Opinion
Civil Action No. 02-752 (GK)
June 21, 2002
MEMORANDUM OPINION
This matter is before the Court on Plaintiff's Motion for Summary Judgment and Defendant's Motion to Dismiss. Upon consideration of the motions, oppositions, replies, the motions hearing conducted on May 24, 2002, and the entire record herein, for the reasons stated below, Plaintiff's Motion for Summary Judgment is granted, and Defendant's Motion to Dismiss is denied.
I. BACKGROUND
Plaintiff Sughrue Mion PLLC ("Sughrue"), a District of Columbia law firm has brought this action for a preliminary injunction. Defendant is Thomas Macpeak, a former partner of Sughrue. During his tenure at Sughrue, the terms of Defendant's employment were governed by the Professional Limited Liability Company Operating Agreement ("Operating Agreement").
On October 4, 2001, Defendant resigned from Sughrue. The terms of his resignation are detailed in the Notice of Resignation and Memorandum of Agreement Between Thomas J. Macpeak and Sughrue, Mion, Zinn, Macpeak Seas, PLLC ("Resignation Agreement). The Resignation Agreement provides that any dispute regarding Defendant's compensation shall be submitted to arbitration. See Resignation Agreement ¶ 3(c), Pl. Ex. 2 ("Arbitration Clause").
In January 2002, the parties reached an impasse as to the amount of compensation owed to Defendant pursuant to the Operating Agreement. At that time, Macpeak's counsel suggested to Sughrue's counsel that the parties consider proceeding before a private arbitrator, rather than an American Arbitration Association ("AAA") arbitrator. See Def.'s Mem. in Opp'n to Pl.'s Mot. for J. at 2 ("Def.'s Opp'n"); Cohen Decl. ¶ 4. Macpeak's counsel proposed Judge Richard Levie, a private non-AAA arbitrator, as a potential arbitrator. See Id.; Compl. ¶ 14.
The parties subsequently agreed to proceed with the arbitration before Judge Levie and an arbitration date of April 11, 2002, was scheduled.See Cohen Decl. ¶ 4; Pl. Ex. 3 (Feb. 11, 2002, Email from Barry Cohen to Thomas McCally); Pl. Ex. 4 (Feb. 27, 2002, Email from Barry Cohen to Judge Levie); Pl. Ex. 5 (Feb. 27, 2002, Email from Judge Levie to Barry Cohen and Thomas McCally). During that time, the parties were also engaged in negotiations regarding the terms of the Joint Submission of Dispute to Be Arbitrated ("Joint Arbitration Submission"), which outlines the scope of the issues to be addressed by The arbitrator. When time parties were unable to finalize the terms of the Joint Arbitration Submission by mid-March 2002, Counsel for Macpeak suggested that the arbitration be rescheduled for a later date. See Pl. Ex. 9 (March 12 2002, Email From Barry Cohen to Thomas McCally). The parties thereafter agreed to an arbitration date of June 27, 2002. See Pl. Ex. 10 (March 22, 2002, Email from Judge Levie to Barry Cohen and Thomas McCally).
By the end of March 2002, the parties were still unable to finalize the terms of the Joint Arbitration Submission. On March 22, 2002, Counsel for Macpeak informed Sughrue that Macpeak did not intend to continue with the non-AAA arbitration before Judge Levie, and would instead proceed before an AAA arbitrator. See Pl. Ex. 11 (March 22, 2002, Email from Barry Cohen to Thomas McCally).
On April 22, 2002, Plaintiff filed the instant action for a temporary restraining order and preliminary injunction. Plaintiff seeks an order permanently enjoining Defendant from arbitrating this matter before the AAA and requiring the parties to proceed to arbitration before Judge Levie. On May 3, 2002, the Court granted Plaintiff's Motion for a Temporary Restraining Order, enjoining Macpeak from proceeding before the AAA pending final resolution of the claims asserted in Plaintiff's Complaint.
II. STANDARD OF REVIEW
Under Fed.R.Civ.P. 56, a motion for summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, admissions, and affidavits show that there is no genuine issue of material fact, and that the moving party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
III. ANALYSIS
The parties do not dispute that the Arbitration Clause in the Resignation Agreement is valid, enforceable, and irrevocable. Nor do they contest that the dispute regarding Macpeak's compensation should be submitted to arbitration or that the arbitration shall be conducted pursuant to the expedited rules of the AAA. Rather, the dispute hinges on whether, under the terms of the Arbitration Clause, the arbitration must be held before an AAA arbitrator, or whether a non-AAA arbitrator is permissible.
Defendant advances two arguments in support of his claim that the arbitration must proceed before an AAA arbitrator. First, Macpeak contends that the express terms of the Arbitration Clause require the use of an AAA arbitrator. Second, Defendant argues that the parties never modified the original Arbitration Clause to permit use of a private non-AAA arbitrator. Specifically, Defendant contends that the parties' failure to agree on the terms of the Joint Arbitration Submission constitutes a failure to modify the Arbitration Clause.
A. The Arbitration Clause Does Not Require Arbitration Before the AAA
It is well-established that contractual provisions are to be construed according to their terms. See Zellan v. Cole, 183 F.2d 139 (D.C. Cir. 1950); Mercer Management Consulting, Inc. v. Wilde, 920 F. Supp. 219 (D.D.C. 1996). The relevant provision of the Resignation Agreement provides that [i]n the event of a failure to agree on the amount of such compensation, the parties agree to submit their dispute to a single arbitrator for decision under expedited procedures of the American Arbitration Association." Resignation Agreement ¶ 3(c), Pl. Ex. 2.
