United States District Court, D. Kansas
MEMORANDUM AND ORDER
MURGUIA UNITED STATES DISTRICT JUDGE.
matter comes before the court on third-party defendant
Computer Consulting Services of America, Inc. d/b/a
ClientSolv Technologies' Motion to Dismiss Third-Party
Complaint and to Compel Arbitration (Doc. 32). Third-party
defendant claims its agreement with third-party plaintiff
Great-West Financial Retirement Plan Services, LLC contains
an arbitration clause, and therefore this court does not have
subject matter jurisdiction over the third-party complaint.
For the reasons discussed below, the court denies the motion.
2006, third-party plaintiff entered into a contract with
Corporate Employment Resources, Inc.
(“CoreStaff”) in which CoreStaff agreed to
provide temporary workers to third-party plaintiff. On June
28, 2010, CoreStaff and third-party defendant entered into an
agreement (“the 2010 agreement”) under which
third-party defendant agreed it would supply temporary
workers to third-party plaintiff. This agreement contained an
arbitration clause which stated that all disputes arising
under the agreement were subject to arbitration. In October
2015, third-party defendant placed plaintiff Tom Pattison
(“Pattison”) as a temporary employee with
third-party plaintiff. Pattison and third-party defendant had
an employment agreement which contained an arbitration
provision. On March 2016, CoreStaff and third-party defendant
entered into another contractual agreement (“the 2016
agreement”) in which CoreStaff subcontracted its
temporary services provision to third-party defendant.
Third-party plaintiff is an express third-party beneficiary
to the agreement. This agreement also contained an
arbitration clause, however, unlike the 2010 agreement, the
2016 arbitration clause stated that all disputes were subject
to arbitration except . . . for causes of action involving
third-party plaintiff as a party.
plaintiff terminated Pattison's temporary employment on
August 25, 2016. Pursuant to the arbitration clause in his
employment agreement, Pattison submitted a demand for
arbitration to third-party plaintiff, alleging his employment
had been wrongfully terminated. Third-party plaintiff then
requested indemnification from third-party defendant pursuant
to the indemnification provision in the 2016 agreement.
Third-party defendant rejected the demand for
indemnification. Pattison's demand for arbitration
against third-party plaintiff, however, was dismissed on the
grounds that third-party plaintiff was not subject to the
arbitration provision because it was not a signatory to the
then filed a petition against third-party plaintiff in
Johnson County District Court on February 6, 2017, alleging
statutory and common law claims arising from his termination.
The case was removed to this court on March 3, 2017.
Third-party plaintiff renewed its demand for indemnification
to third-party defendant pursuant to the 2016 agreement.
Third-party defendant again rejected this demand. On July 7,
2017, third-party plaintiff filed its third-party complaint
alleging breach of contract for refusing to indemnify it in
the action filed by Pattison. Third-party defendant then
submitted a demand for arbitration on the breach of contract
claim based on the arbitration clause in the 2010 agreement.
Federal Arbitration Act (“FAA”) establishes a
“federal policy favoring arbitration” and courts
are required to “rigorously enforce agreements to
arbitrate.” Shearson/Am. Exp., Inc. v.
McMahon, 482 U.S. 220, 226 (1987). Under the FAA, a
district court should compel arbitration when (1) a valid
arbitration agreement exists between the parties, and (2) the
dispute before the court falls within the scope of the
arbitration agreement. 9 U.S.C. § 2 (“A written
provision . . . 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.”); Id. at § 3 (“If
any suit or proceeding be brought in any of the courts of the
United States upon any issue referable to arbitration under
an agreement in writing for such arbitration, the court in
which such suit is pending . . . shall . . . stay the trial
of the action until such arbitration has been had in
accordance with the terms of the agreement . . . .”);
see also Olathe Senior Apts., L.P. v. Ace Fire
Underwriters Ins., Co., No. 04-2346-CM, 2005 U.S. Dist.
LEXIS 43449, at *11 (D. Kan. Sept. 30, 2005) (outlining
bears an initial summary-judgment-like burden of establishing
that it is entitled to arbitration.” Phox v.
Atriums Mgmt. Co., Inc., 230 F.Supp.2d 1279, 1282 (D.
Kan. 2002). The court applies ordinary state-law principles
that govern the formation and interpretation of contracts
when evaluating whether the parties have agreed to arbitrate
a particular dispute. Hardin v. First Cash Fin. Servs.,
Inc., 465 F.3d 470, 475 (10th Cir. 2006); Summit
Constrs., Inc. v. Legacy Corner L.L.C., 147 Fed.Appx.
798, 801 (10th Cir. 2005).
defendant moved to dismiss third-party plaintiffs third-party
complaint and to compel arbitration, arguing third-party
plaintiffs breach of contract claim falls within the scope of
the arbitration clause in the agreement to which third-party
plaintiff is a third-party beneficiary. Third-party defendant
claims the 2010 agreement applies to this dispute because
Pattison was hired before the 2016 agreement was signed and
the language of the arbitration provision included in the
2016 agreement indicates a clear intent that it is to apply
only to workers placed by third-party defendant after March
2010 agreement between CoreStaff and third-party defendant,
entered into for the purpose of providing temporary
employment services to third-party plaintiff, includes an
arbitration clause which provides:
10, 9. Arbitration. The parties agree that in all
disputes arising under this Agreement (except for breaches of
the Agreement for which injunctive relief is an appropriate
remedy) shall be subject to arbitration. Such arbitration
shall be conducted under the commercial arbitration rules of
the American Arbitration Association, Any arbitration award
shall be final and not subject to appeal, and may be entered
in any court having ...