United States District Court, E.D. Kentucky, Central Division, Lexington
MEMORANDUM OPINION AND ORDER
M. Hood Senior U.S. District Judge.
matter is before the Court on the Defendant Lowe's Home
Centers, LLC's (“Lowe's”) motion to
dismiss or to compel arbitration. [DE 4]. The instant action
is a contractual dispute between Plaintiff, I3 Triple Crown
Holdings, LLC (“Triple Crown”) and Lowe's
relating to service contracts whereby Lowe's would
provide repair, demolition, and replacement services to
Triple Crown on two Triple Crown-owned apartment properties
in Fayette County, Kentucky. [DE 1-1].
Lowe's claims that the subject contracts provided that
any disputes between Lowe's and Triple Crown be resolved
by binding arbitration. [DE 4]. Accordingly, Lowe's now
moves to dismiss or to compel arbitration or otherwise stay
these proceedings pending the resolution of arbitration
pursuant to the Federal Arbitration Act, 9 U.S.C.
§§ 1-16. [Id.]. Triple Crown has responded
in opposition to the motion to dismiss [DE 5], and Lowes has
replied in support of its motion. [DE 7]. As a result, this
matter is ripe for review and consideration. For the reasons
that follow, Lowes's motion [DE 4] is
Procedural and Factual Background
Crown owns two apartment complex properties located at 3501
(“3501 location”) and 3550 (“3550
location”) Pimlico Parkway, Lexington, Kentucky. [DE
1-1 at 2, PageID #7, ¶¶ 5-6]. Between November 2016
and August 2017, Triple Crown entered into at least four
Services Solutions Installed Sales Contracts (“the
contracts”) with Lowe's for the repair of ninety
apartment balconies at the 3501 location and the demolition
and replacement of sixty-seven apartment balconies at the
3550 location, respectively. [Id. at 3, PageID #8,
¶¶ 8-9; Id. at 16-7, PageID #19-22].
Crown attached the first page of these contracts to its
Complaint. [DE 1-1 at 16-7, PageID #19-22]. Those contracts
are form-printed and numbered as follows: 1057679, 0939030,
0939017, 0939017. [Id.]. Although Triple Crown only
attached the first page of the contracts to the complaint,
each is, in fact, three pages long. [DE 4-2 at 17-9, PageID
#56-8; DE 4-3 at 2-4, PageID #60-2; DE 4-3 at 5-7, PageID
#63-5; DE at 4-3 at 8-10, PageID #66-8].
the first page of each of the subject contracts provides a
binding arbitration provision. [DE 1-1 at 16-7, PageID
#19-22]. The arbitration provision, which is two paragraphs
above the signature line states:
This Contract provides that all claims by Customer or
Lowe's will be resolved by BINDING ARBITRATION. Customer
and Lowe's GIVE UP THE RIGHT TO GO TO COURT to enforce
this Contract (EXCEPT for matters that may be taken to SMALL
CLAIMS COURT). Lowe's and Customer's rights will be
determined by a NEUTRAL ARBITRATOR and NOT a judge or jury.
Lowe's and Customer are entitled to a FAIR HEARING. But
the arbitration procedures are SIMPLER and MORE LIMITED THAN
RULES APPLICABLE IN COURT. Arbitrator decisions are as
enforceable as any court order and are subject to VERY
LIMITED REVIEW BY A COURT...
[DE 1-1 at 15-7, PageID #20-2].
arbitration provision goes on to provide “...FOR MORE
DETAILS: Review the section titled ARBITRATION AGREEMENT,
WAIVER OF JURY TRIAL AND WAIVER OF CLASS ACTION ADJUDICATION
found in the Terms and Conditions of this Contract.”
referenced section, titled “ARBITRATION AGREEMENT,
WAIVER OF JURY TRIAL AND WAIVER OF CLASS ACTION ADJUDICATION
found in the Terms and Conditions of this Contract” is
located on page 3 of the subject contracts. [DE 4-2 at 19,
PageID #58; DE 4-3 at 4, PageID #62; DE 4-3 at 7, PageID #65;
DE at 4-3 at 10, PageID #68]. Notably, immediately below the
arbitration provision but above the signature line on page 1,
the contract also provides:
DO NOT SIGN THIS CONTRACT UNTIL COMPLETE AND YOU HAVE
READ THE TERMS AND CONDITIONS CONTAINED ON ALL PAGES OF THIS
CONTRACT. BY SIGNING BELOW, YOU ARE ACKNOWLEDGING THAT YOU
HAVE READ, UNDERSTAND AND AGREE TO THE TERMS AND CONDITIONS
SET FORTH ON ALL PAGES OF THIS CONTRACT. YOU ARE ENTITLED TO
A COPY OF THIS CONTRACT AT THE TIME OF SIGNATURE.
