Williams v. Home Properties, L.P. et al
Filing
61
MEMORANDUM AND ORDER Granting 43 Defendant J.C. Ehrlich's Motion to Dismiss the Third Party Complaint and/or to Compel Arbitration of Third Party Plaintiff's Claims; Dismissing the Third Party Complaint; Denying as moot 45 Home Properti es' Opposition to Third Party Defendant J.C. Ehrlich's Motion to Dismiss the Third Party Complaint and/or to Compel Arbitration of Third Party Plaintiff's Claims and Cross-Motion for Summary Judgment; Denying as moot 49 Third Party Defendant J.C. Ehrlich Co., Inc.'s Motion to Strike Home Properties' Surreply. Signed by Judge Marvin J. Garbis on 6/29/2015. (nd2s, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
ANNISNICOLE WILLIAMS
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Plaintiff
vs.
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HOME PROPERTIES, L.P. et al.
Defendants
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*
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CIVIL ACTION NO. MJG-13-2947
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MEMORANDUM AND ORDER RE: ARBITRATION
The Court has before it Defendant J.C. Ehrlich's Motion to
Dismiss the Third Party Complaint and/or to Compel Arbitration
of Third Party Plaintiff's Claims [Document 43], Home
Properties' Opposition to Third Party Defendant J.C. Ehrlich's
Motion to Dismiss the Third Party Complaint and/or to Compel
Arbitration of Third Party Plaintiff's Claims and Cross-Motion
for Summary Judgment [Document 45], Third Party Defendant J.C.
Ehrlich Co., Inc.'s Motion to Strike Home Properties' Surreply
[Document 49], and the materials submitted relating thereto.
The Court finds a hearing unnecessary.
I.
BACKGROUND
Plaintiff Annisnicole Williams ("Williams") rented an
apartment (the "Unit") in the Hunters Glen Apartments ("Hunters
Glen"), a subsidiary of Defendant / Third Party Plaintiff Home
Properties, L.P. ("Home Properties").
Shortly after taking
occupancy, Williams was bitten by bedbugs and vacated the Unit.
As discussed herein, before - and after – Williams'
tenancy, Home Properties contracted with Third Party Defendant
J.C. Ehrlich Co., Inc. ("JCE") for pest control services,
including, but not limited to, bedbug treatments, at Hunters
Glen generally and in the Unit specifically.
Williams filed the case against Home Properties in the
Circuit Court for Frederick County, Maryland, and Home
Properties removed to this Court.
In the Complaint, Williams
asserted claims in four Counts, of which two remain pending1:
Count I
Negligence
Count II
Maryland Consumer Protection Act
Home Properties filed a Third Party Complaint, [Document
26], against JCE, asserting claims in three Counts:
Count I
Contractual Indemnification
Count II
Common Law Indemnification
Count III
Contribution
1
In the Memorandum and Order Re: Remand and Dismissal,
[Document 21], issued December 30, 2013, the Court dismissed all
claims against Melissa LaChance, the Hunters Glen Property
Manager, and dismissed a battery claim against Home Properties
in Count IV.
In the Memorandum and Order Re: Partial Summary Judgment,
[Document 59], issued June 23, 2015, the Court granted summary
judgment to Home Properties on Williams' claims in Count III
(Fraudulent Concealment) and on the claims for punitive damages.
2
II.
ARBITRATION LEGAL STANDARD
A.
Applicable Rule
By the instant motion, JCE seeks dismissal of all claims in
the Third Party Complaint, contending that the Court lacks
jurisdiction by virtue of an arbitration clause in a Bed Bug
Limited Service Agreement between JCE and Hunters Glen dated
July 16, 2012.
JCE seeks dismissal pursuant to Rule 12(b)(1) of
the Federal Rules of Civil Procedure "on the grounds that the
parties have contractually agreed to binding arbitration."
2
[Document 43] at 1.
It appears that there could be an academic debate as to
which Rule of the Federal Rules of Civil Procedure – e.g., Rule
12(b)(1) [subject matter jurisdiction], Rule 12(b)(6) [failure
to state a claim], and/or Rule 56 [summary judgment] - is
applicable, or most applicable, when a defendant seeks dismissal
based on the presence of a mandatory arbitration provision.
See
5B Wright & A. Miller, Federal Practice & Procedure § 1350, nn.
14-15 (3d ed. 2004) (collecting cases).
However, inasmuch as
the issue before the Court is the extent to which, if at all,
the Court has jurisdiction over the claims in the Third Party
2
JCE's motion indicates that it seeks dismissal "pursuant to
Fed.R.Civ.P. 12(b)(1) and (3)." [Document 43] at 1 (emphasis
added).
