Gore v. Buccaneer, The Inc.

• Court: District Court, Virgin Islands
• Decided: May 15, 2020
• Docket: 1:20-cv-00011
• Status: Unknown

Opinion

DISTRICT COURT OF THE VIRGIN ISLANDS

DIVISION OF ST. CROIX ║ TONIA GORE, ║ ║ 1:20-cv-00011 Plaintiff, ║ ║ v. ║ ║ THE BUCCANEER, INC. ║ ║ Defendant. ║ ________________________________________________ ║

TO: Pamela L. Colon, Esq. Robert J. Kuczynski, Esq.

MEMORANDUM OPINION AND ORDER THIS MATTER is before the Court on Defendant’s “Motion To Compel Arbitration And Stay Proceedings” (ECF No. 6), Plaintiff’s Response (ECF No. 13), and Defendant’s Reply (ECF No. 19). Having considered the parIt. ies’ arBgAumCKeGntRsO, tUheN DCo urt will grant the motion. This is a personal injury action in which Plaintiff alleges that, on June 28, 2019, while she was a guest at The Buccaneer (“Defendant”), she fell down stairs while walking on the premises. (ECF No. 1). Defendant claims that when Plaintiff checked in at the hotel, she signed an arbitration agreement that covers this particular type of lawsuit. (ECF No. 7 at 1- 2). That arbitration agreement states as follows: Any dispute, controversy or claim of any kind whatsoever, including but not limited to torts allegedly resulting in injuries while on the hotel property, and including also all disputes about the validity of this arbitration clause or the breach thereof, shall be settled by a mutually agreed to local arbitrator and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The parties agree that all decisions of the Tonia Gore v. The Buccaneer, Inc.

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any dispute will bear half the costs involved in any arbitration. This arbitration agreement covers all claims as set forth herein between the undersigned and The Buccaneer, Inc. and/or its agents, directors, officers and employees and will continue from the time of the acknowledgement of this agreement by the undersigned until it is otherwise terminated in writing by the agreement of the parties. In the event a court or arbitrator declares that the arbitration clause is not enforceable or does not cover the claim in question, then the parties agree that the matter will proceed in court as a non- jury trial as EACH PARTY EXPRESSLY WAIVES ITS RIGHT TO A JURY TRIAL IN ANY SUCH PROCEEDING.

(ECF No. 7-1). In the instant motion, Defendant seeks a court order compelling arbitration and a stay of this lawsuit until arbitration is complete. (ECF No. 7 at 5). Plaintiff argues that 1) there was no contract between Plaintiff and Defendant, and 2) even if the arbitration clause is otherwise enforceable, it IiIs. uncoAnPscPioLnICaAblBeL. E(E LCEFG NAoL. P1R3 IaNt C3I-P7L).E S 1. Federal Arbitration Act Under the Federal Arbitration Act (“FAA”), a district court has jurisdiction over a petition to compel arbitration only if the court would have jurisdiction over “a suit arising ouat cocfo trhdeV caodnetnr ovv. eDrissyc obveetrw Beaennk the parties” without the arbitration agreement. 9 U.S.C. § 4; , 556 U.S. 49, 59 (2009) (observing that an independent basis for federal jurisdiction over a dispute is required and that the FAA is not itself a basis for federal jurisdiction). Here, this Court has jurisdiction pursuant to 28 U.S.C. § 1332, because the parties a re citizens of different states. This Court thus has jurisdiction to decide Tonia Gore v. The Buccaneer, Inc.

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The FAA applies to a contract “evidencing a transaction involving commerce to settle by ... or submit to arbitration” any controversy arising out of that contract. 9 U.S.C. § 2. Further, the FFAliAn teksottaeb lCisoh. evs. Aav “ivstar oPnLgC federal policy in favor of resolving disputes through arbitration.” i.e. , 769 F.3d 215, 219 (3d Cir. 2014) (quotation marks omitted). Thus, “the Act [ , the FAA], both through its plain meaning and the strong federal policy it reDfleeacnts W, rietqteuri rReesy cnoouldrst sI ntoc .e vn. fBoyrrcde the bargain of the parties tose aer ablistoraMteo”s wesh He.n Ceovneer pMoesmsi’bl lHe.o sp. v. Mercury Constr. Corp. , 470 U.S. 213, 217 (1985); , 460 U.S. 1, 24-25 (1983) (stating that courts are required to resolve “any doubts concerning the scope of arbitrable issues ... in favor of arbitration”). In addition, the FAA requires that written arbitration agreements be “valid, irrevocable, and enforceable, save upon sseuec ahl sgorFoiurnstd Os patsi oenxsi sotf aCth il.a, wIn co. rv .i nK aepqluanity for the revocation of any contract.” 9 U.S.C. § 2; , 514 U.S. 938, 943 (1995) (“[A]rbitration is simply a matter of contract between the parties; it is a way to resolve those disputes—but only those disputes—that the parties have agreed to submit to arbitration.”). Accordingly, prior to compelling arbitration pursuant to the FAA, a court must first conclude that (1) a valid agreement tFoli natrkboittrea Cteo .exists, and (2) the particular dispute falls within the scope of that agreement. , 769 F.3d at 220. A “party to a valid and enforceable arbitration agreement is entitled to a stay of federIna lr ceo Puhrat rpmro. cBeeendeifnitg Ms paennadgienrgs arbitration as well as an order compelling such arbitration.” Tonia Gore v. The Buccaneer, Inc.

