MAUN v. KOTLER et al
Filing
27
OPINION AND ORDER granting 13 Motion to Stay; granting deft. A to Z's 17 Motion to Set Aside Default; granting deft. Kotler's motion to compel pltf. to arbitrate the claims in the complt.. Signed by Magistrate Judge Steven C. Mannion on 10/14/2014. (nr, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
NOT FOR PUBLICATION
DIMPLE MAUN, M.D.
Plaintiff,
v.
Civil Action No.
14-cv-2669-KM-SCM
AMY KOTLER, M.D. AND A TO Z
PEDIATRICS, LLC,
Defendants.
OPINION AND ORDER
[D.E. 13, 17, 22]
STEVEN C. MANNION, United States Magistrate Judge.
I.
INTRODUCTION
Defendant
Amy
Kotler,
M.D.
filed
the
instant
motion
to
compel
arbitration and to stay this litigation pending arbitration, [D.E. 13]
pursuant
to
the
parties’
Operation
Agreement
and
the
Federal
Arbitration Act, 9 U.S.C. §§ 1-16 (1947) (“FAA”).
This motion was
filed in lieu of answering Plaintiff’s Complaint.
See (ECF Docket
Entry
(D.E.)
aforementioned
1,
Complaint).
authority
contest this assertion.
compels
Defendant
Kotler
arbitration.
(D.E. 22).
claims
Plaintiff
that
the
does
not
Defendant A to Z Pediatrics, LLC
("A to Z") motion to vacate entry of default is likewise uncontested.
For the reasons set forth below, the respective motions to compel
arbitration and stay are granted, as is the motion to vacate default.
II.
BACKGROUND AND PROCEDURAL HISTORY
This matter arises from a contract dispute between plaintiff Dimple
Maun, M.D., a citizen of Texas, and defendant Amy Kotler, M.D., a
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citizen of New Jersey. (D.E. 1 at ¶¶ 1-2).
These doctors formed A to
Z, a New Jersey limited liability company, as a medical practice in
about June or July 2009. (D.E. 1 at ¶¶ 1, 3, 6).
In or about July 2009, Dr. Maun and Dr. Kotler entered into an
Operating
Agreement
responsibilities.
which
Included
set
among
forth
its
various
provisions,
rights
Section
and
8.02,
entitled “Retirement and Voluntary Withdrawal” provided:
A Member may retire or resign from the Company
after being a Member for at least three (3) years
upon giving written notice to the Company (the
"Withdrawal Notice"). The Withdrawal Notice shall
specify an effective date for such Member's
retirement or resignation which shall be no
earlier than six ( 6) months after the date ofthe
Withdrawal Notice. Any Member who shall so retire
or resign is referred to hereinafter as a
"Withdrawing Member". The Membership Interest of
the Withdrawing Member shall be purchased by the
Company or the Remaining Member for the purchase
price and in accordance with the terms and
conditions of Section 8.05 and Section 8.06
hereof, respectively.
[D.E. 1 at ¶ 9].
Dr. Maun withdrew from A to Z in 2012. (D.E. 1 at ¶¶ 28, 29).
In
2013, Dr. Kotler sold A to Z to Zufall Health Center. (D.E. 1 at ¶
43).
On April 28, 2014, Plaintiff filed a complaint in the United States
District
Court
for
Kotler. (D.E. 1).
the
District
of
New
Jersey
against
Defendant
The complaint alleged breach of contract, quantum
merit, unjust enrichment, conversion, fraud, breach of fiduciary duty,
breach of good faith, and other counts.
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On June 3, 2014, Plaintiff requested entry of default. (D.E. 7).
The Court subsequently granted a ten-day extension of time to respond
to the Complaint. (D.E. 12).
On July 18, 2014, Defendant Kotler filed the instant motion in lieu
of answer to the Complaint. (D.E. 13).
Default was entered against A to Z on August 1, 2014.
to Z moved to vacate default. (D.E. 17).
Defendant A
Plaintiff has not opposed
the motion to vacate default. (D.E. 25).
The Motions to Compel Arbitration and for A Stay and to Vacate
Default were referred to the Undersigned on September 16, 2014.
III. DISCUSSION
a. Federal Arbitration Act
Defendant’s primary assertion is that the Federal Arbitration Act
requires this Court to stay the proceedings pending arbitration.
According to 9 U.S.C. § 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, upon being satisfied that
the issue involved in such suit or proceeding is
referable to arbitration under such an agreement,
shall on application of one of the parties stay
the trial of the action until such arbitration
has been had in accordance with the terms of the
agreement, providing the applicant for the stay
is not in default in proceeding with such
arbitration.
9 U.S.C. § 3.
There is a strong federal policy favoring arbitration, however,
that policy “does not lead automatically to the submission of a
3
dispute to arbitration upon the demand of a party to the dispute.”