However, it appears that the reference to Rule
12(b)(3) was a typographical error, as JCE's Memorandum of
Points and Authorities, [Document 43], addresses only Rule
12(b)(1) – lack of subject matter jurisdiction and makes no
mention of 12(b)(3) - improper venue.
3
Complaint, the Court would, in any event, find Rule 12(b)(1)
most appropriate.
See [Document 15] in TECH USA, Inc. v.
Belbot, et al., MJG-10-2351.
B.
Legal Setting
The Federal Arbitration Act reflects a strong federal
policy favoring arbitration, and courts are thus required to
"rigorously enforce agreements to arbitrate."
Shearson/American
Exp., Inc. v. McMahon, 482 U.S. 220, 226 (1987).
However, this
liberal policy does not operate to compel arbitration of issues
that do not fall within the scope of the parties' arbitration
agreement.
Before compelling an unwilling party to arbitration, a
court must "'engage in a limited review to ensure that the
dispute is arbitrable - i.e., that a valid agreement to
arbitrate exists between the parties and that the specific
dispute falls within the substantive scope of that agreement.'"
Murray v. United Food and Commercial Workers Intern. Union, 289
F.3d 297, 302 (4th Cir. 2002) (citation omitted).
"The 'heavy
presumption of arbitrability requires that when the scope of the
arbitration clause is open to question, a court must decide the
question in favor of arbitration.'" Levin v. Alms & Assocs.,
Inc., 634 F.3d 260, 266 (4th Cir. 2011) (citation omitted).
4
The party seeking to arbitrate must establish only two
facts: "(1) [t]he making of the agreement and (2) the breach of
the agreement to arbitrate."
Mercury Constr. Corp. v. Moses H.
Cone Mem'l Hosp., 656 F.2d 933, 939 (4th Cir. 1981).
The Court
must particularly "avoid reaching the merits of arbitrable
issues." Id. (citation omitted).
III. DISCUSSION
A.
Pertinent Background
The following chronology sets forth the pertinent events.
Apr. 21, 2011
Home Properties signed a Contractor Agreement
("2011 Contract") with JCE, which states:
[JCE] agrees to . . . [p]rovide pest control
operations [at Hunters Glen]. . . . Service
shall be one time each week to include one
building 6 units and up
to 1 additional
units for a total of 7 units.
[JCE] shall begin work May 1st 2011 or, or
at the discretion of the owner
this
agreement
shall
become
null
and
void.
Work shall be completed in a timely manner,
but in no event later than April 30, 2012.
[Home Properties] agrees to pay [JCE] . . .
the sum of Two Thousand One Hundred Eighty
Four
Dollars
($2184.00)
[in]
Monthly
installments of $182.00 per month.
The scope of work for the 2011 Contract states
that the "Pest Problem to be Treated" was: "Rats,
mice, roaches, ants, silverfish" on a weekly
basis, rotating through the units at Hunters
Glen.
The "Prescribed Service" section also
states "[$]320 per unit for bedbugs."
5
The 2011 Contract contained
Provision, which states:
an
Indemnification
(c) Indemnification. To the fullest extent
permitted
by law, [JCE] agrees to defend,
indemnify,
and
hold
harmless
[Home
Properties],
its
affiliates,
assigns,
directors, officers, agents, and employees
from and against any and all claims, damages
(including property damage and loss of use
of
such
property),
losses,
fines,
or
penalties
(Including
related
costs,
expenses, and reasonable attorney fees) that
may arise in whole or part from [JCE]'s
work on behalf of [Home Properties]. This
includes claims, demands, damages, losses,
fines, or penalties for Injuries to persons
or damage to property, including theft,
resulting from [JCE]'s acts or omissions or
the acts or omissions of those persons or
products furnished by [JCE].
Apr. 30, 2012
Date by which pest control services contracted
for in the 2011 Agreement was to be completed.
July 16, 2012
Tracy Walker, an Assistant
Hunters Glen, signed a Bed
Agreement ("July 2012 Bedbug
for "the periodic treatment
infestations" in the Unit to
visits" for $320.
Property Manager at
Bug Limited Service
Agreement") with JCE
of existing bed bug
"treat all areas – 3
The July 2012 Bedbug Agreement contains a
mandatory arbitration clause on the reverse side
that states:
Mandatory Arbitration. Claims, dispute and
other
matters
in
question
between
the
parties to this agreement arising out of or
relating to the agreement or warranty shall
be submitted to arbitration by a single
neutral arbitrator.
