Opinion
Civil Action No. 02-2893, Section "A" (5)
December 16, 2002
ORDER AND REASONS
Before the Court is a Motion for Summary Judgment (Rec. Doc. 6) filed by plaintiff Primerica Financial Services, Inc. ("Primerica" or "PFS"). Defendant, Duque DiUrales, opposes the motion. The motion, set for hearing on November 20, 2002, is before the Court on the briefs without oral argument. For the reasons that follow the motion is GRANTED.
Background
Defendant filed suit in state court against his former employer, Primerica, and its parent corporation Citigroup. He sought to represent a class of possibly thousands of Primerica employees. In his state court proceeding, DiUrales alleged that his employer engaged in a pattern and practice of racial discrimination against him and other employees. He claimed that this discrimination ultimately resulted in his wrongful termination after more than twenty years of employment. Primerica removed that suit to this Court as Civil Action 02-2906 (Section A), DuQue DiUrales, et al. v. Citigroup, et al. A motion to remand is currently pending in that action.
Primerica, the defendant employer from Civil Action 02-2906, filed the instant suit seeking to compel arbitration of Plaintiff's claims pursuant to 9 U.S.C. § 4, the Federal Arbitration Act. Primerica argues that DiUrales entered into an agreement to arbitrate any claims he has against Primerica as well as its parent Citgroup. Consequently, Primerica moves for an order staying the underlying case, Civil Action 02-2906, so that Plaintiff's claims can proceed to arbitration.
In opposition, Defendant argues that Plaintiff can produce no written agreement to arbitrate. Should such an agreement exist, Defendant argues that Plaintiff has nevertheless waived the right to compel arbitration. Finally, Defendant is seeking to represent a class of thousands and the arbitration agreement does not contemplate class action proceedings.
Discussion
The first step in evaluating a motion to compel arbitration is to determine whether the parties agreed to arbitrate. Fleetwood Enters., Inc. v. Gaskamp, 280 F.3d 1069, 1073 (5th Cir. 2002). This determination depends on two considerations: (1) whether there is a valid agreement to arbitrate between the parties, and (2) whether the dispute in question falls within the scope of the arbitration agreement. Id. (citing Webb v. Investacorp, 89 F.3d 252, 258 (5th Cir. 1996)). Ambiguities or uncertainties as to whether a particular dispute falls within the scope of an arbitration agreement are resolved in favor of arbitration. Id. (citing Volt Info Sciences, Inc. v. Board of Trustees, 489 U.S. 468, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989)).
Ordinary contract principles apply to the determination of whether a valid agreement to arbitrate exists between the parties. Id. (citingDaisy Mfg. Co. v. NCR Corp., 29 F.3d 389 (8th Cir. 1984)). Thus, the strong federal policy favoring arbitration is triggered only after the Court determines that a binding arbitration agreement exists. See id.
The first issue for the Court's consideration is whether a valid arbitration agreement binds DiUrales to arbitrate his claims. Although DiUrales asserts that Primerica cannot produce any document "executed by Named Plaintiff, Duque DiUrales," agreeing to arbitration, Primerica has submitted a Basic Agreement executed by Ural T. Hutchinson, Jr. on December 15, 1992. (Exhibit B to Rec. Doc. 1). The record shows that Plaintiff legally changed his name in April 1995 from Ural Hutchinson, Jr. to his current name of Duque DiUrales. (Exhibit B to Plaintiff's motion). Thus, his assertion that no signed written agreement exists is meritless.
The Basic Agreement, which Plaintiff executed, provides in pertinent part:
[A]ny dispute between you and a PFS company, between you and a PFS Company affiliate (or any of their past or present officers, directors or employees) . . . will be settled solely through good faith negotiation . . . or, if that fails, binding arbitration.
Basic Agreement at ¶ 15(a).
The agreement further defines a "dispute" as
[A]ny type of dispute in any way relate to your relationship with a PFS Company that under law may be submitted by agreement to binding arbitration, including allegations of breach of contract, personal or business injury or property damage, fraud and violation of federal, state or local statues, rules, or regulations . . . .Id.
The foregoing demonstrates that DiUrales entered an arbitration agreement and that it is broad enough to encompass his claims. The agreement broadly defines "dispute". Thus, the claims he brings in this lawsuit are subject to arbitration.
Defendant's assertion that Primerica waived its right to arbitrate is unpersuasive in light of clear Fifth Circuit jurisprudence. Although the Fifth Circuit recognizes that the right to compel arbitration is waivable, waiver of arbitration is not a favored finding, and there is a presumption against it. Williams v. Cigna Financial Advisors, Inc., 56 F.3d 656, 661 (5th Cir. 1995) (citing Miller Brewing Co. v. Fort Worth Distrib. Co., 781 F.2d 494 (5th Cir. 1986)). The party claiming waiver has a heavy burden, but waiver will be found where the party seeking arbitration substantially invokes the judicial process to the detriment of the other party. Frye v. Paine, Webber, Jackson Curtis, Inc., 877 F.2d 396, 398 (5th Cir. 1989) (citing Price v. Drexel Burnham Lambert, Inc., 791 F.2d 1156 (5th Cir. 1986)).
In the instant case, minimal activity has taken place in the underlying civil action. The only real activity in the case was its removal by Primerica and the motion to remand filed by DiUrales. This, and participation in prior settlement negotiations, for which Primerica funded the cost, falls far short of the level of activity present in other cases in which the Fifth Circuit refused to find waiver. See, e.g., Tenneco Resins, Inc. v. Davy International, 770 F.2d 416 (5th Cir. 1985) (finding no waiver where defendant delayed eight months and participated in discovery). In contrast, in cases where waiver is found the facts are far more egregious. See, e.g., Frye, 877 F.2d at 397 (finding waiver where defendant waited two and a half years to seek arbitration, participated in extensive discovery, and participated in a trial).
Finally, Plaintiff's desire to pursue this matter as a representative of a class of thousands has no legal effect on the binding arbitration agreement he signed. See, e.g., Vigil v. Sears National Bank, 2002 WL 987412 (E.D. La. 5/10/02).
Accordingly;
IT IS ORDERED that the Motion for Summary Judgment (Rec. Doc. 6) filed by plaintiff Primerica Financial Services, Inc. should be and is hereby GRANTED. Judgment in this matter shall be entered in favor of Plaintiff.
Civil Action 02-2906, DiUrales v. Citigroup, shall be stayed pending arbitration pursuant to a separate order of the Court issued in that case.