AOR Management Company of Missouri, LLC v. Mahoning Valley Hematology-Oncology Associates, Inc.

PEARSON, J. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION AOR MANAGEMENT COMPANY OF, ) MISSOURI, LLC, ) CASE NO. 4:23CV111 ) Plaintiff, ) ) JUDGE BENITA Y. PEARSON v. ) ) MAHONING VALLEY HEMATOLOGY- ) MEMORANDUM OF OPINION AND ONCOLOGY ASSOCIATES, INC., ) ORDER ) [Resolving ECF Nos. 6, 11] Defendant. ) Pending before the Court is Defendant’s Motion to Compel Arbitration and Dismiss for Lack of Jurisdiction. See ECF No. 6. The parties have fully briefed the motion. ECF Nos. 17, 18. Also pending is Plaintiff’s Motion to Dismiss Defendant’s Counterclaims. See ECF No. 11. The Court, having been duly advised by the parties’ filings, oral arguments, and applicable law, grants Defendant’s motion to compel and dismiss; and denies Plaintiff’s motion to dismiss Counterclaims, as moot. I. Introduction Plaintiff raises one count---breach of contract, in its Complaint. See ECF No. 1 at PageID #: 8. This matter arises out of several executed agreements between Plaintiff and Defendant memorializing their relationship in which Defendant agreed to compensate Plaintiff in exchange for Plaintiff providing management, administrative, and business services relating to the daily administration and nonmedical aspects of Defendant. See ECF No. 1 at PageID #: 3. The Complaint alleges that Plaintiff filed a statement of claim and demand for arbitration with the American Arbitration Association (“AAA”), alleging that Defendant breached one of the contracts by refusing to pay Plaintiff the outstanding amounts owed under the executed contracts. See id. Plaintiff filed a demand for arbitration with the AAA pursuant to the terms of the Parties’ contracts, and Defendant filed an Answering Statement denying Plaintiff’s claims. See id. After the close of pleadings with the AAA and before discovery responses or any other activity, the Parties engaged in settlement discussions, seeking to resolve the issues between them without incurring further costs. See id. On November 23, 2022, at the request of Plaintiff, counsel for Defendant sent correspondence to Plaintiff’s counsel with an initial settlement offer of a payment to Plaintiff. See id. On December 1, 2022, counsel for Plaintiff responded to Defendant’s settlement offer, rejecting the offer but proposing a counter-offer. See ECF No. 1 at PageID #: 4. On December 13, 2022, Defendant’s counsel wrote to counsel for Plaintiff and indicated that Defendant accepted. See ECF No. 1 at PageID #: 5. Subsequently, Defendant inquired about a draft of the settlement agreement for review. See id. Plaintiff alleges that Defendant never indicated it was expecting payment from Plaintiff or any offset to the Settlement Payment to be made to Plaintiff, during the settlement discussions. See id. On December 22, 2022, counsel for Plaintiff sent Defendant’s counsel a draft settlement agreement for Defendant’s review, memorializing the terms Plaintiff understood the Parties had agreed on and as reflected in Defendant’s email of December 13 (the “Settlement Agreement”). See ECF No. 1 at PageID #: 6. Defendant’s counsel responded with a revised settlement agreement containing a single change to the Settlement Agreement. See id. Counsel for Plaintiff responded that the change was material because the settlement terms that the Parties expressly agreed to did not contain the Retainage Payment to Defendant. See ECF No. 1 at PageID #: 6-7. Plaintiff asserts that the Retainage Payment to Defendant was neither mentioned during the Parties’ settlement discussions nor was it included in the terms upon which the Parties mutually agreed. See id. Defendant’s counsel responded that Defendant would not move forward with the agreed-upon terms. See id. II. Discussion A. Validity and Scope of the Agreement Federal law requires that courts “rigorously enforce agreements to arbitrate.” See Shearson/Am. Express, Inc. v. McMahon, 482 U.S. 220, 226 , 107 S.Ct. 2332 , 96 L.Ed.2d 185 (1987). “The Federal Arbitration Act (“FAA”) provides that ‘a party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration’ may seek an order compelling arbitration from any district court ‘which, save for such agreement, would have jurisdiction under Title 28 ... of the subject matter of a suit arising out of the controversy between the parties.’” Stachurski v. DirecTV, Inc., 642 F. Supp. 2d 758, 764 (N.D. Ohio 2009) (quoting 9 U.S.C. § 4 ). The Court must analyze the following when considering a motion to stay proceedings and compel arbitration: [F]irst, it must determine whether the parties agreed to arbitrate; second, it must determine the scope of that agreement; third, if federal statutory claims are asserted, it must consider whether Congress intended those claims to be [non-arbitrable]; and fourth, if the court concludes that some, but not all, of the claims in the action are