Jules v. Andre Balazs Props.
| Decision Date | 28 May 2021 |
| Docket Number | 20 Civ. 10500 (LGS) |
| Parties | ADRIAN JULES, Plaintiffs, v. ANDRE BALAZS PROPERTIES et al., Defendants. |
| Court | U.S. District Court — Southern District of New York |
Defendants Andre Tomas Balazs, Andre Balazs Properties, Balazs Investors LLC and HotelsAB, LLC, move to (1) compel arbitration of Plaintiff's claims in California or (2) stay this action pending such arbitration. For the reasons stated below, this action is stayed pending any arbitration of Plaintiff's claims in California.
The following facts are taken from the Complaint, the parties' memoranda of law regarding Defendants' motion to compel arbitration and other submissions. See Nicosia v. Amazon.com, Inc., 834 F.3d 220, 229 (2d Cir. 2016).
Plaintiff worked at the Chateau Marmont Hotel ("Chateau Marmont") in Los Angeles, California, from May 2017 to March 2020, when the hotel ended his employment, citing staffing issues related to the COVID-19 pandemic. On October 5, 2020, Plaintiff filed a charge of employment discrimination and retaliation with the Equal Opportunity Employment Commission ("EEOC"). That charge was against Chateau Holdings, Ltd. a/k/a the Chateau Marmont hotel. The EEOC issued a right to sue letter on October 13, 2020. Plaintiff filed this action on December 11, 2020, asserting sixteen causes of action under (1) federal and California statutes and (2) California common law. Plaintiff did not assert claims against Chateau Holdings, Ltd. or Chateau Property Holdings, LLC.
Defendant Andre Balazs holds ownership interests in companies that own Chateau Property Holdings, LLC -- which is itself owned at least in part by Chateau Holdings, Ltd. Defendant HotelsAB, LLC is the management company for some hotels owned by Mr. Balazs, but not the Chateau Marmont. Defendant Andre Balazs Properties is the d/b/a name for HotelsAB, LLC. Defendant Balazs Investors LLC is the parent company of HotelsAB, LLC.
Before starting work at the Chateau Marmont, Plaintiff signed an arbitration agreement with Chateau Holdings, Ltd. (the "Arbitration Agreement") containing the following clauses:
Defendants move to compel arbitration in Los Angeles or, alternatively, for a stay of this action pending any arbitration in that venue.
The Federal Arbitration Act ("FAA") embodies a national policy favoring enforcement of arbitration agreements based on the desire to preserve the parties' ability to arbitrate, not litigate, their disputes. Doctor's Assocs., Inc. v. Alemayehu, 934 F.3d 245, 250 (2d Cir. 2019). Any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. Holick v. Cellular Sales of N.Y., LLC, 802 F.3d 391, 395 (2d Cir. 2015); accord Coscarelli v. ESquared Hosp. LLC, 364 F. Supp. 3d 207, 215 (S.D.N.Y. 2019).
"[T]he FAA creates a body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act," but "in evaluating whether the parties have entered into a valid arbitration agreement, the court must look to state law principles." Cap Gemini Ernst & Young, U.S., L.L.C. v. Nackel, 346 F.3d 360, 364 (2d Cir. 2003). "As a result, prior to compelling arbitration, the district court must first determine two threshold issues that are governed by state rather than federal law: (1) Did the parties enter into a contractually valid arbitration agreement? and (2) If so, does the parties' dispute fall within the scope of the arbitration agreement?" Cap Gemini, 346 F.3d at 365 (2d Cir. 2003); accord Coscarelli, 364 F. Supp. 3d at 215. The Court must then evaluate two additional issues: (3) whether Congress intended any federal statutory claims to be non-arbitrable and (4) if some, but not all, of the claims are arbitrable, whether to stay the balance of the proceedings pending arbitration. Abdullayeva v. Attending Homecare Servs. LLC, 928 F.3d 218, 221-22 (2d Cir. 2019).
