Stamp v. General Electric Capital Corporation

Filing 11

ORDER denying 6 Defendant's Motion to Dismiss or Compel Arbitration. Signed by Judge Richard F. Cebull on 4/22/2013. (EMA)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BILLINGS DIVISION

NICOLE STAMP,

Case No. CV-12-123-BLG-RFC

Plaintiff,
ORDER DENYING MOTION TO
DISMISS OR COMPEL
ARBITRATION

vs.
GENERAL ELECTRIC CAPITAL
CORPORATION,
Defendant.
I.

INTRODUCTION
Plaintiff Nicole Stamp brings this action against her former employer,

Defendant General Electric Capital Corporation (“GECC”), an automobile
financing company, claiming wrongful discharge. GECC argues Stamp agreed to
arbitrate all wrongful discharge claims when she accepted employment with
GECC and has therefore moved to dismiss this suit or, in the alternative, compel
arbitration. Because third parties will be necessary for the resolution of Stamp’s
claims, her claim is not one of the types of claims subject to arbitration and
GECC’s motion must be denied.

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II.

FACTUAL BACKGROUND
GECC has an office in Billings, Montana that holds automobile titles from

transactions across the United States. Stamp started her employment with GECC
in the Billings office in February of 2011 as a Titles Associate. Her job was to
review and release titles.
The offer of employment was contingent on Stamp’s agreement to the terms
in conditions in GECC’s “Acknowledgment–Conditions of Employment,” one of
those conditions was that she agree to resolve all disputes through GECC’s
“Solutions.” Ex. A to GECC’s Brief in Support, Doc. 7-1. Solutions is a GECC’s
alternative dispute resolution procedure designed to provide a “fair, quick and
efficient process to resolve certain claims arising out of or related to their
employment relationship …” Ex. B to GECC’s Brief in Support, Doc. 7-2.
Solutions contains four levels of procedures to resolve disputes, the last of which
is binding arbitration. By signing the “Acknowledgment,” Stamp acknowledged
she had received and reviewed Solutions, agreed to resolve disputes through
Solutions, and waived the right to pursue “Covered Claims” in court. Doc. 7-1, ¶
5. Stamp again signed the “Acknowledgment–Conditions of Employment” when
she started work on February 7, 2011. Doc. 7-1, pp. 5-6.

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In November of 2011, Stamp received a Service Request to release a title to
Manti’s Transportation in New York. She remembers being confused by this
Service Request because the documentation was unusual. First, there was no
original title issued directly to Manti’s Transportation, only a title endorsed on the
back to Manti’s Transportation by the prior owner. Second, although the endorsed
title was issued in New York, the file did not include an original New York title
with a lien to GECC or its predecessor. Finally, although the file contained
paperwork filed in Oklahoma to obtain a lien, there was no Oklahoma certificate
of title in the file. Stamp could not confirm whether GECC sill held a lien on the
asset in Oklahoma or whether the asset was still titled in New York and delivered
the certificate of title and lien documents to Alfred Manti/Manti’s Transportation
in New York.
During a December, 2011 team meeting involving her supervisor and a
GECC in-house attorney, Stamp was told she should not have released the title to
Alfred Manti because there was litigation involving the title. Stamp was also told
that if Alfred Manti tried to contact her, she should not speak with him. Stamp
noted that during the meeting, the in-house attorney had another title and
Oklahoma lien papers for a second vehicle. Stamp asserts the litigation referenced
by her supervisors was former lawsuits relating to vehicles purchased by Manti’s
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Transportation and that the titles would have been material evidence in support of
Manti’s Transportation’s claims and defenses in those lawsuits. Stamp also notes
that her attorney has been contacted by the U.S. Attorney for the Eastern District
of Pennsylvania regarding Manti’s Transportation.
Stamp was terminated effective February 6, 2012, for “unprofessional and
disruptive behaviors.”
III.