subject to arbitration, it must determine whether to stay the remainder of the proceedings pending arbitration. McGee v. Armstrong, 941 F.3d 859, 865 (6th Cir. 2019) (quoting Stout v. J.D. Byrider, 228 F.3d 709, 714 (6th Cir. 2000)). Plaintiff concedes that neither the third nor fourth factors of the analysis are applicable to this case. See ECF No. 17 at PageID #: 213. Accordingly, the Court will determine whether the parties agreed to arbitrate, and, if an arbitration provision exists, the scope of that agreement. “In determining whether the parties formed a valid arbitration agreement, ‘state law may be applied if that law arose to govern issues concerning the validity, revocability, and enforceability of contracts generally, although the FAA preempts state laws applicable to only arbitration provisions.’” Price v. Taylor, 575 F. Supp. 2d 845, 851 (N.D. Ohio 2008) (quoting Great Earth Cos. v. Simons, 288 F.3d 878, 889 (6th Cir. 2002). There is no dispute that the parties agreed to arbitrate. “[T]he parties entered into a certain Master Transaction Agreement (the “MTA”) and an Amended & Restated Comprehensive Services Agreement (the “Amended CSA”). Both agreements contain arbitration provisions. ECF No. 6-1 at PageID #: 76. Nevertheless, Plaintiff asserts that the underlying issue for this pending motion is Defendant’s breach of the Settlement Agreement. See ECF No. 17 at PageID #: 210; ECF No. 13-6 at PageID #: 153-158. Plaintiff also argues that “the settlement agreement and enforcement of same is not subject to arbitration.” ECF No. 1 at PageID #: 2. “In determining whether claims are within the arbitration agreement's scope, the strong federal policy for arbitration demands that ‘any ambiguities or doubts as to the parties' intentions ... be resolved in favor of arbitration.’” Price v. Taylor, 575 F. Supp. 2d 845, 851 (N.D. Ohio 2008) (quoting Stout v. J.D. Byrider, 228 F.3d 709, 714 (6th Cir. 2000). Section 8.6 of the Amended CSA states the following: The parties shall use good faith negotiation to resolve any controversy, dispute or disagreement arising out of or relating to this Agreement or the breach of this Agreement. Any matter not resolved by negotiation shall be submitted to binding arbitration pursuant to the procedures set forth in Article IV of the Master Transaction Agreement. ECF No. 6-2 at PageID #: 84. Plaintiff’s position that the parties “only agreed to arbitrate disputes arising out of the Amended CSA, [and] not the Settlement Agreement” is not well taken. ECF No. 17 at PageID #: 213 (emphasis added). While Plaintiff is correct in stating that the Settlement Agreement does not contain an arbitration provision, this does not narrow the scope of the originally agreed arbitration provisions which pertains to disputes or disagreements arising out of or relating to the Amended CSA. See ECF No. 6-2 at PageID #: 84. Plaintiff provides no evidence to support the assertion that the Settlement Agreement does not relate to the Amended CSA. In fact, the Settlement Agreement explicitly references the Amended CSA, indicating that the Settlement Agreement would waive and release claims under the Amended CSA and all other agreements. See ECF No. 13-6 at PageID #: 153-154. For these reasons, the Court grants Defendant’s Motion to Compel Arbitration. B. Dismissal Defendant asserts that, should the Court compel Plaintiff to submit the breach of contract claim to arbitration, the case should be dismissed in its entirety because the Court lacks subject matter jurisdiction. See ECF No. 6-1 at PageID #: 75. The FAA “instructs that ‘upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration,’ the [C]ourt ‘shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.’” Hilton v. Midland Funding, LLC, 687 Fed.Appx. 515, 518 (6th Cir. 2017) (quoting 9 U.S.C. § 3 ). “[W]here ‘all issues raised in this action are arbitrable and must be submitted to arbitration, retaining jurisdiction and staying the action will serve no purpose.’” Arabian Motors Grp. W.L.L. v. Ford Motor Co., 19 F.4th 938, 943 (6th Cir. 2021) (quoting Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th Cir. 1992)). Plaintiff’s claim of breach of contract alleged in the Complaint against Defendant is subject to binding arbitration. Accordingly, the Court’s retention of jurisdiction during the pendency of arbitration would serve no purpose, and dismissal is the appropriate remedy. See Milan Exp. Co. v. Applied Underwriters Captive Risk Assur. Co., 590 F. App'x 482, 486 (6th Cir. 2014). Therefore, the Court grants Defendant’s Motion to Dismiss. III. Conclusion For the reasons above, Defendant’s Motion to Compel Arbitration and Dismiss for Lack of Jurisdiction (ECF No. 6) is granted. Accordingly, Plaintiff’s Motion to Dismiss Defendant’s Counterclaims (ECF No. 11) is denied as moot. IT IS SO ORDERED. June 29, 2023 /s/ Benita Y. Pearson Date Benita Y. Pearson United States District Judge