Doctor's Assocs., Inc. v. Alemayehu

321 F. Supp. 3d 305
CourtDistrict Court, D. Connecticut
DecidedJune 7, 2018
DocketCIVIL ACTION NO. 3:18–CV–276 (JCH)
StatusPublished
Cited by1 cases

This text of 321 F. Supp. 3d 305 (Doctor's Assocs., Inc. v. Alemayehu) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Doctor's Assocs., Inc. v. Alemayehu, 321 F. Supp. 3d 305 (D. Conn. 2018).

Opinion

Janet C. Hall, United States District Judge

This case comes before the court pursuant to a Petition to Compel Arbitration filed by the plaintiff, Doctor's Associates, Inc. ("DAI"). See Petition to Compel Arbitration ("Petition") (Doc. No. 1). DAI is the franchisor of Subway sandwich shops in the United States. See id. at ¶ 2. The defendant, Girum Alemayehu ("Alemayehu"), submitted an application to become a Subway franchisee on or about February 15, 2017. See id. at ¶ 6. Pursuant to the Federal Arbitration Act ("FAA"), title 9 section 4 of the United States Code, DAI moves to compel arbitration of claims that Alemayehu has raised in United States District Court, District of Colorado, against DAI and a DAI Development Agent, John Marshall; a staff person of the Development Agent, Connie Gemignani; and John Marshall's corporate entity, Clear Stone Development, Inc (collectively "the DA"). See Exh. B, Petition ("Colorado Complaint") (Doc. No. 1-2). Alemayehu opposes DAI's Petition. See generally Memorandum in Opposition to Plaintiff's Petition to Compel Arbitration ("Opposition") (Doc. No. 18).

For the following reasons, DAI's Petition to Compel Arbitration (Doc. No. 1) is denied.

I. FACTUAL BACKGROUND

The plaintiff, DAI, is the franchisor of Subway restaurants. Petition at ¶ 2. DAI is incorporated in Florida and has its principal place of business in Connecticut. Id. The defendant, Alemayehu is a resident and citizen of Colorado. Id. at ¶ 3. Alemayehu submitted a Subway franchise application on February 15, 2017. See generally Exh. A, Mot. to Compel ("Franchise Application"). The Franchise Application is two pages long, and contains the following provision for residents of the United States, Puerto Rico, Guam, and Canada:

I agree that I will settle any and all previously unasserted claims, disputes *307or controversies arising out of or relating to my application or candidacy for the grant of a SUBWAY franchise from Franchisor, pursuant to the laws of Connecticut, USA, and by binding arbitration only. I agree that the arbitration will be administered by either the American Arbitration Association or its successor ("AAA") or the American Dispute Resolution Center or its successor ("ADRC") at the discretion of the party first filing a demand for arbitration. I understand that AAA will administer the arbitration in accordance with its administrative rules (including, as applicable, the Commercial Rules of the AAA and the Expedited Procedures of such rules), and ADRC will administer the arbitration in accordance with its administrative rules (including, as applicable, the Rules of Commercial Arbitration or under the Rules for Expedited Commercial Arbitration). If both AAA and ADRC are no longer in business, then I understand that the parties will mutually agree upon an alternative administrative arbitration agency. If the parties cannot mutually agree, then the parties agree to take the matter to a court of competent jurisdiction to select the agency. I agree that arbitration will be held in Bridgeport, Connecticut, USA, conducted in English and decided by a single arbitrator.

Franchise Application at 3.

On or about January 26, 2018, Alemayehu filed a Complaint and Jury Demand in the United States District Court for the District of Colorado alleging that his franchise application was denied due to his race, and bringing claims of racial discrimination in the making of a contract pursuant to section 1981 of title 42 of the United States Code, tortious interference with a contract, extreme and outrageous conduct, fraud, violations of the Colorado consumer protection statute, breach of contract, and civil conspiracy. See generally Colorado Complaint.

II. DISCUSSION

The FAA provides that a district court shall compel arbitration if a "party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration" moves the court for an order compelling arbitration, so long as the court is satisfied, after hearing the parties, "that the making of the agreement for arbitration or the failure to comply therewith is not in issue." 9 U.S.C. § 4. "A dispute is arbitrable only if the parties contractually bind themselves to arbitrate it." Telenor Mobile Comms. AS v. Storm LLC, 584 F.3d 396, 405-06 (2d Cir. 2009). Arbitrability disputes under the FAA are governed by a summary judgment standard. See Alvarez v. Coca-Cola Refreshments, USA, Inc., 914 F.Supp.2d 256, 256 (E.D.N.Y. 2012). If there is a genuine dispute of material fact as to the existence or validity of an agreement to arbitrate or a breach of that agreement, the parties are entitled to a jury trial on the disputed facts. Telenor Mobile Comms. AS, 584 F.3d at 411 ; see Schnabel v. Trilegiant Corp., 697 F.3d 110, 118 (2d Cir. 2012) ("[A] trial is warranted only if there exists one or more genuine issues of material fact regarding whether the parties have entered into such an agreement.").

In determining whether parties have agreed to arbitrate, state law applies. See Trilegiant, 697 F.3d at 119 ; Progressive Cas. Ins. Co. v. C.A. Reaseguradora Nacional De Venezuela, 991 F.2d 42, 45 (2d Cir. 1993). The Franchise Application includes a choice of law provision selecting Connecticut law. See Franchise Application at 2. However, because the dispute before the court is whether the Franchise *308Application is a binding contract, the choice of law provision in the Franchise Application "does not determine the law that the [c]ourt should apply to determine whether the arbitration clause was part of any agreement between the parties unless and until it is determined that the parties have agreed to and are bound by it." Trilegiant, 697 F.3d at 119 ; but see Motorola Credit Corp. v. Uzan, 388 F.3d 39

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Bluebook (online)
321 F. Supp. 3d 305, Counsel Stack Legal Research, https://law.counselstack.com/opinion/doctors-assocs-inc-v-alemayehu-ctd-2018.