United States District Court, S.D. Alabama, Southern Division
FAIRHOPE PIGGLY WIGGLY-INC., and THOMAS EUGENE CAIN, Plaintiffs,
PS 2 LED, INC., a Texas corporation, and PINNACLE LED SOLUTIONS, LLC, Defendants.
K. DuBOSE CHIEF UNITED STATES DISTRICT JUDGE.
matter is before the Court on Plaintiffs' First Amended
Complaint (Doc. 22); Defendants' motion to compel
arbitration (Doc. 5), Plaintiffs' response (Doc. 8) and
Defendants' Reply (Doc. 9); and related responses to
Court Orders (Docs. 13-15, 18, 20, 21).
this case concerns a dispute regarding an LED lighting
project at Plaintiffs' Fairhope grocery
store. (Doc. 22). That dispute, however, is
secondary to the dispute over whether the parties are
contractually bound to resolve their dispute in arbitration
-- the basis for Plaintiffs' declaratory judgment claim
(First Cause of Action). (Doc. 22 at 4 at ¶¶20-24).
November 2015, Plaintiff Thomas Eugene Cain (Cain),
behalf of “Piggly Wiggly Spanish Fort, Inc.”
(Spanish Fort Piggly Wiggly), contracted with “Pinnacle
Solutions” to purchase and install LED lighting
fixtures at its retail grocery store in Spanish Fort, Alabama
via the “Turnkey Agreement for Piggly Wiggly Spanish
Fort” (the November 2015 contract). (Doc. 5-1 at 2-14).
The November 2015 contract chooses the law of the State of
Texas, provides for arbitration, defines the buyer as
“Piggly Wiggly Spanish Fort, Inc., ” defines what
an “Order” means, and provides for
“additional worksites.” (Doc. 5-1 at ¶2.5,
2.10, 5.2, 10.1).
March 24, 2016, Plaintiff Cain executed a Letter of
Intent/Acceptance Agreement (March 2016 contract) on behalf
of “Cain's Grocery” authorizing
“Pinnacle Solutions” to purchase and install LED
lights for the Fairhope Alabama Piggly Wiggly grocery store
(Fairhope Piggly Wiggly). (Doc. 5-1 at 16). On August 17, 2016,
Pinnacle Solutions issued a final invoice (the 2016 Invoice)
to Plaintiffs, and Plaintiff Cain paid $136, 231.02, leaving
a balance of $11, 800.77. (Doc. 5-1 at 25). The 2016 Invoice
incorporates Pinnacle's Purchase Agreement (which chooses
the law of the State of Texas and provides for arbitration).
(Doc. 5-1 at 22-23).
November 22, 2016, Defendant PS2 LED, Inc. filed an
arbitration demand against Plaintiff Fairhope Piggly Wiggly
before the American Arbitration Association (AAA) for breach
of contract and unjust enrichment. An arbitrator was
appointed and the parties were scheduled to have a
preliminary hearing conference with the arbitrator, but
Plaintiffs disputed the matter is subject to arbitration and
raised an objection to the proceeding.
December 15, 2016, Plaintiffs filed a five (5) count
complaint against “Defendant PS2 LED, Inc. d/b/a
Pinnacle LED Solutions, LLC” in Baldwin County Circuit
Court, Alabama (05-CV-2016-901424.00), seeking declaratory
and equitable relief and damages for breach of contract and
fraud stemming from its performance with regard to the
Fairhope Piggly Wiggly 2016 contract. Said defendant removed
the case to this Court on January 17, 2017, and thereafter
filed the present motion to compel arbitration. (Docs. 1, 5).
On March 21, 2017, Plaintiffs filed an amended complaint -
specifying two (2) separate defendants PS2 LED, Inc. and
Pinnacle LED Solutions, LLC - requesting a declaratory
judgment on the issue of arbitration, and alleging breach of
contract, fraud in the inducement, fraudulent intentional
misrepresentation of material facts and fraudulent
suppression of material facts. (Docs. 17, 22). No objections
to the amended complaint were filed such that it is the
operative complaint. (Doc. 22).