The language contained in the Arbitration Clause is unambiguous on its face. It requires only that the arbitration be held by a single arbitrator and that the expedited procedures of the AAA be employed. There is simply no requirement that the arbitrator be affiliated with the AAA. The only restriction the parties imposed regarding the arbitrator is that the dispute be submitted to a "single arbitrator"; they did not choose to require that the dispute be submitted to a single AAA arbitrator." Accordingly, the express terms of the Arbitration Clause do not provide exclusive arbitral jurisdiction to an AAA arbitrator. Accordingly, the express terms of the Arbitration Clause do not provide exclusive arbitral jurisdiction to an AAA arbitrator.
Indeed, the only cases Defendant cites in support of his position are inapposite, see Cole v. Burns Int'l Security Svcs., et al., 105 F.3d 1465 (D.C. Cir. 1997), or actually support Plaintiff's position see PaineWebber, Inc. v. Fowler, 791 F. Supp. 821 (D. Kan. 1992); Wall Street Assoc., L.P. v. Becker Paribas Inc., et al., 27 F.3d 845 (2d Cir. 1994).
In Cole, the parties had explicitly agreed to proceed before an AAA arbitrator and the controversy in that case had nothing to do with whether the dispute should be submitted to a private or AAA arbitrator. Contrary to Defendant's contentions, the mere fact that the Cole court twice mentioned the fact that the parties agreed to arbitrate before the AAA does nothing to advance Defendant's position.
In PainWebber, the court declined to read into the general arbitration clause (which is similar to the Arbitration Clause in this case) a requirement to proceed exclusively before a particular forum. The court reasoned that, "[i]f PaineWebber intended to make the NASD the exclusive forum for arbitrating all claims that might arise . . . it could have drafted an arbitration clause to that effect." PainWebber, 791 F. Supp. at 825. Similarly, as addressed above, Macpeak's failure to include an AAA exclusivity requirement in the Arbitration Clause suggests that he did not intend to make the AAA the only available arbitration forum.
In Wall Street Assoc., the court found that the defendants consented to arbitrate before the AAA because they joined in a motion in which the AAA was one of the fora to which the motion applied. Accordingly, the court inferred intent to arbitrate before the AAA from the defendants' failure to object to any of the fora listed in the motion. As will be addressed below, Macpeak's actions also demonstrate consent to submit the dispute to a private non-AAA arbitrator.
In summary, the Court concludes that the express language of the Arbitration Clause does not provide exclusively for arbitration before an AAA arbitrator.
B. The Parties Agreed To Proceed Before A Private Non-AAA Arbitrator
Not only does the Arbitration Clause permit the parties to proceed before a non-AAA arbitrator, but it is also clear that the parties did in fact agree to proceed before Judge Levie, a private non-AAA arbitrator.
As noted above, as of February 27, 2002, the parties had clearly agreed to submit their dispute to Judge Levie and had scheduled the arbitration date with Judge Levie for the following month. See Pl. Ex. 4 (Feb. 27, 2002, Email from Barry Cohen to Richard Levie and Thomas McCally); Pl. Ex. 5 (Feb. 27, 2002, Email from Judge Levie to Barry Cohen and Thomas McCally). As of March 22, 2002, the parties were obviously still in agreement about their choice of arbitrator because they agreed to reschedule the arbitration before Judge Levie for June 27, 2002. See Pl. Ex. 10 (March 22, 2002, Email from Judge Levie to Barry Cohen and Thomas McCally) Indeed, the parties not only agreed on two different occasions to schedule a date to proceed before Judge Levie, but it was the Defendant who originally suggested that they consider arbitrating their claims before Judge Levie. See Def.'s Opp'n at 2. Accordingly, it is clear from Defendant's actions that he consented to the non-AAA forum.
Defendant does not dispute that the parties agreed to an arbitration date before Judge Levie. Rather, the heart of Defendant's argument is that, because the parties failed to agree on the terms of the Joint Arbitration Submission, they did not modify the terms of the Arbitration Clause. Accordingly, absent modification of the Arbitration Clause, Macpeak contends that the parties are required to proceed before an AAA arbitrator. Defendant's argument is unpersuasive.
First and foremost, as addressed above, the Arbitration Clause permits the parties to submit their dispute to a non-AAA arbitrator. Therefore, the parties did not need to modify the terms of the Arbitration Clause to proceed before Judge Levie. Second, as noted, Macpeak's actions demonstrate that he had consented to the non-AAA forum.
Third and finally, even if a modification to the Arbitration Clause were necessary to permit the parties to proceed before Judge Levie, which it is not, the Joint Arbitration Submission simply could not constitute such a modification. That document is precisely what its name implies, namely a "Joint Submission of Dispute to be Arbitrated." It merely outlines the scope of the issues submitted to arbitration. There is no indication anywhere in the Joint Arbitration Submission That the parties intended it to modify the existing Arbitration Clause. See Def. Exs. E G. Indeed, the document contains a signature line for Judge Levie. Because Judge Levie was not a party to the original Arbitration Clause and Resignation Agreement, he had no authority to modify those provisions, and the parties would not have required his signature on any document intended to modify their contractual obligations.
In summary then, the Court concludes that the express language of the Arbitration Clause permits the parties to submit their dispute to a non-AAA arbitrator. The Court further concludes that the parties did in fact agree to proceed before such a private arbitrator, Judge Levie.
IV. CONCLUSION
For the foregoing reasons, Plaintiff's Motion for Summary Judgment is granted, and Defendant's Motion to Dismiss is denied.