LEPORE v. SELECTQUOTE INSURANCE SERVICES, INC. et al
Filing
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OPINION and ORDER denying 11 Defendants' Motion to Compel Arbitration; directing the parties to conduct limited expedited discovery on the issue of arbitrability. Signed by Judge Claire C. Cecchi on 11/21/2022. (dam)
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NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
GIOVANNI LEPORE,
Civil Action No.: 22-1753
Plaintiff,
v.
OPINION & ORDER
SELECTQUOTE INSURANCE SERVICES,
INC. et al.,
Defendants.
CECCHI, District Judge.
This matter comes before the Court by way of defendants Selectquote Insurance Services,
Inc., Selectquote Auto & Home Insurance Services, LLC, and Selectquote, Inc.’s (collectively,
“Defendants”) motion to compel arbitration and dismiss or stay the action. ECF No. 11. Plaintiff
filed an opposition (ECF No. 13), and Defendants replied (ECF No. 14). The Court decides this
matter without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons set
forth below, Defendant’s motion is denied, and the parties are ordered to conduct limited discovery
on the issue of arbitrability.
I.
BACKGROUND1
This matter arises out of an employment dispute wherein Plaintiff alleges Defendants
wrongfully terminated Plaintiff’s employment due to a disability. Specifically, Plaintiff alleges
that he began working for Defendants as an insurance agent on or about September 7, 2021. ECF
No. 1, Exhibit A at ¶ 3. Approximately two weeks later, on September 24, 2021, Plaintiff began
to experience chest pain, and informed his supervisor, Mark Morrissey (“Morrissey”), of his
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The following facts are accepted as true for the purposes of the motion to dismiss.
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discomfort. Id. at ¶¶ 4–5. Thereafter, an ambulance was called, and Plaintiff was taken to an
emergency room, where he was admitted. Id. at ¶ 6.
Upon being admitted, Plaintiff purportedly alerted Morrissey via email that he was in the
hospital. Id. at ¶¶ 6–7. Plaintiff alleges that Morrissey replied to Plaintiff’s email. Id. at ¶ 8. In his
reply, Morrissey allegedly acknowledged Plaintiff’s health situation and directed Plaintiff to
inform a different supervisor, Brent Elrod (“Elrod”), who was also copied on the email, of the
situation. Id. Plaintiff alleges that Morrissey further instructed him to “[p]lease just continue to
communicate with us on this.” Id. Plaintiff claims that he emailed Elrod as Morrissey directed, but
Plaintiff received no response. Id. at ¶ 9.
Plaintiff was allegedly hospitalized until October 3, 2021, and, during his stay, underwent
“three bypasses and a valve replacement in his heart.” Id. at ¶ 10. Despite his condition, Plaintiff
claims he remained in communication with his employers. Id. For example, Plaintiff contends that,
on September 30, 2021, Plaintiff emailed Morrissey the following:
Hey Mark, I emailed [Elrod] but he didn’t get back to me. Who do I contact about
disability? Had the surgery on Tuesday [September 28] its pretty tough pain is
intense. But this too shall pass. Please let me know at least an email for HR. Thanks.
Id. at ¶ 11.
On October 10, 2021, a representative from Defendants contacted Plaintiff, and instructed
him to return his company-owned equipment, (id. at ¶ 12), and one day later, on October 11,
Defendants’ department of human resources emailed Plaintiff, informing him that he had been
terminated, effective September 30, 2021 (id. at ¶ 15). Further, Plaintiff contends that later on
October 11, Elrod emailed Plaintiff to explain that he was terminated for violating Defendants’
attendance policy for new hires, “regardless of the unfortunate events that led” to the violation. Id.
at ¶ 16. Plaintiff alleges that, despite keeping Defendants informed of his condition, no
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representative from Defendants ever inquired regarding his medical condition or need for possible
accommodation. Id. at ¶ 13.
