Spencer v. TICI LLC
| Decision Date | 24 February 2023 |
| Docket Number | Civil Action 22-cv-02464-RM-KLM |
| Parties | MARSHA SPENCER also known as Marsha Waddell, Plaintiff, v. TICI LLC, doing business as Denny's, G2G MANAGEMENT GROUP, LLC, ISAIAH DANZIK, an individual, and VINCE EUPIERRE, an individual, Defendants. |
| Court | U.S. District Court — District of Colorado |
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
This matter is before the Court on Defendant's Motion to Dismiss and Compel Arbitration [#21] (the “Motion”). Plaintiff filed a Response [#24] in opposition to the Motion [#21], and Defendant filed a Reply [#27]. Pursuant to 28 U.S.C. § 636(b)(1)(A) and D.C.COLO.LCivR 72.1(c), the Motion [#21] has been referred to the undersigned for a recommendation regarding disposition. See [#32]. The Court has reviewed the briefs, the entire case file, and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Court RECOMMENDS that the Motion [#21] be GRANTED.
On September 22, 2022, Plaintiff initiated this action against Defendants TICI LLC, doing business as Denny's (“TICI”), G2G Management Group, LLC (“G2G”), Isaiah Danzik (“Danzik”), and Vince Eupierre (“Eupierre”). Compl. [#1] ¶¶ 9, 16, 21, 26. Plaintiff alleges that she worked at several affiliated Denny's restaurants located in the Denver, Colorado area from approximately October 5, 2020, to March 4, 2022. Id. ¶¶ 12. The Denny's locations at which Plaintiff worked were affiliated under the TICI/G2G umbrella. Id. ¶ 2. Defendant Danzik served as Plaintiff's immediate boss at Denny's, and Defendant Eupierre is the Chief Executive Officer of G2G, TICI, and non-party MDC Restaurants, LLC (“MDC”). Id. ¶¶ 4, 23, 28. Plaintiff alleges that Defendants violated the minimum and overtime wage requirements of the Fair Labor Standards Act of 1938, as amended (“FLSA”), the Colorado Wage Claim Act, as implemented by the Colorado Minimum Wage Act, and the Colorado Overtime and Minimum Pay Standards Orders. Id. ¶ 4.
When Plaintiff was hired, she executed a Mutual Arbitration Agreement (the “Agreement”) on her first day of employment. Compl. [#1] ¶ 1; Def.'s Ex. A, Agreement [#22-3] ¶ 12.[1] The Agreement [#21-3] was entered into by Plaintiff and MDC regarding all claims or disputes “that could otherwise be filed in state or federal court arising out of or related in any way to Employee's employment with the Company [i.e., MDC] and/or the termination of Employee's employment.” Ex. A, Agreement [#22-3] ¶ 3. In the present Motion [#21], Defendants argue that the Court should dismiss Plaintiff's Complaint [#1] and compel arbitration pursuant to Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction. Motion [#21-1] at 2. Plaintiff argues that because Defendants were not signatories to the Agreement [#21-3], they are not parties to the Agreement and therefore cannot compel arbitration. Response [#24] at 4-5. Plaintiff also argues that Defendants are not third-party beneficiaries to the Agreement, and similarly cannot compel arbitration on that basis. Id. at 7-11. The primary issue in the Motion [#21] therefore is whether Defendants may enforce the Agreement [#21-3] as nonsignatories and compel this matter to arbitration.
Federal Rule of Civil Procedure 12(b)(1) empowers the Court to dismiss a complaint for lack of subject matter jurisdiction. The determination of a court's jurisdiction over the subject is a threshold question of law. Madsen v. United States ex. rel. U.S. Army Corps of Eng'rs, 841 F.2d 1011, 1012 (10th Cir. 1987). If at any time, the Court determines that it lacks subject matter jurisdiction, the Court must dismiss the action. Fed.R.Civ.P. 12(b)(1); Arbaugh v. Y & H Corp., 546 U.S. 500, 506 (2006). When reviewing a Rule 12(b)(1) motion, the Court may reference evidence outside of the pleading without converting it to a Rule 56 motion. Holt, 46 F.3d at 1003. When the moving party challenges the facts upon which subject-matter jurisdiction depends, the Court is entitled to resolve the factual attack on the complaint by making “its own findings regarding disputed jurisdictional facts.” Celauro v. Fed. Express Ground, 548 F.Supp.3d 1034, 1039 (D. Colo. 2021).
