Kiefer Specialty Flooring, Inc. v. Tarkett, Inc.

• Decision Date: 21 April 1999
• Docket Number: No. 98-1945,98-1945
• Citation: 174 F.3d 907
• Parties: KIEFER SPECIALTY FLOORING, INC., Plaintiff-Appellant, v. TARKETT, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 907

174 F.3d 907

KIEFER SPECIALTY FLOORING, INC., Plaintiff-Appellant, v. TARKETT, INC., Defendant-Appellee.

No. 98-1945.

United States Court of Appeals Seventh Circuit.

Argued Jan. 8, 1999.

Decided April 21, 1999.

David M. Levin (argued), Chicago, IL, for Plaintiff-Appellant.

David F. Heroy, Douglas M. Chalmers (argued), Bell, Boyd & Lloyd, Chicago, IL, Kenneth H. Zucker, Pepper, Hamilton & Scheetz, Berwyn, PA, for Defendant-Appellee.

Before KANNE, DIANE P. WOOD, and EVANS, Circuit Judges.

KANNE, Circuit Judge.

Kiefer Specialty Flooring, Inc., and Tarkett, Inc., were parties to two separate distributorship agreements in which Kiefer was appointed as a non-exclusive distributor of Tarkett's commercial vinyl flooring products, first within the Northern Illinois market and then within the Kansas City market. These agreements contained identical arbitration provisions requiring all claims and controversies arising from or relating to the distributorship agreements to be settled by arbitration.

Upon Kiefer's request to terminate the distributorship agreements, Tarkett commenced an arbitration proceeding against Kiefer to collect a debt of approximately $194,000 that Kiefer allegedly owed Tarkett. Kiefer responded by filing suit in district court against Tarkett, alleging that Tarkett intentionally interfered with the contract of a Kiefer employee, Richard Rollins, by soliciting Rollins for employment with Tarkett and that this solicitation constituted a breach of Tarkett's duty not to interfere with the distributorship agreements. The issue presented before us is whether Kiefer's claim that Tarkett tortiously interfered with Rollins's employment contract falls within the arbitration provision included in the distributorship agreements.

According to Kiefer's amended complaint, Rollins was employed by Tarkett at the time Tarkett and Kiefer entered into the first distributorship agreement covering the Northern Illinois market in 1990. Rollins served as a commercial specialist for a six state region, which included Missouri and Kansas. As a commercial specialist, Rollins had extensive knowledge of the market in these states because he was largely responsible for promoting Tarkett's vinyl flooring products within this region.

During the performance of the first distributorship agreement, Kiefer approached Tarkett about the possibility of entering into another distributorship agreement covering the Indianapolis market. Although this market was unavailable, Tarkett offered to enter into a distributorship agreement with Kiefer for the Kansas City market on the condition that Kiefer employ Rollins to manage the office serving this market. Kiefer agreed to hire Rollins and the parties, according to Kiefer, entered into a distributorship agreement for the Kansas City market as a result of the extension of employment to Rollins. Approximately two years later, Rollins accepted a position with Tarkett to become sales manager for the Kansas City market. After Rollins's departure, Kiefer terminated the distributorship agreements with Tarkett.

In response to the litigation initiated by Kiefer, Tarkett filed a motion to compel arbitration pursuant to the arbitration provision in the parties' distributorship agreements and to stay the suit pending arbitration. Kiefer opposed this motion and asserted that its claims were beyond the scope of the arbitration provision. The district court granted Tarkett's motion and dismissed Kiefer's suit without prejudice. Tarkett and Kiefer participated in an arbitration proceeding before the American Arbitration Association, and the arbitrator entered an award in favor of Tarkett on its claims and against Kiefer on its counterclaims.

Upon receiving a favorable outcome in the arbitration proceedings, Tarkett filed a motion in district court to confirm the arbitration award and for judgment. The district court granted this motion and entered judgment in favor of Tarkett. Kiefer now appeals, asserting that its claim of tortious interference was beyond the scope of the arbitration provision in the distributorship agreements and, therefore, the district court erred by compelling arbitration and dismissing Kiefer's claim. Because we agree that Kiefer's claim was within the scope of the arbitration provision agreed upon by the parties, we affirm.

ANALYSIS

The Federal Arbitration Act ("FAA") provides that an arbitration clause in a "contract evidencing a transaction involving commerce ... shall be 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. Whether a particular issue is subject to arbitration is a matter of contract interpretation, because "a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960). Notwithstanding this qualification, strong support for the federal policy favoring arbitration exists. The Supreme Court has explained that the FAA "establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983); see also Miller v. Flume, 139 F.3d 1130, 1136 (7th Cir.1998) ("[O]nce it is clear that the parties have a contract that provides for arbitration of some issues between them, any doubts concerning the scope of the arbitration clause are resolved in favor of arbitration."). To this end, a court may not deny a party's request to arbitrate an issue "unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute." Warrior & Gulf Navigation Co., 363 U.S. at 582-83. With these considerations in mind, we review de novo a...