Singleton v. Goldman et al

Filing 16

Memorandum Opinion and Order granting #8 MOTION to Dismiss , Alternatively, to Stay Action and Compel Arbitration. Separate judgment to be entered. Signed by District Judge Tom S. Lee on 8/30/11 (LWE)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF MISSISSIPPI
JACKSON DIVISION

CASSANDRA SINGLETON

PLAINTIFF

VS.

CIVIL ACTION NO. 3:11CV224TSL-MTP

DENNIS GOLDMAN, EDNA GOLDMAN,
PERSONNEL NETWORK, INC.,
PERSONNEL NETWORK, LLC AND
PERSONNEL NETWORK, II, LLC

DEFENDANTS

MEMORANDUM OPINION AND ORDER
This cause is before the court on the motion of defendants
Dennis Goldman, Edna Goldman, Personnel Network, Inc. (PNI),
Personnel Network, LLC and Personnel Network II, LLC to dismiss
or, alternatively, to stay and compel arbitration.

Plaintiff

Cassandra Singleton has responded in opposition to the motion and
the court, having considered the memoranda of authorities,
together with attachments, submitted by the parties, concludes
that the parties have entered an arbitration agreement which
covers all of plaintiff's claims herein, and that therefore,
defendants' request for an order compelling arbitration and
dismissing this case is well taken.
Singleton, who alleges that she was formerly employed by all
of the named defendants,1 filed this lawsuit, asserting federal
1

According to defendants, plaintiff was hired by
Personnel Network, Inc. (PNI), “a management company that provides
accounting, payroll and IT services to other related entities,
[including defendants PN LLC and PNII].” Defendants further

claims under the Family Medical Leave Act of 1993 (FMLA), 29
U.S.C. § 2601 et seq., the Americans with Disabilities Act (ADA),
42 U.S.C. § 12101 et seq., and Employee Retirement Income Security
Act of 1974, 29 U.S.C. § 1132 (ERISA), as well as state law claims
for negligent and intentional infliction of emotional distress.
According to the complaint, defendants hired plaintiff on April
14, 2008 to serve as chief financial officer.

Thereafter, on July

5, 2010, due to an epidural abscess which developed after she
received injections to treat neck pain, plaintiff underwent an
emergency laminectory on her neck.

After this surgery, she was a

quadriplegic.
Plaintiff returned to work in September 2010, and according
to the complaint, defendant Dennis Goldman refused her request
that the ladies’ restroom be modified to accommodate her
wheelchair and ultimately terminated her when she informed him
that she would need additional leave for a second surgery.
Defendants have moved to compel arbitration in accordance
with the arbitration agreement which was signed by plaintiff on
April 14, 2008.

The agreement provides, in pertinent part:

I hereby agree that any and all claims or controversies
between me and the Company relating to my employment
with the Company, or termination thereof, including
claims for breach of contract, tort, employment
discrimination (including unlawful harassment) and any
violation of any state or federal law shall be resolved
recite that the Goldman defendants are individual stockholders and
management personnel of PNI and related entities.
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by arbitration in accordance with the then applicable
National Rules for Resolution of Employment Disputes of
the American Arbitration Association. I understand that
this Arbitration Agreement covers any and all claims
that I might bring under Title VII, the Americans with
Disabilities Act, the Age Discrimination in Employment
Act, and the California Fair Employment and Housing Act.
. . .
If any party prevails on a statutory claim which affords
the prevailing party attorney’s fees, then the
arbitrator may award reasonable attorney’s fees and
costs to the prevailing party.
I understand and agree that this Arbitration Agreement
contains a full and complete statement of any and all
agreements regarding resolution of disputes between the
Company and me, and I agree that this Arbitration
Agreement supersedes all previous agreements, whether
written or oral, express or implied, relating to
subjects covered in this Arbitration Agreement.
As is well established, in adjudicating a motion to compel
arbitration under the FAA, the court conducts a two-step inquiry.
The court must first determine whether the parties
agreed to arbitrate the dispute. This determination
involves two considerations: (1) whether there is a
valid agreement to arbitrate between the parties; and
(2) whether the dispute in question falls within the
scope of that arbitration agreement. The court then
must determine if any legal constraints foreclose
arbitration of those claims.
Brown vs. Pacific Life Ins. Co., 462 F.3d 384, 397 (5th Cir. 2006)
(internal citations omitted).

“The FAA expresses a strong

national policy in favoring arbitration of disputes, and all
doubts concerning arbitrability of claims should be resolved in
favor of arbitration.”

Primerica Life Ins. Co. v. Brown, 304 F.3d

469, 471 (5th Cir. 2002).

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Defendants maintain that they are entitled to an order
compelling arbitration as the subject arbitration agreement is
valid and all plaintiff’s claims fall squarely within the scope of
the agreement.

For her part, plaintiff admits she signed the

arbitration agreement; however, she challenges the validity of the
agreement under Mississippi law, contending the agreement fails
for want of consideration.

See Byrd v. Simmons, 5 So. 3d 384, 388

(Miss. 2009) (“[a] valid contract must have (1) two or more
contracting parties, (2) consideration, (3) an agreement that is
sufficiently definite, (5) mutual assent, and (6) no legal
prohibition precluding contract formation.”); see also Morrison v.
Amway Corp., 517 F.3d 248, 254 (5th Cir. 2008) (explaining that
determination of whether an arbitration agreement is valid “is
generally made on the basis of ordinary state-law principles that
govern the formation of contracts”) (internal quotation marks and
citation omitted).

More specifically, she argues that because the

document memorializing the arbitration agreement evinces neither
mutuality of promises, in particular promises to arbitrate, nor
any other consideration, the agreement is not valid.

