RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 2 O.J. Distributing v. Hornell Brewing Co. No. 01-1583 ELECTRONIC CITATION: 2003 FED App. 0288P (6th Cir.) File Name: 03a0288p.06 _________________ COUNSEL UNITED STATES COURT OF APPEALS ARGUED: Matthew A. Gibb, GIBB LAW FIRM, Shelby FOR THE SIXTH CIRCUIT Township, Michigan, for Appellant. John A. Ruemenapp, _________________ WEISMAN, YOUNG, SCHLOSS & RUEMENAPP, Bingham Farms, Michigan, for Appellee. ON BRIEF: O.J. DISTRIBUTING, INC., a/k/a X Matthew A. Gibb, GIBB LAW FIRM, Shelby Township, GREAT STATE BEVERAGE, - Michigan, for Appellant. John A. Ruemenapp, WEISMAN, - YOUNG, SCHLOSS & RUEMENAPP, Bingham Farms, Plaintiff-Appellant, Michigan, for Appellee. - No. 01-1583 - v. > CLAY, J., delivered the opinion of the court, in which , MOORE, J., joined. BATCHELDER, J. (pp. 28-31), - delivered a separate opinion concurring in part and dissenting HORNELL BREWING - in part. COMPANY , INC., d/b/a - FEROLITO, VULTAGGIO & - _________________ SONS, a/k/a ARIZONA - - OPINION BEVERAGES, - _________________ Defendant-Appellee. - N CLAY, Circuit Judge. Plaintiff, O.J. Distributing, Inc., Appeal from the United States District Court a/k/a Great State Beverage, appeals from the district court’s for the Eastern District of Michigan at Detroit. order entered on March 29, 2001 granting the motion brought No. 98-71940—Denise Page Hood, District Judge. by Defendant, Hornell Brewing Company, Inc., d/b/a Ferolito, Vultaggio & Sons, a/k/a AriZona Beverages, to Argued: January 28, 2003 confirm an arbitration award, while dismissing Defendant’s motion to dismiss Plaintiff’s amended complaint as moot, and Decided and Filed: August 14, 2003 dismissing Plaintiff’s motion for summary judgment as moot. For the reasons set forth below, we VACATE the district Before: BATCHELDER, MOORE, and CLAY, Circuit court’s order confirming the arbitration award, and Judges. REMAND the case to the district court with instructions that the case should proceed on the merits of Plaintiff’s claims inasmuch as Defendant waived its right to arbitrate under the Agreement.
1 No. 01-1583 O.J. Distributing v. Hornell Brewing Co. 3 4 O.J. Distributing v. Hornell Brewing Co. No. 01-1583
BACKGROUND default on September 30, 1998, with the Clerk of the United Procedural History States District Court for the Eastern District of Michigan, and on October 2, 1998, Plaintiff filed a motion for Entry of Plaintiff, a Michigan corporation, filed suit against Default Judgment. Defendant, a New York corporation, in the Eastern District of Michigan on May 11, 1998, on the basis of diversity of Defendant claims that it was not served with any papers citizenship and the amount in controversy being over regarding Plaintiff’s actions with respect to the entry of $75,000, claiming that in May of 1997, Defendant breached default, but learned of Plaintiff’s actions by way of a voice- the provisions of the “Distributing Agreement” (“the mail message from Plaintiff’s attorney to Defendant’s Agreement”) held between the parties for the distribution of counsel. Defendant responded by sending a letter to the AriZona beverage products. Plaintiff mailed the complaint to district court “Via Facsimile” with a copy to Plaintiff’s Defendant’s corporate counsel along with a request for waiver counsel wherein Defendant explained that entry of default of service in May of 1998. The waiver had not been returned was inappropriate because Defendant had not been served in as of July of 1998, so Plaintiff sent an additional copy of the the action, and that Defendant had served Plaintiff with a complaint to Defendant’s corporate counsel via overnight demand for arbitration as required under the Agreement. At courier. that time, Defendant also filed a cross-motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(5) for On or about August 4 and 5, 1998, Defendant sent two insufficiency of service of process, and moved to dismiss or letters to counsel for Plaintiff demanding arbitration. stay the action pending arbitration. Defendant based its demand on a provision of the Agreement that provided for arbitration of any dispute that arose between On October 5, 1998, Defendant initiated arbitration the parties and that the arbitration must be commenced within proceedings before the American Arbitration Association 180 days following the event giving rise to the claim, and (“AAA”) in New York City, New York and, in accordance further provided that “the failure to abide by such time with the AAA rules, Defendant served the arbitration papers requirement shall constitute a waiver by the Distributor on Plaintiff via certified mail, return receipt requested. By [Plaintiff] of any rights in respect of, and shall constitute a bar letter dated October 20, 1998, the AAA acknowledged receipt on, any claims by Distributor on the basis of such event or of Defendant’s arbitration demand and requested Plaintiff’s circumstance.” (J.A. at 52-53.) Defendant’s letters advised responses thereto. The AAA also scheduled an administrative counsel for Plaintiff of this provision in the Agreement conference regarding the matter for October 27, 1998, and requiring arbitration of all disputes. provided information and papers with which the parties were to begin the process of selecting arbitrators and hearing dates. On September 4, 1998, via “telecopier and mail,” Defendant restated its objections to Plaintiff’s attempted Plaintiff filed a motion on October 28, 1998, seeking a service by overnight courier and reiterated that Plaintiff’s temporary restraining order preventing Defendant from claims were subject to “mandatory arbitration.” The letter arbitrating the matter. On November 3, 1998, the district also advised Plaintiff that Defendant “was willing to continue court denied Plaintiff’s motion for a temporary restraining a dialogue with you in the hopes of achieving at [sic] an order, and scheduled a hearing for the various other motions. amicable settlement of your claims. Please call if you are Thereafter, the district court entered an order on April 2, interested.” (J.A. at 115.) Plaintiff arranged for an entry of 1999, denying Defendant’s motion to dismiss, while also No. 01-1583 O.J. Distributing v. Hornell Brewing Co. 5 6 O.J. Distributing v. Hornell Brewing Co. No. 01-1583
