Watson v. Corvias Construction LLC et al
Filing
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MEMORANDUM OPINION and ORDER granting 12 AMENDED MOTION to Stay Case Judicial Proceedings and Refer to Arbitration filed by Corvias Construction LLC, Hartford Fire Insurance Company ; terming 11 MOTION to Stay Case Judicial Proceedings and Refer to Arbitration filed by Corvias Construction LLC, Hartford Fire Insurance Company; ADMINISTRATIVE CLOSING. Signed by Honorable Robin J. Cauthron on 7/21/16. (lg)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
UNITED STATES OF AMERICA
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For the use and benefit of KIM WATSON, )
d/b/a McGUIRE PLUMBING,
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Plaintiff,
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v.
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CORVIAS CONSTRUCTION, LLC;
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and HARTFORD FIRE INSURANCE
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COMPANY,
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Defendants.
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Case No. CIV-16-463-C
MEMORANDUM OPINION AND ORDER
Plaintiff McGuire Plumbing entered into a contract with Defendant Corvias
Construction, LLC, to perform plumbing services on a project at the Fort Sill Army
Installation. Dissatisfied with Corvias’ actions in terms of payment for work performed,
Plaintiff brought the present action asserting breach of contract, quantum meruit, and sought
to recover on a bond held by Defendant Hartford Fire Insurance Company. In response to
Plaintiff’s lawsuit, Defendants filed a Motion to Stay Proceedings and Refer to Arbitration.
According to Defendants, the contract between Plaintiff and Corvias contained an arbitration
clause which, Defendants argue, requires Plaintiff’s dispute to be resolved under the dispute
resolution clause. The dispute resolution clause has two steps: first the parties submit their
disagreement to non-binding mediation, and if no accord is reached, the second step is
binding arbitration. Plaintiff objects to the Motion to Stay and Refer to Arbitration, arguing
that the contract is an adhesion contract and as a result the arbitration clause is unenforceable.
Plaintiff does not dispute that the contract was signed by the parties and that the
contract contains the arbitration clause as outlined by Defendants. Rather, Plaintiff argues
it should be excused from complying with the dispute resolution clause because the contract
was presented as a take-it-or-leave-it document, and therefore is an adhesion contract which
is so unfairly one-sided as to be unconscionable.
Resolution of Plaintiff’s objection turns on the question of unconscionability.
Whether or not the contract can be classified as an adhesion contract is of no moment if the
terms are enforceable. See MJ Lee Constr. Co. v. Okla. Transp. Auth., 2005 OK 87, ¶ 12,
125 P.3d 1205, 1210 (recognizing that even though the contract was an adhesion contract the
contract was still enforceable.) Plaintiff has a substantial burden in overcoming the
preference in favor of arbitration. See Freeman v. Bodyworks, Inc., 2008 OK CIV APP 114,
¶ 6, 213 P.3d 838, 840. Further, the Oklahoma Supreme Court’s explanation of what makes
a contract unconscionable weighs heavily against Plaintiff’s position:
An unconscionable contract is one which no person in his senses, not under
delusion would make, on the one hand, and which no fair and honest man
would accept on the other. The basic test of unconscionability of a contract is
whether under the circumstances existing at the time of making of the contract,
and in light of the general commercial background and commercial needs of
a particular case, clauses are so one-sided as to oppress or unfairly surprise one
of the parties.
Barnes v. Helfenbein, 1976 OK 33, ¶ 23, 548 P.2d 1014, 1020.
While Plaintiff has pointed out instances in which the contract between the parties
appears to favor Defendant, it has failed to demonstrate that the contract is so unfair or onesided as to meet this definition of unconscionability. Defendant Corvias has offered a
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reasonable explanation for each of the alleged unfair or one-sided portions of the dispute
resolution clause. As for whether Plaintiff was surprised by the terms of the dispute
resolution clause, the evidence before the Court demonstrates to the contrary. By Plaintiff’s
own admission, it sought out the right to bid on the project and prior to submitting that bid
was well aware of the terms of the contract, including the terms of the dispute resolution
clause. Both parties to this transaction were commercial enterprises who entered into a
contract believing that performance under it would be mutually beneficial. It appears from
the allegations of Plaintiff’s Complaint that was the case for approximately five years.
Plaintiff will not now be heard to complain the contract was unfairly one-sided. In short,
Plaintiff has failed to demonstrate any basis on which to avoid the terms of a contract to
which it voluntarily agreed and a contract from which it has obtained substantial benefit.
Accordingly, Defendant’s Motion to Stay Judicial Proceedings and Refer to
Arbitration (Dkt. No. 11) and Defendants’ Amended Motion to Stay Judicial Proceedings and
Refer to Arbitration (Dkt. No. 12) are GRANTED. The Court Clerk shall administratively
close this action pending resolution of the matter through arbitration. Either party may seek
to reopen the matter upon the conclusion of those proceedings.
IT IS SO ORDERED this 21st day of July, 2016.
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