Proctor v. RES ICD LP
Filing
20
Memorandum Opinion and Order granting 12 Motion to Compel Arbitration, and denying Motion to Stay Proceedings filed by RES ICD LP. The court ORDERS that....... the parties arbitrate the issues presented in plaintiff's original complaint file d in this action; and (4) all claims and causes of action asserted by plaintiff, Tammy Proctor, against, defendant, RES lCD, L.P., d/b/a Integrated Construction and Development, be, and are hereby, dismissed. [see order for specifics] (Ordered by Judge John McBryde on 7/19/2011) (cxb)
U.S. DISTRICT COURr-'---~··-I
NORTHERN DISTRICT OF TEXAS
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FILED
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IN THE UNITED STATES DISTRICT CO
NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
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JUl I 9 2011
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CLERK, U.S. DISTRICT COURT
by_ _-;=;-=~
Deputy
TAMMY PROCTOR,
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Plaintiff,
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VS.
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NO. 4:10-CV-915-A
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RES ICD, L.P. D/B/A INTEGRATED
CONSTRUCTION AND DEVELOPMENT,
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Defendant.
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MEMORANDUM OPINION
and
ORDER
Now before the court for consideration is the motion to
compel arbitration and stay proceedings filed in the above action
by defendant, RES ICD, L.P. d/b/a Integrated Construction and
Development.
Plaintiff, Tammy Proctor, filed a response, and
defendant a reply.
Having considered all of the filings by the
parties, as well as the applicable legal authorities, the court
that the motion to stay proceedings should be denied, but that
the motion to compel arbitration should be granted and this case
dismissed. 1
lDefendant argues that arbitration is required under both the federal and Texas acts. As the court
concludes that the Federal Arbitration Act requires arbitration of this case, it need not reach defendant's
arguments under the Texas act.
_
1.
Background and Grounds of the Motion
Plaintiff initiated this action by the filing on November
23, 2010, of her original complaint, wherein she asserted claims
and causes of action against defendant for wrongful termination
on the basis of pregnancy in violation of the Pregnancy
Discrimination Act of 1978, 42 U.S.C. 2000e(k), and the Texas
Labor Code.
Pursuant to a waiver of service agreement, defendant
filed its answer on January 31, 2011.
Defendant filed the
instant motion on May 6, 2011.
The basis of defendant's motion is the following provision
in an arbitration agreement plaintiff signed upon commencement of
her employment with defendant:
It is in the interest of [defendant] and their
employees to resolve in a speedy and inexpensive way,
any legal controversy that may arise.
Therefore, other
than a worker's compensation claim covered by
insurance, no dispute between the companies and the
undersigned, including but not limited to a claim for
wrongful termination" [sic] discrimination and/or
harassment, and worker's compensation not covered by
insurance, shall be the subject of a lawsuit filed in
any state or federal court.
Instead, any such dispute
shall be submitted to arbitration in accordance with
the rules of the American Arbitration Association
( "AAA") .
App. to Br. in Supp. of Def.'s Mot. to Compel Arbitration and
Stay Proceedings at 3.
Although plaintiff claims she does not
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specifically recall signing the arbitration agreement, she
acknowledges that the signature appears to be hers, and she does
not otherwise dispute the authenticity of the agreement.
Plaintiff also does not dispute that her claims in this
action are covered by the arbitration agreement.
Instead,
plaintiff contends that defendant waived its right to move for
arbitration as a result of its involvement in the instant
litigation, specifically because it filed an answer to
plaintiff's complaint, participated in a settlement conference
and Joint Status Report, and participated in written discovery.
Plaintiff also argues waiver because defendant only recently
raised the issue of arbitration, despite knowing of plaintiff's
intentions as early as December 3, 2009, when she filed a demand
letter and indicated her intent to pursue a claim of
discrimination.
Defendant counters that none of the actions described by
plaintiff are sufficient to constitute waiver or overcome the
presumption in favor of arbitration.
II.
Analysis
A.
Law Pertaining to Arbitration
The Federal Arbitration Act provides that a written
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arbitration agreement "shall be valid, irrevocable, and
enforceable."
9 U.S.C.
§
2.
The Act further allows a party
"aggrieved by the alleged failure, neglect, or refusal of another
to arbitrate under a written agreement for arbitration" to
petition the court for an order directing the parties to proceed
to arbitration as provided in their agreement.
Id. at
§
4.
Consideration of a motion to compel arbitration requires the
court to engage in a two-step analysis: the court must first
determine whether the parties agreed to arbitrate the dispute in
question, and then decide whether "legal constraints external to
the parties' agreement" precludes arbitration of those claims.
Walton v. Rose Mobile Homes LLC, 298 F.3d 470, 473
2002).
(5th Cir.
Because there appears to be no dispute that plaintiff's
claims are covered by a valid arbitration agreement, the court
will focus on the second issue.
A strong presumption exists under federal law in favor of
the enforceability of contractual arbitration agreements.
(citing
Id.
Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460
U.S. I, 24-25 (1983)).
Consequently,
"[t]he burden on one
seeking to prove a waiver of arbitration is a heavy one."
Tenneco Resins, Inc. v. Davy Int'l, AG, 770 F.2d 416, 420 (5th
Cir. 1985)
(internal citation omitted)
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The question of waiver
depends on the facts of each case; however, the Fifth Circuit
"indulge[s] a presumption against finding waiver."