In the

court’s opinion, however, there is both mutuality of obligation
and consideration, though either alone would be sufficient in
order for the agreement to be valid.

See McKenzie Check Advance

of Mississippi, LLC v. Hardy, 866 So. 2d 446, 453 (Miss. 2004)
(“Pursuant to Mississippi law, mutuality of obligation is not
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required for an arbitration agreement to be enforceable as long as
there is consideration.”); First Family Financial Svcs. v. Fairly,
173 F. Supp. 2d 565, 572 (S.D. Miss. 2001) (“[M]utual promises may
constitute consideration.”).
Plaintiff’s characterization of the arbitration agreement as
a “one-sided document requir[ing] [her] to arbitrate her claims,
but does not require the employer to arbitrate anything or do
anything” is not borne out by the terms of the document.

The

first sentence of the agreement provides for resolution by
arbitration of “any and all claims and controversies between me
and the Company...,” and thus reflects both parties’ agreement to
arbitrate disputes arising out of plaintiff’s employment.

This

intent is further evidenced by the provision on attorney’s fees,
which by its terms contemplates that either party could assert
claims against the other as it authorizes the arbitrator to award
reasonable attorney’s fees and costs “any party [who] prevails on
a statutory claim which affords the prevailing party attorney’s
fees....”

(Emphasis added).

Thus, there is mutuality of the

obligation to arbitrate.
Even without such mutuality, however, the agreement would
still be valid, as it is supported by adequate consideration.
Defendants have presented Dennis Goldman’s affidavit in which he
states that PNI conditioned its decision to employ plaintiff on
her signing the arbitration agreement; that PNI undertook a

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detriment to pay and otherwise employ plaintiff; and that
plaintiff received all the benefits of employment in return for
her promise to arbitrate employment disputes.

See American Olean

Tile Co. v. Morton, 247 Miss. 886, 893, 157 So. 2d 788, 790 (Miss.
1963) (“All that is needed to constitute valid consideration to
support an agreement or a contract is that there must be either a
benefit to the promisor or a detriment to the promisee.

If either

of these requirements exist, there is sufficient consideration.”).
Significantly, plaintiff does not dispute that the “reality of the
situation” may have been that she would not have been hired or
would have been terminated had she not signed the agreement.
However, she contends the agreement fails because Mississippi law
requires that a contract contain a recital as to consideration in
order to be valid and the arbitration agreement at issue here
contains no such recital.

She further asserts that the parole

evidence rule prohibits the court’s consideration of Goldman’s
affidavit.
In the court’s opinion, the cases cited by plaintiff in
support of her argument do not stand for the proposition that
under Mississippi law, a contract may only be found to be
supported by consideration if it contains a specific recital as to
consideration.

Rather, the cases stand for the more general

proposition that, in the absence of mutual promises, an agreement
to arbitrate executed as part of a larger transaction is valid as

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long as the underlying transaction is supported by consideration.
See Raesly v. Grand Housing, Inc., 105 F. Supp. 2d 562, 570 (S.D.
Miss. 2000) (holding that mutuality of obligation was not required
to enforce arbitration clause executed in connection with contract
to purchase mobile home “as long as the underlying contract was
supported by consideration”) (internal citations and quotations
omitted), overruled on other grounds, Walton v. Rose Mobile Homes
LLC, 298 F.3d 470, 478, n.16 (5th Cir. 2002)); McKenzie Check
Advance, 866 So. 2d at 453 (same).

Here, Goldman’s affidavit

demonstrates that the underlying employment agreement was
supported by consideration and thus, the arbitration agreement
that plaintiff executed in connection with her employment is
valid.2

Based on the foregoing, the court concludes that

2

Implicit in this conclusion is the court’s rejection of
plaintiff’s argument that because the arbitration agreement
contains an integration clause, the parole evidence rule
forecloses the court’s consideration of Goldman’s affidavit. As
the Mississippi Supreme Court has recognized:
[T]he parol evidence rule does not become applicable
unless there is an integration of the agreement, that
is, unless the parties have assented to a certain
writing as a statement of the agreement between them.
Accordingly, it may be shown by parol evidence not only
that the contract was never executed or delivered as a
contract, but also that the proffered instrument was not
the complete contract, or that its validity was impaired
by fraud, illegality, duress, mistake, lack of or
failure of consideration rendering the agreement
voidable or void. Jones v. Index Drilling Co., 251
Miss. 578, 170 So. 2d 564 (1965); 4 Jaeger, Williston on
Contracts §§ 631-634 (3d ed. 1961); 32A C.J.S. Evidence
§ 933 (1964).
Broome Constr. Co., Inc. v. Beaver Lake Recreational Center, Inc.,
229 So. 2d 545, 547 (Miss. 1969); see also Restatement (Second) of
Contracts § 214 (“Agreements and negotiations prior to or
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defendants’ motion is granted such that defendants are entitled to
an order compelling arbitration and further that the case should
be dismissed.

See Alford v. Dean Witter Reynolds, Inc., 975 F.2d

1161, 1164 (5th Cir. 1992) (providing that where all claims are
referable to arbitration, upon granting motion to compel, district
court has discretion to dismiss case, as opposed to imposing
stay).
A separate judgment will be entered in accordance with Rule
58 of the Federal Rules of Civil Procedure.
SO ORDERED this 30th day of August, 2011.

_/s/ Tom S. Lee_______________
UNITED STATES DISTRICT JUDGE

contemporaneous with the adoption of a writing are admissible in
evidence to establish ... (d) illegality, fraud, duress, mistake,
lack of consideration, or other invalidating cause.”).
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