NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ______________
No. 20-3324 ______________
AMERICAN NEIGHBORHOOD MORTGAGE ACCEPTANCE COMPANY, LLC d/b/a Anniemac Home Mortgage
v.
CROSSCOUNTRY MORTGAGE, INC.
Todd Bailey; Shawn Miller; Steven LoBue; CrossCountry Mortgage, Inc., Appellants
Appeal from the United States District Court for the District of New Jersey (D.C. No. 2:20-cv-00874) District Judge: Hon. Susan D. Wigenton ______________
Submitted Pursuant to Third Circuit L.A.R. 34.1(a) October 7, 2021 ______________
Before: SHWARTZ, NYGAARD, and FISHER, Circuit Judges.
(Filed: October 8, 2021)
______________
OPINION * ______________
SHWARTZ, Circuit Judge.
* This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7, does not constitute binding precedent. American Neighborhood Mortgage Acceptance Company, LLC d/b/a AnnieMac
Home Mortgage (“AnnieMac”) sued its former employees, Todd Bailey, Shawn Miller,
and Steven Lo Bue (collectively, “Individual Defendants”), and CrossCountry Mortgage,
LLC (“CrossCountry”) (collectively with Individual Defendants, “Defendants”). After
Individual Defendants moved to compel arbitration and stay the case, AnnieMac filed an
Amended Complaint that dropped all claims against them. The District Court dismissed
as moot Individual Defendants’ motion to compel arbitration, and Defendants appealed.
Because Individual Defendants’ motion to compel arbitration and stay the case was
mooted once AnnieMac’s Amended Complaint dropped its claims against them, we will
affirm the order dismissing their motion.
I
A
AnnieMac and CrossCountry are mortgage lenders. Individual Defendants
worked for AnnieMac as co-branch managers and as loan officers, and they each signed a
Branch Manager Employment Agreement (“Employment Agreements”). These
Employment Agreements required them to keep AnnieMac’s information confidential
and included identical arbitration provisions that, in relevant part, state:
Employer and Employee agree to submit to final and binding arbitration for any and all disputes, claims (whether in tort, contract, statutory or otherwise); and disagreements concerning (1) the interpretation or application of this Agreement, (2) Employee’s employment by Employer, or (3) the termination of this Agreement and the termination of Employee’s employment by Employer, including the ability to arbitrate any such controversy or claim.
App. 154, 171, 187. Individual Defendants left AnnieMac and joined CrossCountry. 2 AnnieMac alleges that while Individual Defendants still worked for AnnieMac, they
diverted its employees, customers, loans, and other confidential information to
CrossCountry.
B
Based on this alleged misappropriation, AnnieMac sued Defendants for violating
federal and state law. Individual Defendants moved to compel arbitration and to stay the
action pending arbitration pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1,
et seq. 1
AnnieMac then filed an Amended Complaint that named only CrossCountry as a
defendant. Defendants moved to strike the Amended Complaint as untimely, filed
without their consent, and filed without leave of the Court, all pursuant to Federal Rule of
Civil Procedure 15(a). The District Court denied Defendants’ motion to strike the
Amended Complaint and dismissed as moot Individual Defendants’ motion to compel
arbitration and stay the case.
Defendants appeal. 2
1 CrossCountry joined the motion, but it did not argue that any of the claims against it were arbitrable. 2 A motions panel dismissed the appeal “with respect to the order denying the motion to strike the amended complaint and dismissing CrossCountry’s motion to dismiss as moot,” ECF No. 20, and Defendants now concede that they did not appeal the denial of their motion to strike the Amended Complaint. 3 II 3
Before turning to the merits of this appeal, we must determine whether we have
jurisdiction. Under the FAA, “[a]n appeal may be taken from . . . an order . . . refusing a
stay of any action under section 3 of” the FAA or “denying a petition under section 4 of”
the FAA to compel arbitration. 9 U.S.C. § 16(a)(1)(A)-(B). Thus, the FAA provides “an
exception to the final decision rule in 28 U.S.C. § 1291.” Bacon v. Avis Budget Grp.,
Inc., 959 F.3d 590, 597 (3d Cir. 2020). In other words, “[i]f we conclude that the order
[on appeal] denied a motion to compel arbitration, then we will exercise jurisdiction even
if that order is not final.” Id. “To determine whether [the order on appeal resolved] a
motion to compel arbitration, we examine (1) ‘the caption and relief requested in the
underlying motion’ and (2) ‘the label and the operative terms of the district court’s
order.’” Id. (quoting Devon Robotics, LLC v. DeViedma, 798 F.3d 136, 146-47 (3d Cir.
