Growtech Partners v. Accenture LLP

• Decision Date: 13 July 2015
• Docket Number: Civil Action No. H–14–3307.
• Citation: 118 F.Supp.3d 920
• Parties: GROWTECH PARTNERS, et al., Plaintiffs, v. ACCENTURE LLP, et al., Defendants.
• Court: U.S. District Court — Southern District of Texas

118 F.Supp.3d 920

GROWTECH PARTNERS, et al., Plaintiffs,

v.ACCENTURE LLP, et al., Defendants.

Civil Action No. H–14–3307.

United States District Court, S.D. Texas, Houston Division.

Signed July 13, 2015.

Joe House, House and Perron, Houston, TX, for Plaintiffs.

Alex Benjamin Roberts, Beck Redden LLP, Houston, TX, for Defendants.

MEMORANDUM AND OPINION

LEE H. ROSENTHAL, District Judge.

Cyriac Abraham is an engineer who works as a project-management consultant for multibillion dollar energy projects through the company he owns and operates, Growtech Partners. Abraham sued Accenture Services Pvt. Ltd. ("Accenture" or "Accenture India"), Accenture LLP ("Accenture America"), and Accenture PLC ("Accenture Ireland") in Texas state court, alleging that they failed to pay the full amount due under a November 2010 consulting agreement (the "Agreement") with Accenture India. This Memorandum and Opinion addresses the defendants' motion to enforce the arbitration clause in the parties' Agreement. The specific issues are whether the clause covers the claims Abraham asserts and, if so, whether Accenture's initial refusal to arbitrate in response to Abraham's presuit demand waived its right to require Abraham to do so. The court heard oral argument on the motion to compel arbitration. Based on the pleadings, the motions and responses, the arguments of counsel, and the relevant law, the court finds and concludes that Accenture waived its right to arbitration and denies the motion to compel. (Docket Entry No. 7). The reasons for this ruling are set out below.

I. Background

In July 2010, Accenture contacted Abraham to discuss having him provide consulting services in both Houston, Texas and New Delhi, India. Abraham was then living in Houston but wanted to work in New Delhi, where his parents lived. Although the parties dispute some aspects of their negotiations, they agree that in November 2010, Abraham signed an Agreement to provide consulting services "for a period of 13 weeks," from November 22, 2010 to February 25, 2011, for $105,560. (Docket Entry No. 7, Ex. 1, ¶ 17). Abraham alleges in this lawsuit that Accenture's representative, Maxson Lewis, told him that Accenture would renew this Agreement three times during 2011, orally promising that the Agreement would extend through November 1, 2011. When Accenture did not renew the Agreement after the first 13 weeks, Abraham sent a letter demanding arbitration in India of a number of claims, including the failure to renew the Agreement. He invoked the Agreement's arbitration clause, which states:

Any dispute, controversy, or claim arising out of, relating to, involving, or having any connection with this Agreement or otherwise related to Subcontractor's Services, including any question regarding the validity, interpretation, scope, performance, or enforceability of this dispute resolution provision, shall be exclusively and finally settled by arbitration in accordance with the Indian Arbitration and Conciliation Act of 1996.

(Docket Entry No. 7, Ex. 1, ¶ 16.2). "All disputes arising under or in connection with [the] Agreement shall be governed and determined by the substantive law of India." (Id., Ex. 1, ¶ 13).

Abraham's presuit demand letter outlined his "tentative list of claims," as follows:

1. Accenture did not provide documents timely and accurately for obtaining employment visa to India, which resulted in delay.... I worked from home in Houston, TX for Accenture per their directions.... I also visited Indian consulate in Houston, TX multiple times for obtaining visa to India, and communicated with Accenture to expedite visa process.... Accenture is liable to compensate my lost earnings during 22–November–2010 to 12–Dec–2010, which amounts to $24,360.

2. Bill No GPACNIN004 dated 28–March–2011 for an amount of $9,338 was submitted whereas only $6,496 was paid. A balance of $2,842 is outstanding.

3. Bill No GPACNINO06 dated 31–August–2011 for an amount of $11,774 was submitted for work done in weeks 14 and 15 per Accenture's directions. The bill was rejected by Accenture on 02–Sept–2011, and is not paid as of now.

4. Bill No GPACNIN007 dated 31–August–2011 for an amount of $42,122.50 was submitted for claiming time spent on travel within India per Accenture's directions. The bill was declined by Accenture as payable on 02–Sept–2011. Travel time is payable by Accenture per terms of the Agreement. $42,122.50 is claimed hereby.

