United States District Court, W.D. Kentucky, Louisville Division
HAIER U.S. APPLIANCE SOLUTIONS, INC. d/b/a GE APPLIANCES, as successor-in-interest to the appliance business unit of GENERAL ELECTRIC COMPANY PLAINTIFF
MENARD, INC. d/b/a MENARD's DEFENDANT
MEMORANDUM OPINION AND ORDER
N. STIVERS, JUDGE UNITED STATES DISTRICT COURT
matter is before the Court on Defendant's Motion to
Dismiss, or in the Alternative, Motion to Compel Arbitration
(DN 7). The motion is ripe for adjudication. For the reasons
outlined below, the motion is GRANTED.
STATEMENT OF FACTS AND CLAIMS
Haier U.S. Appliance Solutions d/b/a GE Appliances
(“GE”) manufactures appliances and provides
appliance-related services. (Compl. ¶ 2, DN 1).
Defendant Menard, Inc. d/b/a Menard's
(“Menard's”) operates a chain of home
improvement retail stores. (Compl. ¶ 3). The parties
entered into two separate agreements relating to Menard's
sale of GE's appliances in its stores. (Pl.'s Resp.
Def.'s Mot. Dismiss Ex. 2, at 2, 5, DN 15-2; Pl.'s
Resp. Def.'s Mot. Dismiss Ex. 4, DN 15-4).
filed this action alleging various claims, inter
alia, breach of contract and unjust enrichment relating
to offsets and credits that Menard's asserts it is
entitled to withhold from payments due to GE. (Compl.
¶¶ 17-43, DN 1). In the present motion,
Menard's argues that the parties are required to
arbitrate this dispute. (Def.'s Mem. Supp. Mot. Dismiss
2-3, DN 7-1).
Court has original jurisdiction of “all civil actions
where the matter in controversy exceeds the sum or value of
$75, 000, exclusive of interest and costs, as is between . .
. citizens of different States . . . .” 28 U.S.C.
§ 1332(a)(1). Both parties are residents of different
states, and the amount in controversy exceeds the minimum
jurisdictional limit of this Court. (Compl ¶¶ 2-4).
STANDARD OF REVIEW
ruling on a motion to compel arbitration, courts apply the
summary judgment standard in Fed.R.Civ.P. 56(c). See
Arnold v. Rent-a-Center, Inc., No. 11-18-JBC, 2011 WL
1810145, at *2 (E.D. Ky. May 12, 2011) (“This court
will treat the motion to compel arbitration as one for
summary judgment . . . .”); Weddle Enters., Inc. v.
Treviicos-Soletanche, J.V., No. 1:14CV-00061-JHM, 2014
WL 5242904, at *2 (W.D. Ky. Oct. 15, 2014) (“A motion
to dismiss based on the existence of a valid arbitration
agreement is not evaluated under the usual Fed.R.Civ.P.
12(b)(6) standard. Instead, courts apply the standard
applicable to motions for summary judgment.” (citations
omitted)). “In order to show that the validity of the
agreement is in issue, the party opposing arbitration must
show a genuine issue of material fact as to the validity of
the agreement to arbitrate, a showing that mirrors the
summary judgment standard.” Great Earth Cos. v.
Simons, 288 F.3d 878, 889 (6th Cir. 2002) (internal
quotation marks omitted).
the Federal Arbitration Act (“FAA”), 9 U.S.C.
§§ 1-16, a written agreement to arbitrate involving
a dispute arising from a contract that affects interstate
commerce “shall be valid, irrevocable, and enforceable,
save upon such grounds as exist at law or in equity for the
revocation of any contract.” Stout v. J.D.
Byrider, 228 F.3d 709, 714 (6th Cir. 2000) (quoting 9
U.S.C. § 2). “The FAA expresses a strong public
policy favoring arbitration of a wide class of
disputes.” Cooper v. MRM, Inc., 367 F.3d 493,
498 (6th Cir. 2004). Consequently, “arbitration
agreements must be read liberally to effect their
purpose” with any doubts regarding arbitrability to be
resolved in favor of arbitration. Moore v. Ferrellgas,
Inc., 533 F.Supp.2d 740, 745 (W.D. Mich. 2008) (citing
Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79,
89-91 (2000); Moses H. Cone Mem'l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 24 (1983)); see also
Fazio v. Lehman Bros., Inc., 340 F.3d 386, 392 (6th Cir.
2003) (citation omitted). Furthermore, the FAA “leaves
no place for the exercise of discretion by a district court,
but instead mandates that district courts shall
direct the parties to proceed to arbitration on issues as to
which an arbitration agreement has been signed . . . absent a
ground for revocation of the contractual agreement.”
Dean Witter Reynolds, Inc. v. Byrd, 470
U.S. 213, 218 (1985).
the Court's perspective, this case is atypical because
both parties-sophisticated businesses-are in agreement that
they are bound to arbitrate this dispute. (Def.'s Mem.
Supp. Mot. Dismiss 2-3, DN 7-1; Pl.'s Resp. Def. Mot.
Dismiss 1, DN 15). In invoking arbitration between the
parties, Menard's relies on an arbitration provision
contained in a document entitled “Conditions of
Order” that was executed on July 15, 2009. (Def.'s
Mem. Supp. Mot. Dismiss 4, DN 7; Def.'s Mot. Dismiss Ex.
A, DN 7-2). As GE has noted, however, that provision is part
of a separate defect agreement (“Defect
Agreement”) between the parties relating to a
“parts account.” (Warren Aff. ¶ 8, DN 15-3;
Pl.'s Resp. Def.'s Mot. Dismiss Ex. 4). The Defect
Agreement incorporates the Conditions of Offer, which
contains an arbitration provision that provides for the
arbitration of dispute pursuant to the Commercial Arbitration
Rules of the American Arbitration Association. (Def.'s
Mot. Dismiss Ex. A, at 1, DN 7-2).
maintains that the salient document is the Vendor Compliance
Program Letter (“VCPL”), which was executed by
representatives of both parties on October 31, 2011.
(Pl.'s Resp. Def.'s Mot. Dismiss Ex. 2, at 2, 5). By
its terms, the VCPL incorporates the GE Dealer Handbook,
which contains a provision requiring the arbitration of
disputes in accordance with the Center for Public Resources
Rules for Non-Administered Arbitration of Business Disputes
and directing that the location for the arbitration will be
in Louisville, Kentucky. (Pl.'s Resp. Def.'s Mot.
Dismiss Ex. 2, at 2; Pl.'s Resp. Def.'s Mot. Dismiss
Ex. 1, at 7-8).
on the Court's review of the Complaint, the Court is
unable to determine upon which agreement GE has asserted its
claims. In fact, the Complaint acknowledges that the parties
entered into more than one agreement. (Compl. ¶ 7). More
importantly, however, neither party has challenged the
validity of those arbitration provisions, which is a gateway
issue of ...