Bernard v. Kabco Builders, Inc., CIVIL ACTION NO. 1:15-CV-02023
| Decision Date | 11 February 2016 |
| Docket Number | CIVIL ACTION NO. 1:15-CV-02023 |
| Parties | GLENN J. BERNARD, Plaintiff v. KABCO BUILDERS, INC., ET AL. Defendants |
| Court | U.S. District Court — Western District of Louisiana |
Before the Court are First and Supplemental Motions to Compel Arbitration and Stay (Docs. 13, 24) filed by Defendants, Kabco Builders, Inc. ("Kabco"), Andries & Associates, LLC ("Andries"), and LA Movers, LLC ("LA Movers") (collectively, "Defendants"). Plaintiff, Glenn J. Bernard ("Bernard"), opposes the Motions.
The Motions have been referred to the undersigned for review, report, and recommendation under 28 U.S.C. § 636 and the standing orders of the Court.
On April 14, 2014, Bernard purchased a manufactured home from Andries. (Doc. 1-3, p. 2). Kabco manufactured the home. (Id., pp. 2-3). Andries and LA Movers delivered and erected the home on a lot in Avoyelles Parish, Louisiana. (Id.).
According to Bernard, the home suffered from a litany of defects. (Id., pp. 3-4). Some defects pertained to materials: the type of refrigerator and air conditioning unit installed, for instance. Others involved workmanship: poorly fastened molding, incorrectly installed bathroom fixtures, and missing materials. (Id.). Bernard acknowledges that Defendants repaired some of the defects. But Bernard insists that many other defects still exist. As a result, Bernard claims he has suffered damages for, among other things, repairs, lost market value, mental anguish, attorney's fees, and litigation costs.
According to Defendants, Bernard entered into three binding arbitration agreements governing his claims against each Defendant. First, on May 13, 2014, Andries and Bernard completed a "Customer Closing Package." (Doc. 13-2). The "Customer Closing Package" contains the following "Arbitration Agreement":
The parties agree that all disputes, claims, or controversies arising from or relating to this agreement or the relationships which result from this agreement, or the validity of this arbitration agreement or the entire contract, shall be resolved by binding arbitration by one arbitrator selected by [Andries] with consent of [Bernard]. This arbitration agreement . . . shall be governed by [the Federal Arbitration Act]. . . . The parties agree and understand that they have a right or opportunity to litigate disputes through a court but they prefer to resolve their disputes through arbitration, except as provide (sic) herein. THE PARTIES VOLUNTARILY AND KNOWINGLY WAIVE ANY RIGHT THEY HAVE TO A JURT (sic) TRIAL EITHER PURSUANT TO ARBITRATION UNDER THIS CLAUSE OR PURSUANT TO A COURT ACTION BY COMPANY AS PROVIDED HEREIN. The parties agree and understand that all disputes . . . including, but not limited to, all contract, tort, and property disputes will be subject to binding arbitration in accord with this agreement.
(Id., p. 14) (hereinafter, the "Andries Arbitration Agreement").1
Second, Bernard seeks to enforce a "Limited One-Year Warranty and Arbitration Agreement" (the "Warranty") against Kabco. The Warranty contains the following arbitration agreement:
Any and all disputes, controversies or claims of any kind or nature which arise from or relate to the subject manufactured home, this single limited warranty, the subject purchase transaction, documents received, delivered or executed in connection therewith or the parties thereto, including their successors, assigns, heirs, representatives, parent companies, divisions, subsidiaries, affiliates, officers, directors, employees, agents and contractors shall be governed by the Federal Arbitration Act and if the claims cannot be resolved through direct discussions or negotiations, and unless the parties otherwise agree on a different mediation or arbitration process, then the claims involving only a single claimant, or claimants who are related or asserting claims arising from a single transaction shall first be mediated as administered by the American Arbitration Association (the "AAA") under its Home Construction Arbitration Rules and Mediation Procedures before resorting to binding arbitration. Thereafter, any unresolved claims shall be settled by binding arbitration administered by the AAA in accordance with its Home Construction Arbitration Rules and Mediation Procedures or such other rules as may be applicable, and any judgment on the award rendered by the arbitrator(s) may be entered in any Court having jurisdiction thereof.
(Doc. 13-3, p. 4) (hereinafter, the "Kabco Arbitration Agreement").