denying Plaintiff’s motion for entry of a default judgment, but Plaintiff’s amended complaint. (J.A. at 216.) Plaintiff, in granted Defendant’s motion to stay the proceedings pending turn, filed a motion for summary judgment. The district court arbitration. held a hearing on the various motions on August 11, 2000, and then entered a memorandum opinion and order on In the meanwhile, the arbitration set in New York City was March 29, 2001, confirming the arbitration award and finding going forward. On April 19, 1999, Plaintiff filed its the remaining motions moot. arbitration summary and statement of issues with the AAA setting forth a claim for damages under the Agreement. Plaintiff timely appealed from the district court’s March 29, Defendant, upon consent of the arbitrators, filed a motion to 2001, memorandum opinion and order confirming the enforce the 180-day contractual time limitations as set forth arbitration award and denying Plaintiff’s motion for summary in the Agreement, and thereby requested a dismissal of judgment as moot. Oral argument was heard on January 28, Plaintiff’s claims as time-barred. Defendant argued that the 2003, after which Defendant moved to file a supplemental 180-day time limit barred Plaintiff’s claim and that “[u]nder brief as to a case raised by the panel at oral argument, New York law (which governs this dispute as per ¶ 20.2 of General Star National Insurance Co. v. Administratia the Agreement), it is well established that only the arbitrators Asigurarilor de Stat, 289 F.3d 434 (6th Cir. 2002). (and not the Courts) are charged with enforcing a contractual Defendant’s motion was granted and its supplemental brief time limitation.” (J.A. at 531-32 (citation omitted).) Plaintiff has been considered by this Court. responded by claiming that the 180-day period did not begin to run until April 8, 1998, and that Defendant’s filing of its Facts demand for arbitration on October 5, 1998 satisfied the time limitation period. In the alternative, Plaintiff argued that A. Background of the Relationship Between the because of Defendant’s alleged false and deceptive acts Parties throughout the arbitration process, the limitations period should be tolled under the doctrine of equitable tolling. A Defendant is a supplier of certain alcoholic and non- hearing before the arbitrators was held on March 13, 2000, alcoholic beverages including AriZona brand teas and soft regarding Defendant’s motion to dismiss Plaintiff’s claim as drinks.2 Plaintiff is a distributor of non-alcoholic beverage untimely. 1 Thereafter, on or about March 30, 2000, the products in the greater Detroit, Michigan area. In April of arbitrators issued their award dismissing Plaintiff’s claims in 1995, Defendant began supplying AriZona beverage products their entirety. to Plaintiff for distribution in three Michigan counties: Wayne, Oakland, and Macomb. About two months later, on On May 5, 2000, Plaintiff, filed an amended complaint in June 16, 1995, Plaintiff entered into a sales agreement (“the the district court. Defendant filed a motion on May 22, 2000, Sales Agreement”) with a third party for the purchase price of seeking to confirm the arbitration award and to dismiss $70,000, for purposes of securing the rights to distribute AriZona products in two additional Michigan counties, 1 Although Defendant makes reference to testimo ny taken at this hearing in its brief on app eal, (D efendant’s Br. on A ppe al at 9), no 2 transcript of the hearing is provided in the joint appendix and, according Unless otherwise specified, throughout this opinion, the term to Plaintiff, “there is no transcript of this hearing.” (Plaintiff’s Br. on “Defendant” shall refer to Hornell and the names under which it has been Appeal at 4.) known or operated. No. 01-1583 O.J. Distributing v. Hornell Brewing Co. 7 8 O.J. Distributing v. Hornell Brewing Co. No. 01-1583
Livingston and Washtenaw. According to Plaintiff, to Plaintiff; and 4) AriZona’s actions constituted a breach of Defendant had to consent to Plaintiff purchasing the rights to the Agreement. (J.A. at 189.) The letter also advised distribute AriZona products in these two additional counties. AriZona that if it was not willing to act pursuant to the terms Thereafter, on September 16, 1995, Plaintiff and Defendant of the Agreement, Plaintiff would not hesitate to take legal entered into the Agreement now at issue for the purpose of action. The letter was copied to, among others, Don providing the terms under which Defendant would supply and Vultaggio and Lawrence I. Fox, and sent by certified mail Plaintiff would distribute AriZona products. with return receipt requested. The record indicates that Vultaggio and Fox each received the letter. (J.A. at 191-92.) Each party not only performed under the Agreement, but Plaintiff allegedly met and exceeded the set sales goals and On April 29, 1997, attorney Lisa S. Derman, of MW&E expended considerable time and resources in exceeding the sent a letter to Plaintiff’s former counsel Smith, advising expected market growth for AriZona products. Plaintiff Smith that the “firm [McDermott, Will & Emery] [was] claims that its efforts resulted in a large and profitable litigation counsel for Hornell Brewing Co., Inc. d/b/a Ferolito, customer list for AriZona products. The performance Vultaggio & Sons (“Hornell”).” (J.A. at 196.) The letter also continued until April of 1997, when AriZona informed apprised Smith that his “letter of April 24, 1997, to Mr. Ted Plaintiff that it was terminating the relationship. Shanahan ha[d] been forwarded to [Hornell] for response.” (J.A. at 196.) Finally, the letter advised that MW&E was in B. Events Giving Rise to the Matter at Hand the process of reviewing the matter with Hornell, and would contact Smith after gathering “the relevant information.” AriZona sent a letter to Plaintiff on April 22, 1997, (J.A. at 196.) The letter was copied to Shanahan and Fox. informing Plaintiff that it was “concluding our non-alcoholic supplier relationship with you” effective May 12, 1997. (J.A. Smith sent a letter to Derman on May 2, 1997 advising her at 155.) The letter was written on AriZona letterhead, signed that he had received a direct communication from Shanahan by Ted Shanahan, Eastern Division Manager, and copied to asking Smith to contact him to “discuss an amicable “Don Vultaggio” at Hornell Brewing in Long Island, New resolution of the matter.” (J.A. at 194.) Smith stated that he York, as well as to “Lawrence I. Fox” an attorney at was hesitant to contact Shanahan directly inasmuch as McDermott, Will, and Emory (“MW&E”) in New York, New Derman had indicated that MW&E was representing Hornell, York. The letter made no reference the Agreement. and asked Derman to advise accordingly. In response, on April 24, 1997, Eric Smith, Plaintiff’s then Apparently Derman posted no objection to Smith directly counsel, sent a letter to Shanahan acknowledging receipt of contacting Shanahan, inasmuch as Shanahan sent a letter to the termination letter and informing Shanahan that 1) “[t]he Smith on May 7, 1997 indicating that, pursuant to a telephone relationship between the parties is subject to an executed conversation on May 5, 1997, Smith agreed to send Shanahan Agreement dated September 16, 1995;” 2) the April 22, 1997 a complete copy “of a [sic] what O.J. Distributing claims is letter did not constitute termination “for cause” and under the their ‘contract’ along with case sales information for terms of the Agreement, if Defendant terminated the Washtenau [sic] and Livingston counties[,]” but that Agreement without cause, Defendant had to provide Plaintiff Shanahan had yet to receive the materials. (J.A. at 193.) with at least thirty days notice; 3) AriZona’s legal obligations Shanahan therefore asked Smith as to when the materials under the Agreement demanded that certain monies be paid would be sent. (J.A. at 193.) No. 01-1583 O.J. Distributing v. Hornell Brewing Co. 9 10 O.J. Distributing v. Hornell Brewing Co. No. 01-1583
