Electricity v. Abm Indus. Inc.

• Decision Date: 11 January 2016
• Docket Number: CIVIL ACTION No. 3:15-00252-JWD-RLB
• Parties: VECTOR ELECTRIC & CONTROLS, INC., Plaintiff, v. ABM INDUSTRIES INCORPORATED, and TEGG INCORPORATED, Defendants.
• Court: U.S. District Court — Middle District of Louisiana

VECTOR ELECTRIC & CONTROLS, INC., Plaintiff, v. ABM INDUSTRIES INCORPORATED, and TEGG INCORPORATED, Defendants.

CIVIL ACTION No. 3:15-00252-JWD-RLB

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA

January 11, 2016

ORDER ON DEFENDANT ABM INDUSTRIES INCORPORATED'S MOTION TO COMPEL ARBITRATION AND TO DISMISS THE COMPLAINT OR, IN THE ALTERNATIVE, TO STAY PENDING ARBITRATION

I. INTRODUCTION

Before the Court is Defendant ABM Industries Incorporated's Motion to Compel Arbitration and to Dismiss the Complaint or, in the Alternative, to Stay Pending Arbitration ("Motion to Compel"), (Doc. 3), filed by one defendant, TEGG Inc. ("TEGG"), and both the second defendant and TEGG's apparent owner, ABM Industries, Inc. ("ABM") (collectively, "Defendants"). In opposition, Vector Electric & Controls, Inc. ("Vector," "Vector Electric," or "Plaintiff"), has submitted the Memorandum in Opposition to Motion to Compel Arbitration and to Dismiss the Complaint or, in the Alternative, to Stay Proceedings Pending Arbitration ("Opposition"). (Doc. 7.) Defendants have countered the Opposition with the Reply in Support of Defendant ABM Industries Incorporated's Motion to Compel Arbitration and to Dismiss the Complaint or, in the Alternative, to Stay Pending Arbitration ("Reply"). (Doc. 8.) Having considered the arguments advanced by Defendants and Plaintiff (collectively, "Parties"), this Court finds that the Plaintiff's claims, as articulated in the relevant petition ("Petition") prior to its removal from the District Court of the Twenty-Third Judicial Circuit in and for Ascension Parish, Louisiana ("State Court"), (Doc. 1-1), to be subject to the most recent iteration of the freely and knowingly signed agreements to arbitrate "any dispute arising out of or relating to" the franchise agreement between Plaintiff and TEGG "or a claimed breach thereof" ("Arbitration Provision"),¹ (Doc. 3-2 at 10-65). Accordingly, pursuant to the Federal Rules of Civil Procedure² and Section 3 of the Federal Arbitration Act ("FAA"),³ so as to allow for arbitration to commence and conclude, this Court will stay the present action.⁴

II. BACKGROUND

A. FACTUAL BACKGROUND

Founded as a California corporation in 1909, ABM incorporated in Delaware on March 19, 1985, and adopted its current name in 1994. ABM INDUSTRIES, INC., ANNUAL REPORT (Form 10-K) (Dec. 17, 2015); see also Doc. 1-1 at 1. It describes itself as "a leading provider of end-to-end integrated facility solutions to thousands of commercial, industrial, institutional, retail,residential, and governmental facilities located primarily throughout the United States," with "comprehensive capabilities [that] include expansive facility solutions, energy solutions, commercial cleaning, maintenance and repair, HVAC, electrical, landscaping, parking, security, and commercial aviation support services, which we provide through stand-alone or integrated solutions." ABM INDUSTRIES, INC., QUARTERLY REPORT (Form 10-Q) (Sept. 3, 2015). More recently born, TEGG emerged in 1992 as a Delaware entity, its base in Pittsburgh, Pennsylvania. (Doc. 3-2 at 12, 34, 51; see also, e.g., Doc. 1 at 2; Doc. 1-1 at 1.) As presently constituted, it holds itself out to be "an exclusive, international group of electrical contractors who are dedicated to providing the highest-quality service possible." TEGG, http://www.tegg.com/about%20us/pages/default.aspx (last visited on Jan. 5, 2016). Headquartered in New York, one of ABM's many operating units, ABM Franchising Group, acquired TEGG's assets in 2012.⁵ (Doc. 1-1 at 7-8; see also Doc. 3-1 at 3.) Apparently, TEGG thereupon became "defunct." (Doc. 1 at 2; see also Doc. 1-1 at 7-8.) Amongst the assets purchased was TEGG's franchise agreement with Plaintiff, a Louisiana corporation. (Doc. 1-1 at 1, 7-8.) The product of negotiations between TEGG and Plaintiff that first began in 1995, this accord was signed on June 1, 1997, and renewed on June 1 of 2003 and 2009. (Doc. 3-2 at 27, 47, 65; see also, e.g., Doc. 3-1 at 2-3; Doc. 7 at 1-2.) Pursuant to these agreements' terms, Vector served as "an electrical and instrumentation contractor providing services to clients primarily in South Louisiana and Texas," operating as a member of TEGG's and later ABM's franchise network of electrical contractors. (Doc. 1-1 at 1; see also Doc. 7 at 1-2.) In 2013, as required by the franchise agreement's latest renewal, Vector paid $97,950 to ABM. (Doc. 1 at 2;see also Doc. 1-1 at 8.)

