Pattison v. Great-West Financial Retirement Plan Services, LLC
MEMORANDUM AND ORDER denying 32 Motion to Dismiss Third-PartyComplaint and to Compel Arbitration. Signed by District Judge Carlos Murguia on 3/7/18. (kao)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
Case No. 17-2136-CM
GREAT-WEST FINANCIAL RETIREMENT
PLAN SERVICES, LLC,
COMPUTER CONSULTING SERVICES OF
AMERICA, INC. d/b/a CLIENTSOLV
MEMORANDUM AND ORDER
This matter comes before the court on third-party defendant Computer Consulting Services of
America, Inc. d/b/a ClientSolv Technologies’ Motion to Dismiss Third-Party Complaint and to Compel
Arbitration (Doc. 32). Third-party defendant claims its agreement with third-party plaintiff Great-West
Financial Retirement Plan Services, LLC contains an arbitration clause, and therefore this court does not
have subject matter jurisdiction over the third-party complaint. For the reasons discussed below, the
court denies the motion.
In 2006, third-party plaintiff entered into a contract with Corporate Employment Resources, Inc.
(“CoreStaff”) in which CoreStaff agreed to provide temporary workers to third-party plaintiff. On June
28, 2010, CoreStaff and third-party defendant entered into an agreement (“the 2010 agreement”) under
which third-party defendant agreed it would supply temporary workers to third-party plaintiff. This
agreement contained an arbitration clause which stated that all disputes arising under the agreement were
subject to arbitration. In October 2015, third-party defendant placed plaintiff Tom Pattison (“Pattison”)
as a temporary employee with third-party plaintiff.
Pattison and third-party defendant had an
employment agreement which contained an arbitration provision. On March 2016, CoreStaff and thirdparty defendant entered into another contractual agreement (“the 2016 agreement”) in which CoreStaff
subcontracted its temporary services provision to third-party defendant. Third-party plaintiff is an
express third-party beneficiary to the agreement. This agreement also contained an arbitration clause,
however, unlike the 2010 agreement, the 2016 arbitration clause stated that all disputes were subject to
arbitration except . . . for causes of action involving third-party plaintiff as a party.
Third-party plaintiff terminated Pattison’s temporary employment on August 25, 2016. Pursuant
to the arbitration clause in his employment agreement, Pattison submitted a demand for arbitration to
third-party plaintiff, alleging his employment had been wrongfully terminated. Third-party plaintiff then
requested indemnification from third-party defendant pursuant to the indemnification provision in the
2016 agreement. Third-party defendant rejected the demand for indemnification. Pattison’s demand for
arbitration against third-party plaintiff, however, was dismissed on the grounds that third-party plaintiff
was not subject to the arbitration provision because it was not a signatory to the employment agreement.
Pattison then filed a petition against third-party plaintiff in Johnson County District Court on
February 6, 2017, alleging statutory and common law claims arising from his termination. The case was
removed to this court on March 3, 2017. Third-party plaintiff renewed its demand for indemnification
to third-party defendant pursuant to the 2016 agreement. Third-party defendant again rejected this
demand. On July 7, 2017, third-party plaintiff filed its third-party complaint alleging breach of contract
for refusing to indemnify it in the action filed by Pattison. Third-party defendant then submitted a
demand for arbitration on the breach of contract claim based on the arbitration clause in the 2010
The Federal Arbitration Act (“FAA”) establishes a “federal policy favoring arbitration” and
courts are required to “rigorously enforce agreements to arbitrate.” Shearson/Am. Exp., Inc. v.
McMahon, 482 U.S. 220, 226 (1987). Under the FAA, a district court should compel arbitration when
(1) a valid arbitration agreement exists between the parties, and (2) the dispute before the court falls
within the scope of the arbitration agreement. 9 U.S.C. § 2 (“A written provision . . . to settle by
arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid,
irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of
any contract.”); Id. at § 3 (“If any suit or proceeding be brought in any of the courts of the United
States upon any issue referable to arbitration under an agreement in writing for such arbitration, the
court in which such suit is pending . . . shall . . . stay the trial of the action until such arbitration has
been had in accordance with the terms of the agreement . . . .”); see also Olathe Senior Apts., L.P. v.