2015)).
Here, Individual Defendants’ motion is captioned as one “to compel arbitration
and stay this action under 9 U.S.C. § 3,” App. 93, and its accompanying brief asks the
District Court to “enter an Order compelling mandatory arbitration . . . and staying the
remaining claims,” App. 114. The order states that the “Motion to Compel
Arbitration/Stay is Dismissed as Moot.” App. 5. Because the dismissal order in effect
“declin[ed] to compel arbitration,” we have jurisdiction to review it. Sandvik AB v.
3 The District Court had jurisdiction under 28 U.S.C. §§ 1331 and 1367. 4 Advent Int’l Corp., 220 F.3d 99, 100, 103 (3d Cir. 2000) (recognizing Congress intended
that appellate courts “promptly” review “orders declining to compel arbitration”); see 9
U.S.C. § 16(a)(1). 4
B5
Having determined that we have appellate jurisdiction, we now turn to the merits.
The FAA provides that a district court “shall hear the parties, and upon being satisfied
that the making of the agreement for arbitration or the failure to comply therewith is not
in issue, the court shall make an order directing the parties to proceed to arbitration in
accordance with the terms of the agreement.” 9 U.S.C. § 4. Furthermore, the court “shall
on application of one of the parties stay the trial of the action until such arbitration has
been had in accordance with the terms of the agreement.” 9 U.S.C. § 3. Thus, “[t]he
FAA requires courts to stay litigation and compel arbitration of claims covered by a
written, enforceable arbitration agreement.” Bacon, 959 F.3d at 599.
Once the District Court denied the motion to strike and accepted the Amended
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ______________
No. 20-3324 ______________
AMERICAN NEIGHBORHOOD MORTGAGE ACCEPTANCE COMPANY, LLC d/b/a Anniemac Home Mortgage
v.
CROSSCOUNTRY MORTGAGE, INC.
Todd Bailey; Shawn Miller; Steven LoBue; CrossCountry Mortgage, Inc., Appellants
Appeal from the United States District Court for the District of New Jersey (D.C. No. 2:20-cv-00874) District Judge: Hon. Susan D. Wigenton ______________
Submitted Pursuant to Third Circuit L.A.R. 34.1(a) October 7, 2021 ______________
Before: SHWARTZ, NYGAARD, and FISHER, Circuit Judges.
(Filed: October 8, 2021)
______________
OPINION * ______________
SHWARTZ, Circuit Judge.
* This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7, does not constitute binding precedent. American Neighborhood Mortgage Acceptance Company, LLC d/b/a AnnieMac
Home Mortgage (“AnnieMac”) sued its former employees, Todd Bailey, Shawn Miller,
and Steven Lo Bue (collectively, “Individual Defendants”), and CrossCountry Mortgage,
LLC (“CrossCountry”) (collectively with Individual Defendants, “Defendants”). After
Individual Defendants moved to compel arbitration and stay the case, AnnieMac filed an
Amended Complaint that dropped all claims against them. The District Court dismissed
as moot Individual Defendants’ motion to compel arbitration, and Defendants appealed.
Because Individual Defendants’ motion to compel arbitration and stay the case was
mooted once AnnieMac’s Amended Complaint dropped its claims against them, we will
affirm the order dismissing their motion.