1:20-cv-00011 Memorandum Opinion and Order Page 4 Antitrust Litig. see

, 700 F.3d 109, 116 (3d Cir. 2012) (quotation marks omitted); 9 U.S.C. §§ 3-4. 2. Standard for Deciding a Motion to Compel Arbitration When considering a motion to compel arbitration, a district court must apply either the standard used to resolve motions to dismiss or that used to resolve motions for summary judgment. Where “it is apparent” based on the complaint and supporting documents “that certain of a party’s claims are subject to an enforceable arbitration clause, a motion to compel arbitration should Gbuei docottni svi.d Leergeadl Huenldpeerr s aD eFbEt DR.e sRo.l uCtiIoVn. , LPL. C12(b)(6) standard without discovery’s delay.” , 716 F.3d 764, 776 (3d Cir. 2013) (quotation marks omitted). In other words, “[m]otions to compel arbitration are reviewed under Rule 12(b)(6) ‘[w]here the affirmative defense of arbitrability of clSaainmfos rids av.p pBarraecnewt oenll t&he Gfaucieli aonf ia, cLoLmPplaint (or ... documents relied upon in the complaint).’” , 618 F. App’x 114, 117 (3d Cir. 2015). Conversely, where arbitrability is not apparent, or if the party seeking to avoid arbitration has put forth sufficient additional facts to place the agreement to arbitrate in issue, a motion to compel arbitration should be considered under a FED. R. CIV. P. 56 summary judgment standard, after providiIndg. the parties the opportunity for limited discovery on the issue of arbitrability. Defendant has provided the Court with a copy of the arbitration agreement. Thus, the Court will review Defendant’s motion under a Rule 12(b)(6) standard. Tonia Gore v. The Buccaneer, Inc.

1:20-cv-00011 Memorandum Opinion and Order Page 5 3. Virgin Islands Law

In determininSge ew Ghoeltdheenr G taot ec Noamt’pl eSle nairobri Ctraarteio, LnL, Cc ov.u Ardtsd irsoenly on the principles of applicable state law. Volt Info. S,c Cieanscee Ns,o I.n 1c4. v-M. BCo-a0r4d2 o1f, 2T0ru1s4t eWesL o4f7 L9e2l3an8d6 , Satta *n1f3or (dM J.uDn. iPoar. SUenpivt.. 24, 2014) (citing , 489 U.S. 468, 475 (1989)). “The Virgin Islands Supreme CVouarletn htians vn. oGtr aepxpetrreeses lSyh oadreospted the common law rule for formation of a valid contract.” , Case No. SX-11-CV-305, 2015 WL 13579631, at *3 (V.I. Super. Ct. June 30, 2015). “However, the basic elements for what constitutes a valid contract are so widely accepted and fundamental to the practice of law in the Virgin Islands and every other United States jurisdiction tIhda.t maintaMinaicnhga tdhoe vse. Y ealecmhte Hnatsv eisn u Un.qS.uVe.Is.,t iLoLnCably 1 the soundest rule for the Virgin Islands.” (citing , 61 V.I. 373, 380 (2014)). Thus, “[i]n the Virgin Islands, a valid contract reIqdu.;i raecsc oar ‘db arugnasihni nine wShhoipchpi nthge Cretr .i,s I na cm. vu. tLuGa lE alessces.n Pt atnoa tmhea , eSx.Ach.ange, and consideration.’” S , Case No. 2015-0041, 2018 WL 4558982, at *7 (D.V.I. Sept. 21, 2018) (applying VirgiVna Ilselnatninds law). “Assent is not measured by subjective intent, but by outward expression.” , 2015 WL 13579631, at *3. Further, “[i]n an 1 Banks Halliday v. Great L aWkhese rIen sp. rSioEr precedent is “lacking on a common law rule, courts in the Virgin Islands must conduct what has become known as a “ analysis” to determine the applicable law in the Virgin Islands.” , Case No. 3:18-CV-00072, 2019 WL 3500913, at *5 (D.V.I. Aug. 1, 2019). The Court must first “ascertain[ ] whether any Virgin Islands courts haveG opvr’etv oifo Vuisrlgyi nad Isolpatnedds av . pCaorntnicourlar rule, then identify[ ] the position taken by a majority of courts froBma nokths evr. Injut'rli Rsdeincttaiol n&s L, eaansdin gfi nCaolrlpy .determin[e] which app roach r epresents the soundest rule for the Virgin Islands.” , Case No. 2013-0095, 2014 Tonia Gore v. The Buccaneer, Inc.