Smith replied in a May 9, 1997, letter to Shanahan did not return Gibb’s letters or phone calls. Gibb asked that indicating, among other things, that Shanahan’s “summation Vultaggio contact him regarding the matter. of our conversation [was] not accurate. I am not sending you a copy of anything O.J. Distributing drafted. It is AriZona’s Gibb sent a letter to attorney John Calandra of MW&E on contract that it uses for its distributors in this area. It has been January 15, 1998, regarding Plaintiff’s claims against executed by your representative.” (J.A. at 197.) Smith also Defendant. The letter states that “[a]ttached is a copy of the discussed monies owed to Plaintiff under the terms of the Sales Agreement assigning Hornell’s Distributor Agreement Agreement. (J.A. at 197-98.) Smith sent another letter to with [Plaintiff].” (J.A. at 160.) The letter further provides a Shanahan on May 14, 1997, indicating additional monies summary of damages that Plaintiff believes it is due under the owed to Plaintiff under the terms of the Agreement. (J.A. at terms of the Agreement. 200.) Several days later, on January 27, 1998, Gibb sent a letter On June 5, 1997, Shanahan sent a letter to Smith requesting to Calandra and Fox requesting that they advise how they copies of Plaintiff’s last twelve months “Sales & Inventory” were going to proceed inasmuch as they had “already stated reports for O.J. Distributing. Shanahan advised that “[w]e are that attempts at litigation or arbitration would be opposed hoping to amicably resolve this matter as soon as possible.” . . . .” (J.A. at 162.) Gibb added that he “look[ed] forward to (J.A. at 201.) On July 1, 1997, Smith sent a letter to discussing how these claims may be settled or if it will be Shanahan in response to the June 5, 1997, correspondence necessary to send this matter to arbitration or the federal indicating that all of the information requested had been sent, court.” (J.A. at 162.) and that Smith therefore had “all of the information required to make the calculations necessary to move forward toward a On February 11, 1998, Gibb sent yet another letter to resolution of this matter.” (J.A. at 199.) Thus, Smith asked Calandra requesting that Calandra respond to Gibb’s that Shanahan provide his “calculations by the next week’s January 15, 1998 letter and advise how Hornell wished to end so that we know more precisely where this matter is proceed. Gibb also requested that “[i]n the event this matter going to ultimately head.” (J.A. at 199.) Smith added, “[i]f does proceed to litigation, would you prefer to accept service we are going to resolve the situation, we need to address it or should Hornell be served personally?” (J.A. at 163.) immediately.” (J.A. at 199.) Several weeks later, on March 27, 1998, having heard no reply, Gibb sent a letter to Calandra stating that “[m]y client Plaintiff’s current counsel Matthew Gibb, sent a letter to has not received a response to their claim against Hornell attorney Lawrence I. Fox at MW&E on December 12, 1997, Brewing. As no offer of settlement or request for arbitration indicating that Gibb was representing Plaintiff and that Gibb appears likely, I am advising my client to seek relief from the was writing regarding the breach of the Agreement by Fox’s United States District Court. Please advise on how service client, Hornell. Gibb requested that Fox contact him should be perfected in this matter. I understand your client is regarding the matter. A few weeks later, on January 9, 1998, not registered to do business in Michigan under their Gibb sent letter to Don Vultaggio at Hornell Brewing corporate name and therefore, they do not have a local indicating that Gibb represented Plaintiff, that Hornell resident agent. . . . If you have a better solution to this matter, terminated the Agreement with Plaintiff, and that Gibb please call.” (J.A. at 164.) attempted to resolve the matter with Lawrence Fox, but Fox No. 01-1583 O.J. Distributing v. Hornell Brewing Co. 11 12 O.J. Distributing v. Hornell Brewing Co. No. 01-1583
Donna Messina, corporate counsel to Hornell, sent a letter attorneys fees. I do not believe that this matter is being to Gibb on April 8, 1998, indicating that Hornell was not given its proper attention and therefore, feel the Federal aware of the existence of any Agreement with Plaintiff, and Court is my client’s only source of relief. If Hornell has asked that if such a document existed. Gibb forwarded a copy an offer in this matter, please fax it to my office upon to Messina. On that same day, Gibb responded with a letter your return on June 29, 1998. I look forward to hearing to Messina and enclosed Plaintiff’s “Notice of Lawsuit and from you.” Request for Waiver of Service of Summons.” (J.A. at 168.) Gibb added, “[a]s your company is not registered to do (J.A. at 172.) business in Michigan, I trust that you, as General Counsel, have the authority to accept this complaint. A self-addressed, On August 4, 1998, yet another attorney from MW&E, stamped envelope is enclosed for your assistance.” (J.A. at James R. Anderson, sent a letter to Plaintiff stating: 168.) We represent Hornell Brewing Co., Inc. d/b/a Ferolito, Several weeks later, on May 26, 1998, Gibb sent a letter to Vultaggio & Sons (“Hornell”) and have received a copy Fox of MW&E stating: of a summons and complaint in an action styled O.J. Distributing, Inc. v. Hornell Brewing Co., Inc., No. 98- When we last spoke I understood that your client, 71940 (E.D. Mich) (the “Action”). Hornell Brewing, was going to make a preliminary offer of settlement by May 22, 1998. As of the date of this Under ¶ 20.3(b) of the above-referenced Distributor correspondence, I have not received anything to present Agreement (the “Distributor Agreement”), the claims to my clients. Is the offer forthcoming? . . . If no offer asserted by O.J. Distributing, Inc. (“O.J.”) in the Action is pending in this matter, I need to know if Hornell is are subject to mandatory arbitration in New York City. agreeing to waive service of [sic] if they desire to incur Accordingly, Hornell hereby demands arbitration in New costs under Rule 4. Please advise what position your York City of O.J.’s claims and such counterclaims as client is taking. Hornell may choose to interpose.
