Full Moon Logistics v. Bald Eagle Logistics, Inc.
| Decision Date | 16 February 2022 |
| Docket Number | 8:21-cv-2695-WFJ-AAS |
| Court | U.S. District Court — Middle District of Florida |
| Parties | FULL MOON LOGISTICS, a Florida Limited Liability Company; and JADESH JAIGOBIND, an individual, Plaintiffs, v. BALD EAGLE LOGISTICS, INC., a New Jersey Corporation; and MALIAN NUS, an individual, Defendants. |
ORDER GRANTING MOTION TO COMPEL ARBITRATION IN PART
This matter is before the Court on Defendants Bald Eagle Logistics, Inc. and Malian Nus' motion to compel arbitration and stay the action or, alternatively, dismiss the case, (Dkt. 24), Plaintiffs Full Moon Logistics, LLC and Jadesh Jaigobind's response, (Dkt. 28), and Defendants' reply in further support of their motion (Dkt. 31). After careful consideration of the parties' submissions, the Court grants the Defendants' motion to compel arbitration.
Full Moon Logistics, LLC (“Full Moon”) and Bald Eagle Logistics, Inc. (“Bald Eagle”) entered into an agreement on or about August 18, 2021. (Dkt. 1-2).
This “Dispatcher-Carrier Agreement” (“Agreement”) was drafted by the Defendant Bald Eagle, (Dkt. 24 at 9), with the alleged help of the Plaintiff Full Moon, (Dkt. 28 at 11).[1] The Agreement provided that Full Moon would supply dispatching services to Bald Eagle in exchange for monetary compensation. (Dkt. 1-2). The Agreement was perpetual but allowed termination by either party after giving 30 days' written notice to the other party. (Dkt 1-2). The Agreement restricted Bald Eagle from soliciting or doing transportation or warehousing business with any customers it serviced through the Agreement until two years after the Agreement's termination, unless both parties agreed otherwise in writing. (Dkt. 1-2 at 2). If this were breached, Full Moon would be entitled to “twenty five (25) percent of the aggregate of all rates and charges assessed by carrier [Bald Eagle] for transportation services provided to any account of dispatcher [Full Moon] that is handled in contravention of this agreement, ” as well as $10, 000 of liquidated damages. (Dkt. 1-2 at 3). The Agreement also provided the following arbitration provision in Paragraph 10 of the Agreement: “Where a dispute or disagreement arises, both parties agree to tender the issue to binding arbitration in the ‘State of Florida.'” (Dkt. 1-2 at 3). This provision is the reason for the current dispute.
On October 22, 2021, Bald Eagle allegedly terminated the Agreement without providing adequate notice to Full Moon. (Dkt. 1 at 2; Dkt. 24 at 9). Full Moon notified Bald Eagle of its breach via email the same day, and on October 27, 2021 Full Moon sent formal notice to Bald Eagle via letter that Bald Eagle was in breach of contract. (Dkt. 1 at 2; Dkt. 24 at 9-10). Plaintiff Full Moon (and owner, Jadesh Jaigobind) filed a complaint against Bald Eagle (and owner, Malian Nus) on November 17, 2021, alleging misappropriation of trade secrets under Florida's Uniform Trade Secrets Act, Misappropriation of Trade Secrets under the Defend Trade Secrets Act, breach of contract, and unjust enrichment. (Dkt. 1). Bald Eagle filed a motion to compel arbitration pursuant to the arbitration provision in the Agreement or, in the alternative, dismiss Plaintiffs' complaint on January 3, 2022. (Dkt. 24). Plaintiffs subsequently replied with a response in opposition to Bald Eagle's motion to compel arbitration on January 18, 2022, arguing that arbitration is not required because the Agreement was not valid under an unconscionability defense. (Dkt. 28). Defendants replied on January 31, 2022 rebutting the unconscionability defense and arguing that arbitration is thereby required (if the case is not dismissed), and that neither Jaigobind nor Nus are parties to the lawsuit, particularly to the breach of contract claim. (Dkt. 31).
The Federal Arbitration Act (“FAA”) holds that written arbitration agreements are “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. This reflects the strong federal policy toward resolving disputed arbitrable issues through arbitration; in fact, “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 language itself or an allegation of waiver, delay, or a likely defense to arbitrability.” Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983); see also Milestone v. Citrus Specialty Grp., Inc., No. 8:19-cv-2341-T-02JSS, 2019 WL 5887179, at *1 (M.D. Fla. Nov. 12, 2019) ().
