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Owen v. CBRE, Inc.

United States District Court, D. Maryland

December 2, 2016

DENNIS OWEN, Plaintiff,
v.
CBRE, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          Paul W. Grimm United States District Judge.

         Plaintiff Dennis Owen filed suit in state court, alleging that his former employer, Defendant CBRE, Inc. (“CBRE”) discriminated against him based on his sexual orientation and then retaliated against him by terminating his employment when he complained of the discrimination, in violation of state and local laws. Compl., ECF No. 2. CBRE removed to this Court, ECF No. 1, and now seeks to arbitrate the claims pursuant to an arbitration provision (“Arbitration Provision”) to which Owen purportedly agreed when he entered into a Broker- Salesperson Contract with CBRE after CBRE acquired Owen's previous employer, Trammel Crow Company. Def.'s Mot., ECF No. 9.[1] According to CBRE, Owen's claims fall within the scope of the Arbitration Provision. Because I must treat Defendant's motion to compel arbitration as a motion for summary judgment, and no genuine dispute exists as to the validity or scope of the Arbitration Provision, I will grant the motion, order the parties to proceed to arbitration, and dismiss the case.

         Standard of Review

         CBRE moves to compel arbitration under the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-15. Congress enacted the FAA “to promote the enforceability of arbitration agreements and to make arbitration a more viable option to parties weary of the ever-increasing ‘costliness and delays of litigation.'” Saturn Distrib. Corp. v. Williams, 905 F.2d 719, 722 (4th Cir. 1990) (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 220 (1985) (quoting H.R. Rep. No. 96, 68th Cong., 1st Sess. 2 (1924) (quotation marks omitted))). It “reflects ‘a liberal federal policy favoring arbitration agreements.'” Adkins v. Labor Ready, Inc., 303 F.3d 496, 500 (4th Cir. 2002) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)). If an issue is “‘referable to arbitration under an agreement in writing for such arbitration, '” then a stay is mandatory and a motion to compel must be granted. Id. (quoting 9 U.S.C. § 3). “Notwithstanding the terms of § 3, however, dismissal is a proper remedy when all of the issues presented in a lawsuit are arbitrable.” Choice Hotels Int'l, Inc. v. BSR Tropicana Resort, Inc., 252 F.3d 707, 709-10 (4th Cir. 2001).[2]

         Relevantly, “‘even though arbitration has a favored place, there still must be an underlying agreement between the parties to arbitrate.'” Adkins, 303 F.3d at 501 (quoting Arrants v. Buck, 130 F.3d 636, 640 (4th Cir. 1997)). Here, Owen challenges the very existence of the Arbitration Provision, rather than its scope. See Pl.'s Opp'n 4. As both parties acknowledge, when a party moves to compel arbitration and the validity of the purported arbitration agreement between the parties is disputed, the motion is treated as one for summary judgment. See Rose v. New Day Fin., LLC, 816 F.Supp.2d 245, 251 (D. Md. 2011); see also Id. at 252 n.5 (“If the parties dispute the existence of an arbitration agreement, the court must ‘hear the parties' on the issue, and the party alleged to have violated the arbitration agreement is entitled to a jury trial on the existence of an agreement. Standard summary judgment rules apply.” (quoting 9 U.S.C. § 4 and citing Shaffer v. ACS Gov't Servs., Inc., 321 F.Supp.2d 682, 684 n.1 (D. Md. 2004))). Therefore, I will treat CBRE's motion as one for summary judgment on the validity and enforceability of the Arbitration Provision. See id.

         Summary judgment is proper when the moving party demonstrates, through “particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . ., admissions, interrogatory answers, or other materials, ” that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a), (c)(1)(A); see Baldwin v. City of Greensboro, 714 F.3d 828, 833 (4th Cir. 2013). If the party seeking summary judgment demonstrates that there is no evidence to support the nonmoving party's case, the burden shifts to the nonmoving party to identify evidence that shows that a genuine dispute exists as to material facts. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-87 & n.10 (1986). The existence of only a “scintilla of evidence” is not enough to defeat a summary judgment motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). Instead, the evidentiary materials submitted must show facts from which the finder of fact reasonably could find for the party opposing summary judgment. Id. A “genuine” dispute of material fact is one where the conflicting evidence creates “fair doubt”; wholly speculative assertions do not create “fair doubt.” Cox v. Cnty. of Prince William, 249 F.3d 295, 299 (4th Cir. 2001); see also Miskin v. Baxter Healthcare Corp., 107 F.Supp.2d 669, 671 (D. Md. 1999).

         The question here is “whether a contract to arbitrate was formed, ” and “unless there is no genuine issue of fact as to whether a contract was formed, the court must submit the question to the jury.” Galloway v. Santander Consumer USA, Inc., No. CCB-13-3240, 2014 WL 4384641, at *2 (D. Md. Sept. 3, 2014). To determine whether an arbitration agreement exists, “[c]ourts apply ‘ordinary state-law principles that govern the formation of contracts.'” Id. (quoting Noohi v. Toll Bros., Inc., 708 F.3d 599, 607 (4th Cir. 2013) (internal quotation marks and citations omitted)). In support of its motion, CBRE attaches the Broker-Salesperson Contract between the parties, which includes the Arbitration Provision at issue. Broker-Salesperson Contract ¶ 18, ECF No. 9-2. Thus, the burden is on Owen to show that a genuine dispute exists regarding the validity or enforceability of this written agreement. See Matsushita, 475 U.S. at 585-87 & n.10.