(J.A. at 171.) Then, on June 22, 1998, in response to a Hornell reserves its right to assert in such arbitration facsimile, Gibb sent a letter to Messina acknowledging that he any and all defenses it may have to O.J.’s claims, was in receipt of the facsimile, and advised that his “previous including but not limited to those relating to the correspondence [was] clear as to what [his] client requires in formation and terms of the Distributor Agreement. this matter,” and that if Hornell “ha[d] a counter proposal, [Plaintiff] would be happy to consider it. However, at this Please have your attorney contact me to discuss the point, [Plaintiff] cannot delay any longer.” (J.A. at 172.) selection of arbitrators and other procedural and Gibb concluded: logistical matters.
“I have not received the waiver of service as requested (J.A. at 112-13.) Anderson copied Messina on the letter. with my client’s complaint. Therefore, I am forced to effectuate personal service in this matter. Under Rule 4 Anderson sent a letter to Gibb on August 5, 1998, of FRCP, I will be entitled to all costs, including indicating that Gibb’s service of process was ineffective, and reiterating that Plaintiff’s claims were subject to arbitration. No. 01-1583 O.J. Distributing v. Hornell Brewing Co. 13 14 O.J. Distributing v. Hornell Brewing Co. No. 01-1583
Anderson copied Donna Messina on the letter. Anderson sent A. Legal Standards another letter to Gibb on September 4, 1998, 1) confirming that Hornell’s time to answer and/or move in response to The process by which a default may be entered by the clerk Plaintiff’s complaint had been extended to September 18, of court, and a default judgment entered thereafter by the 1998; 2) advising that Hornell was not waiving any objection district court, has been succinctly stated as follows: to the service of complaint; 3) Plaintiff’s claims were subject to arbitration; and 4) Hornell was willing to continue in The Federal Rules of Civil Procedure require a dialogue in the hope of reaching an amicable settlement. defendant to serve an answer within twenty days of being (J.A. at 115.) served with a summons and complaint. Fed. R. Civ. P. 12(a)(1)(A). Rule 55 permits the clerk to enter a default On October 2, 1998, Anderson sent a letter to the district when a party fails to defend an action as required. The court regarding the entry of default, and adding that “Hornell court may then enter a default judgment. Fed. R. Civ. P. has advised plaintiff’s attorney on numerous occasions that 55(b)(1). A party against whom a default judgment has there is no basis for this action because the contract that O.J. been entered may petition the court to set aside the seeks to enforce herein requires arbitration of the present default judgment under Rules 55(c) and 60(b) for good dispute.” (J.A. at 116.) Thereafter, on October 5, 1998, cause, and upon a showing of mistake, or any other just Anderson sent a letter to Plaintiff enclosing the “Demand for reason. Arbitration, filed today [October 5, 1998], instituting proceedings before the American Arbitration Association in Weiss v. St. Paul Fire & Marine Ins. Co., 283 F.3d 790, 794 New York.” (J.A. at 118.) The letter was copied to Gibb and (6th Cir. 2002). Messina. “[I]t is important to distinguish between an entry of default DISCUSSION and a default judgment.” United States v. Real Property & All Furnishings Known as Bridwell’s Grocery & Video, 195 I. Entry of Default F.3d 819, 820 (6th Cir. 1999) (hereinafter “Real Property”). That is, “‘a stricter standard of review applies for setting aside Plaintiff first argues that the district court erred in setting a default once it has ripened into a judgment.’” Id. (quoting aside the clerk’s entry of default and in dismissing Plaintiff’s Waifersong, Ltd. Inc. v. Classic Music Vending, 976 F.2d motion for a default judgment. 290, 292 (6th Cir. 1992)). Specifically, “‘once the court has determined damages and a judgment has been entered, the The decision whether to set aside an entry of default under district court’s discretion to vacate the judgment is Federal Rule of Civil Procedure 55(c) is reviewed for an circumscribed by public policy favoring finality of judgments abuse of discretion. United Coin Meter Co., Inc. v. Seaboard and termination of litigation’” as reflected in Rule 60(b). Coastline R.R., 705 F.2d 839, 844 (6th Cir. 1983) (citing Weiss, 283 F.3d at 794 (quoting Waifersong, 976 F.2d at Keegel v. Key West & Caribbean Trading Co., Inc., 627 F.2d 292). However, under Federal Rule of Civil Procedure 55(c), 372, 373 (D.C. Cir. 1980)). “[f]or good cause shown, the court may set aside an entry of default . . . .” No. 01-1583 O.J. Distributing v. Hornell Brewing Co. 15 16 O.J. Distributing v. Hornell Brewing Co. No. 01-1583
“‘[T]he district court enjoys considerable latitude under the B. Analysis ‘good cause shown’ standard of Rule 55(c)’ to grant a defendant relief from a default entry.” Real Property, 195 Plaintiff attempted to receive a waiver of service from F.3d at 820 (quoting Waifersong, 976 F.2d at 292). The Defendant pursuant to Federal Rule of Civil Procedure 4(d). criteria used to determine whether “good cause” has been Rule 4(d)(2) provides in part: shown for purposes of granting a motion under Rule 55(c) are whether “‘(1) the default was willful, (2) set-aside would An individual, corporation, or association that is prejudice plaintiff, and (3) the alleged defense was subject to service under subdivision (e), (f), or (h) and meritorious.’”3 United Coin Meter Co., 705 F.2d at 844 that receives notice of an action in the manner provided (citations omitted) (quoting Keegel, 627 F.2d at 373); see also in this paragraph has a duty to avoid unnecessary costs of Real Property, 195 F.3d at 820. It has been found that a serving the summons. To avoid costs, the plaintiff may district court abuses its discretion in denying a motion to set notify such a defendant of the commencement of the aside an entry of default when two of the three factors have action and request that the defendant waive service of a been demonstrated by the defendant: the defendant had a summons. The notice and request meritorious defense and no prejudice would result to the plaintiff if the matter were to go forward. See Shepard (A) shall be in writing and shall be addressed Claims Servs., Inc. v. Willaim Darrah & Assoc., 796 F.2d directly to the defendant, if an individual, or else to an 190, 193-94 (6th Cir. 1986). officer or managing or general agent (other agent authorized by appointment or law to receive service of Due process requires proper service of process for a court process) of a defendant subject to service under to have jurisdiction to adjudicate the rights of the parties. subdivision (h); Amen v. City of Dearborn, 532 F.2d 554, 557 (6th Cir. 1976). Therefore, if service of process was not proper, the court must Fed. R. Civ. P. 4(d)(2)(A). Rule 4(h) provides in relevant set aside an entry of default. Id.; see also Omni Capital Int’l, part: Ltd. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104 (1987) (“Before a federal court may exercise personal jurisdiction Unless otherwise provided by federal law, service upon over a defendant, the procedural requirement of service of a domestic or foreign corporation or upon a partnership summons must be satisfied.”); Bank One of Cleveland, N.A. or other unincorporated association that is subject to suit v. Abbe, 916 F.2d 1067 (6th Cir. 1990). under a common name, and from which a waiver of service has not been obtained and filed, shall be effected: (1) in a judicial district of the United States in the manner prescribed for individuals by subdivision (e)(1), or by delivering a copy of the summons and of the complaint to an officer, a managing or general 3 agent, or to any other agent authorized by The three-part inquiry made by a district court in determining good cause to set aside an entry of default has also been characterized as appointment or by law to receive service of process whether (1) the plaintiff will be prejud iced; (2) de fendant has a and, if the agent is one authorized by statute to meritorious defense; and (3) defendant’s culpable conduct led to the default. Berthelsen v. v. Kane, 907 F.2d 61 7, 620 (6th Cir. 1990). No. 01-1583 O.J. Distributing v. Hornell Brewing Co. 17 18 O.J. Distributing v. Hornell Brewing Co. No. 01-1583