Finally, on May 13, 2014, Bernard signed a "Manufactured Home Transport Agreement" (the "Transport Agreement") during his transaction with LA Movers. (Doc. 24-1). The Transport Agreement contains the following arbitration agreement:
The parties agree that all claims, disputes, and controversies arising out of or relating in any way to this Agreement, the obligations of the parties to or under this Agreement, the interpretation or enforcement of any term, provision, condition, warranty, responsibility, exemption, exclusion, or limitation in this Agreement, the services provided under this Agreement, any condition of the Manufactured Home, the Current Location or the New Location, and any other claim, dispute or controversy that may exist or develop between the parties whether based on contract, tort, statute, common law, civil law, state law, federallaw or equity, shall be resolved by binding arbitration administered by the American Arbitration Association ("AAA") under and in accordance with its Commercial Arbitration Rules, as may be supplemented or amended by AAA, it being the express intention of the parties that the nature and types of claims, disputes and controversies between them subject to arbitration be given the broadest and most inclusive possible coverage and interpretation. IT IS SPECIFICALLY AGREED AND UNDERSTOOD THAT THE PARTIES WAIVE ANY RIGHT TO A JURY TRIAL.
(Id., p. 4) (hereinafter, the "LA Movers Arbitration Agreement").
Defendants maintain that Bernard's claims are subject to binding arbitration pursuant to these agreements. Bernard disagrees.
On April 13, 2015, Bernard filed a Petition for Damages in the 12th Judicial District Court in Avoyelles Parish (the "12th JDC"). (Doc. 1-3). In his original Petition, Bernard sought damages for the remaining defects in his manufactured home under the Louisiana New Manufactured and Modular Home Warranty Act (the "LMHWA"), La. R.S. 51:912.1, et seq.
On July 6, 2015, in response to an exception of prematurity, Bernard amended his Petition to enforce the Warranty against Kabco, and to assert claims under the federal Magnuson-Moss Warranty Act (the "MMWA"), 15 U.S.C. § 2301, et seq. (Doc. 1-3, p. 56).
Defendants promptly removed two days later. (See Doc. 1). Bernard moved to remand, arguing principally that Defendants failed to show damages could exceed $50,000.00 as required to sustain a claim under the MMWA. (Doc. 8). The Court denied Bernard's motion to remand, finding Bernard expressly asserted a claimunder the MMWA, and that this assertion - along with the bill of sale evidencing the value of the home - were sufficient to establish the Court's jurisdiction under the MMWA. (Docs. 16, 21).
On August 7, 2015, Defendants filed a Motion to Compel Arbitration (Doc. 13). In the original Motion, Defendants assert that Bernard signed two arbitration agreements, and that the Court should stay this matter and order arbitration in accordance with those agreements. (Id., pp. 1-2). Bernard responds that: (1) the MMWA does not allow binding arbitration of an express warranty under the Kabco Arbitration Agreement; (2) the Andries Arbitration Agreement is adhesionary; and (3) no arbitration agreement covers Bernard's claims against LA Movers.
On October 15, 2015, Defendants filed a Supplemental Motion to Compel Arbitration. (Doc. 24). In the Supplemental Motion, Defendants - for the first time - file and assert the LA Movers Arbitration Agreement. (Doc. 24-1). Bernard did not file a separate opposition to Defendants' Supplemental Motion.
Under the Federal Arbitration Act, 9 U.S.C. § 1, et seq. (the "FAA"), when parties have entered into a valid arbitration agreement, the Court must stay its proceedings and refer the parties to arbitration:
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 hasbeen 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. This provision of the FAA is mandatory: "A court must stay its proceedings if it is satisfied that an issue before it is arbitrable under the agreement." In re Gandy, 299 F.3d 489, 494 (5th Cir. 2002).
In determining whether to order arbitration, courts must engage in the following inquiry:
This Court must first ascertain whether the parties agreed to arbitrate the dispute. In determining this question, there are two considerations: (1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls within the scope of that arbitration agreement. If it is determined that the parties agreed to arbitrate, this Court must determine whether any federal statute or policy renders the claims nonarbitrable.
JF Morgan Chase & Co. v. Conegie ex rel. Lee, 492 F.3d 596, 598 (5th Cir. 2007) (internal citations and quotations omitted). Moreover, courts in our circuit distinguish between "broad" and "narrow" arbitration clauses. See ...
To continue reading
Request your trial