[DE 1-1 at 15-7, PageID #20-2] (emphasis in original).
this statement, Triple Crown's representative, Yufang
Pang, claims “...at no time was [she] provided nor had
any knowledge of, or received any section or provision of
those contracts entitled ‘Arbitration Agreement, Waiver
of Jury Trial, and Waiver of Class Action Adjudication'
nor Terms and Conditions beyond the first page of each such
contract... .” [DE 5 at 7-8, PageID #76-7]. Regardless,
there is no question that Ms. Pang executed the contracts.
[Id.; see also DE 4-2 at 17, PageID #56; DE
4-3 at 2, PageID #60; DE 4-3 at 5, PageID #63; DE at 4-3 at
8, PageID #66].
Triple Crown became dissatisfied with the performance of the
contracts, stating they were “not performed in
accordance with the inducements, promises, and
representations of Lowe's and under
‘start-to-finish' project management, completed in
a timely fashion, in a good and workmanlike manner, and in
accordance with engineering plans, work permits, and all
other applicable national, state, and local building codes
and laws.” [Id. at 4, PageID #9, ¶¶
January 29, 2019, Triple Crown filed the instant action in
Fayette Circuit Court, alleging Lowe's breached the
subject contracts. [Id. at 5-6, PageID #10-1,
¶¶ 19-24]. Triple Crown further alleges that
Lowe's breached its express warranties on the subject
contracts, was negligent in its performance of its
contractual obligations, and that Lowe's made false and
deceptive advertisements that induced Triple Crown to enter
into the contracts. [Id. at 6-9, PageID #11-4,
¶¶ 25-44]. Finally, Triple Crown alleges that
Lowe's made negligent misrepresentations to Triple Crown
relating to the contracts, [Id. at 9-10, PageID
#14-5, ¶¶ 45-8], and that Lowe's actions and
conduct caused property damage and losses to both properties.
[Id. at 10, PageID #15, ¶¶ 49-52].
removed the action to this Court, [DE 1], and later filed the
instant motion to dismiss to compel arbitration. [DE 4].
Triple Crown responded in opposition to the motion to dismiss
or to compel arbitration, claiming the arbitration provisions
are procedurally unconscionable and unenforceable. [DE 5].
Appropriate Standard of Review For Motion to Dismiss or to
this Court engaged in a detailed discussion about the
appropriate standard of review when considering a motion to
dismiss or to compel arbitration. See FCCI Ins. Co. v.
Nicholas Cty. Library, No. 5:18-cv-038-JMH,
2019 WL 1234319, at *2-5 (E.D. Ky. Mar. 15, 2019). The Court
explained that motions to dismiss or to compel arbitration
are most appropriately construed as motions to dismiss under
Federal Rule of Civil Procedure 12(b)(6). Id. at 5.
as this Court noted in FCCI, the analysis does not
end where, as here, the parties have submitted matters
outside the pleadings in their briefing on the pending motion
to dismiss. Id. at 5; see also, [DE 4-5,
7]. As a result, the motion to dismiss under Rule 12(b)(6)
must be treated as a motion for summary judgment under Rule
56. See Fed. R. Civ. P. 12(d) (“If, on a
motion under Rule 12(b)(6) . . . matters outside the
pleadings are presented to and not excluded by the court, the
motion must be treated as one for summary judgment under Rule
56.”). This result is supported by analogous cases in
this Court. FCCI Ins. Co., 2019 WL 1234319, at *2-5
(internal citations omitted). As a result, Lowe's motion
to dismiss must be considered as a motion for summary
judgment under Fed.R.Civ.P. 56.
Summary Judgment Standard and Applicable Law
judgment is appropriate only when no genuine dispute exists
as to any material fact and the movant is entitled to
judgment as a matter of law. Fed.R.Civ.P. 56(a). A material
fact is one “that might affect the outcome of the suit
under governing law.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). The moving party has the
burden to show that “there is an absence of evidence to
support the nonmoving party's case.” Celotex
Corp. v. Catrett, 477 U.S. 317, 325 (1986). “A
dispute about a material fact is genuine if the evidence is
such that a reasonable jury could return a verdict for the
nonmoving party.” Smith v. Perkins Bd. of
Educ., 708 F.3d 821, 825 (6th Cir. 2013) (internal
quotations omitted). The Court construes the facts in the
light most favorable to the ...