receive service and the statute so requires, by also The district court did not err in concluding that service of mailing a copy to the defendant . . . . process was not effected inasmuch as Plaintiff failed to receive a waiver of summons from Defendant, and failed to Fed. R. Civ. P. 4(h). demonstrate that it served an “authorized agent” by virtue of an unknown receptionist signing for the overnight package for The district court noted that despite Plaintiff’s attempts, it purposes of complying with Rule 4(d) or Rule 4(h). See LSJ had not received a waiver of summons pursuant to Rule 4(d), Inv. Co., Inc. v. O.L.D., Inc., 167 F.3d 320, 322 (6th Cir. and that, as a result, Plaintiff was required to comply with 1999) (noting that where the facts are undisputed, formal service of process. (J.A. at 716.) Specifically, the determination of whether there was adequate service of court opined: process is a question of law); see also Friedman v. Estate of Presser, 929 F.2d 1151, 1154-156 (6th Cir. 1991) (finding I think the parties agree that [Plaintiff’s] request for that service of process under Rule 4(c)(2)(C)(ii), as amended waiver was in writing. It is unclear whether it was by current Rule 4(d), requires copy of return of notice and addressed to the appropriate officer or agent of acknowledgment form). [Defendant], and it’s not clear whether the request informed [Defendant] of the consequences of complying Therefore, the question becomes whether Plaintiff effected or not complying with the request under Rule 4(d). service of process under the alternative method of Rule 4(h); that being, the manner prescribed for individuals under Rule *** 4(e)(1). See Fed. R. Civ. P. 4(h)(1). Federal Rule of Civil Procedure 4(e)(1) provides: Because [Defendant] didn’t give its consent to waive service, [Plaintiff] was then required to follow the formal Unless otherwise provided by federal law, service procedure for service of process; and it’s undisputed, I upon an individual from whom a waiver has not been think, that [Plaintiff] did not properly affect [sic] service obtained and filed, other than an infant or an incompetent on [Defendant] under the rules. person, may be effected in any judicial district of the United States: [Plaintiff] sent [Defendant] the Complaint and Summons by Airborne in care of [Defendant’s] in-house (1) pursuant to the law of the state in which the counsel. district court is located, or in which service is effected, for the service of a summons upon the It is not clear to me that under the Federal Rules defendant in an action brought in the courts of overnight mail is not a proper – is a proper method of general jurisdiction of the State; . . . . serving an officer agent or authorized agent. And even if were proper service, it is not clear that the receptionist The district court found that Plaintiff had complied neither – it’s clear that the receptionist signed for it. And there with Michigan’s procedures for effecting service of process, isn’t any evidence, I don’t think, in this record that she is nor those of New York. On appeal, Plaintiff provides no an authorized agent of [Defendant] to receive that kind of argument as to whether it complied with the laws of either document. Michigan or New York for effecting service of process. From our independent review of those procedures, we conclude that (J.A. at 716-17.) No. 01-1583 O.J. Distributing v. Hornell Brewing Co. 19 20 O.J. Distributing v. Hornell Brewing Co. No. 01-1583
the district court did not err in finding that the procedures of Arbitration Act requires that ‘the court in which the suit is both states were not properly met. See Mich. Ct. R. 2.105(D) pending, upon being satisfied that the issue involved in such (stating that service of summons and copy of the complaint suit or proceeding is referable to arbitration . . . shall . . . stay must be made upon officer, resident agent, director, trustee, the trial of the action . . . .’” ATAC Corp. v. Arthur or person in charge of an office or business establishment of Treacher’s Inc., 280 F.3d 1091, 1094-095 (6th Cir. 2002) the corporation, and sending a summons and copy of the (quoting 9 U.S.C. § 3). complaint by registered mail to principal office of corporation); N.Y. CPLR § 311 (McKinney 1999) (“Personal “[T]here is a strong presumption in favor of arbitration, and service upon a corporation or governmental subdivision shall . . . waiver of the right to arbitration is not to be lightly be made by delivering the summons as follows: . . . to any inferred.” Cotton v. Slone, 4 F.3d 176, 179 (2d Cir.1993); see other agent authorized by appointment or by law to receive also E. L. Kellett, Annotation, Delay in Asserting Contractual service.”) Right to Arbitration as Precluding Enforcement Thereof, 25 A.L.R. 3d 1171 (1969) (providing cases and general Accordingly, the district court did not err in finding that principles regarding when delay in enforcing an arbitration Plaintiff had not properly effected service of process on right constitutes waiver, laches, or default). However, as this Defendant, see LSJ Inv. Co., Inc., 167 F.3d at 322, and Court recently recognized: therefore did not abuse its discretion in setting aside the entry of default. See Amen, 532 F.2d at 557. In light of this “[a]n agreement to arbitrate may be waived by the holding, we need not weigh the three factors a court considers actions of a party which are completely inconsistent with when setting aside an entry of default when service of process any reliance thereon.” Germany v. River Terminal Ry. has been properly effected, and Plaintiff’s claim regarding the co., 477 F.2d 546, 547 (6th Cir. 1973) (per curiam). district court’s denial of its motion for a default judgment is Although a waiver of the right to arbitration is “not to be moot. lightly inferred,” MicroStrategy, Inc. v. Lauricia, 268 F.3d 244, 249 (4th Cir. 2001) (internal quotation marks II. Stay Pending Arbitration omitted), a party may waive the right by delaying its assertion to such an extent that the opposing party incurs Plaintiff next argues that the district court erred in granting actual prejudice. Doctor’s Assocs., Inc. v. Distajo, 107 Defendant’s motion to stay the proceedings pending F.3d 126, 131 (2d Cir. 1997) (recognizing that a party arbitration where Defendant’s actions constituted a waiver of waives the right to arbitrate where it delays the the arbitration provision. invocation of that right to the extent that the opposing party incurs “unnecessary delay or expense”) (internal This Court reviews a district court’s determination as to the quotation marks omitted). arbitrability of a matter de novo. M&C Corp. v. Erwin Behr GMBH & Co., 143 F.3d 1033, 1037 (6th Cir. 1998). Gen. Star Nat’l Ins. Co. v. Administratia Asigurarilor de Stat, 289 F.3d 434, 438 (6th Cir. 2002) (alterations in Gen. Star A. Legal Standards Nat’l Ins. Co.). “When a suit is brought in federal court on issues that by In General Star National Insurance Co. v. Administratia written agreement are subject to arbitration, the Federal Asigurarilor de Stat (“General Star”), the Plaintiff, General No. 01-1583 O.J. Distributing v. Hornell Brewing Co. 21 22 O.J. Distributing v. Hornell Brewing Co. No. 01-1583