Walker v.
J.C. Bradford & Co., 938 F.2d 575, 576-77 (5th Cir. 1991).
A party waives its right to seek arbitration when it
"substantially invokes the judicial process to the detriment or
prejudice of the other party."
Id. at 577.
This generally
requires the party to "engage in some overt act in court that
evinces a desire to resolve the arbitrable dispute through
litigation rather than arbitration."
Republic Ins. Co. v. PAlCO
Receivables, LLC, 383 F.3d 341, 344 (5th Cir. 2004)
(internal
citation omitted) .
B.
Application of Law to the Facts
None of the actions taken by defendant that form the basis
of plaintiff's waiver argument have been considered sufficient to
waive a party's right to seek arbitration.
Indeed, the Fifth
Circuit has refused to find waiver where parties have engaged in
the same activities and more prior to moving for arbitration.
For example, no waiver was found where a defendant removed a case
to federal court then, over the course of thirteen months, filed
an answer, served plaintiffs with interrogatories and document
requests, and participated in a court-ordered pretrial conference
prior to moving for arbitration.
Walker, 938 F.2d at 576-78.
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Similarly, filing an answer, serving interrogatories and
requests for production, moving for a protective order, and
agreeing to a joint motion for continuance of the discovery
period, along with a delay of eight months before seeking to
compel arbitration, failed to constitute waiver.
770 F.2d at 420-21.
Tenneco Resins,
The court could continue with a list of the
Fifth Circuit cases that have refused to find waiver despite a
party's participation in litigation to the same or a greater
extent as defendant here.
However, the two cases cited as
examples above sufficiently make the point: more than what
plaintiff has presented is required to overcome the strong
presumption in favor of arbitration.
Despite a significant number of Fifth Circuit cases
discussing waiver, plaintiff cites only to Eleventh Circuit cases
and to the Fifth Circuit's decision in Price v. Drexel Burnham
Lambert, Inc., 791 F.2d 1156 (5th Cir. 1986), to support her
waiver argument.
The court finds Price distinguishable, as the
actions that constituted waiver in that case--a seventeen-month
delay,
"extensive" discovery, filing multiple answers,
participating in depositions, filing motions to dismiss and for
summary judgment, and obtaining two extensions of pretrial
deadlines--are not alleged here.
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Nor can the court agree that defendant's failure to seek
arbitration from the time plaintiff sent her demand letter up to
the time she filed suit has any bearing on waiver.
Again, the
Fifth Circuit has spoken rather clearly on this subject:
"[p]re-suit inactivity does not invoke the judicial process and
cannot support a finding of waiver."
Walker, 938 F.2d at 578.
Because plaintiff has failed to establish waiver based on
defendant's invocation of the judicial process, the court need
not consider if plaintiff has also shown prejudice.
Corp., 613 F.3d 584,
(5th Cir. 2010).
In Re Mirant
Nevertheless, it is
clear that plaintiff has failed to meet her burden.
"Prejudice in the context of arbitration waiver refers to
delay, expense, and damage to a party's legal position."
(internal citation omitted).
these.
Id.
Plaintiff has established none of
Plaintiff again attempts to use the length of time
between her demand letter and the time she filed suit to argue
that she has been prejudiced by defendant's delay in seeking
arbitration.
Plaintiff cites no authority for this proposition.
As the Fifth Circuit has refused to find waiver based on pre-suit
activity, the court has no reason to believe such could support a
claim of prejudice.
Plaintiff's other arguments as to prejudice are generally
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reiterations of her waiver argument; that is, she has been
prejudiced by defendant's delay in seeking arbitration.
Plaintiff has cited no binding authority to support her
contentions, and the court finds her arguments no more persuasive
to support a finding of prejudice than to support waiver.
Plaintiff also argues that she has been prejudiced because her
counsel has expended seventy-eight hours of attorney time to
litigate this matter, and arbitration will cause further delay
and expense.
Plaintiff's generalized complaints of the cost of
delay are insufficient to show prejudice and overcome the strong
presumption in favor of arbitration.
Walker, 938 F.2d at 578.
Defendant has asked the court to stay the instant litigation
pursuant to 9 U.S.C.
§
3, which requires that on application of a
party to the arbitration agreement, the court "shall" stay the
proceedings pending the arbitration.
The Fifth Circuit has
determined, however, that dismissal, rather than a stay, is
proper where all of the issues raised in the district court must
be submitted to arbitration.
Alford v. Dean Witter Reynolds,
Inc., 975 F.2d 1161, 1165 (5th Cir. 1992).
All of plaintiff's
claims and causes of action are covered by the arbitration
agreement.
Accordingly, the court concludes dismissal of this
action, rather than a stay, is warranted.
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Id.
III.
Order
Therefore,
The court ORDERS that:
and is hereby, deniedi
(1) defendant's motion for stay be,
(2) defendant's motion to compel
arbitration be, and is hereby, grantedi
(3) the parties arbitrate
the issues presented in plaintiff's original complaint filed in
this actioni and (4) all claims and causes of action asserted by
plaintiff, Tammy Proctor, against, defendant, RES lCD, L.P.,
d/b/a Integrated Construction and Development, be, and are
hereby, dismissed.
SIGNED
JUlY~,
2011.
District J
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