United States District Court, D. Connecticut
RULING ON PETITION TO COMPEL ARBITRATION (DOC. NO.
1)
Janet
C. Hall United States District Judge
The
plaintiff, Doctor's Associates, Inc. (“DAI”),
filed a Petition to Compel Arbitration. See
generally Petition to Compel Arbitration
(“DAI's Petition”) (Doc. No. 1). DAI is the
franchisor of Subway sandwich shops in the United States.
Id. at ¶ 2. The pro se defendant,
Karlton F. Kirksey (“Kirksey”), is a Subway
franchisee. Memorandum in Opposition to Petition to Compel
Arbitration (“Kirksey's Opp'n”) (Doc. No.
16) at 1; Amended Complaint for Damages and Declaratory
Relief, Kirksey's Opp'n (“Kirksey's Am.
Compl.”) (Doc. No. 16) at ¶ 2.[1] On May 31, 2018,
Kirksey filed suit against DAI in Louisiana state court,
which DAI later removed to the United States District Court
for the Eastern District of Louisiana (the “Louisiana
Lawsuit”). DAI's Petition at ¶¶ 15, 17;
Kirksey's Am. Compl. at ¶¶ 12, 14. Pursuant to
section 4 of the Federal Arbitration Act (“FAA”),
9 U.S.C. § 4, DAI moves to compel arbitration of the
claims raised by Kirksey in the Louisiana Lawsuit. DAI's
Petition at ¶ 20.
For the
reasons stated below, DAI's Petition to Compel
Arbitration is granted so that the arbitrator may decide, in
the first instance, whether the claims raised in the
Louisiana Lawsuit are arbitrable.
I.
FACTUAL BACKGROUND
DAI, a
Florida corporation with its principal place of business in
Connecticut, is the franchisor of Subway sandwich shops.
See DAI's Petition at ¶ 2; Kirksey's
Am. Compl. at ¶ 38. Kirksey is a resident of Louisiana.
DAI's Petition at ¶ 3; Kirksey's Am. Compl. at
¶ 38.
On or
about February 5, 2004, DAI and Kirksey entered into a
written contract, Franchise Agreement #33426 (the
“Franchise Agreement”), allowing Kirksey to
operate a Subway restaurant in Louisiana. DAI's Petition
at ¶ 6; Kirksey's Am. Compl. at ¶ 2; Exhibit A,
DAI's Petition (“Franchise Agreement”) (Doc.
No. 1). Paragraph 10 of the Franchise Agreement is an
arbitration clause, which provides in relevant part:
a. Any dispute, controversy or claim arising out of or
relating to this Agreement or the breach thereof shall be
settled by arbitration. The arbitration shall be administered
by an arbitration agency, such as the American Arbitration
Association (“AAA”) or the American Dispute
Resolution Center, in accordance with its administrative
rules including, as applicable, the Commercial Rules of the
AAA and under the Expedited Procedures of such rules or under
the Optional Rules For Emergency Measures of Protection of
the AAA . . . . The parties agree that Bridgeport,
Connecticut shall be the site for all hearings held under
this Paragraph 10 . . . .
. . .
c. You may only seek damages or any remedy under law or
equity for any arbitrable claim against us or our successors
or assigns. 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.
. . .
e. 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 an 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 parties' expenses of
enforcing the arbitration clause, including court costs,
arbitration filing fees and other costs and attorney's
fees.
Franchise Agreement at ¶ 10.
On
September 28, 2016, DAI notified Kirksey that he was in
default of the Franchise Agreement. DAI's Petition at
¶ 10; Kirksey's Am. Compl. at ¶ 5. On January
6, 2017, DAI initiated arbitration proceedings against
Kirksey, which resulted in Kirksey and DAI entering into an
Interim Order. DAI's Petition at ¶¶ 10, 11;
Kirksey's Am. Compl. at ¶¶ 6, 7. On August 7,
2017, Kirksey and DAI again engaged in arbitration and
entered into a Second Interim Order. DAI's Petition at
¶ 12; Kirksey's Am. Compl. at ¶¶ 8, 9. In
substance, both Interim Orders provided that DAI would not
seek to terminate Kirksey's Franchise Agreement if
Kirksey satisfied certain conditions. DAI's Petition at
¶ 12; Kirksey's Am. Compl. at ¶¶ 7, 10.
On
March 21, 2018, DAI notified Kirksey that he was in breach of
the Second Interim Order and that DAI would initiate
arbitration proceedings against Kirksey to terminate Kirksey
as a Subway franchisee. DAI's Petition at ¶ 13;
Kirksey's Am. Compl. at ¶ 11. The arbitration
hearing was scheduled for June 1, 2018, in ...