Star National Insurance Company, an Ohio corporation, arbitration from July 1992 until October 1993 and [the brought suit against Astra, S.A. (“Astra”), a Romanian state- plaintiff] bore the costs of proceeding to try to obtain the owned insurance company, asserting claims for breach of sums it thought owed”); Stone v. E.F. Hutton & Co., 898 contract and unjust enrichment. 289 F.3d at 436. Astra had F.2d 1542, 1543 (11th Cir. 1990) (per curiam) (holding assumed the reinsurance contracts of the defendant, that the defendant waived its right to arbitrate where it Administratia Asigurarilor de Stat. Id. Astra did not respond delayed its assertion of the right for 20 months). to the plaintiff’s complaint, and the plaintiff moved for a default judgment which the district court granted. Id. About Gen. Star Nat’l Ins. Co., 289 F.3d at 438 (alterations and one year later, Astra filed a motion to vacate the default emphasis in Gen. Star Nat’l Ins. Co.). judgment. Id. Astra claimed that the default judgment was void because of an alleged lack of subject matter jurisdiction Thus, while there is a strong presumption in favor of due, in part, to a clause in the reinsurance contract requiring enforcing arbitration rights, both this Court and our sister the parties to submit any disputes arising under the contract circuits have been willing to find under appropriate to mandatory arbitration, thereby making the issue of whether circumstances that a party has waived its right to arbitrate by Astra was a successor in interest to the defendant a matter for virtue of its actions in delaying the right to the point of arbitration, not a matter for the district court. Id. at 438. prejudicing the other party. See id. Astra also contended that the default judgment should be set aside based on improper service of process. Id. at 437. The B. Analysis district court denied Astra’s motion to set aside the entry of a default judgment, and Astra appealed. Id. Like Astra in General Star, Defendant in the matter at hand waived its right to arbitrate due to its actions of engaging in On appeal, this Court examined Astra’s claim that the negotiations with Plaintiff for approximately fifteen months district court lacked subject matter jurisdiction to hear the (April of 1997 through August of 1998), while at the same matter due to the contract’s mandatory arbitration provision. time denying the existence of the Agreement and, therefore, In doing so, the Court also considered whether Astra waived the arbitration provision, to the prejudice of Plaintiff. As the its right to arbitrate, and opined as follows: record indicates, by way of letter dated April 24, 1997 to Shanahan at AriZona, Plaintiff’s former counsel, Eric Smith, Astra did not assert its purported right to arbitrate until it informed Shanahan that “[t]he relationship between the filed its motion to vacate the default judgment on parties is subject to an executed Agreement dated September March 16, 2000. General Star gave Astra actual notice 16, 1995.” (J.A. at 189.) The record further indicates that of the lawsuit on October 16, 1998. Thus for 17 months, this letter also informed Vultaggio at Hornell and attorney Astra remained idle while General Star incurred the costs Lawrence I. Fox at MW&E of the Agreement in that Smith’s associated with this action. Astra, moreover, sought letter was copied to these individuals and received by them. arbitration only after the district court had entered a In addition, the record indicates that attorney Lisa S. Derman default judgment against it. Under these circumstances, at MW&E was also aware of the Agreement’s existence by we believe that Astra has waived its right to arbitrate. way of Smith’s April 24, 1997 letter, in that Derman sent a Menorah Ins. Co. v. INX Reinsurance Corp., 72 F.3d letter to Smith on April 29, 1997, apprising Smith that his 218, 222 (1st Cir. 1995) (concluding that the defendant letter had been forwarded to her for a “response.” (J.A. at waived its right to arbitrate where it “chose not to invoke 196.) No. 01-1583 O.J. Distributing v. Hornell Brewing Co. 23 24 O.J. Distributing v. Hornell Brewing Co. No. 01-1583
The record goes on to show that, apparently by way of your client, Hornell Brewing, was going to make a permission from Derman, Smith and Shanahan engaged in preliminary offer of settlement by May 22, 1998. As of the negotiations, Shanahan requested a copy of the Agreement date of this correspondence, I have not received anything to from Smith in a telephone conversation that occurred on present to my clients. Is the offer forthcoming?” (J.A. at May 5, 1997, and Smith sent Shanahan a copy of the 171.) No settlement was reached, and Gibb indicated in a agreement on or about May 9, 1997. It also appears from the June 22, 1998 letter to Messina that it appeared that federal record that from May of 1997 through July of 1997, court was his “client’s only source of relief.” (J.A. at 172.) negotiations continued between Smith and Shanahan as to the amount of monies owed to Plaintiff apparently under the Finally, after months of communications and negotiations terms of the Agreement. with at least six representatives or attorneys for Defendant, Plaintiff received a letter from yet another attorney at The record indicates that the matter was not resolved, MW&E, James R. Anderson, indicating that Plaintiff’s claims Plaintiff obtained new counsel, Gibb, and on December 12, as made in its complaint were subject to the mandatory 1997, Gibb sent a letter to Fox at MW&E regarding arbitration provision in the Agreement, and that Defendant Defendant’s breach of the Agreement and requested that Fox was “demand[ing] arbitration in New York City of O.J.’s contact Gibb. Having received no response from Fox, Gibb claims and such counterclaims as [Defendant] may choose to contacted Vultaggio at Hornell by way of letter dated interpose.” (J.A. at 112-13.) Anderson sent a similar letter to January 9, 1998, regarding Defendant’s breach of the Gibb on August 5, 1998 reiterating that Plaintiff’s claims Agreement. The record next indicates that on January 15, were subject to arbitration. It was not until October 5, 1998, 1998, Gibb sent a letter to attorney Calandra at MW&E and after the entry of default had been