On February 18, 2022, Plaintiff filed this action in the Superior Court of New Jersey, Law
Division (No. MRS-L-000313-22), alleging that Defendants improperly discriminated against him
on the basis of a disability when Defendants terminated Plaintiff’s employment due to his heart
condition. In his Complaint, Plaintiff brings three causes of action: 1) disability discrimination in
violation of the New Jersey Law Against Discrimination (“NJLAD”), N.J.S.A. §§ 10:5-1., et seq.;
2) failure to accommodate a disability in violation of the NJLAD, §§ 10:5-1., et seq.; and 3)
retaliation in violation of the NJLAD §§ 10:5-1., et seq.
Defendants timely removed the matter to this Court on March 29, 2022, pursuant 28 U.S.C.
§§ 1332 and 1446. ECF No. 1. Thereafter, on April 26, 2022, Defendants filed a motion to compel
arbitration and dismiss or stay the action. ECF No. 11. Defendants assert that arbitration is
appropriate because, among other things, Plaintiff’s employment contract with Defendant contains
a valid, enforceable arbitration clause, which covers the claims asserted in Plaintiff’s Complaint.
Id. at 10–16. In opposition, filed on May 23, 2022, Plaintiff contends first that the arbitration
agreement is invalid because it fails to clearly and unambiguously state that, by agreeing to
arbitration, Plaintiff waived his right to seek relief in court. ECF No. 13 at 5–10. Second, Plaintiff
argues that the arbitration agreement does not pertain to Plaintiffs claims. Id. at 10–13. Thereafter,
Defendants replied on May 31, 2022. ECF No. 14.
II.
LEGAL STANDARD
The Federal Arbitration Act (“FAA”) reflects the strong federal policy in favor of
arbitration and “places arbitration agreements on equal footing with all other contracts.’” Bacon v.
Avis Budget Grp., Inc., 959 F.3d 590, 599 (3d Cir. 2020) (quoting Buckeye Check Cashing, Inc. v.
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Cardegna, 546 U.S. 440, 443 (2006)). Pursuant to the FAA, courts “compel arbitration of claims
covered by a written, enforceable arbitration agreement.” Bacon, 959 F.3d at 599 (citing FAA, 9
U.S.C. §§ 3, 4). Yet despite the strong presumption of arbitrability, “[a]rbitration is strictly a matter
of contract” and is thus governed by state law. Bel-Ray Co. v. Chemrite (Pty) Ltd., 181 F.3d 435,
441, 444 (3d Cir. 1999) (“If a party has not agreed to arbitrate, the courts have no authority to
mandate that he do so.”). Accordingly, when deciding whether to compel arbitration under the
FAA, the Court must determine “(1) whether there is a valid agreement to arbitrate between the
parties and, if so, (2) whether the merits-based dispute in question falls within the scope of that
valid agreement.” Flintkote Co. v. Aviva PLC, 769 F.3d 215, 220 (3d Cir. 2014) (citation omitted).
In conducting this inquiry, the Court applies state law principles of contract formation. Torres v.
Rushmore Serv. Ctr., LLC, No. 18-9236, 2018 WL 5669175, at *2 (D.N.J. Oct. 31, 2018).
III.
DISCUSSION
In determining whether a valid arbitration agreement exists between the parties, the Court
must first decide whether to apply the Rule 12(b)(6) or Rule 56 standard of review. Sanford v.
Bracewell & Guiliani, LLP, 618 F. App’x 114, 117 (3d Cir. 2015). The Court will review a motion
to compel arbitration under the Rule 12(b)(6) standard “when it is apparent, based on ‘the face of
a complaint, and documents relied upon in the complaint,’ that certain of a party’s claims ‘are
subject to an enforceable arbitration clause . . . .’” Guidotti v. Legal Helpers Debt Resolution, LLC,
716 F.3d 764, 776 (3d Cir. 2013) (citation omitted); see also MZM Construction Co., Inc. v. N.J.
Building Laborers Statewide Benefits Fund, Nos. 18-3791 & 19-3102, 2020 WL 5509703, at *14
(3d Cir. Sept. 14, 2020).