The customer's damages
in any arbitration or lawsuit shall be
limited to the costs of labor and materials
incurred in connection with this agreement.
6
Aug. 8, 2012
1st attempt to treat the Unit – JCE did not treat
because prior tenant did not have Unit prepared.
Aug. 15, 2012
1st treatment - 11 to 25 bedbugs, "[i]nspected and
treated throughout interior baseboards, sofa,
mattress," but other areas "not prepared"
Aug. 22, 2012
2nd treatment – 11 to 25 bedbugs, "treatment to
accessible areas only"
Sept. 4, 2012
3rd treatment – 2 bedbugs, treated multiple areas
Oct. 16, 2012
Email from Hunters Glen Property Manager Melissa
Ellison, née LaChance ("LaChance/Ellison") to
Jeff Patterson at JCE regarding the Unit: "We
need to treat this vacant unit tomorrow please.
This is the unit we had down for a while treating
while vacant. . . . Not sure why after 3
treatments it still had BB's but need to get rid
of them before new clients move in."
Oct. 17, 2012
4th treatment – 11 to 25 bedbugs – "heavy activity
in bedroom"
Oct. 22, 2012
Email from LaChance/Ellison to Hunters Glen staff
stating that the Unit was infested with bedbugs
and the prospective tenant had to "find another
apartment."
Dec. 4, 2012
Hunters Glen informed Williams that she would be
living in the Unit instead of in the apartment
she originally rented.
Dec. 15, 2012
Williams moved into the Unit.
Dec. 23, 2012
Williams woke up with bedbug bites.
Dec. 27, 2012
Hunters Glen signed a Bed Bug Limited Service
Agreement ("December 2012 Bedbug Agreement") with
JCE for the Unit to "treat all areas – 3 visits.
14 days apart" for $320. The Unit was treated on
January 2, 2013, January 16, 2013, and January
30, 2013. [Document 43-2] at 6.
JCE suggested to Hunters Glen
brought the bedbugs with her.
7
that
Williams
LaChance/Ellison
emailed
Hunters
Glen
staff
stating: "NO [WILLIAMS] DID NOT [BRING THE
BEDBUGS]! THE UNIT WAS INFESTED WITH THEM FROM
THE PREVIOUS RESIDENTS AND EHRLICH TREATED IT
SEVERAL TIMES."
Jan. 3, 2013
B.
Williams vacated the Unit.
The Binding Arbitration Agreement
The Court finds that the July 2012 Bedbug Agreement is, as
JCE contends, "a valid, binding and enforceable Arbitration
Agreement."
[Document 43-1].
The Court further finds that
Home Properties' efforts to avoid compliance with this agreement
are without merit.
Home Properties contends that the Hunters Glen employee who
signed the July 2012 Bedbug Agreement did not have the authority
to bind Home Properties to a contract.
6.
See [Document 45-1] at
Tracy Walker ("Walker"), an Assistant Property Manager at
Hunters Glen, signed the July 2012 Bedbug Agreement under the
Acceptance of Agreement, which states: "The Above Quotations are
Hereby Accepted, Including Terms and Conditions as Found on the
Reverse Side."
The reverse side of the agreement contains the
mandatory arbitration clause.
The only evidence that Home Properties has offered to
support its argument that Walker was not authorized to execute a
contract on behalf of Home Properties (here, via Hunters Glen)
is the Affidavit of Hunters Glen Property Manager
8
LaChance/Ellison.
That affidavit states, in conclusory terms,
that "Ms. Walker had no authority to execute a contract on
behalf of Home Properties."
LaChance/Ellison Aff. ¶ 8.
The
affidavit is not sufficient even to create the need for an
evidentiary hearing.
This is supported by the fact that five
months later, Hunters Glen and JCE entered into the December
2012 Bedbug Agreement to provide additional bedbug treatments to
the Unit.
LaChance/Ellison acknowledges in her affidavit that "Ms.
Walker had authority to sign work orders reflecting that a
vendor such as [JCE] had completed its work and should be paid."
Id.
Even if Walker lacked actual authority to bind Home
Properties to a contract, she had apparent authority to do so.
Indeed, JCE and Hunters Glen acted as if the July 2012 Bedbug
Agreement that Walker signed was a valid agreement3 – JCE treated
the Unit, and Hunters Glen paid for those services.
Cf. Tobacco
Tech., Inc. v. Taiga Int'l N.V., 626 F. Supp. 2d 537, 548 (D.