Issues of arbitrability are governed by the Federal Arbitration Act (“FAA”). Belnap v. Iasis Healthcare, 844 F.3d 1272, 1279 (10th Cir. 2017). “A party aggrieved by the alleged failure . . . of another to arbitrate under a written agreement for arbitration may petition any United States district court, which, save for such agreement, would have jurisdiction . . . in a civil action . . . arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement.” 9 U.S.C. § 4. The FAA “manifests a liberal federal policy favoring arbitration.” Comanche Indian Tribe v. 49, L.L.C., 391 F.3d 1129, 1131 (10th Cir. 2014) (quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 25 (1991)); see also Epic Sys. Corp. v. Lewis, 138 S.Ct. 1612, 1621 (2018). Consequently, the Court must “resolve ‘any doubts concerning the scope of arbitrable issues . . . in favor of arbitration.'” P&P Indus., Inc. v. Sutter Corp., 179 F.3d 861, 866 (10th Cir. 1999) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)). In addition, “this liberal policy ‘covers more than simply the substantive scope of the arbitration clause,' and ‘encompass[es] an expectation that [arbitration] procedures will be binding.'” Id. (citation omitted).
Under the FAA, when parties agree to settle a controversy by arbitration, courts must enforce that agreement “save upon grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2 (2018). The scope of an arbitration agreement, including the question of who it binds and who it may be enforced by, is a question of state contract law. Reeves v. Enter. Prod. Partners, LP, 17 F.4th 1008, 1011 (10th Cir. 2021); Arthur Andersen L.L.P. v. Carlisle, 556 U.S. 624, 630-31 (2009)). Thus, “a federal court must apply state contract law principles when determining whether an arbitration agreement is valid and enforceable.” Nesbitt v. FCNH, Inc., 74 F.Supp.3d 1366, 1371 (D. Colo. 2014) (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995)). Under Colorado law, “a valid and unwaived arbitration clause deprives the court of subject matter jurisdiction until the dispute has been submitted to arbitration.” Lee v. Grandcor Med. Sys., Inc., 702 F.Supp. 252, 253 (D. Colo. 1988).
The Court first determines whether Defendants, who are nonsignatories, are nevertheless parties to the Agreement [#21-3]. Finding that they are, the Court then analyzes whether nonsignatory parties may enforce the Agreement and compel this matter to arbitration.[2]
The Court starts by determining whether Defendants are parties to the Agreement [#21-3]. The first task of a court asked to compel arbitration of a dispute is to determine whether the parties agreed to arbitrate that dispute. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,473 U.S. 614, 626 (1985). As mentioned above, the question of who is bound by an arbitration agreement is governed by state contract law. Reeves, 17 F.4th at 1101; Judd v. Keypoint Gov't Sol., Inc., No. 18-cv-00327-RM-STV, 2018 WL 3526222, at *2 (D. Colo. July 23, 2018).
“In determining the meaning of a contract, courts ‘seek to give effect to all provisions so that none will be rendered meaningless.'” Frazier v. W. Union Co., 377 F.Supp.3d 1248, 1262 (D. Colo. 2019) (quoting Mapes v. City Council of City of Walsenburg, 151 P.3d 547, 577 (Colo.App. 2006)). In Colorado, “both signatory and nonsignatory parties may be bound by an arbitration agreement if so dictated by ordinary principles of contract law.” Id. (quoting Meister v. Stout, 353 P.3d 916, 920 (Colo.App. 2015)). When interpreting a contact, a court must seek to effectuate the “intent and reasonable expectations of the parties ....” See Winter Park Real Est. & Invs., Inc. v. Anderson, 160 P.3d 399, 403 (Colo.App. 2007). “We ascertain the parties' intent by looking to the plain language of the arbitration agreement.” Lane v. Urgitus, 145 P.3d 672, 677 (Colo. 2006) (quoting Allen v. Pacheco, 71 P.3d 375, 378 (Colo. 2003)). The court will enforce the agreement as written, unless there is an ambiguity in the language, as courts should not rewrite the agreement or limit its effect by a strained construction. Id. If there are ambiguities in the arbitration agreement, the court affords the parties a presumption in favor of arbitration. Allen, 71 P.3d at 378.
Plaintiff argues that, as a general rule, “only parties to an arbitration agreement can compel arbitration under that contract, and they can only compel arbitration as to another signatory of the agreement.” Response [#24] at 4. Defendants aver that the language of the Agreement [#21-3] makes clear that Plaintiff intended disputes with related nonsignatory parties to be submitted to arbitration. Motion [#21-1] at 9. In support, Defendants cite the following language of the Agreement [#21-3]:
To continue reading
Request your trial