The Arbitration Provision appears in Section 41 of the franchise agreement's second renewal ("Section 41"). (Doc. 3-2 at 64; see also Doc. 3-1 at 3-4.) Having taken effect "upon its acceptance and execution by TEGG," Section 41's first paragraph declares: "Except to the extent governed by the Federal Arbitration Act, this Agreement shall be interpreted and construed in accordance with the laws of the Commonwealth of Pennsylvania, which laws shall prevail in the event of any conflict of law." (Doc. 3-2 at 64; see also Doc. 3-1 at 4.) The second paragraph reads: "Except as provided below, the parties agree that, should any dispute arise between them under, relating to or in connection with this Agreement, prior to the commencement of an arbitration or other proceeding pursuant to this Agreement, they shall designate one or more representatives with authority to resolve face-to-face . . . in a good-faith effort to amicably resolve the dispute." (Doc. 3-2 at 64; see also Doc. 3-1 at 5.) If these first efforts proved unsuccessful, the Parties bound themselves to continue discussions "under the then-prevailing commercial mediation rules of a recognized dispute resolution service . . . ." (Doc. 3-2 at 64; see also Doc. 3-1 at 5.) The failure of this second mediation triggered the agreement's Arbitration Provision: "[A]ny dispute arising out of or relating to this Agreement, or a claimed breach thereof, that remains unresolved after discussions and mediation shall be submitted to arbitration by the American Arbitration Association in accordance with its Commercial Arbitration Rules." (Doc. 3-2 at 64; see also Doc. 3-1 at 4.) This identical sentence appeared in the original franchise agreement and its first renewal (Doc. 3-2 at 26, 47.) Section 41's fourth paragraph contains an inapposite example concerning TEGG's alleged intellectual property. (Id. at 64.)

Beginning in January 2014, Vector allegedly fell behind on the payments owed to ABM. (Doc. 3-1 at 4.) By August 2014, the debt ballooned to $81,246. (Id.) ABM notified Vector ofthis failing by letter dated September 2, 2014. (Id.) When Vector did not respond, ABM invoked the dispute resolution mechanism set forth in Section 41. (Id.; see also Doc. 3-2 at 64.)

B. PROCEDURAL BACKGROUND

In response, Plaintiff filed the Petition on March 18, 2015. (Doc. 3-1 at 4-5; Doc. 1-1 at 5.) With the Petition, Vector indirectly⁶ sued ABM for breach of the franchise agreement. (Id. at 3.) In particular, it argued that Vector "relied upon the statement, representations, and assurances of the employees, agents, and/or representatives of ABM and/or TEGG to the detriment of Vector . . . which sustained damages as a result thereof" and attacked any such statements as "misrepresentation[s] or suppression[s] of the truth made with the intention of inducing Vector . . . to enter into a contractual relationship with and pee fees to ABM." (Doc. 1-1 at 4; see also Doc. 3-1 at 3-4.) In addition, Vector contended that ABM's "actions and/or inactions . . . constitute a violation of the Louisiana Unfair Trade Practices Act." (Doc. 1-1 at 4.) Damages allowable under this state statute, as well as "additional damages, attorneys' fees, and exemplary damages," are sought. (Id.) Though left unquantified, in a later letter to ABM, Plaintiff's counsel allegedly stated that Vector "will present multiple claims which, if successful, will be several hundred thousand dollars, and potentially could reach into the seven figure range."⁷ (Doc. 1 at 3.)

Defendants removed the Petition from State Court on April 22, 2015, (Id.), an action that Plaintiff has never opposed. On July 9, 2015, Defendants filed the Motion to Compel. (Doc. 3.) The Opposition followed on July 30, 2015. (Doc. 7.) The Reply came on August 13, 2015. (Doc.8.) After various scheduling and status conferences were continued, (Docs. 11, 13, 18, 20), a hearing on the Parties' contentions was scheduled for January 14, 2016, at 3:00 p.m., on December 14, 2015. (Doc. 21.) In this flurry's midst, on June 18, 2015, Defendants filed a demand for arbitration with the American Arbitration Association. (Doc. 3-1 at 5.) In accordance with this Court's earlier order, oral argument on the Motion to Compel took place on January 14, 2016.

C. PARTIES' ARGUMENTS

Resting on the "strong federal policy favoring resolution of disputes by arbitration" embodied in the FAA and emphasizing the breadth of the "express" Arbitration Provision, Defendants insist that this Court "must compel Vector to arbitrate its claims and either dismiss this action or stay this action pending completion of the arbitration." (Id. at 1, 5, 6.) Only two considerations are involved in the determination of whether two parties agreed to arbitrate a dispute—whether a valid agreement exists, and whether the relevant dispute falls within the agreement's scope—and both elements here favor arbitration. (Id. at 7-11.) In this vein, Defendants emphasize that the Arbitration Provision is "[v]alid and [e]nforceable," Vector's claim are wholly "[a]rbitrable," and "[n]o [f]ederal [s]tatute or [p]olicy . . . [r]enders Vector's [c]laims [n]onarbitrable." (Id.)

Plaintiff, in turn, argues otherwise, advancing two arguments. First, according to Plaintiff, this Court must alone decide whether "a valid and binding contract" exists. (Doc. 7 at 5.) Such a determination necessarily includes analysis of whether any consent given was "vitiated by misrepresentation or error, fraud, or duress." (Id. at 6.) Notably, Plaintiff specifies...