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arbitration agIrde. ement, consideration exists where both parties agree to be bound by the arbitrat4io. nU.”n conscionability Unconscionability is a genePrlaalslyk ertetc ov.g Bniezcehdt eclo Innttrearcnt. ,d Ienfce.n, se that may be used to set aside an arbitration aDgorceteomr’se nAts. s ociates, Inc. v. Casarotto, 243 F. Supp. 2d 334, 339 (D.V.I. 2003) (citing 517 U.S. 681, 687 (1996)). The dAolecxtarinndee ro vf . uAnnctohnonscyi oInnatebrinli.t, yL .iPn.,volves both “procedural” and “substantive” elements. 341 F.3d 256, 265 (3d Cir. 2003) (citations omitted). “Procedural unconscionabiliItdy. pertains to the process by which an agreement is reached and the form of ain.e a.greement.” This element is normally satisfied where the contract is one of adhesion, , “one which is prepared by the party with excessive bargainIidn.g power who presents it to the other party for signature on a take-it-or-leave-it basis.” (quotations omitted). Substantive unconscionability “refers to terms Itdh.at unreasonably favor one party to which the disfavored party does not truly assent.” To find that an agreement is unconscionable, both elements must be proven: first, that the contractual terms are unreasonably favorable to the drafter and (2) that there is nIdo. meaningful choice on the part of the other party regarding acceptance of the provision.” at 265-66. The party seeking to invalidate the arbitration clause generally beHaarsr rtihs ev .b Gurredeenn T orfe ep rFoinv.i nCgo rtph.a, t the contract or provision of the contract is unconscionable. 183 F.3d 173, 181 (3d. Cir. 1999). If the court determines that a term of a contract is unconscionable, it Tonia Gore v. The Buccaneer, Inc.

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may “refuse to enforce the contract, or may enforce the remainder of the contract without the unconscionable term, or may soA lliemjaint dthroe va.p Lp.lSi.c aHtoioldni nogf , aInnyc. ,unconscionable term as to avoid any unconscionable result.” 310 F. Supp. 2d 745, 748 (D.V.I. 250. 04S)ta (yci otifn Pg rRoecseteadteimngesn t (Second) of Contracts § 208). “‘The Supreme Court has recognized that district courts have broIandte rdMisectrreot iIonnd utso. mCoarnpa. gv.e E tnhoevira dteo Mckeedtisc,a inl, cLlLuCd,ing the power to grant a stay of proceedings.’” Proctor & Gamble C 3o:.1 v3.- CKVra-0ft2 8F5o4od, 2s 0G1l7ob W., LIn 9c0.,1100, at *2 (M.D. Pa. Mar. 7, 2017) (quoting 549 F.3d 842, 848-49 (Fed. Cir. 2008)). When determining whether to grant a stay, “courts should consider (1) the length of the requested stay; (2) the ‘hardship or inequity’ that the movant would face in going forward with the litigation; (3) the injury that a stay would inflict uponS ttrhuec tnuorna-lm Gorvpa., nItn;c (. 4v). wLihbeerthtye rM au ts.t Ianys .w Cioll., simplify issues and promote judicial economy.” Lan Cdiivs ivl .A Nc.t Aiomn. NCoo.., 1:07-cv-01793, 2008 WL 4616843, at *5 (M.D. Pa. Oct. 16, 2008) (citing I I2I.9 9 UD.SI. S2C4U8S, 2SI5O4N-5 5 (1936)).

Here, the arbitration agreement is enforceable. It involves interstate commerce in that Plaintiff is a New York citizen who was a paid guest at The Buccaneer, which has Virgin Tonia Gore v. The Buccaneer, Inc.

