Cox v. Ocean View Hotel Corp.

• Citation: 433 F.Supp.2d 1171
• Decision Date: 03 April 2006
• Docket Number: No. Civ. 05-00765 JMS/BM.,Civ. 05-00765 JMS/BM.
• Parties: Thomas R. COX, Plaintiff, v. OCEAN VIEW HOTEL CORPORATION doing business as Radisson, John Does 1-50; Jane Does 1-50; Doe Partnerships 1-50; Doe Corporations 1-50; and Doe Entities 1-50, Defendants.
• Court: U.S. District Court — District of Hawaii

433 F.Supp.2d 1171

Thomas R. COX, Plaintiff, v. OCEAN VIEW HOTEL CORPORATION doing business as Radisson, John Does 1-50; Jane Does 1-50; Doe Partnerships 1-50; Doe Corporations 1-50; and Doe Entities 1-50, Defendants.

No. Civ. 05-00765 JMS/BM.

United States District Court, D. Hawai`i.

April 3, 2006.

Stephen T. Hioki, Honolulu, HI, for Plaintiff.

Richard M. Rand, Torkildson Katz Fonseca Jaffe Moore & Hetherington, Honolulu, HI, for Defendants.

ORDER DENYING DEFENDANT'S MOTION TO COMPEL ARBITRATION AND TO STAY JUDICIAL PROCEEDINGS PENDING ARBITRATION AND GRANTING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

SEABRIGHT, District Judge.

ORDER DENYING DEFENDANT'S MOTION TO COMPEL ARBITRATION AND TO STAY JUDICIAL PROCEEDINGS PENDING ARBITRATION AND GRANTING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

I. INTRODUCTION

Defendant Ocean View Hotel Corporation ("Defendant") has moved the court for an order compelling Plaintiff Thomas R. Cox ("Plaintiff') to arbitrate his claims against the Defendant; Defendant also asks the court to stay judicial proceedings pending arbitration. The Plaintiff, meanwhile, has moved the court for partial summary judgment as to his claim that the Defendant breached its agreement to arbitrate disputes with the Plaintiff. Based on the following, the court DENIES the Defendant's motion and GRANTS the Plaintiffs motion.

II. BACKGROUND

The Plaintiff worked for the Defendant from 2001 to 2004 as the Director of Finance for the Radisson Waikiki Prince Kuhio Hotel. On July 17, 2001, the Plaintiff and Defendant entered into a "Letter of Agreement," which set forth the terms of the Plaintiffs employment with the Defendant. The Letter of Agreement, in addition to setting forth the Plaintiffs job description and compensation, contained the following arbitration clause:

ARBITRATION

Any disputes between Employer [the Defendant] and Employee [the Plaintiff] arising out of the employment relationship shall be settled by arbitration in accordance with the then current Model Employment Arbitration Procedures of the American Arbitration Association (AAA) in lieu of jury trial and all other judicial dispute resolution methods. Employee fully understands and accepts this. A judgment on the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof. Any controversy except for Workmen's Compensation, involving the construction or application of the terms, provisions, or conditions of this Agreement or otherwise arising out of or related to this Agreement shall likewise be settled by arbitration. This agreement to arbitrate covers all employment disputes including but not limited to those involving tort, wrongful discharge, and discrimination claims. The cost of the arbitration shall be paid by the Company [the Defendant]. The location of the arbitration shall be paid by the Company. The location of the arbitration shall be in the County in which the Company is located. This Clause cannot be amended without written consent of both parties.

Defendant's Ex. A at 3.¹ The Letter of Agreement also provided that "[t]he validity, interpretation, enforceability, and the performance of this Agreement shall be governed by and construed in accordance with the law of the State of California." Defendant's Ex. A at 4.

The present dispute centers on whether, in 2004, the Plaintiff requested arbitration and whether the Defendant refused that request to arbitrate.

On October 9, 2003, the Plaintiff attended a meeting with Gary Jutz (the Plaintiff's supervisor, General Manager of the Radisson Waikiki Prince Kuhio Hotel), Rae Takahashi (the Plaintiff's subordinate, an Accounting Manager), and another employee. The Plaintiff claims that, at that meeting, he became aware of an unsigned, undated letter addressed to Jutz. That letter accused the Plaintiff of violating company policy by having a "`secret' relationship" with Takahashi. Plaintiffs Ex. 2. The Plaintiff alleges that he and Ms. Takahashi did not have any kind of romantic or sexual relationship, but Jutz nevertheless instructed the Plaintiff and Ms. Takahashi to stop whatever they were doing. Later that day, the Plaintiff sent a letter to the Director of Human Resources in which he stated "I wish to file a formal complaint of harassment." Plaintiffs Ex. 3. The Plaintiff appears to have withdrawn this complaint shortly after filing it, although this is unclear. See Plaintiffs Ex. 6 at 2.

