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Zetor North America, Inc. v. Rozeboom

United States Court of Appeals, Eighth Circuit

July 3, 2017

Zetor North America, Inc. Plaintiff- Appellee
v.
Brent Rozeboom, individually, and as Director of Alberni Enterprises doing business as Ridgeway Enterprises; Glenda Rozeboom, individually Defendants Ridgeway Enterprises, a private trust company Defendant-Appellant Antonie Rozeboom; Alberni Enterprises Defendants Alan Scott Peterson, individually, and as Executive Trustee of Ridgeway Enterprises Defendant-Appellant Zetor North America, Inc. Plaintiff-Appellee
v.
Brent Rozeboom, individually, and as Director of Alberni Enterprises doing business as Ridgeway Enterprises; Glenda Rozeboom, individually Defendants-Appellants Ridgeway Enterprises, a private trust company; Antonie Rozeboom; Alberni Enterprises; Alan Scott Peterson, individually, and as Executive Trustee of Ridgeway Enterprises Defendants

          Submitted: February 8, 2017

         Appeals from United States District Court for the Western District of Arkansas - Harrison

          Before SMITH, [1] BENTON and SHEPHERD, Circuit Judges.

          BENTON, Circuit Judge.

         Zetor North America, Inc., sued Ridgeway Enterprises and its associates for trademark infringement. Years before, Zetor settled a dispute with Ridgeway over similar infringement. The settlement agreement included an arbitration clause, which Ridgeway seeks to enforce. The district court[2] denied Ridgeway's motion to compel arbitration. Zetor N. Am., Inc. v. Rozeboom, 2016 WL 1611599 (W.D. Ark. April 22, 2016). Having jurisdiction under 28 U.S.C. § 1292(a)(1) and 9 U.S.C. § 16(a)(1)(c), this court affirms.

         I.

         Zetor was granted a license to use the Zetor mark and promotional materials in the United States. Ridgeway Enterprises[3] sells tractor parts but is not an authorized Zetor dealer. According to Zetor, Ridgeway advertises, markets, sells, and distributes new and used parts using the Zetor mark without clearly distinguishing which are genuine, causing consumer confusion about the source and quality of the parts. Zetor also alleges that Ridgeway's use of Zetor photos and promotional materials infringes its copyright.

         Zetor and Ridgeway had a similar dispute in 2008. Becoming aware of similar tactics, Zetor sent a cease and desist letter. The dispute was resolved by a settlement agreement with an arbitration provision. That provision stated that the parties would "attempt in good faith to resolve any controversy arising out of or relating to this Agreement." If that failed, the controversy would go to mediation "in accordance with American Arbitration Association [sic] or may proceed directly to arbitration."

         Under the Agreement, "Ridgeway acknowledge[d] the validity of the mark ZETOR" and "that only Zetor and its authorized resellers and licensees may use the Zetor Mark in advertising, promotional, and sales materials." In paragraph 2, Ridgeway agreed to "permanently cease and desist the use of the ZETOR Mark, except" to describe the compatibility of its products with a Zetor product, subject to several restrictions. Ridgeway also transferred to Zetor a domain name it used, zetorusa.com. Both Zetor and Ridgeway released all claims "that occurred prior to the effective date of this Agreement."

         In 2014, Zetor became aware of allegedly trademark-infringing conduct by Ridgeway. Zetor sent another cease and desist letter. Ridgeway did not respond. Zetor sued Ridgeway for trademark infringement and dilution, injury to business reputation, unfair competition, copyright infringement, deceptive trade practices, and civil conspiracy, adding claims as under Arkansas anti-dilution laws, the Arkansas Deceptive Trade Practice Act, and common law. In its answer, Ridgeway included "arbitration and award" in a list of affirmative defenses. However, Ridgeway did not move to compel arbitration until after the case progressed: The parties had completed preliminary discovery and participated in a case-management hearing and settlement conference; Zetor had added defendants and moved to compel discovery.[4]

         The district court, finding the arbitration provision inapplicable to Zetor's new claims, denied Ridgeway's motion to compel arbitration. It did not address Zetor's argument that the settlement agreement was void due to fraudulent inducement in its formation. Ridgeway appeals.

         II.

         The contract-interpretation-based denial of a motion to compel arbitration is reviewed de novo. Unison Co. v. Juhl Energy Dev., Inc., 789 F.3d 816, 818 (8th Cir. 2015). The Federal Arbitration Act-which governs here-reflects "a liberal federal policy favoring arbitration." AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (internal quotation marks omitted). But it is a "fundamental principle that arbitration is a matter of contract." Id. (internal quotation marks omitted). Therefore, "a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002). See also Unison, 789 F.3d at 818.

         "[T]he liberal federal policy favoring arbitration agreements requires that a district court, " faced with a broad arbitration clause "send a claim to arbitration as long as the underlying factual allegations simply touch matters covered by the arbitration provision." Unison, 789 F.3d at 818 (internal quotation marks and alterations omitted). Arbitration clauses covering claims ...


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