ANALYSIS
The purpose of the Federal Arbitration Act (“FAA”) was to overcome

judicial hostility to arbitration that resulted in courts’ refusing to enforce
arbitration agreements. Kilgore v. Keybank, Nat. Ass'n, --F.3d --, 2013 WL
1458876, * 2 (9th Cir. April 11, 2013). In furtherance of this goal, it declares
agreements to arbitrate “valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C. §
2. Section 2 “mandates that district courts shall direct the parties to proceed to
arbitration on issues as to which an arbitration agreement has been signed.” Id.,
quoting Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). The role
for courts it to determine “(1) whether a valid agreement to arbitrate exists and, if
it does, (2) whether the agreement encompasses the dispute at issue.” Id. The
party opposing arbitration bears the burden of proving that the claims at issue are
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unsuitable for arbitration. Hoffman v. Citibank (South Dakota), N.A, 546 F.3d
1078, 1082 (9th Cir,. 2008). Here, the Court need not consider whether the
arbitration agreement is valid and enforceable against Stamp because her claim in
this case is not subject to resolution through Solutions.
In determining whether a particular claim is subject to arbitration, courts
must look to the “language of the contract that defines the scope of claims subject
to arbitration.” E.E.O.C. v. Waffle House, Inc., 534 U.S. 279, 289 (2002).
Solutions defines “Covered Claims” as those “that arise out of or are related to an
employee’s employment or cessation of employment” and further provides
specific examples of “Covered Claims,” including “[c]laims relating to involuntary
terminations …, [r]etaliation claims for legally protected activity and/or for
whistleblowing …, and [c]laims of violation of public policy.” Ex. A to GECC’s
Reply Brief, Doc. 10-1, pp. 5-6. Stamp’ s wrongful discharge claim is obviously a
claim contemplated by Solutions.
But Solutions also contains a list of “Excluded Claims.” Doc. 10-1, at p.6.
Relevant here, Solutions expressly excludes claims brought by Covered
Employees “where a third party would be necessary to the resolution of any claims
…” Id. Stamp argues that in order to prosecute her claim that she was terminated
for a violation of public policy, she will have to call witnesses and obtain
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discovery from various third-parties, including Manti’s Transportation and
GECC’s predecessor in interest.
GECC responds that the fact that third parties have evidence in support of
Stamp’s claims does not render them “necessary to the resolution” of the claim and
argues that the Solutions contains procedures for third party discovery. See doc.
10-1, pp. 17-20. While at first that argument seems to have merit, a closer look
reveals that Solutions does not guarantee third party discovery. For example,
Solutions defines “Discovery” as “the process by which parties to a pending
Covered Claim obtain certain non-privileged information in the possession,
custody or control of the other party, which is relevant to the proof or defense of
the Covered Claim …” Doc. 17-1, p.17. Moreover, under the heading
“Guidelines for Discovery,” Solutions provides that ‘[e]ither party may seek from
the other party discovery of the types described below to the extent relevant to
claims or defenses before the arbitrator.” Id. at p.18. And the types of discovery
described in Solutions do not contemplate third party discovery. Specifically,
“Interrogatories” are defined as written questions “to the other party,” “Document
Requests” refers to items “in the responding party’s possession,” and “Requests
for Admission” seek the “responding party’s admission.” Id. Finally, although
Solutions authorizes the arbitrator to issue subpoenas, it only references subpoenas
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“served on the other party.” Id. at p. 20. If Solutions were intended to provide for
third party discovery it should say so. See e.g. McIntosh v. Adventist Health/West
St. Helena Hosp., 2013 WL 968293, * 6 (N.D. Cal March 26, 2013) (slip op.)
(involving an arbitration agreement authorizing arbitrator to issue subpoenas to
third parties).
Having determined that Solutions does not provide for third party discovery,
it makes sense that Solutions excludes claims “where a third party would be
necessary to the resolution of any claims …” Accordingly, Stamp’s claim is not
subject to arbitration. The Court therefore need not consider Stamp’s arguments
that the arbitration provision is unconscionable or that GECC has waived its right
to rely on the arbitration provision through failure to invoke it or failure to provide
Stamp with a copy of Solutions within seven days of termination as required by
Mont. Code Ann. § 39-2-911(3).
IV.

ORDER
For those reasons, IT IS ORDERED that GECC’s Motion to Dismiss, or in

the Alternative, to Stay Proceedings and Compel Arbitration (doc. 6) is DENIED.
Dated this 22nd day of April, 2013.
/s/ Richard F. Cebull___________
Richard F. Cebull
Senior United States District Judge
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