United States District Court, D. Maryland
MEMORANDUM OPINION AND ORDER
W. Grimm United States District Judge.
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. 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.
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).
“‘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.
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).
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 &
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.
contract exists under Maryland law 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).
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. . . .
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 ...