Grapetree Shores, Inc. v. Ehleiter

47 V.I. 648, 2006 U.S. Dist. LEXIS 14071
CourtDistrict Court, Virgin Islands
DecidedMarch 24, 2006
DocketSup. Ct. Civ. 190/2001
StatusPublished

This text of 47 V.I. 648 (Grapetree Shores, Inc. v. Ehleiter) is published on Counsel Stack Legal Research, covering District Court, Virgin Islands primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grapetree Shores, Inc. v. Ehleiter, 47 V.I. 648, 2006 U.S. Dist. LEXIS 14071 (vid 2006).

Opinion

MEMORANDUM OPINION

(March 24, 2006)

Appellant Grapetree Shores, Inc. (“GSI” or “Appellant”) challenges the trial court’s determination that its prolonged and active participation in litigating the underlying civil action effected a waiver of its right to arbitration. GSI additionally challenges the authority of the trial court to [650]*650decide that issue in the first instance. The following issues are presented on appeal:

1. Whether the trial court acted contrary to law by failing to allow an arbitrator to consider whether GSI had waived its right to have the merits of the underlying claims decided by an arbitrator;
2. Whether the trial court’s factual finding that GSI waived its ability to seek arbitration of the appellee’s claims was clearly erroneous.

The appellee additionally questions GSI’s standing to raise the arbitration defense, arguing it was not a signatory to the arbitration agreement and, therefore, could not enforce that contract.

For the reasons more fully stated below, this Court holds that the issue of waiver was properly before the trial court under the facts of this case and, further, that the court did not err in its determination of waiver. Accordingly, the order denying a stay of proceedings will be affirmed.

!. STATEMENT OF FACTS AND PROCEDURAL POSTURE

The relevant facts of this case are as follows. GSI leased a portion of its hotel property to Treasure Bay V.I. Corp. (“TBVI”) to operate the Divi Carina Bay Casino. [Joint Appendix (“J.A.”) Vol. I at 90-99]. As part of that agreement, GSI agreed to complete construction of the leased property for use as a casino. [Id.]. The casino property was turned over for TBVI’s use in March, 2000.

After TBVI commenced its casino operation, it employed the appellee, Jack Ehleiter (“Ehleiter” or “appellee”), as a card dealer pursuant to an employment agreement, [J.A. Vol. II at 196-207], which also included an arbitration clause. On April 2, 2001, following a fall he claimed he suffered on the casino premises, Ehleiter filed an action for negligence in the Superior Court, naming GSI as defendant.2 [Complaint, J.A. Vol. I at 43-44].

GSI actively participated in litigating that action for over three and one-half years. Its participation began with the filing of an answer on May 1, 2001, in which GSI claimed that Ehleiter’s own conduct had [651]*651proximately caused his damages and, alternatively raised the defense of contributory negligence. [J.A. at 45-46]. However, the answer made no mention of the arbitration clause in the employment agreement. Thereafter, the parties engaged in significant discovery, including the taking of depositions and production of expert opinions, and also engaged in motion practice. [Sup. Ct. Docket, App. at 15-27].

After unsuccessful completion of mediation, [See Sup. Ct. Docket, J.A. Vol. I at 25], the trial court, by order entered December 2, 2004, set trial for January 10, 2005. [J.A. at 50-51]. On December 7, 2004, GSI moved to continue that trial date due to its counsel’s scheduling conflict. [Id. at 52-53]. The trial court granted that request and set a new trial date of March 21, 2005, and the parties filed a joint pretrial order on February 18, 2005. [J.A. Vol. II at 209-17].

However, on February 17, 2005, GSI moved to stay the proceedings to permit the parties to participate in arbitration, pursuant to the arbitration clause in the employment agreement. [J.A. at 186-208]. The trial court denied that motion, holding that GSI, through its participation in lengthy litigation and extensive discovery which was prejudicial to the adverse party, had waived its right to arbitration. [J.A. Vol. I at 9-11]. GSI thereafter filed this appeal and successfully moved to stay trial proceedings pending resolution of this appeal.

II. DISCUSSION

A. Jurisdiction and Standards of Review

We have jurisdiction to consider this appeal by virtue of The Omnibus Justice Act of 2005, Act No. 6730, § 54 (amending Act No. 6687 (2004), which repealed 4 V.I.C. §§ 33-40, and reinstating appellate jurisdiction in this Court); Revised Organic Act of 1954 § 23A, 48 U.S.C. § 1613a,3 9 U.S.C. § 3 (the Federal Arbitration Act (“FAA”) and Government of V.I. v. United Indus. Workers, N.A., 169 F.3d 172, 175-78, 40 V.I. 489 (3d Cir. 1999).4

[652]*652We exercise plenary review of the trial court’s denial of GSI’s motion to stay proceedings and to compel arbitration. See Hoxworth v. Blinder, Robinson & Co., Inc., 980 F.2d 912, 925 (3d Cir. 1992); see also Medtronic AVE, Inc. v. Advanced Cardiovascular Systems, Inc., 247 F.3d 44, 53-54 (3d Cir. 2001) (noting that legal questions concerning the applicability and scope of an arbitration agreement is subject to plenary review) (considering a district court’s denial of a motion to compel arbitration and stay proceedings pending arbitration); Pritzker v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 7 F.3d 1110, 1113 (3d Cir. 1993)). To the extent the court’s determination rests on its findings of fact or interpretation of contract, however, we review for clear error. See Medtronic, 247 F.3d at 53-54 (citing Kaplan v. First Options of Chicago, Inc., 19 F.3d 1503, 1509 (3d Cir. 1994)).

B. Whether The Trial Court Acted Contrary To Law By Failing To Reserve The Issue Of Waiver For An Arbitrator.

GSI contends the trial court improperly decided the issue of waiver, where the language of the arbitration agreement and relevant authorities expressly provided that issues of arbitrability are to be put to an arbitrator. In support of its argument that the parties agreed that the arbitrator would have jurisdiction over any and all issues regarding the employment agreement, including issues of arbitrability and all related [653]*653matters, GSI points to the following provisions of the employment contract:

16. ARBITRATION
Any controversy or claim arising out of or relating in any way to this Agreement, to the breach of this Agreement ..., including claims against Employer, its owners or subsidiary or parent or affiliated companies, and its or their officers, directors, employees, and agents (including any person or company that manages any portion of the Facility) ... shall be resolved by arbitration and not in a court or before an administrative agency.
17. MATTERS ARBITRABLE

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47 V.I. 648, 2006 U.S. Dist. LEXIS 14071, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grapetree-shores-inc-v-ehleiter-vid-2006.