Md. 2009) ("An agent is imbued with apparent authority to bind
his or her principal if a third person could reasonably
interpret acts or omissions of the principal as indicating that
the agent has authority to act on behalf of the principal."
(quoting Crothers v. Commodity Futures Trading Comm'n, 33 F.3d
3
Rather than, as Home Properties contends, a mere "work
order" used as a "matter of convenience." See [Document 45-1]
at 3-4.
9
405, 410 (4th Cir. 1994)).
Furthermore, Hunters Glen and JCE
entered into a contract substantially identical to the July 2012
Bedbug Agreement in December 2012.
Home Properties contends that "[f]ollowing the date of the
[2011 Contract] the parties continued to act as thought (sic) it
was in full force and effect[, and a]s such, the contract
renewed."
[Document 45] at 1-2.
The contention is meritless.
Home Properties has presented no evidentiary support for
its conclusory contention - and the conclusory statement by
LaChance/Ellison – that the 2011 Contract extended past the
agreed upon "finish by date" of April 30, 2012.
Moreover, the
fact, as found by the Court, that Home Properties (via Hunters
Glen) entered in the July 2012 Bedbug Agreement, resolves the
matter.
Home Properties presents the somewhat obscure contention
that the July 2012 Bedbug Agreement cannot be a valid agreement
because no consideration was offered since the 2011 Contract
states that bedbug service cost $320, the same price as set
forth in the July 2012 Bedbug Agreement.
Prior to the parties
entering into the July 2012 Bedbug Agreement, there was –
pursuant to the Court's rejection of Home Properties' contention
that the 2011 Contract remained in effect - no contract between
the parties.
Hence, the July 2012 Bedbug Agreement was an
10
agreement in which JCE gave consideration by offering to perform
specified services for an agreed upon price.
Finally, the 2011 Contract states that the "Pest Problem to
be Treated" was: "Rats, mice, roaches, ants, silverfish."
The
"Prescribed Service" section lists the cost of bedbug services,
but provides no specification as to what bedbug treatment
entails.
See [Document 45-2] at 5.
The terms of the bedbug
service set forth in the July 2012 Bedbug Agreement differ from
the general pest control terms of service in the 2011 Contract.
Compare [Document 43-2] at 5 (July 2012 Bedbug Agreement –
specific to the Unit "treat all areas – 3 visits") with
[Document 45-2] at 5 (2011 Contract – general to Hunters Glen
"weekly service – 6 units (1 bldg) + 1 extra as need – rotate
through units").
And, of course, the July 2012 Bedbug Agreement
gave Home Properties - as well as JCE - the right and obligation
to have disputes determined through arbitration.
C.
Scope of the Arbitration Agreement
The Court finds that the July 2012 Bedbug Agreement
constitutes a valid agreement to submit any disputes that fall
within the scope of the agreement to arbitration.
The Court
"may not deny a party's request to arbitrate an issue 'unless it
may be said with positive assurance that the arbitration clause
11
is not susceptible of an interpretation that covers the asserted
dispute.'"
Long v. Silver, 248 F.3d 309, 316 (4th Cir. 2001).
The mandatory arbitration clause in the July 2012 Bedbug
Agreement states that "[c]laims arising out of or relating to
the agreement . . . shall be submitted to arbitration by a
single neutral arbitrator." [Document 43-2] at 7.
The claims asserted in the Third Party Complaint are based
on JCE's alleged negligence, or inadequate performance of its
obligations, in performing bedbug treatments to the Unit in
August, September, and October 2012.
6-7, 10.
See Third Party Compl. ¶¶
Those claims plainly arise out of, or are related to,
services provided by JCE pursuant to July 2012 Bedbug Agreement.
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IV.
CONCLUSION
For the foregoing reasons:
1.
Defendant J.C. Ehrlich's Motion to Dismiss the
Third Party Complaint and/or to Compel
Arbitration of Third Party Plaintiff's Claims
[Document 43], is GRANTED. The Third Party
Complaint is, hereby, DISMISSED.
2.
Home Properties' Opposition to Third Party
Defendant J.C. Ehrlich's Motion to Dismiss the
Third Party Complaint and/or to Compel
Arbitration of Third Party Plaintiff's Claims and
Cross-Motion for Summary Judgment [Document 45],
is DENIED AS MOOT.
3.
Third Party Defendant J.C. Ehrlich Co., Inc.'s
Motion to Strike Home Properties' Surreply
[Document 49], is DENIED AS MOOT.
SO ORDERED, on Monday, June 29, 2015.
/s/__________
Marvin J. Garbis
United States District Judge
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