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Islands citizenship. Further, the agreement is valid, because Plaintiff signed it as a condition 2 of her stay at the hotel. Although at first glance the arbitration agreement appears to present an open-and- shut case regarding its enforceability, a deeper dive into it—and further consideration of Plaintiff’s arguments—necessitates a more comprehensive explanation of why the Court is compelling arbitration. The contract that was attached to Defendant’s motion is highly unusual in tAhamte, rwichailne A itir pliunrepsorts to be an agreement between Plaintiff and Defendant, it is labelled as “ Crew Sign In Sheet.” Although American Airlines is not a party to this case, Plaintiff has submitted an affidavit, in which she indicated that “[w]hen [she] checked into the hotel [she] was asked to sign an American Airlines Crew Sign In Sheet for the purposes of documenting [her] stay at the hotel so that American Airlines would pay the Buccaneer for [her] accommodations.” (ECF No. 18-1 at 2). Further, PIlda.i ntiff stated that “[n]o one ever mentioned anything about an arbitration agreement.” To this extent, Plaintiff argues: [I]t looks as tho[ugh] the arbitration language is buried in fine print that has been lifted from a different document and dropped into the American Airlines 2 validit y of this arbitration clause The agreement specifically states that “[a]ny dispute, contHroevnerrys Syc ohre cinla, iImnc o. vf .a Anryc khienrd & w Whhaittseo Seavleers …, In inc.cluding also all disputes about the … shall be settled by a mutually agreed to local arbitrator.” (ECF No. 7-1) (emphasis added). Last year, in , 139 S. Ct. 525, 528 (2019), the Supreme Court said that “[w]heHne nthrye Spcahretiines’ contract delegates the arbitrability question to an arbitrator, the courts must respect the parties’ decision as embodied in the contract.” The arbitration clause here falls squarely within the dictates of ’s directive, and, as such, the arbitrator must decide the arbitrability of Plaintiff’s claim. Alternatively, the Court notes that the agreement covers the dispute at issue, because the broad language of the arbitration clause covers all disputes between Plaintiff and Defendant arising from Plaintiff’s stay on the hotel property. The agreement even goes so far as to specifically Tonia Gore v. The Buccaneer, Inc.

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Sign In Sheet, cut and paste style. In fact, there is no way to determine when this language was added to the document, or if this Defendant’s document or an American Airlines document[.] This is consistent with Ms. Gore’s denial of having ever signed an arbitration agreement or agreeing in any fashion to arbitrate anything against Defendant.

(ECF No. 13 at 5). While this argument captures some of the unfamiliar elements of this contract, Plaintiff has not put forth any allegations in her opposition or affidavit to suggest that she did not know what she was signing or that the document now offered by Defendant is different than the one she signewd.h oM hoaredo av ceor,n itnr ahcetr w oiwthn D berfieenfd, sahnet states that “[s]he was an employee of American Airlines, to provide lodging for its employees that overnight on St. Croix as part of their job requirements.” (ECF No. 13 at 1) (emphasis added). Although the Court would have preferred to see some indication from Defendant regarding the existence and terms of that contract, it presumably outlines the terms as memorialized in the Sign-In Sheet. As such, the Court can safely infer that this document, even if a little confusing, is a structured component of the agreement between 3 Defendant and American Airlines or is at least sufficiently intertwined with such agreement. 3 Regarding considSeerea tion, even though the parties have not yet engaged in any fact-finding, the Court presumes, as argued by Defendant, that Plaintiff “used and benefit[t]ed from The Buccaneer’s services, whether paid or unpaid[.]” ( ECF No. 19 at 3). Defendant cites “lodging, meals, [and] facilities” as potential benefits of Plaintiff’s stay at the hSoetee lT. w Winh Ciliet itehse M Caonuargte dmoeenst n, LoLt Cw va.n Itg btoa lspeculate as to what Plaintiff may or may not have done while at the hotel, it is an almost inescapable fact that a benefit(s) was conferred upon her simply by virtue of her stay there. , No. A-5821-17T1, 2020 WL 1943232, at *12 ( N.J. Super. Ct. App. Div. Apr. 23, 2020) (“[C]onsideration need not be significant; whatever consideration the Tonia Gore v. The Buccaneer, Inc.

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The Court respects Plaintiff’s understanding that she thought she was merely signing an attendance sheet. However, even if nobody informed her about the arbitration agreement, it covers approximately half of the page and was there for her to read on her own. Yet, Plaintiff argues that 1) the conditions under which she signed the contract, and 2) the terms of the arbitration clause itself are unconscionable. Plaintiff lays out her argument as follows: Ms. Gore arrived at Defendant’s hotel at 11:00 p.m. after a full day of working as a flight attendant. She was presented a document entitled “American Airlines Crew Sign In Sheet.”

