Encore Productions, Inc. v. Promise Keepers
| Decision Date | 30 June 1999 |
| Docket Number | No. Civ.A. 99-B-14.,Civ.A. 99-B-14. |
| Parties | ENCORE PRODUCTIONS, INC., Plaintiff, v. PROMISE KEEPERS, Michael Whalen d/b/a Whalen & Associates, Inc., Defendants. |
| Court | U.S. District Court — District of Colorado |
Dennis W. Brown, Ellen Rubright Ivy, Baldwin & Brown, P.C., Denver, CO, Howard M. Wood, III, Phelon, FitzGerald & Wood, P.C., Manchester, CT, for plaintiff.
Brent E. Rychener, Ashley W. Jordaan, Holme Roberts & Owen, LLP, Colorado Springs, CO, for defendants.
Asserting application of an arbitration clause, Defendant, Promise Keepers ("PK"), moves to dismiss this action pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction, or, in the alternative, to stay it pending arbitration. Defendant, Michael Whalen, moves to dismiss this action pursuant to Rule 12(b)(2) for lack of personal jurisdiction. The motions are fully briefed and heard. For the reasons set forth below, I grant PK's motion to dismiss pursuant to Rule 12(b)(1), and I grant Mr. Whalen's motion to dismiss pursuant to Rule 12(b)(2).
The following alleged facts are taken from the Plaintiff's Complaint, unless otherwise noted. Plaintiff, Encore Productions, Inc. ("Encore"), is an Indiana corporation with its principal place of business in Indiana. PK is a non-profit Colorado corporation with its principal place of business in Denver, Colorado. Mr. Whalen is a resident and domiciliary of Georgia with his principal place of business in Georgia. Diversity jurisdiction is asserted pursuant to 28 U.S.C. § 1332. (Complaint, ¶ 4).
PK is in the business of conducting Christian meetings and conferences for men in stadiums and arenas throughout the United States. On April 18, 1997, PK and Encore entered into a contract designated Encore! Productions, Inc. Service Contract for Promise Keepers Men's Conferences 1997 ("Service Contract") in which Encore would provide production and consulting services in connection with the meetings and conferences conducted by PK.
Paragraph 18 of the Service Contract contains the following mediation/arbitration provision:
Any claim or dispute arising from or related to this Agreement shall be settled by mediation and, if necessary, legally binding arbitration, in accordance with the Rules of Procedure for Christian Conciliation of the Institute for Christian Conciliation. Such arbitration shall be held in Colorado unless otherwise agreed by both parties. Judgment upon an arbitration award may be entered in any court otherwise having jurisdiction.
(Service Contract, ¶ 18). The Service Contract also contains the following choice of law provision:
This Agreement shall be governed, construed, and interpreted under the laws of the State of Colorado. Venue on any dispute arising from this Agreement shall be at Arapahoe County, Colorado, unless otherwise agreed by both parties.
After entering into the Service Contract, Encore subcontracted with Mr. Whalen d/b/a Whalen Associates, Inc. to provide production and stage management services for certain PK conferences in 1997 (the "Subcontract"). The Subcontract contains both a confidentiality agreement and an agreement by Mr. Whalen not to compete with Encore in soliciting business with PK for two years from the termination of the agreement. The Subcontract also contains a choice of law provision which reads, "[t]his agreement shall be construed pursuant to the laws of the State of Indiana." (Subcontract, ¶ 10).
Encore alleges that, beginning in March 1998, "PK and Whalen conspired to terminate Encore's service contract ... and Whalen began sharing confidential information concerning Encore's policies, procedures, methods and pricing, in violation of [the Subcontract]." (Complaint, ¶ 19).
On July 24, 1998, Encore and PK entered into an agreement (the "Termination Agreement") terminating the Service Contract for mutual financial reasons upon certain conditions, among which were that: PK would not violate the terms of any valid non-compete agreement Mr. Whalen had with Encore; Encore would work for PK through the remaining stadium events; and outstanding financial issues would be finalized for 1997 within sixty days from the Termination Agreement and for 1998 within sixty days following the last stadium event.
Encore alleges that in September of 1998, PK wrongfully terminated the Service Contract in regard to all future events. Encore further alleges that PK wrongfully retained Mr. Whalen to perform services in violation of the Service Contract, Termination Agreement, and Subcontract.
Encore filed suit in this court on January 6, 1999, alleging the following seven claims for relief against the respective Defendants in this action:
(1) Interference with Contracts by Whalen;
(2) Interference with Contracts by PK;
(3) Unfair Misappropriation of Business Value by PK and Whalen;
(4) Unfair Trade Practices by PK and Whalen;
(5) Breach of Covenant of Good Faith and Fair Dealing by PK and Whalen;
(6) Breach of Contract — PK; and
(7) Civil Conspiracy by PK and Whalen.
PK then moved to dismiss pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction based on the arbitration clause, or, in the alternative, to stay proceedings pending arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 3 (the "FAA"). Mr. Whalen moved to dismiss the action against him pursuant to Rule 12(b)(2) for lack of personal jurisdiction.