I
A
AnnieMac and CrossCountry are mortgage lenders. Individual Defendants
worked for AnnieMac as co-branch managers and as loan officers, and they each signed a
Branch Manager Employment Agreement (“Employment Agreements”). These
Employment Agreements required them to keep AnnieMac’s information confidential
and included identical arbitration provisions that, in relevant part, state:
Employer and Employee agree to submit to final and binding arbitration for any and all disputes, claims (whether in tort, contract, statutory or otherwise); and disagreements concerning (1) the interpretation or application of this Agreement, (2) Employee’s employment by Employer, or (3) the termination of this Agreement and the termination of Employee’s employment by Employer, including the ability to arbitrate any such controversy or claim.
App. 154, 171, 187. Individual Defendants left AnnieMac and joined CrossCountry. 2 AnnieMac alleges that while Individual Defendants still worked for AnnieMac, they
diverted its employees, customers, loans, and other confidential information to
CrossCountry.
B
Based on this alleged misappropriation, AnnieMac sued Defendants for violating
federal and state law. Individual Defendants moved to compel arbitration and to stay the
action pending arbitration pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1,
et seq. 1
AnnieMac then filed an Amended Complaint that named only CrossCountry as a
defendant. Defendants moved to strike the Amended Complaint as untimely, filed
without their consent, and filed without leave of the Court, all pursuant to Federal Rule of
Civil Procedure 15(a). The District Court denied Defendants’ motion to strike the
Amended Complaint and dismissed as moot Individual Defendants’ motion to compel
arbitration and stay the case.
Defendants appeal. 2
1 CrossCountry joined the motion, but it did not argue that any of the claims against it were arbitrable. 2 A motions panel dismissed the appeal “with respect to the order denying the motion to strike the amended complaint and dismissing CrossCountry’s motion to dismiss as moot,” ECF No. 20, and Defendants now concede that they did not appeal the denial of their motion to strike the Amended Complaint. 3 II 3
Before turning to the merits of this appeal, we must determine whether we have
jurisdiction. Under the FAA, “[a]n appeal may be taken from . . . an order . . . refusing a
stay of any action under section 3 of” the FAA or “denying a petition under section 4 of”
the FAA to compel arbitration. 9 U.S.C. § 16(a)(1)(A)-(B). Thus, the FAA provides “an
exception to the final decision rule in 28 U.S.C. § 1291.” Bacon v. Avis Budget Grp.,
Inc., 959 F.3d 590, 597 (3d Cir. 2020). In other words, “[i]f we conclude that the order
[on appeal] denied a motion to compel arbitration, then we will exercise jurisdiction even
if that order is not final.” Id. “To determine whether [the order on appeal resolved] a
motion to compel arbitration, we examine (1) ‘the caption and relief requested in the
underlying motion’ and (2) ‘the label and the operative terms of the district court’s
order.’” Id. (quoting Devon Robotics, LLC v. DeViedma, 798 F.3d 136, 146-47 (3d Cir.
2015)).
Here, Individual Defendants’ motion is captioned as one “to compel arbitration
and stay this action under 9 U.S.C. § 3,” App. 93, and its accompanying brief asks the
District Court to “enter an Order compelling mandatory arbitration . . . and staying the
remaining claims,” App. 114. The order states that the “Motion to Compel
Arbitration/Stay is Dismissed as Moot.” App. 5. Because the dismissal order in effect
“declin[ed] to compel arbitration,” we have jurisdiction to review it. Sandvik AB v.
3 The District Court had jurisdiction under 28 U.S.C. §§ 1331 and 1367. 4 Advent Int’l Corp., 220 F.3d 99, 100, 103 (3d Cir. 2000) (recognizing Congress intended
that appellate courts “promptly” review “orders declining to compel arbitration”); see 9
U.S.C. § 16(a)(1). 4
B5
Having determined that we have appellate jurisdiction, we now turn to the merits.
The FAA provides that a district court “shall hear the parties, and upon being satisfied
that the making of the agreement for arbitration or the failure to comply therewith is not
in issue, the court shall make an order directing the parties to proceed to arbitration in
accordance with the terms of the agreement.” 9 U.S.C. § 4. Furthermore, the court “shall
on application of one of the parties stay the trial of the action until such arbitration has
been had in accordance with the terms of the agreement.” 9 U.S.C. § 3. Thus, “[t]he
FAA requires courts to stay litigation and compel arbitration of claims covered by a
written, enforceable arbitration agreement.” Bacon, 959 F.3d at 599.