When deciding whether the parties have agreed to arbitrate certain matters, courts generally apply state law principles governing the formation of contracts. Am. Express Fin Advisors, Inc. v. Makarewicz, 122 F.3d 936, 940 (11th Cir. 1997) (citing First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995)); see Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 452 (2003) (). Florida law applies here because the arbitration provision indicates that both parties intended to subject themselves to binding arbitration in Florida, [2]and the Agreement itself contains no contrary choice-of-law clause. See Paladino v. Avnet Comput. Techs., Inc., 134 F.3d 1054, 1061 n.1 (11th Cir. 1998); Tranchant v. Ritz Carlton Hotel Co., LLC, No. 2:10-cv-233-Ftm-29DNF, 2011 WL 1230734, at *3 (M.D. Fla. Mar. 31, 2011).
The Court considers the following factors when deciding whether to compel arbitration: “1) whether a valid written agreement to arbitrate exists; 2) whether an arbitrable issue exists; and 3) whether the right to arbitrate has been waived.” Williams v. Eddie Acardi Motor Co., No. 3:07-cv-782-J-32JRK, 2008 WL 686222, at *4 (M.D. Fla. Mar. 10, 2008) (citations omitted).
Under Florida law, a valid contract requires an “offer acceptance, consideration, ” St. Joe Corp. v. McIver, 875 So.2d 375, 381 (Fla. 2004), and mutual assent to the terms of the agreement, Gibson v. Courtois, 539 So.2d 459, 460 (Fla. 1989).
The evidence shows that a valid contract exists. The Dispatcher-Carrier Agreement signed by both parties constitutes an offer and acceptance. (Dkt. 1-2). Furthermore, consideration is present, shown by the language of the contract, [3] as well as the obligations of both parties. (Dkt. 1-2 at 1-3). Finally, mutual assent is met as the parties agreed to the obligations required of each party. (Dkt. 1-2 at 1). Therefore, the Dispatcher-Carrier Agreement is a valid contract. Unconscionability
The Court is not persuaded by Plaintiffs' attempts to show an invalid contract based on the theory of procedural and substantive unconscionability, which, if successful, could destroy the arbitration provision. Dunn v. Global Trust Mgmt., LLC, 506 F.Supp.3d 1214, 1233 (M.D. Fla. 2020) (citing Dr.'s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996)). If the formation of a contract is an issue, then a court must hold a trial to resolve factual questions over whether an agreement was formed. Garcia v. Harmony Healthcare, LLC, No. 8:20-cv-1065-WFJ-AAS, 2021 WL 1610093, at *3 (M.D. Fla. Apr. 26, 2021) (citing 9 U.S.C. § 4). However, “a district court may conclude as a matter of law that parties [executed] an arbitration agreement only if ‘there is no genuine dispute as to any material fact' concerning the formation of such an agreement.” Bazemore v. Jefferson Cap. Sys., LLC, 827 F.3d 1325, 1333 (11th Cir. 2016). A dispute will not be “genuine” if it is not supported by evidence or if it is supported by evidence that is not probative or colorable. Baloco v. Drummond Co., 767 F.3d 1229, 1246 (11th Cir. 2014). When looking at whether the unconscionability defense is genuine, the party claiming unconscionability has the burden to prove that the agreement or a provision is both procedurally and substantively unconscionable. Dunn, 506 F.Supp.3d at 1233 (citing Basulto v. Hialeah Auto., 141 So.3d 1145, 1157 (Fla. 2014)).
Procedural Unconscionability-First, the contract is not procedurally unconscionable. Under Florida law, courts consider four factors to determine whether a contract is procedurally unconscionable:
1) the manner in which the contract was entered into; 2) the relative bargaining power of the parties and whether the complaining party had a meaningful choice at the time the contract was entered into; 3) whether the terms were merely presented on a “take-it-or-leave-it” basis; and 4) the complaining party's ability and opportunity to understand the disputed terms of the contract.
McAdoo v. New Line Transp., LLC, No. 8:16-cv-1917-T-27AEP, 2017 WL 942114, at *2 (M.D. Fla. Mar. 9, 2017) (citing Dorward v. Macy's Inc., No. 2:10-cv-669-FtM-29DNF, 2011 WL 2893118, at *5 (M.D. Fla. July 20, 2011)).
No facts in the instant case lead the Court to believe that the Dispatcher-Carrier Agreement was procedurally unconscionable to the detriment of Plaintiffs. Plaintiffs state that both they and Defendants negotiated the Agreement, making this far from a “take-it-or-leave-it” situation where the parties have no meaningful choice. (Dkt. 28 at 5). In fact, Defendants claim that Plaintiffs were the ones in control of the drafting process and that they had no input in the drafting process at all. (Dkt. 31 at 7-8).
Finally the fact that the arbitration provision was allegedly “hidden among the text and fine print” does...
To continue reading
Request your trial