All of the information that was preprinted and typed in on the sheet at or above her signature had nothing to do with her employment. There is absolutely nothing at or above her signature that mentions arbitration at all. Thus, the notice she was given by Defendant that she was signing into a document related to her employment, not an arbitration agreement.

Once she was signed in there was no reason for her to read anything that was printed below her signature as it was not relevant to the information she was to provide which only included her name, signature, wake up call, flight arrival time, flight number, van departure time, flight departure time and departure flight number. Defendant’s efforts to sneak in arbitration provisions below her signature in tiny font, that seems to have been cut and pasted into this document, after luring her to believe this document only related to her employment, is on its face unconscionable.

(ECF No. 13 at 6-7). Here, none of Plaintiff’s arguments—or her affidavit—indicate that she did not remember signing this document or that the signature on the document is not hers. Although she states that she arrived at the hotel at a late hour, there is no indication that she was given Tonia Gore v. The Buccaneer, Inc.

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understanding of its terms. While this document does appear to be a bit of a patchwork product, there is no support for Plaintiff’s argument that the arbitration clause was “sn[uc]k in” or that she was “lur[ed] to believe this document only related to her employment.” Further, to the extent that this document is an adhesion contract, there must also be some evidence that the terms of the contract are overly one-sided. To this end, Plaintiff draws attention to the fact that the font for the arbitration clause was smaller than on the rest of the page. (ECF No. 13 at 7). However, this was not an instance where a microscopic arbitration clause was hidden in a 100-page-plus document. Rather, the arbitration clause was presented point blank on the sole page that Plaintiff signed, and, as much as the font of the arbitration clause is a little smaller than the text in the rest of the document, the difference in size might have made all the more reason for Plaintiff to take note of it. Plaintiff also makes issue of the fee-splitting provision in the arbitration clause and argues that this arrangement would result in greater expenses for her than if the case were to remain in court. (ECF No. 13 at 7). A party seeking to “invalidate an arbitration agreement on the ground that arbitration would be prohibGitrieveenl yT reexep Fenins.i vCeo r…p. vb.e Raarsn dtohlep hburden of showing the likelihood of incurring such costs.” , 531 U.S. 79, 92 (2000). The Third Circuit has “consistently held that to meet this burden, a plaintiff must (1) come forward with some evidence to show the projected fees that would apHpalyll tvo. tThreeiars uspree cBifaiyc Var.Ib. iCtroartpi.ons, and (2) show the party’s inability to pay those costs.” , 371 Fed. App’x 311, 313 (3d Cir. 2010). “Thus, a party seeking to Tonia Gore v. The Buccaneer, Inc.

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declare a provision awarding arbitration costs unenforceable must proffer some credible and substantiIadt.e d evidence of that party’s financial situation as well as the specific costs of arbitration.” Plaintiff has not indicated—in her affidavit or otherwise—that she is unable to afford these potential costs. In fact, Plaintiff makes no mention of her financial conditions at all. Additionally, she has not offered any explanation as to how arbitration would be more costly for her—even if it is ultimately possible. In short, the information provided by Plaintiff is not sufficient for the Court to determine that arbitration would be prohibitively expensive 4 for her. In sum, the Court notes that, while this document is not a great model for parties seeking to invoke arbitration clauses, it is nevertheless enforceable against Plaintiff. The Court cannot identify unfairness in this document—either in the procurement of Plaintiff’s signature or in its terms—egregious enough to render it unconscionable. Having determined that Defendant is entitled to enforce the arbitration clause, the Court will issue a stay as to the claim suIVbj.e ct tCo OthNaCt LaUrbSiItOraNt ion. ORDERED: For the foregoing reasons, it is 4 Plaintiff also argues that the portion of the arbitration clause that states the arbitrator’s decision will be “conclusive and binding” prohibits judicial review of the arbitrator’s award. (ECF No. 13 at 7-8). While it is true that there are only limited circumstances under which courts can review arbitration awards, Plaintiff has not put forth any argument thaIdt . this clause forecloses Plaintiff’s right to argue one of those exceptional cbirectuwmeesnta nces. Further, Plaintiff states that the arbitration agreement covers only her claims against Defendant Tonia Gore v. The Buccaneer, Inc.

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1. DGRefAenNdTaEnDt’s “Motion To Compel Arbitration And Stay Proceedings” (ECF No. 6) is . STAYED 2. The case is pending completion of arbitration. 3. The parties are to fileN wovitehm thbee rC 1ou5r, t2 a0 2st0atus report concerning the arbitration process no later than .

ENTER: Dated: May 15, 2020 /s/ George W. Cannon, Jr. GEORGE W. CANNON, JR. MAGISTRATE JUDGE