The perception that the Plaintiff had an inappropriate personal relationship with Ms. Takahashi apparently persisted for the next year, though the Plaintiff maintains he did nothing wrong. On October 5, 2004, Jutz sent the Plaintiff a letter stating that the Plaintiffs personal relationship with Ms. Takahashi had led to a "perception of favoritism." As a result, Jutz instructed the Plaintiff as follows:

I have advised you over the past few months that your personal relationship with a subordinate is affecting the organization and I have asked you to correct this situation.... You have chosen to deliberately ignore my advice, and your relationship with a subordinate continues to be a disruptive force in your department and the hotel in general. It is affecting your job performance and the performance of the Accounting Department. We are beyond the days of counsel. I am directing you to stop. Starting immediately, either you or the Accounting Manager will be on property at all times during the normal business day. That is to say, lunch off-property on a daily basis with your subordinate will cease.

Failure to change your behavior and maintain expected work responsibilities is a serious disciplinary matter. A continued failure to work within the organization to resolve this situation in a manner beneficial to all may ultimately be deemed an act of insubordination and grounds for immediate termination of employment.

Plaintiff's Ex. 4 at 1-2.

On October 11, 2004, the Plaintiff sent a letter to Clyde Guinn, Senior Vice President of Operations for the hotel. The letter began by stating, "It is with much regret that I must file this request to enter into arbitration." The letter accused the hotel of sex discrimination, harassment, and retaliation, among other things. The letter ended by asking Guinn to contact the Plaintiffs attorney with the date, time, and location of the arbitration hearing. Plaintiffs Ex. 5 at 1-2.

On October 27, 2004, Guinn responded to the Plaintiffs letter. Guinn's letter began by stating, "I refer to your letter of October 15^th 2004 in which you demand arbitration...." Plaintiffs Ex. 6 at 1. Guinn proceeded to disagree with the substance of the Plaintiffs complaints, after which he stated the following:

In summary, therefore, I do not consider this is [sic] a case for arbitration. Gary Jutz believes that your behavior, as a senior member of the hotel management team, is cause for censure. You do not accept this is the case. Clearly, if you continue to pursue the activities which Gary Jutz has complained of, you run the risk of being terminated. At that point, assuming you then consider it a wrongful termination, arbitration may be in order.

Plaintiffs Ex. 6 at 2.

On November 16, 2005, the Plaintiff filed a Complaint in the Circuit Court of the First Circuit of the State of Hawaii. On December 9; 2005, the Defendant removed this action to federal court pursuant to 28 U.S.C. § 1441. On December 16, 2005, the Defendant filed a Motion to Compel Arbitration and to Stay Proceedings Pending Arbitration. On February 2, 2006, the Plaintiff filed a Motion for Partial Summary Judgment; the motion asks the court for summary judgment as to the Defendant's refusal to arbitrate. The court heard arguments on the motions on March 13, 2006.

III. STANDARD OF REVIEW

A. Summary Judgment

Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).

"One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses[.]" Celotex Corp. v. Catrett, 477 U.S. 317, 323-324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden initially lies with the moving party to show that there is no genuine issue of material fact. T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n., 809 F.2d 626, 630 (9th Cir. 1987). Nevertheless, "summary judgment is mandated if the non-moving party `fails to make a showing sufficient to establish the existence of an element essential to that party's case.'" Broussard v. Univ. of Cal. at Berkeley, 192 F.3d 1252, 1258 (9th Cir.1999) (quoting Celotex, 477 U.S. at 322, 106 S.Ct. 2548).

B. Motion to Compel Arbitration

The Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et. seq., which applies to arbitration agreements in contracts involving transactions in interstate commerce, provides that written arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or equity for the revocation of any contract." 9 U.S.C. § 2. The FAA provides that "any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). "The standard for demonstrating arbitrability is not high. The Supreme Court has held that the FAA leaves no place for the exercise of discretion by a district court, but instead mandates that district courts direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed." Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 719 (9th Cir. 1999) ...