Ace Fire Underwriters Ins., Co., No. 04-2346-CM, 2005 U.S. Dist. LEXIS 43449, at *11 (D. Kan.
Sept. 30, 2005) (outlining two-step approach).
“Defendant bears an initial summary-judgment-like burden of establishing that it is entitled to
arbitration.” Phox v. Atriums Mgmt. Co., Inc., 230 F. Supp. 2d 1279, 1282 (D. Kan. 2002). The court
applies ordinary state-law principles that govern the formation and interpretation of contracts when
evaluating whether the parties have agreed to arbitrate a particular dispute. Hardin v. First Cash Fin.
Servs., Inc., 465 F.3d 470, 475 (10th Cir. 2006); Summit Constrs., Inc. v. Legacy Corner L.L.C., 147 F.
App’x 798, 801 (10th Cir. 2005).
Third-party defendant moved to dismiss third-party plaintiff’s third-party complaint and to
compel arbitration, arguing third-party plaintiff’s breach of contract claim falls within the scope of the
arbitration clause in the agreement to which third-party plaintiff is a third-party beneficiary. Third-party
defendant claims the 2010 agreement applies to this dispute because Pattison was hired before the 2016
agreement was signed and the language of the arbitration provision included in the 2016 agreement
indicates a clear intent that it is to apply only to workers placed by third-party defendant after March 24,
The 2010 agreement between CoreStaff and third-party defendant, entered into for the purpose
of providing temporary employment services to third-party plaintiff, includes an arbitration clause which
(Doc. 33-1, at 16.)
Third-party plaintiff, however, argues that the 2016 agreement—also between CoreStaff and
third-party defendant for the purpose of providing temporary employment services to third-party
plaintiff—applies because it was the operative contract at the time Pattison’s cause of action accrued for
which third-party plaintiff seeks indemnification. The arbitration clause in the 2016 agreement states:
(Doc. 38-1, at 34.)
The “customer” referred to in the clause is third-party plaintiff. Third-party plaintiff therefore
claims that it is not subject to the arbitration clause in the 2016 agreement and argues third-party
defendant has not met its burden of proving the 2010 agreement is the operative agreement. Third-party
plaintiff notes that the 2016 agreement was drafted with the intention that it was to “supersede all prior
or contemporaneous understandings and agreements.” (Doc. 38-1, at 34–35.)
Third-party defendant has not met its burden to show that the 2010 contract was the operative
contract. The 2016 agreement, signed on March 24, 2016, expressly stated it effectively superseded the
2010 agreement. And although Pattison was placed with third-party plaintiff when the 2010 agreement
was in effect, he was terminated on August 25, 2016—well after the 2016 agreement went into effect.
His cause of action for wrongful termination, for which third-party plaintiff seeks indemnification,
therefore accrued when the 2016 agreement was in in effect. After Pattison filed the present case, thirdparty plaintiff—believing it was contractually entitled to indemnification—looked for relief in the
contract that was in place when it was sued by Pattison. Absent some express instruction in the contract,
the court finds no reason why the contract that was in place when Pattison was placed by third-party
defendant should apply over the contract that was in place when Pattison’s wrongful termination claim
accrued and when third-party plaintiff sought indemnification for that claim. The court therefore finds
that third-party defendant has not met its burden to show that the arbitration clause in the 2010 agreement
applies to third-party plaintiff’s breach of contract claim.
IT IS THEREFORE ORDERED that third-party defendant’s Motion to Dismiss Third-Party
Complaint and to Compel Arbitration (Doc. 32) is denied.
Dated March 7, 2018, at Kansas City, Kansas.
s/ Carlos Murguia
United States District Judge
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?