Court proceedings must be stayed once the district court is "satisfied that the parties have agreed in writing to arbitrate an issue or issues underlying the district court proceeding."Amazon.com, Inc., 834 F.3d at 229. In deciding this issue, courts apply a "standard similar to that applicable for a motion for summary judgment." Id. Courts must "consider all relevant, admissible evidence submitted by the parties and contained in pleadings, depositions, answers to interrogatories, and admissions on file, together with . . . affidavits," and must "draw all reasonable inferences in favor of the non-moving party." Id.
State law governs whether (1) the parties entered into a valid arbitration agreement that (2) covers the claims at issue. Cap Gemini, 346 F.3d at 365. The parties' memoranda of law assume that California law determines these questions, and "such implied consent . . . is sufficient to establish choice of law." Chau v. Lewis, 771 F.3d 118, 126 (2d Cir. 2014) (internal quotation marks omitted); accord Breaking Media, Inc. v. Evan Jowers, No. 21 Misc. 194, 2021 WL 1299108, at *3 (S.D.N.Y. Apr. 7, 2021).
Under California law, a court construing an arbitration agreement must focus on the parties' "objective intent, as evidenced by the words of the contract, rather than the subjective intent of one of the parties," DiCarlo v. MoneyLion, Inc., 988 F.3d 1148, 1152 (9th Cir. 2021) (quoting Reilly v. Inquest Tech., Inc., 218 Cal. App. 4th 536, 544 (2013)), so long as the "contract language is clear and explicit and does not lead to absurd results," Revitch v. DIRECTV, LLC, 977 F.3d 713, 717 (9th Cir. 2020) (). When in doubt, "both federal and state law point to interpreting [an agreement] topermit arbitration." DiCarlo, 988 F.3d at 1152. (alteration in original) (citing Cal. Civ. Code § 1643; Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985)).
Here, the Arbitration Agreement states, "[Plaintiff] hereby agree[s] that any claims, disputes or controversies arising between me and Chateau Holdings, Ltd. [the 'Company'], which could give rise to a legal claim relating to my employment with the Company or the termination thereof . . . shall be addressed," inter alia, "by binding arbitration under the Federal Arbitration Act." (emphasis added).1 This language explicitly and unambiguously reflects the parties' intent to arbitrate under the FAA all disputes arising from Plaintiff's employment.
In response, Plaintiff first claims the Arbitration Agreement is invalid because, although he signed it, Chateau Holdings, Ltd. did not. "[T]he writing memorializing an arbitration agreement need not be signed by both parties in order to be upheld as a binding arbitration agreement" because "it is not the presence or absence of a signature [on an agreement] which is dispositive; it is the presence or absence of evidence of an agreement to arbitrate which matters." Serafin v. Balco Properties Ltd., LLC, 235 Cal. App. 4th 165, 176 (2015) (internal quotation marks omitted) (emphasis removed); see also Batory v. Sears, Roebuck & Co., 124 F. App'x 530, 533 (9th Cir. 2005) (summary order) ("the Ninth Circuit clearly has recognized that '[w]hile the FAA requires a writing, it does not require that the writing be signed by the parties'" (quoting Nghiem v. NEC Elec., Inc., 25 F.3d 1437, 1439 (9th Cir. 1994)) (internal quotation marks omitted). Factors confirming an employer's intent to be bound by an unsigned arbitration agreement include the employer's preparation of the agreement and its filing of a motion to staylitigation and compel arbitration. See Serafin, 235 Cal. App. 4th at 176-77. Chateau Marmont, Ltd. prepared the Arbitration Agreement and affiliated Defendant Andre Balazs has moved to compel arbitration. The evidence shows that Chateau Marmont, Ltd. intended to be bound by the Arbitration Agreement.
Plaintiff also claims that the Arbitration Agreement is invalid because it is unconscionable under California...
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