Once the District Court denied the motion to strike and accepted the Amended
Complaint, which omitted claims against Individual Defendants, those defendants were
no longer parties to this case. Thus, no case or controversy existed between AnnieMac
4 Cf. Quilloin v. Tenet HealthSystem Phila., Inc., 673 F.3d 221, 228 (3d Cir. 2012) (“[W]e have the authority to review an appeal from the District Court’s order denying a motion to compel arbitration, irrespective of the fact that the order was denied without prejudice.”). 5 We exercise plenary review over a district court’s order denying a motion to compel arbitration and stay the case. Brayman Const. Corp. v. Home Ins. Co., 319 F.3d 622, 624-25 (3d Cir. 2003); Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912, 925 (3d Cir. 1992). 5 and Individual Defendants for the Court to resolve. Therefore, Individual Defendants’
motion to compel arbitration of the claims in the original Complaint against them was
moot. See Old Bridge Owners Coop. Corp. v. Twp. of Old Bridge, 246 F.3d 310, 314
(3d Cir. 2001) (“Mootness occurs when there is no live controversy left to be resolved.”).
Defendants counter that the District Court should have decided Individual
Defendants’ motion to compel arbitration before allowing AnnieMac to amend its
Complaint. Before compelling a party to arbitrate, a district court must determine
“whether a concededly binding arbitration clause applies to a certain type of
controversy.” In re Remicade (Direct Purchaser) Antitrust Litig., 938 F.3d 515, 519 (3d
Cir. 2019) (quoting Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1416-17 (2019)). To do
so, a court must determine whether the complaint raises a dispute covered by the
arbitration agreement. Here, the Court had to first identify the operative complaint.
Once the Court denied the motion to strike the Amended Complaint, it became the
operative complaint because an amended complaint generally supersedes the original
complaint. Palakovic v. Wetzel, 854 F.3d 209, 220 (3d Cir. 2017). Because the
Amended Complaint controlled, the “type of controversy” set forth in the original
Complaint—which included AnnieMac’s claims against Individual Defendants—no
longer existed. As a result, there were no claims to arbitrate. The only remaining
defendant was CrossCountry, and it is not a party to the Employment Agreements
between AnnieMac and Individual Defendants, and no claims against it are otherwise
6 subject to arbitration. 6 Therefore, the Court properly dismissed as moot Individual
Defendants’ motion to compel arbitration and stay the case. 7
III
For the foregoing reasons, we will affirm.
6 CrossCountry has not asserted that it, as a non-signatory to the arbitration provisions, can compel AnnieMac to arbitrate its claims against CrossCountry. Nonetheless, Defendants contend that, even after the Amended Complaint superseded the Complaint, Individual Defendants’ motion to compel arbitration was still not moot because (1) the relevant arbitration provisions apply to “disputes” and “disagreements” relating to the Employment Agreements, Appellants’ Br. at 25 (citing App. 154, 171, 187); and (2) the Amended Complaint still presented such disputes and disagreements even after Individual Defendants were dismissed from the case. Even if we assume that the Amended Complaint includes the type of “disputes” or “disagreements” covered by the arbitration provisions, the District Court could not provide any relief to Individual Defendants once they were dropped from the operative complaint. See U.S. ex rel. Atkinson v. PA. Shipbuilding Co., 473 F.3d 506, 516 (3d Cir. 2007) (noting that “parties that do not appear in amended complaints have a legitimate expectation that they are no longer involved in the litigation”). 7 To conclude otherwise would force AnnieMac to pursue claims against Individual Defendants that it has, at least for now, disavowed. This result would conflict with the rule that a “plaintiff is the master of her own complaint.” Judon v. Travelers Prop. Cas. Co. of Am., 773 F.3d 495, 505 (3d Cir. 2014). 7