made by the clerk of court, stated that “[a]ttached is a copy of the Sales Agreement that Defendant made a demand for arbitration in New York. assigning Hornell’s Distributor Agreement with [Plaintiff].” (J.A. at 160.) The letter further provides a summary of Under these facts, it is clear that Defendant was aware of damages that Plaintiff believes it is due under the terms of the the Agreement’s existence, and in fact had possession of the Agreement. Despite Gibb’s repeated letters to Calandra Agreement by way of Plaintiff’s counsel in May of 1997, during the period of January of 1998 through March of 1998, January of 1998, and April of 1998, and therefore was also wherein Gibb in requested that Calandra respond and advise aware of the arbitration provision therein. However, Gibb how Defendant wished to proceed, particularly with Defendant did not maintain that Plaintiff’s claims were respect to the case going to court, Calandra failed to reply. subject to arbitration until August of 1998, and did not demand arbitration until October of 1998, after the entry of It was not until April 8, 1998 that Messina, corporate default was made. Thus, as in General Star, Defendant slept counsel for Hornell, sent a letter to Gibb again denying the on its rights for approximately fifteen months (April of 1997 existence of the Agreement, and requesting that a copy of the through August of 1998) while Plaintiff incurred costs Agreement be sent to her. The record indicates that Gibb associated with the matter and was prejudiced as a result. complied with the request on that same day, and letters were Accordingly, as in General Star, we find that Defendant thereafter exchanged between Messina and Gibb clearly waived its right to arbitrate the matter. See 289 F.3d at 438. indicating that the two were in the midst of settlement negotiations. For example, in a May 26, 1998 letter to While these actions by themselves appear to be sufficient Messina, Gibb stated, “[w]hen we last spoke I understood that to conclude that Defendant waived its right to arbitrate under No. 01-1583 O.J. Distributing v. Hornell Brewing Co. 25 26 O.J. Distributing v. Hornell Brewing Co. No. 01-1583
General Star, the fact that the arbitration provision contains contrary and despite Plaintiff providing Defendant with a a 180-day limitation provides a further basis to conclude that copy of the Agreement when requested— and after engaging Defendant waived its right to arbitrate. That is, for about one in talks with Plaintiff, thus providing a basis for Plaintiff to year Defendant appeared to engage in negotiations with believe that Defendant agreed that the matters were not the Plaintiff as if the claims were, as Plaintiff has consistently type for which arbitration applied. maintained, not subject to arbitration; then, after suit was filed Defendant prolonged the matter for two more months before In short, for more than a year Defendant acted “completely claiming that the matter was governed by the Agreement’s inconsistent with any reliance” upon the arbitration provision, arbitration provision. However, at this point, Defendant made and “delay[ed] its assertion to such an extent that the the claim that the matter was one for arbitration under the opposing party [Plaintiff] incur[red] actual prejudice” Agreement, secure in the knowledge that the 180-day inasmuch as the 180-day period for resolving matters limitation had long expired inasmuch as the alleged breach of pursuant to the arbitration provision had long passed. which Plaintiff complained occurred in April of 1997. In fact, General Star, 289 F.3d at 438. The district court found at when Defendant submitted the matter to arbitration, it did so oral argument that Defendant had not waived its right to making a preliminary motion to dismiss Plaintiff’s claims as arbitrate, noting that Defendant had made Plaintiff aware by time-barred. Under these facts, Plaintiff suffered “actual way of the August of 1998 letter that the matter was to be prejudice” by Defendant’s “delaying its assertion” regarding arbitrated pursuant to the Agreement. The district court erred arbitrability, see General Star, 289 F.3d at 438, and in so finding inasmuch as Defendant had denied the Defendant should therefore be found to have waived its Agreement’s existence for more than a year and knew by the arbitration rights. Id. time that it demanded arbitration that the 180-day limitation had expired. In its brief on appeal, Defendant argues that once Plaintiff “formally asserted its claims,” Defendant “immediately Because Defendant waived its right to arbitrate, all of demanded arbitration, and consistently asserted that Plaintiff’s claims should have been decided on the merits [Plaintiff’s] claims must be arbitrated.” Defendant’s Br. at before the district court, thus making it unnecessary for us to 25. Defendant further argues that “although it had no address Plaintiff’s claim that the district court erred in finding obligation to do so, [Defendant] commenced the arbitration that all issues raised in its complaint were subject to that [Plaintiff] could have initiated—and in fact was required arbitration, or to address any of Plaintiff’s other claims raised to initiate under the Agreement within 180 days of the on appeal.4 occurrence of the events giving rise to its claims.” Defendant’s Br. at 25. We are not persuaded by Defendant’s arguments. The record indicates that Defendant did not 4 “immediately demand arbitration” after Plaintiff filed its During the district court’s ruling on the various motions, the court “noted and preserved for the record” that Mr. Ruemenapp, counsel for complaint in May of 1998, but waited for sixty days before Defendant, stipulated on the record that he “accept[ed] service on behalf doing so via Defendant’s August of 1998 letter to Plaintiff, of all the claim s involved[.]” (J.A. at 7 27.) Specifically, the district court and waited approximately five months before formally inquired of defense counsel, “That is your stipulatio n, and you accept demanding arbitration in New York. Again, Defendant did so service on behalf of all the claims invo lved?” (J.A. at 727 .) Defense after a year or more of claiming that it was unaware of the counsel replied, “That’s correct.” (J.A. at 727.) The district court concluded, “Okay. So noted and p reserved for the record.” (J.A. at 727 .) Agreement’s existence—despite Plaintiff’s assertions to the Thereafter, in its April 2, 1999, order which, among other things, set aside No. 01-1583 O.J. Distributing v. Hornell Brewing Co. 27 28 O.J. Distributing v. Hornell Brewing Co. No. 01-1583
