United States District Court, D. Kansas
MEMORANDUM AND ORDER
D. CRABTREE UNITED STATES DISTRICT JUDGE.
matter comes before the court on defendant Cornerstone
Systems, Inc.'s Motion to Dismiss or, in the Alternative,
to Compel Arbitration or, in the Alternative, to Transfer
(Doc. 6). Plaintiff LPF II, LLC has filed a response opposing
the motion, and defendant has filed its Reply.
reasons explained below, the court denies defendant's
motion to compel arbitration based on the current record.
Instead, the court concludes that a summary trial is
necessary to determine whether the Carrier Agreement requires
the parties to this lawsuit to arbitrate their current
disputes with one another. Given that conclusion, the court
denies without prejudice the portion of defendant's
motion seeking dismissal or transfer.
facts recited here are taken from plaintiff's Complaint
(Doc. 1-1) and the Carrier Agreement at issue in this lawsuit
(Doc. 7-1). Although plaintiff does not attach the Carrier
Agreement to its Complaint, the court may consider it because
plaintiff references it in the Complaint. See GFF Corp.
v. Associated Wholesale Grocers, Inc., 130 F.3d 1381,
1384 (10th Cir. 1997) (“[I]f a plaintiff does not
incorporate by reference or attach a document to its
complaint, but the document is referred to in the complaint
and is central to the plaintiff's claim, a defendant may
submit an indisputably authentic copy to the court to be
considered on a motion to dismiss.”); Black &
Veatch Int'l Co. v. Wartsila NSD N. Am., Inc., No.
CIV.A. 97-2556-GTV, 1998 WL 953966, at *2 (D. Kan. Dec. 17,
1998) (deciding a Rule 12(b)(6) motion to dismiss and compel
arbitration where the Complaint referenced the contract
containing the arbitration provision without converting
motion to one seeking summary judgment).
The Carrier Agreement
March 18, 2014, defendant Cornerstone Systems, Inc.
(“Cornerstone”) entered into a Carrier Agreement
with two nonparties-Rail Logistics, L.C. (“Rail
Logistics”) and Rail Logistics/Cold Train, L.C. f/k/a
Cold Train, L.C. (“Cold Train”). Doc. 7-1; Doc.
1-1 at 3 ¶ 10. Cornerstone had served as a Registered
Property Broker under the auspices of the Federal Motor
Carrier Safety Administration. Doc. 7-1 at 1. Rail Logistics
and Cold Train were the carriers. Rail Logistics and Cold
Train each agreed to provide fleet management and other
services to Cornerstone. And Cornerstone agreed to pay Rail
Logistics and Cold Train for those services. Doc. 1-1 at 3
Carrier Agreement contains a “Disputes”
provision. It provides:
In the event of a dispute arising out of this Agreement,
including but not limited to Federal or State statutory
claims, BROKER shall sole right to determine Arbitration or
Litigation. Arbitration proceedings shall be conducted under
the rules of the Transportation Arbitration and Mediation
PLLC (TAM), or Transportation ADR Council, Inc. (ADR), upon
mutual agreement of the Parties, or if no agreement, then at
BROKER's sole discretion. Arbitration or Litigations
proceedings shall be started within eighteen (18) months from
the date of delivery or scheduled date of delivery of the
freight, whichever is later. Upon agreement of the Parties,
arbitration proceedings may be conducted outside of the
administrative control of the TAM or ADR. The decision of the
arbitrators shall be binding and final and the award of the
arbitrator may be entered as judgment in any court of
competent jurisdiction. The rationale and reasoning of the
decision of arbitrator(s) shall be fully explained in a
written opinion. The prevailing party shall be entitled to
recovery of costs, expenses and reasonable attorney fees as
well as those incurred in any action for injunctive relief,
or in the event further legal action is taken to enforce the
award of arbitrators. Arbitration proceedings shall be
conducted at the office of the TAM or ADR nearest Memphis,
Tennessee or such other place including by teleconference, or
video conference, as mutually agreed upon in writing or
directed by the acting arbitration association. Provided,
however, either Party may apply to a court of competent
jurisdiction for injunctive relief. Unless preempted or
controlled by federal transportation law and regulations, the
laws of the State of Tennessee shall be controlling
notwithstanding applicable conflicts of laws rules. The
arbitration provisions of this paragraph shall not apply to
enforcement of the award of arbitration.
In the event of litigation the prevailing Party shall be
entitled to recover costs, expenses and reasonable attorney
fees, including but not limited to any incurred on appeals.
Venue, controlling law, and jurisdiction in any legal
proceedings shall be in Shelby County in the State of
Tennessee not withstanding conflicts of laws and rules to the
Doc. 7-1 at 6.
Rail Logistics and Cold Train's Accounts
two years before defendant Cornerstone had entered into the
Carrier Agreement with Rail Logistics and Cold Train, Rail
Logistics and Cold Train had entered into a security
agreement with Great Western Bank. This 2012 security
agreement gave the bank a security interest in all assets
owned by Rail Logistics and Cold Train. These secured assets
included Rail Logistics and Cold Train's accounts
January 2016, plaintiff LPF II, LLC (“LPF”) and
Great Western Bank agreed to settle a dispute they had with
one another. In their settlement agreement, the bank assigned
its interest in Rail ...