Rule 12(b)(1) empowers a court to dismiss a complaint for "lack of jurisdiction over the subject matter." In response to a Rule 12(b)(1) motion, the district court has wide discretion to consider affidavits, documents, and even hold a limited evidentiary hearing. See Holt v. United States, 46 F.3d 1000, 1003 (10th Cir.1995); Morrison v. Colorado Permanente Medical Group, P.C., 983 F.Supp. 937, 939 (D.Colo. 1997). Both parties to this Rule 12(b)(1) motion have submitted supporting exhibits, all of which I have considered in my ruling. As courts of limited jurisdiction, federal courts may only adjudicate cases that the Constitution and Congress have granted them authority to hear. See Todd Holding Co., Inc. v. Super Valu Stores, Inc., 744 F.Supp. 1025, 1026 (D.Colo.1990). The burden of establishing subject matter jurisdiction and personal jurisdiction is on the party asserting jurisdiction. See Basso v. Utah Power and Light Co., 495 F.2d 906, 909 (10th Cir.1974); Behagen v. Amateur Basketball Ass'n, 744 F.2d 731, 733 (10th Cir.1984), cert. denied, 471 U.S. 1010, 105 S.Ct. 1879, 85 L.Ed.2d 171, (1985). When a party moves to dismiss a pleading because the pleading does not establish sufficient grounds for the court's jurisdiction, whether the district court has jurisdiction "must be determined from the allegations of fact in the complaint, without regard to mere conclusionary allegations of jurisdiction." Groundhog v. Keeler, 442 F.2d 674, 677 (10th Cir.1971).
Here, Encore has placed in issue the existence of a valid arbitration clause by claiming that the subsequent Termination Agreement superseded the original Service Contract and, therefore, disposed of the arbitration clause. When a dispute concerns whether there is a valid and enforceable arbitration clause in the first instance, there is no presumption of arbitrability on this initial issue. See Riley Manufacturing Co., Inc. v. Anchor Glass Container Corp., 157 F.3d 775, 779 (10th Cir.1998). The court will have jurisdiction to determine initially the existence of a valid arbitration clause unless there is "clear and unmistakable evidence" within the four corners of the agreement that the parties intended to submit to an arbitrator the question of whether an agreement to arbitrate exists. Id. at 780.
Although the arbitration clause in this case is written broadly, referencing "any claim or dispute arising from or related to this Agreement," there is nothing in the contract that demonstrates the parties' intent to submit to an arbitrator the threshold question of whether an agreement to arbitrate exists or remained in existence after the later agreement. (Service Contract, ¶ 18). Thus, I must resolve the initial question of arbitrability. See Riley, 157 F.3d at 781.
Encore argues that the arbitration clause in the Service Contract no longer holds any force or effect in the face of the Termination Agreement, claiming that PK "waived its rights to Christian Conciliation when it entered the new contract on July 24, 1998." (Encore's Objection to PK's Motion to Dismiss or Stay Proceedings, p. 2). The question then is whether the Termination Agreement supersedes the arbitration provision in the Service Contract, making it ineffective to force arbitration.
The Termination Agreement speaks only to the termination of the arrangement between PK and Encore and the additional conditions submitted by Encore. These conditions, as discussed above, refer to termination, the non-compete agreement with Mr. Whalen, the remaining stadium events that Encore agreed to service, and the finalization of the remaining financial issues. The Termination Agreement does not address any new arbitration clause, nor does it discuss the status of the arbitration clause in the previous Service Contract.
Under the federal common law of arbitrability, an arbitration provision in a contract is held to survive the termination of that contract unless there is clear evidence that the parties intended to override this presumption. See Nolde Bros., Inc. v. Local No. 358, Bakery and Confectionery Workers Union, 430 U.S. 243, 255, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977) (); Riley, 157 F.3d at 781. Even if the Termination Agreement effectively terminated the...
To continue reading
Request your trial
-
National Union Fire Ins. Co. of Pitts. v. Kozeny
...burden is "light" and all disputed facts and reasonable inferences must be drawn in plaintiff's favor. Encore Prods, Inc. v. Promise Keepers, 53 F.Supp.2d 1101, 1114 (D.Colo. 1999). Personal jurisdiction is a prerequisite to granting injunctive relief. See Citizens Concerned for Separation ......
-
Levine v. Vitamin Cottage Nat. Food Mkts.
... ... VITAMIN COTTAGE NATURAL FOOD MARKETS, INC., Defendant. Civil Action No. 20-cv-00261-STV United ... Ct. App. 1986) ... (finding that the implied promise of employment and continued ... employment were ... Encore Prod., Inc. v. Promise Keepers , 53 F.Supp.2d ... ...
-
Levine v. Vitamin Cottage Nat. Food Mkts.
... ... VITAMIN COTTAGE NATURAL FOOD MARKETS, INC., Defendant. Civil Action No. 20-cv-00261-STV United ... Ct. App. 1986) ... (finding that the implied promise of employment and continued ... employment were ... Encore Prod., Inc. v. Promise Keepers , 53 F.Supp.2d ... ...
-
International Beauty Products, LLC v. Beveridge
...activities.'" Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); Encore Prods., Inc. v. Promise Keepers, 53 F.Supp.2d 1101, 1116 (D.Colo.1999). The defendant must have committed some act to purposefully avail himself of the privilege of conducting acti......
-
'THE PECULIAR GENIUS OF PRIVATE-LAW SYSTEMS': MAKING ROOM FOR RELIGIOUS COMMERCE.
...a brief summary, see Helfand, Counter-Narrative, supra note 93, at 3001-02. (95.) See, e.g.. Encore Prods., Inc. v. Promise Keepers, 53 F. Supp. 2d 1101, 1113 (D. Colo. 1999); Meshel v. Ohev Sholom Talmud Torah, 869 A.2d 343, 354 (D.C. 2005); Elmora Hebrew Ctr., Inc. v. Fishman, 593 A.2d 72......
-
Arbitration Law in Colorado - June 2007 - Review of Legal Resources
...to practical guidance, Arbitration Law describes interesting and useful cases, such as Encore Productions, Inc. v. Promise Keepers, 53 F.Supp.2d 1101 (D.Colo. 1999), in which an arbitration clause incorporated the Rules of Procedure for Christian Conciliation. Those rules provided that "the......