CONCLUSION _____________________________________________ For the above-stated reasons, the district court’s order CONCURRING IN PART, DISSENTING IN PART confirming the arbitration award is VACATED, and the case _____________________________________________ is REMANDED to the district court with instructions that the case should proceed on the merits of Plaintiff’s claims. ALICE M. BATCHELDER, Circuit Judge, concurring in part and dissenting in part. I concur in the majority opinion’s holding that the district court did not err in finding that the plaintiff failed properly to effectuate service of process on the defendant, and therefore, the court did not abuse its discretion in setting aside the entry of default. Because I believe that the majority opinion’s reliance on Gen. Star Nat’l Ins. Co. v. Administratia Asigurarilor de Stat, 289 F.3d 434 (6th Cir. 2002), is misplaced, I respectfully dissent from the finding that the defendant waived its right to arbitrate. I believe, contrary to the majority’s conclusion, that Hornell’s denial of the existence of the Distributor Agreement, although arguably suspicious, was not contrary to its rights under that agreement to arbitrate any properly filed complaint brought by the plaintiff pursuant to that agreement. General Star involved a situation in which, following a lawsuit properly filed by the plaintiff, the defendant waited more than one year from the entry of a default judgment, and almost seventeen months following the commencement of the suit, before finally appearing before the court and moving to vacate the judgment on the basis of a mandatory arbitration clause contained within the agreement between the parties. Gen. Star, 289 F.3d at 438 (emphasizing the amount of time between the filing of the complaint and the demand for arbitration, and finding that “a party may waive the right by delaying its assertion to such an extent that the opposing party the entry of d efault and stayed the matter pending arbitration, the district incurs actual prejudice.”)1 In General Star, the defendant’s court ordered that “Plaintiff shall serve [sic] have fourteen (14) days from the date of this Order to serve Defendant, and John Ruemenapp stated on the record that he is authorized to acc ept service of the Summons and Complaint in this case on behalf of Defendant.” (J.A. at 203.) Inasmuch 1 as there is no thing in the record to indicate that service of process was not The court in General Star relied upon two cases in which the effected in compliance with this order, it would appear that Defendant has defendants who waited more than a year following the filing of complaint been served and that the matter may proceed before the district court on to assert their rights to arbitrate were fo und to have w aived any right to the merits. arbitrate the claim. See Gen. Star, 289 F.3d at 438 (citing Menorah Ins. No. 01-1583 O.J. Distributing v. Hornell Brewing Co. 29 30 O.J. Distributing v. Hornell Brewing Co. No. 01-1583
actions were inconsistent with the right to arbitrate because expired.2 Unlike the facts in General Star, there was no one- the defendant allowed a complaint to sit for a year and a half year or greater delay by the defendant in demanding while the plaintiff incurred the costs of maintaining the arbitration that prejudiced that plaintiff in the present case. litigation. Hornell’s actions in the current case—denying the existence of the agreement prior to O.J. Distributing’s filing General Star does not stand for the proposition that a party the complaint and demanding arbitration relatively quickly to an agreement containing a mandatory arbitration clause after the filing of the complaint—are clearly distinguishable must demand arbitration once it is notified that another party from the actions of the defendant in General Star. might bring suit to enforce rights allegedly violated under the Furthermore, the only prejudice suffered by the plaintiff arose agreement. This is not a case where the plaintiff filed suit from its failure to timely file the complaint and not from any within the deadline and the defendant “participated in the delay by the defendant in seeking arbitration once the litigation” beyond the specified deadline and then moved to complaint was filed. dismiss based on a mandatory arbitration clause, or, as in General Star, failed to appear for over a year, forcing the The terms of the Distributor Agreement required the plaintiff to incur costs and delay while attempting to vindicate plaintiff to “formally” assert its claim “no later than 180 days their rights in court. The obligation on the part of the following the event or circumstances giving rise to the defendant to demand arbitration arises once the defendant is underlying claim . . . .” Although the defendant’s denial of faced with a properly filed claim. Only where a plaintiff the existence of the agreement delayed the plaintiff’s attempts properly files a complaint against the defendant and the to negotiate a settlement of the underlying claim, that denial defendant subsequently extends the litigation or delays did not prevent O.J. Distributing from “formally” asserting its asserting its arbitration rights does the question of prejudice claim with a properly filed complaint. The plaintiff has never to the plaintiff raise the possibility that the defendant waived asserted that it was unaware of either the existence of the Distributor Agreement or the requirement that it formally bring its claim within 180 days of the act giving rise to the 2 The possibility that Hornell acted in bad faith when it denied the complaint. None of the actions of Hornell cited by the existence of the contract is not relevant to the question of whether or not majority opinion prevented O.J. Distributing from timely it acted inconsistently with its right to arbitrate any formally filed claim. filing the complaint. A party’s denial of the existence of an The only time pertinent to the issue raised by General Star is the time agreement giving rise to a cause of action does not foreclose after O.J. Distributing filed the comp laint. Acc ordingly, I disagree w ith the majority opinion’s assertion that the defendant “slept on its rights for a complaining party’s ability to formally bring its charge approximately fifteen mo nths (April of 1997 through Aug ust of 1998) within the time period specified in the agreement. The impact while Plaintiff incurred costs associated with the matter and was of Hornell’s denial of the contract is completely separate from prejudiced as a result.” Supra majority at 24. Specifically, we hold above the question of whether the plaintiff suffered prejudice from that the district court did not err in finding that the p laintiff failed to the timing of the demand for arbitration once the complaint prope rly effectuate service of process on the defendant. Supra majority at 18. Therefore, the defendant demanded arb itration before the court was filed. No action or dely by Hornell caused the plaintiff to gained personal jurisdiction over Ho rnell, e.g., Omni Capital Int’l v. file its complaint after the 180-day deadline had already Rudolf Wolff & Co., Ltd ., 484 U.S. 97, 104 (1987), which is completely contrary to the facts of General Star. Moreover, the only costs relevant to the analysis under Gen eral Star are the costs associated “with the action,” Gen. Star, 289 F.3d at 438, which is usually considered an actual Co. v. INX Reinsurance Corp., 72 F.3d 218 (1st Cir. 1995), and Stone v. judicial proceeding, not the communications between the parties prior to E.F. Hutton & Co., 898 F.2d 15 42 (11th. Cir. 1990)). the lawsuit. See B LACK’S L A W D IC T IO N A R Y 28-29 (Deluxe 7th ed. 1999). No. 01-1583 O.J. Distributing v. Hornell Brewing Co. 31
the right to arbitrate—this case presents neither of these scenarios. Accordingly, on the issue of the waiver, I respectfully dissent. I would therefore affirm the district court’s decision in its entirety.