5. Per contract accommodation and travel were to be booked by Accenture or their Client and paid by Accenture or client. More often, I had to do the bookings and payments for my travel under this contract. Accenture deducted taxes on these expenses, which would not have been required, had Accenture or their client did the bookings and payments themselves. Bill No GPACNIN009 dated 03–Sept–2011 for an amount of $2,840.11 was submitted for claiming reimbursement of the taxes deducted, and also claiming 30% overhead charges towards bookings, and payments, which were responsibilities of Accenture in the first place.

6. Accenture had provided me a ticket to return to Houston, TX on 13–April–11. Accenture asked me to change my travel plan to assist them in their meetings at New Delhi and Tamnar (Chattisgarh), and for other purposes. I had to pay $568 towards fee for ticket change.

7. Per the Agreement referred above, I was eligible for one fly back (from India to base location (USA) and return to India) after the third month of service provided. Accenture did not provide this flyback. The cost of a business class ticket Houston—Delhi—Houston was around $8,400 at that time. I claim $8,400 towards that.

8. Maxson Lewis representing Accenture contacted me in October 2010 to engage me as Subject Matter Expert for capital project Management in India. Maxson, representing Accenture offered me a contract term of minimum one year. After various discussions over telephone and e-mails, Accenture offered to hire my services vide "Subcontract Agreement (Agreement) dated this 28th October 2010" for a period from November 01, 2010 until Nov 01, 2011 delivered to me by e-mail dated November 01, 2010. I accepted Accenture's offer vide my e-mail dated November 01, 2010. On November 05, 2010 Accenture sent me another contract "Subcontract Agreement (Agreement) dated this 1st November 2010" for 13 weeks during the period 22nd November, 2010 to 25th February, 2011 for a contract price of $ 105,560. Maxson Lewis followed the e-mail with a telephone call. Maxson explained his inability to get a signed contract for one year duration, until November 01, 2011 as agreed before, since a contract to the tune of $400,000 needed Accenture's top most authorized signatory, who was not present in India at that time, per Maxson. Maxson, in that telephone conversation, requested me to accept the offer in the interest of expediting the engagement, and he assured me to provide a one year contract as agreed earlier. Maxson also pointed out that a provision was made in the offer e-mailed for one flyback from India to base location (USA) and return to India after the third month of service. Maxson also informed me that visa would be applied for six months initially, and would be extended later. In good faith, I accepted the offer contained in the e-mail dated November 05, 2010.

I requested Maxson Lewis and Nilesh Narwekar, after reaching India, to renew my contract to one year, as originally agreed, to which they agreed again. The Agreement dated November 1, 2010 and e-mailed to me on November 05, 2010, which was to expire on 25th February, 2011, was thus extended by mutual consent. On 13–April–2011, the day of my return travel to Houston, TX, Maxson called me and asked me not to take up any other engagement with any other company since my services would be required by Accenture. I agreed to Maxson's request.

I returned to Houston, TX on 13–April–2011. I continued to provide my services per various directions received from Accenture represented by Maxson Lewis, and other Accenture employees authorized by Maxson Lewis. Vide an e-mail dated 01–September–2011, Accenture disclosed that the contract referred above was closed. Accenture did not reveal the date of termination or the reasons thereof. Accenture did not make any payments for my time or services I provided since 14–April–2011. I believed I had a valid contract with Accenture until 01–November–2011 and hence did not take up any other engagement anywhere, with any other company.

Accenture's nonfulfillment of their promises has caused me losses to an amount of $154,280.

9. Per contract Accenture had the right to terminate my contract by providing me 30 days' notice. Accenture failed to provide this notice and so I claim 30 days' pay to an amount of $35,728.

10. I claim interest @ 18% on items 1 to 9 listed above under "Tentative list of claims": $133,160.

11. Total claim under this contract (items 1 to 10 listed above under "Tentative list of claims"): $416,075.

(Docket Entry No. 13, Ex. 1).

Accenture India sent Abraham a response letter dated March 28, 2014 rejecting his "Notice as ... misconceived and untenable." (Docket Entry No. 13–2, at 2). The letter set out a number of substantive grounds for rejecting the claims and stated that this was "without prejudice to any of our rights, each of which are expressly reserved." (Id. at 7).

In response, Abraham sent Accenture a notice that he had invoked the arbitration clause by appointing a specific arbitrator in New Delhi. (Docket Entry No. 13–4). Accenture refused to arbitrate because the claims went "beyond and are wholly outside" the Agreement's terms, and were "unsubstantiated in law, apart from being barred under the express terms of the Contract." (Docket Entry No. 13–4). Accenture demanded that Abraham withdraw his claims and rejected his " ‘Notice Appointing Arbitrator’... as being in respect of claims that are not arbitrable under the Contract and for being unsustainable under Contract or law." (Id. ). Accenture...