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Graybar Electric Co., Inc. v. Weyerhaeuser Co.

United States District Court, W.D. Arkansas, Texarkana Division

March 26, 2019

GRAYBAR ELECTRIC COMPANY, INC. PLAINTIFF
v.
WEYERHAEUSER COMPANY and PREMIER IEC, LLC DEFENDANTS

          ORDER

          Susan O. Hickey Chief United States District Judge.

         Before the Court is Separate Defendant Weyerhaeuser Company's (“Weyerhaeuser”)[1]Motion to Compel Arbitration and Stay Claims. (ECF No. 9). Plaintiff Graybar Electric Company, Inc. (“Graybar”) filed a response. (ECF No. 12). Separate Defendant Premier IEC, LLC (“Premier”) has not filed a response, and its time to do so has passed. See Local Rule 7.2(b). The Court finds the matter ripe for consideration.

         I. BACKGROUND

         Weyerhaeuser is the owner of a sawmill located in Dierks, Arkansas (the “Weyerhaeuser mill”). On May 1, 2017, Weyerhaeuser and Premier entered into a contract for Premier's electrical contractor services at the Weyerhaeuser mill (the “Weyerhaeuser-Premier contract”). (ECF No. 9, p. 1). The Weyerhaeuser-Premier contract provides, inter alia, that Premier must keep Weyerhaeuser's property free of liens and that if Weyerhaeuser receives notice of a lien caused by Premier, Weyerhaeuser may withhold payment to Premier until the lien has been fully paid or waived. (ECF No. 9, p. 9). The Weyerhaeuser-Premier contract also provides for the resolution by binding arbitration of “[a]ny dispute between the parties regarding this Contract, including a dispute over a party's performance of its obligations or interpretation of the Contract's terms, other than a dispute when a remedy sought in good faith is injunctive relief.” (ECF No. 9-1, p. 12). The Weyerhaeuser-Premier contract provides further that either party may seek to compel arbitration if the other party refuses to participate in arbitration.

         At some time subsequent to the execution of the Weyerhaeuser-Premier contract, Graybar and Premier entered into an agreement under which Graybar would furnish and deliver electrical supplies, materials, and/or equipment at Premier's request for use at the Weyerhaeuser mill.[2]Graybar alleges that it provided materials to Premier and that Premier commenced work on the Weyerhaeuser mill using Graybar's furnished materials, incorporating said materials into the mill. Graybar alleges further that it provided Premier with invoices describing the materials provided and costs of the same, but Premier failed to compensate Graybar for significant portions of the provided materials.

         Graybar states that on June 1, 2018, it provided notice to Weyerhaeuser and Premier that if the unpaid bills were not paid in full, Graybar would place a construction lien on the Weyerhaeuser mill pursuant to Ark. Code Ann. § 18-44-115. On June 4, 2018, Premier notified Weyerhaeuser that it would be withdrawing from the Weyerhaeuser mill, citing “unforeseen business complications.” (ECF No. 9, pp. 1, 19). Weyerhaeuser states that Premier had not completed its contractual obligations when it withdrew, causing Weyerhaeuser to have to hire replacement contractors.

         Graybar states that on July 2, 2018, it provided Weyerhaeuser and Premier a notice of intent to place a lien on the Weyerhaeuser mill, pursuant to Ark. Code Ann. § 18-44-115. On July 23, 2018, Graybar filed a Statement of Account and Claim of Lien with the Circuit Clerk and Ex-Officio Recorder for Howard County, Arkansas, in the amount of $766, 397.60. On August 13, 2018, Graybar filed this lien foreclosure case in the Circuit Court of Howard County, Arkansas, seeking, inter alia, to recover the amount of the materialmen's lien placed on the Weyerhaeuser mill.

         On August 17, 2018, Weyerhaeuser filed a demand for arbitration against Premier, alleging that Premier breached the Weyerhaeuser-Premier contract. (ECF No. 9-2, p. 1). The arbitration between Weyerhaeuser and Premier is currently pending before the American Arbitration Association. (ECF No. 9-2, p. 2). Weyerhaeuser states that Premier has not participated in any arbitration conference calls to date, despite receiving the demand for arbitration.

         On September 11, 2018, Weyerhaeuser removed this case to this Court pursuant to 28 U.S.C. § 1332. On October 3, 2018, Weyerhaeuser filed the instant motion, stating that it and Premier's dispute regarding Premier's performance under the Weyerhaeuser-Premier contract falls within the scope of a valid arbitration agreement. Accordingly, Weyerhaeuser asks the Court to compel it and Premier to engage in binding arbitration regarding that dispute. Weyerhaeuser also argues that Graybar's claims against Defendants are inextricably intertwined with Weyerhaeuser and Premier's arbitrable dispute and, thus, the Court should also compel Graybar to submit to arbitration along with Weyerhaeuser and Premier. