United States District Court, E.D. Louisiana
ORDER AND REASONS
the Court is Defendants' “Motion to Stay
Proceedings Pending Arbitration.” Rec. Doc. 11.
Plaintiffs timely filed an opposition memorandum. Rec. Doc.
14. Defendants then requested (Rec. Doc. 15), and were
granted (Rec. Doc. 16), leave to file a reply memorandum
(Rec. Doc. 17). For the reasons discussed below, IT IS
ORDERED that the motion (Rec. Doc. 11) is GRANTED.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
case arises out of the July 12, 2016 sale of a motorhome, a
2017 Thor Synergy assembled by Defendant Thor Motor Coach,
Inc. (“Thor”), from Defendant Dixie Motors, LLC
(“Dixie Motors”) to Michael and Betsy Wilhelm
(“Plaintiffs”). Rec. Doc. 1 at ¶¶ 7-8.
After purchasing the motorhome, Plaintiffs noticed several
minor defects, including, for example, excessive air noise
from the cabin door, a torn seal, a twisted track on a
drawer, a leaky bathroom faucet, a missing driver's seat
adjustment knob, and loose hardware. Id. at ¶
14. Plaintiffs returned the motorhome to various authorized
dealers for repairs “on numerous occasions, ” but
the defects remained. Id. at ¶ 15. Plaintiffs
informed Defendants of the defects and requested a rescission
of the sale. Id. at ¶ 17. When Defendants
refused, Plaintiffs filed the instant suit on February 9,
2017, alleging violations of Louisiana redhibition laws (La.
Civ. Code Ann. art. 2520), violations of the Magnuson-Moss
Warranty Act (15 U.S.C. §§ 2301-12), and negligent
repair, and requesting damages, rescission, and
attorney's fees and costs. Id. at ¶¶
THE PARTIES' CONTENTIONS
allege that Plaintiffs entered into a written arbitration
agreement when they purchased the motorhome. Rec. Doc. 11-2
respond that the arbitration agreement (1) is invalid,
because it was not signed by a representative of either
Defendant; (2) is a violation of the Louisiana Unfair Trade
Practices Act (“LUTPA”); and/or (3) does not
cover claims asserted against Thor, which was not a party to
the agreement. Rec. Doc. 14 at 1.
LAW AND ANALYSIS
is favored in the law.” Grigson v. Creative Artists
Agency, L.L.C., 210 F.3d 524, 526 (5th Cir. 2000)
(citing Moses H. Cone Mem'l Hosp. v. Mercury Constr.
Corp., 460 U.S. 1, 24-25 (1983)). Section 2 of the
Federal Arbitration Act (“FAA”) provides that
“[a] written provision in any . . . contract evidencing
a transaction involving commerce to settle by arbitration a
controversy thereafter arising out of such contract or
transaction . . . shall be valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in
equity for the revocation of any contract.” 9 U.S.C.
to the courts, § 2 “is a congressional declaration
of a liberal federal policy favoring arbitration agreements,
notwithstanding any state substantive or procedural policies
to the contrary.” Moses H. Cone Mem'l
Hosp., 460 U.S. at 24 (citing § 2). It was
“Congress's clear intent . . . to move the parties
to an arbitrable dispute out of court and into arbitration as
quickly and easily as possible.” Id. at 22.
Essentially, the FAA “establishes that, as a matter of
federal law, any doubts concerning the scope of arbitrable
issues should be resolved in favor of arbitration . . .
.” Id. at 24-25.
“where the contract contains an arbitration clause,
there is a presumption of arbitrability.” Tittle v.
Enron Corp., 463 F.3d 410, 418 (5th Cir. 2006) (quoting
AT&T Techs., Inc. v. Commc'ns Workers of
Am., 475 U.S. 643, 650 (1986)) (citing Primerica
Life Ins. Co. v. Brown, 304 F.3d 469, 471 (5th Cir.
2002) (noting that any doubts regarding arbitrability should
be resolved in favor of arbitration) (citing Southland
Corp. v. Keating, 465 U.S. 1, 10 (1984))). Nonetheless,
§ 2 contains a savings clause that provides that an
agreement to arbitrate is “enforceable, save upon such
grounds as exist at law or in equity for the revocation of
any contract.” § 2 (emphasis added). Accordingly,
to determine if the parties agreed to arbitrate, the court
should consider “(1) whether a valid agreement to
arbitrate between the parties exist; and (2) whether the
dispute in question falls within the scope of that
arbitration agreement.” Pennzoil Expl. & Prod.
Co. v. Ramco Energy Ltd., 139 F.3d 1061, 1065 (5th Cir.
1998) (citing Webb v. Investacorp, Inc., 89 F.3d
252, 258 (5th Cir. 1996); In re Hornbeck Offshore (1984)
Corp., 981 F.2d 752, 754 (5th Cir. 1993); Midwest
Mech. Contractors, Inc. v. Commonwealth Constr. Co., 801
F.2d 748, 750 (5th Cir. 1986)).
the first inquiry, courts “apply ‘ordinary
contract principles.'” Will-Drill Res., Inc. v.
Samson Res. Co., 352 F.3d 211, 214 (5th Cir. 2003)
(quoting Fleetwood Enters., Inc. v. Gaskamp, 280
F.3d 1069, 1073, opinion supplemented on denial of
reh'g, , 303 F.3d 570 (5th Cir. 2002)); see also
Webb, 89 F.3d at 258. Under Louisiana law, a valid
contract requires capacity, consent, a lawful cause, and a
valid object. Granger v. Christus Health Ctr. La.,
12-1892, p. 33 (La. 6/28/13); 144 So.3d 736, 760-61 (internal
citations omitted); see also La. Civ. Code ann.
arts. 1918, 1927, 1966, 1971. Consent is “established
through offer and acceptance, ” which may generally
“be made orally, in writing, or by action or inaction
that under the circumstances is clearly indicative of
consent.” La. Civ. Code ann. art. 1927. Further,
“it is the burden of the party seeking to enforce a
contract to show the contract exists.” FIA Card
Servs., N.A. v. Weaver, 10-1372, p. 16 (La. 3/15/11); 62
So.3d 709, 719 (citing La. Civ. Code ann. Art. 1831;
Kosmala v. Paul, 569 So.2d 158, 162 (La.App. 1 Cir.
1990), writ denied, 572 So.2d 91 (La. 1991)
(“The party seeking to enforce arbitration provisions
has the burden of showing the existence of a valid contract
to arbitrate”) (citing Ciaccio v. Cazayoux,
519 So.2d 799, 800 (La.App. 1 Cir. 1987))).
the second inquiry, “the Fifth Circuit distinguishes
between broad and narrow arbitration clauses.”
Broussard v. First Tower Loan, LLC, 150
F.Supp.3d 709, 724 (E.D. La. 2015), as modified
on denial of reconsideration, No. 15-1161, 2016 WL
879995 (E.D. La. Mar. 8, 2016).
If the clause is broad, the action should be stayed and the
arbitrators permitted to decide whether the dispute falls
within the clause. On the other hand, if the clause is
narrow, the matter should not be referred to arbitration or
the action stayed, unless ...