no motion
to compel arbitration has been filed.1
1
Martin K. Eby Const. Co., Inc. v. Jacobs Civil, Inc., No.
3:05-cv-394-J-32TEM, 2006 WL 1881359, at *1 (M.D. Fla. July
6, 2006) (stating “the Court may take judicial notice of
documents filed in other judicial proceedings . . .”).
3
II.
Discussion
“The validity of an arbitration agreement is generally
governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et
seq. (the ‘FAA’). . . .” Caley v. Gulfstream Aerospace Corp.,
428
F.3d
1359,
arbitration
contracts,
1367
(11th
agreements
Id.,
and
on
Cir.
the
2005).
same
“arbitration
is
The
FAA
footing
simply
a
as
places
other
matter
of
contract . . . .” First Options of Chi., Inc. v. Kaplan, 514
U.S.
938,
943
(1995).
“[W]hen
determining
whether
an
arbitration agreement exits, ‘courts generally . . . should
apply ordinary state-law principles that govern the formation
of contracts.’” Dasher v. RBC Bank (USA), 745 F.3d 1111, 1116
(11th Cir. 2014) (quoting First Options of Chi., 514 U.S. at
944); see also Caley, 428 F.3d at 1368.
However,
“whether
[a
party]
waived
its
right
to
arbitration, as opposed to whether the contract is void under
[state] law, is controlled solely by federal law.” S & H
Contractors, Inc. v. A.J. Taft Coal Co., Inc., 906 F.2d 1507,
1514 (11th Cir. 1990). “Arbitration should not be compelled
when the party who seeks to compel arbitration has waived
that right.” Morewitz v. W. of Eng. Ship Owners Mut. Prot.
and Indem. Ass’n (Luxembourg), 62 F.3d 1356, 1365 (11th Cir.
1995); see also Ivax Corp. v. B. Braun of Am., Inc., 286 F.3d
4
1309,
1315
(11th
Cir.
2002).
Although
“questions
of
arbitrability must be addressed with a healthy regard for the
federal policy favoring arbitration,” Moses H. Cone Mem’l
Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983), “the
doctrine of waiver is not an empty shell,” Morewitz, 62 F.3d
at 1366.
A party waives its right to compel arbitration when,
under the totality of the circumstances, it “substantially
participates in litigation to a point inconsistent with an
intent
to
arbitrate
and
this
participation
results
in
prejudice to the opposing party.” Id.; S & H Contractors, 906
F.2d at 1514. Prejudice occurs where “the party seeking
arbitration allows the opposing party to undergo the types of
litigation
expenses
that
arbitration
was
designed
to
alleviate.” Morewitz, 62 F.3d at 1366. In determining if a
party has been prejudiced, courts consider “the length of
delay in demanding arbitration and the expense incurred by
that party from participating in the litigation process.” S
& H Contractors, 906 F.2d at 1514.
The Court finds Morewitz, 62 F.3d 1356, instructive. In
Morewitz a cargo ship disappeared at sea, along with its
eighteen crew members. Id. at 1359. The administrator of the
estates of crew members sued the ship’s owner and manager in
5
the District Court for the Eastern District of Virginia. Id.
Thereafter,
the
administrator
brought
suit
against
the
insurer in a separate action in the District Court for the
Southern District of Alabama. Id. at 1358, 1360-61. The
insurer moved to compel arbitration, which the district court
granted. Id. at 1361. Because of the administrator’s refusal
to arbitrate, the district court dismissed the action with
prejudice. Id. On appeal, the Eleventh Circuit reversed. Id.
at 1367. The court held that the insurer waived its right to
compel arbitration because it had retained counsel to defend
the action brought by the administrator in Virginia and yet
never
mentioned
the
arbitration
clause
in
the
insurance
policy. Id. at 1359, 1366.
Furthermore, the Eleventh’s Circuit more recent opinion
in Ivax, 286 F.3d 1309, does not change the outcome here. In
that case, Ivax and Braun entered into an agreement whereby
Braun
would
subsidiary.
purchase
Id.
at
all
outstanding
1311.
The
stock
agreement
of
Ivax’s
contained
an
arbitration clause and a clause allowing Ivax to have its
accounting firm verify Braun’s records. Id. at 1312. Braun
subsequently
required
Ivax’s
accounting
firm
to
sign
a
confidentiality agreement as a precondition to examining its
financial records. Id. at 1313. Braun thereafter filed suit
6
against
the
accounting
firm
alleging
it
breached
the
confidentiality agreement. Id. at 1314. The next day, Ivax
sued Braun and Braun moved to compel arbitration. Id. at 131516. The district court denied the motion to compel arbitration
on the ground that Braun waived its right to arbitration by
filing suit against the accounting firm. Id. at 1315-16.
On appeal, the Eleventh Circuit held that Braun had not
waived its right to compel arbitration in the suit between
Ivax and Braun by filing suit against the accounting firm.
Id. at 1323. The court reasoned that Braun’s suit against the
accounting firm did not constitute a waiver of its right to
compel
arbitration
in
the
Ivax
litigation
because
the
accounting firm was not a party to the arbitration agreement.
Id.
at
1316-17.
In
reaching
its
decision,
the
court
distinguished precedent standing for the proposition that
when a party seeking to compel arbitration in a later-filed
action is the plaintiff in an earlier-filed action between
co-signatories to an arbitration agreement, then the party
seeking to compel arbitration will have waived its right to
compel arbitration. Id. at 1317.
When read together, Morewitz and Ivax stand for the
following
proposition.
As
between
co-signatories
to
an
arbitration agreement, when one signatory first sues another
7
signatory without resorting to arbitration and the requisite
prejudice exists, then that party waives its right to compel
arbitration in a later-filed action by the other signatory.
In contrast, when a signatory files suit only against a nonsignatory, then the signatory has not have waived its right
to compel arbitration in a later-filed action by another
signatory.
Applying the above to the instant case, it is evident
that Hair Therapy waived its right to compel arbitration in
this action brought by Mankin. Hair Therapy and Mankin are
co-signatories to the same arbitration agreement. (Doc. # 181). Hair Therapy filed suit in state court against Mankin, a
signatory to the arbitration agreement, and Lavish Locks by
Jordan, a non-signatory, on March 2, 2015. (Doc. # 20 at 5).
Notably, the earlier-filed state court action seeks relief
for an alleged breach of the employment Agreement between
Mankin and Hairy Therapy. (Id.). That same Agreement contains
the arbitration agreement Hair Therapy now seeks to enforce
in this instant action brought by Mankin. See (Doc. # 18-1).
By filing suit against Mankin in state court, Hair
Therapy has substantially participated in litigation to a
point inconsistent with an intent to arbitrate. To be sure,
the extent of Hair Therapy’s participation is evidenced by
8
the service and filing of interrogatories, two motions to
compel, and a notice and subpoena to take the deposition of
Mankin in the state court action. Case Number 15-CA-001943.
Further, Hair Therapy’s participation prejudiced Mankin, who
has been forced to defend a suit for more than 7 months in
state court. See Id. For example, Mankin almost certainly
incurred attorney’s fees for the preparation, service, and
filing of her answer and affirmative defenses, objections to
the notice and subpoena filed by Hair Therapy, and responses
to Hair Therapy’s interrogatories. See Id. Therefore, under
Morewitz, this Court denies Hair Therapy and Russell’s Motion
to Compel Arbitration.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
Hair Therapy for Women and Russell’s Motion to Stay
Proceedings and Compel Arbitration (Doc. # 18) is DENIED.
DONE and ORDERED in Chambers in Tampa, Florida, this
29th day of October, 2015.
Copies: All Counsel of Record
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