Conversely, the Rule 56 standard will apply “when either ‘the motion to compel arbitration
does not have as its predicate a complaint with the requisite clarity’ to establish on its face that the
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parties agreed to arbitrate, or the opposing party has come forth with reliable evidence that is more
than a ‘naked assertion . . . that it did not intend to be bound’ by the arbitration agreement, even
though on the face of the pleadings it appears that it did.” Guidotti, 716 F.3d at 774 (citations
omitted); see Noonan v. Comcast Corp., No. 16-458, 2017 WL 4799795, at *4 (D.N.J. Oct. 24,
2017) (“[Thus], a Rule 12(b)(6) standard is not appropriate because the motion cannot be resolved
without consideration of evidence outside the pleadings, and, if necessary, further development of
the factual record.”). Accordingly, “the non-movant must be given a limited opportunity to conduct
discovery on the narrow issue of whether an arbitration agreement exists.” Ross v. CACH, LLC,
No. 14-6321, 2015 WL 1499282, at *2 (D.N.J. Apr. 1, 2015); see also Guidotti, 716 F.3d at 774–
76 (“Under the first scenario, arbitrability not being apparent on the face of the complaint, the
motion to compel arbitration must be denied pending further development of the factual record . .
. . Under either of those scenarios, a ‘restricted inquiry into factual issues’ will be necessary to
properly evaluate whether there was a meeting of the minds on the agreement to arbitrate.”). “After
limited discovery, the court may entertain a renewed motion to compel arbitration, this time
judging the motion under [the Rule 56] summary judgment standard.” Guidotti, 716 F.3d at 776.
Here, Plaintiff’s Complaint makes no reference to his employment contract with
Defendants or the contract’s arbitration provision. Moreover, the employment contract is not
attached to the Complaint as an exhibit. Instead, it is cited and entered into the record for the first
time in Defendant’s motion. However, on a motion to compel arbitration the Court may only
consider “the face of a complaint and documents relied upon in the complaint.” See Guidotti, 716
F.3d at 774. Thus, the Court cannot rely on Defendant’s submission as the proper vehicle through
which to analyze the validity and enforceability of the arbitration agreement. Stated otherwise, the
question of arbitrability cannot be resolved without considering the employment contract, which is
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evidence extraneous to the pleadings, and thus it would be inappropriate to apply the Rule 12(b)(6)
in deciding this motion. See id.
As the Third Circuit has explained, a “motion to compel arbitration must be denied pending
further development of the factual record,” in scenarios such as this one. Id.; see, e.g., Torres, 2018
WL 5669175, at *2 (denying motion to compel arbitration where the agreement, arbitration
provision, and class action waiver were not referenced in the complaint and raised for the first time
in the defendant’s motion); Sauberman v. Avis Rent a Car Sys., L.L.C., No. 17-756, 2017 WL
2312359, at *2 (D.N.J. May 26, 2017) (denying motion to compel arbitration and ordering limited
discovery where the complaint did not establish on its face that the parties agreed to arbitrate).
Accordingly, the Court will deny Defendant’s motion without prejudice and will order the parties
to conduct limited discovery on the issue of arbitrability. Thereafter, Defendant may file a renewed
motion to compel arbitration, which the Court will review under the Rule 56 standard.
IV.
CONCLUSION
For the reasons set forth above, Defendant’s motion to compel arbitration is denied
pending further factual development of the record.
Accordingly, IT IS on this 21st day of November, 2022;
ORDERED that Defendants’ motion to compel arbitration (ECF No. 11) is DENIED;
and it is further
ORDERED that the parties shall conduct limited expedited discovery on the issue of
arbitrability.
SO ORDERED.
s/ Claire C. Cecchi
CLAIRE C. CECCHI, U.S.D.J.
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