         Discussion

         An arbitration agreement only “is enforceable if it is a valid contract.” Caire v. Conifer Value Based Care, LLC, 982 F.Supp.2d 582, 591 (D. Md. 2013) (citing Hill v. PeopleSoft USA, Inc., 412 F.3d 540 (4th Cir. 2005)). Further, “‘the presumption in favor of arbitration does not apply to questions of an arbitration provision's validity, rather than its scope.'” Id. at 593 (quoting Noohi v. Toll Brothers, Inc., 708 F.3d 599, 611 n.6 (4th Cir. 2013)). “Courts apply ‘ordinary state-law principles that govern the formation of contracts when assessing whether the parties agreed to arbitrate a matter.'” Galloway v. Santander Consumer USA, Inc., No. CCB-13-3240, 2014 WL 4384641, at *2 (D. Md. Sept. 3, 2014) (quoting Noohi, 708 F.3d at 607 (internal quotation marks and citations omitted)). Additionally, “‘generally applicable contract defenses, such as fraud, duress, [and] unconscionability, may be applied to invalidate' the arbitration policy.” Mould v. NJG Food Serv. Inc., 986 F.Supp.2d 674, 678 (D. Md. 2013) (quoting Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996)). Owen insists that the Arbitration Provision is not a valid contract and, in any event, is unconscionable. Pl.'s Opp'n 4, 8.

         Validity

         A contract exists under Maryland law[3] where there is “‘mutual assent (offer and acceptance), an agreement definite in its terms, and sufficient consideration.'” Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769 (4th Cir. 2013) (quoting CTI/DC, Inc. v. Selective Ins. Co. of Am., 392 F.3d 114, 123 (4th Cir. 2004)). Thus, “[a]s with any contract, the arbitration provision must be supported by adequate consideration in order to be valid and enforceable.” Caire, 982 F.Supp.2d at 591; see Raglani v. Ripken Prof'l Baseball, 939 F.Supp.2d 517, 522 (D. Md. 2013) (“Arbitration agreements, like all contracts, ‘ordinarily require consideration.'” (quoting Cheek v. United Healthcare of the Mid-Atlantic, Inc., 835 A.2d 656, 661 (Md. 2003))). Significantly, the “arbitration agreement must, within its four corners, contain adequate consideration, ” as “courts are not permitted, when assessing the enforceability of an arbitration agreement, ‘to go beyond the confines of the arbitration agreement itself and into an analysis of the validity of the larger contract.'” Id. (quoting Cheek, 835 A.2d at 664).

         The Arbitration Provision at issue provides:

In the event of any dispute or claim between Salesperson and Broker . . ., but excluding any dispute which Broker is authorized to resolve pursuant to any other provision contained in this or any other contract with Broker (including but not limited to paragraph 11, above) or Broker's General Rules & Policies (including but not limited to Section 10.11), Salesperson and Broker jointly agree to submit all such disputes or claims to confidential binding arbitration and waive any right to a jury trial. The claims and disputes subject to arbitration include all claims arising from or related to Salesperson's employment or the termination of Salesperson's employment, including but not limited to, claims for wages or other compensation due; claims for breach of any contract or covenant (express or implied); tort claims; claims for discrimination (including, but not limited to, race, sex, religion, national origin, age, marital status, or medical condition or disability); claims for benefits (except where an employee benefit or pension plan specifies that its claims procedure shall culminate in an arbitration procedure different from this one); and claims for violations of any federal, state, or governmental law, statute, regulation, or ordinance. . . .

         Broker-Salesperson Contract ¶ 18 (emphasis added). As Owen sees it, the Arbitration Provision, in the language italicized above, “reserves to CBRE so many exceptions to the ostensible joint commitment to arbitrate disputes as to render CBRE's promise illusory and Owen's obligation one-sided, ” and a result, it lacks consideration and simply is not an enforceable agreement to arbitrate. Pl.'s Opp'n 4. CBRE counters:

Careful examination of this provision demonstrates that Paragraph 11 does not serve to negate the consideration that is clearly provided through the arbitration clause itself. Rather, through Paragraph 11, Defendant merely reserved unto itself discretion concerning how to resolve potential disputes between Plaintiff and third parties, whether such involved another broker or another Salesperson. Additionally, pursuant to Policy 10.5 section G of the Broker's General Rules & Policies, Defendant reserved discretion to have sole and exclusive jurisdiction to resolve commission-based disputes, which is fully consistent with the aforementioned provision concerning the discretion of how to resolve disputes between Plaintiff and third parties.
In other words, Defendant and Plaintiff mutually agreed to arbitrate all claims between Defendant and Plaintiff, with the exception of any disputes between Plaintiff and any ...

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