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Inc. v. Repins

United States District Court, D. Connecticut

January 22, 2018

IVARS REPINS, Defendant.



         This case initially came before the court pursuant to a Motion to Compel Arbitration (Doc. No. 1) filed by the plaintiff, Doctor's Associates, Inc. (“DAI”), against the defendant, Ivars Repins (“Repins”). DAI sought this court's order compelling arbitration of claims arising out of a franchise agreement entered into by DAI, the franchisor of Subway™ restaurants, and Repins, a franchisee. On April 6, 2017, Repins filed a document initially styled on the docket as “Answer to Complaint” (Doc. No. 17). On May 4, 2017, this court issued a Ruling (Doc. No. 18) on DAI's Motion to Compel as well as a Motion for Permanent Injunction (Doc. No. 3) filed by DAI. That Ruling granted DAI's Motion to Compel and denied DAI's Motion for Permanent Injunction.[1]Pursuant to that Ruling, judgment entered in favor of DAI and the above-captioned case was closed. See Judgment (Doc. No. 19).

         On or about October 19, 2017, Repins contacted the District of Connecticut Clerk's Office to ascertain the outcome of this case, asserting that he had never received notice of the case's outcome.[2] The court mailed Repins the Ruling (Doc. No. 18) and Judgment (Doc. No. 19) on October 19, 2017. Subsequently, Repins filed a Motion for Relief from Judgment (Doc. No. 20) on October 27, 2017, specifically requesting that this court grant him leave to appeal despite the appeal deadline having expired, in light of the fact that he did not receive notice of the Judgment entered in this case.[3] Mot. for Relief from Judgment (Doc. No. 20) at 2.

         Upon receipt of Repins's Motion for Relief from Judgment, the court reviewed the filings and identified that docket number 17, styled on the docket as “Answer to Complaint, ” actually contains two separately styled documents: (1) “Defendant's Answer / Response to Doctor's Associates, Inc. (‘Subway') Petition to Compel Arbitration” (Doc. No. 17) at 1; and (2) “Defendant's Memorandum in Support of Motion to Dismiss Plaintiff's Petition for Lack of Subject Matter Jurisdiction / Alternately for other relief” (Doc. No. 17) at 6. Upon discovering this error, the court issued an Order to Show Cause (Doc. No. 22) to DAI why the Judgment should not be vacated to permit the court to rule on Repins's Motion to Dismiss. On November 17, 2017, DAI filed a Response (Doc. No. 23) to the court's Order to Show Cause stating that it had no objection to the court vacating its Judgment and ruling on Repins's Motion to Dismiss. Absent objection, the court vacated its Judgment of May 4, 2017. See Order (Doc. No. 24). The court also directed to the Clerk's Office to rename document number 17 “Motion to Dismiss / Answer to Complaint.”[4]

         For the reasons that follow, Repins's Motion to Dismiss (Doc. No. 17) is denied and DAI's Motion to Compel Arbitration (Doc. No. 1) is granted in part and denied in part.

         I. BACKGROUND

         On May 13, 2002, the parties signed Franchise Agreement Number 903 for the operation of a Subway restaurant. Ex. A, Mot. to Compel (Doc. No. 1-1). Eight years later, on September 22, 2010, they signed Franchise Agreement Number 25752 (Doc. No. 1-2). Ex. B, Mot. to Compel (Doc. No. 1-2). Franchise Agreement Number 25752 states that it “has revised provisions regarding [topics including] dispute resolution, ” and that Repins “agree[s] to accept the provisions set forth in [sections including] Paragraph[ ] 10” in Franchise Agreement Number 25752 “to the amendment of all of [Repins's] other existing Franchise Agreements with [DAI] to include these provisions.” Id. at ¶ 14.

         Paragraph 10 of Franchise Agreement Number 25752 governs arbitration, and provides the following:

Any dispute, controversy or claim arising out of or relating to this Agreement or the breach thereof shall be settled by arbitration. . . .
The parties agree that Bridgeport, Connecticut shall be the site for all arbitration hearings held under this Paragraph 10 . . . .
If you breach the terms of your Sublease, the Sublessor, whether us or our designee, may exercise its rights under the Sublease, including your eviction from the franchised location. Any action brought by the Sublessor to enforce the Sublease (which provides that a breach of the Franchise Agreement is a breach of the Sublease), is not to be construed as an arbitrable dispute. . . .
You agree that our Affiliates, shareholders, directors, officers, employees, agents and representatives, and their affiliates, shall not be liable nor named as a party in any arbitration or litigation proceeding commenced by you where the claim arises out of or relates to this Agreement. You further agree that the foregoing parties are intended beneficiaries of the arbitration clause; and that all claims against them that arise out of or relate to this Agreement must be resolved with us through arbitration . . . .
Any disputes concerning the enforceability or scope of the arbitration clause shall be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. § et seq. (“FAA”), and the parties agree that the FAA preempts any state law restrictions (including the site of the arbitration) on the enforcement of the arbitration clause in this Agreement. . . . If, prior to the Arbitrator's final decision, either we or you commence an action in any court of a claim that arises out of or relates to this Agreement (except for the purpose of enforcing the arbitration clause or as otherwise permitted by this Agreement), that party will be responsible for the other party's expenses of enforcing the arbitration clause, including court costs, arbitration filing fees and other costs and attorney's fees.
If a party [ ] commences action in any court, except to compel arbitration, or except as specifically permitted under this agreement, prior to an arbitrator's final decision . . . then that party is in default of this Agreement. . . . The defaulting party will be responsible for all expenses incurred by the other party, including lawyers' fees.

Id. ¶ 10.

         On August 12, 2015, a Wisconsin court granted a judgment of eviction to Subway Real Estate, LLC (“SRE”) against Repins, in a case entitled Subway Real Estate, LLC, v. Repins, Case No. 15SC017457 (“the Wisconsin Lawsuit”). See Ex. C, Mot. to Compel (Doc. No. 1-3) at 2. SRE is ...

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