Century Indemnity v. Underwriters, Lloyd’s, London, 584 F.3d 513 (3rd
Cir. 2009).
First, this Court must ascertain whether the parties have
a valid agreement to arbitrate their disputes.
Rcm Technologies, Inc.
v. Brignik Technology, Inc., 137 F.Supp.2d 550 (D.N.J., 2001)(citation
omitted).
The
Operating
Agreement’s
arbitration
provision
provides,
in
pertinent part, as follows:
16.11 Dispute Resolution Procedure. Except as may
be necessary to enforce the provisions of Article
XII by temporary injunction, permanent injunction
or other equitable relief, any controversy or
claim arising out of, or related to, this
agreement or the breach thereof, shall be settled
by arbitration in Morris County, New Jersey in
accordance with the rules then obtaining of the
American
Health
Lawyers
Alternative
Dispute
Resolution Service, and judgment upon any award
rendered by the arbitrator or arbitrators may be
entered in any court having jurisdiction thereof.
The results of the arbitration shall be final and
binding on both parties. The fees of the
arbitrator shall be borne equally by the parties.
[D.E. 13-4 at 31].
This provision requires the parties to settle any controversy or
claim relating to the Agreements via arbitration. (D.E. 13-4).
Agreements of this sort are “valid, irrevocable, and enforceable, save
upon grounds as exist at law or in equity for the revocation of any
contract.” 9 U.S.C. § 2.
Plaintiff does not dispute the validity of the arbitration
provision and does not even oppose arbitration, except as to Defendant
Kotler’s potential counter claims which have not been pled in this
matter. See (D.E. 22, Pl. Brf. at 4(Dr. Maun contends that “Dr.
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Kotler’s claim for intentional infliction of emotional distress does
not arise out of or relate to the Operating Agreement and therefore”
Plaintiff “cannot be compelled to arbitrate that claim.”).
To determine whether a dispute falls within the scope of an
arbitration clause, the court’s focus is on the “factual allegations
in the complaint rather than the legal causes of action asserted.”
Mutual Benefit Life Ins. Co. v. Zimmerman, 783 F.Supp. 853, 868
(D.N.J.1992).
Consequently, an order to arbitrate should not be
issued if it can be said with positive assurance that the claims fall
outside the scope of the arbitration clause. See AT&T Technologies,
Inc. v. Communications Workers of America, 475 U.S. 643, 650 (1986).
The Court declines in this instance to provide an advisory
opinion as to the propriety of arbitrating Defendant Kotler’s
potential counter claims.
As for the claims Plaintiff has asserted in
the pending Complaint, there is no dispute that the parties have a
valid and binding arbitration provision.
The FAA therefore compels
arbitration.
The United States Supreme Court has recognized that when
litigation involves a dispute that warrants a stay due to an
arbitration provision, the decision to stay … “is one left to the
district court . . . as a matter of its discretion to control its
docket.” Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 21 (1983).
b. Uncontested Motion to Vacate Default
Federal Rule of Civil Procedure 1 prescribes that the rules
governing civil actions “be construed and administered to secure the
5
just, speedy, and inexpensive determination of every action and
proceeding.”
Therefore, a motion that has not been opposed may be
granted as uncontested if doing so secures the just, speedy, and
inexpensive determination of an action or proceeding.
Local Civil Rule 7.1 requires that motions be made on at least
24-days notice. L.Civ.R. 7.1(a).
on August 22, 2014.
(D.E. 17).
Defendants A to Z filed its motion
Opposition to any motion is due at
least 14 days prior to the original return date, unless the Court
otherwise orders or an automatic extension is obtained. L.Civ.R.
7.1(d)(2).
The Court established deadline for the motion to be
decided was October 6, 2014.
Plaintiff did not oppose the motion or
request another extension of time to respond.
The motion was then
properly considered unopposed within the requirements of Local Civil
Rule 7.1.
unjust.
The motion is not offensive and the relief requested is not
The motion will for all of the foregoing reasons be granted
as uncontested.
IV.
CONCLUSION
This Court concludes that the arbitration provision in the Agreement
between the parties is valid and controlling, and Defendant Kotler’s
motion for a stay of the litigation pending arbitration should be
granted.
Furthermore, Defendant A to Z’s motion to vacate default is
uncontested.
For the foregoing reasons, and good cause shown,
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IT IS on this Tuesday, October 14, 2014,
ORDERED that defendant A to Z’s motion to vacate the August
1, 2014 entry of default is granted pursuant to Fed.R.Civ.P.
55(c); and it is further
ORDERED that defendant Kotler’s motion to compel Plaintiff to
arbitrate the claims asserted in the Complaint is granted; and it is
further
ORDERED that this case is stayed as to all parties pending
completion of arbitration with the American Health Lawyers Alternate
Dispute Resolution Service.
10/14/2014 6:17:21 PM
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