Federal Arbitration Act (“FAA”), 9
U.S.C.A. § 1 et seq., expresses the strong
national preference for arbitration of disputes, and must be
enforced whenever possible. Green Tree-Financial Corp. of
Ala. v. Randolph, 531 U.S. 79 (2000)). A motion to
compel arbitration is assessed by determining: 1) whether the
parties agreed to arbitrate (i.e, whether there is a
valid agreement to arbitrate between the parties and whether
the dispute falls within the scope of that agreement); and 2)
whether any legal constraints foreclose arbitration of the
claims. Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614, 626 and 628
(1985). However, “[i]f the making of the arbitration
agreement or the failure, neglect, or refusal to perform the
same be in issue, the court shall proceed summarily to the
trial thereof. If no jury trial be demanded by the party
alleged to be in default...the court shall hear and determine
such issue. Where such an issue is raised, the party alleged
to be in default may... demand a jury trial of such
issue....” 9 U.S.C. § 4. See, e.g.,
Magnolia Capital Advisors, Inc. v. Bear Stearns &
Co., 272 Fed.Appx. 782, 785-786 (11th Cir.
2008) (“a district court's order to arbitrate a
contested agreement without benefit of trial is ‘in
effect a summary disposition of the issue of whether or not
there ha[s] been a meeting of the minds on the agreement to
arbitrate, ' …..'[o]nly when there is no
genuine issue of fact concerning the formation of the
agreement should the court decide as a matter of law that the
parties did or did not enter into such an
agreement'”); Prescott v. Northlake Christian
Sch., 141 Fed.Appx. 263, 268-269 (5th Cir.
2005) (a jury trial may be used to resolve factual issues
surrounding the making of an arbitration agreement and
applies in proceedings to compel arbitration); Duge v.
Sears, Roebuck, 2016 WL 5376233, *7 (W.D. Tex. Sept. 26,
2016) (“the Court reiterates that the relevant question
here is whether Plaintiff agreed to arbitrate his claims
against Defendant…..Facts put forward by Plaintiff,
including that Plaintiff denied that there was an arbitration
agreement….weigh in favor of Plaintiff. Weighing this
competing evidence, however, is to be left for trial.
See 9 U.S.C. § 4”). Cf.
Bazemore v. Jefferson Captial Sys., LLC, 827 F.3d
1325, 1334 (11th Cir. 2016) (when a
“defendant offered no competent evidence to demonstrate
the existence of a genuine issue of material fact concerning
the existence of an arbitration agreement, its motion to
compel arbitration must be denied as a matter of law without
the need for a trial”).
case, there exist material factual disputes on whether the
parties at issue agreed to arbitrate disputes arising from
the installation of LED lighting in the Piggly Wiggly
Fairhope. Namely, the intentions of the parties are in
dispute (including but not limited to, e.g., whether
the Fairhope Piggly Wiggly lighting project was anticipated
as an “additional worksite” per the November 2015
Spanish Fort contract), and must be determined by a
factfinder, not as a matter of law.
it is ORDERED that Defendants' motion to compel
arbitration (Doc. 5) is DENIED at this time. It is further
ORDERED that because there is a genuine dispute of material
fact over the existence of an agreement to arbitrate among
the parties, trial on this issue is warranted pursuant to 9
U.S.C. § 4, with the following schedule:
This case is set for a Pretrial Conference on Plaintiffs'
declaratory judgment claim (“First Cause of Action:
Complaint for Declaratory Judgment”) on June 6, 2017 at
11:00 a.m. in the Chambers of the undersigned.
This this case is set for a non-jury trial on Plaintiffs'
declaratory judgment claim (“First Cause of Action:
Complaint for Declaratory Judgment”) from June 27-28,
2017, unless the parties demand a jury trial before May 15,
2017, in which case the jury ...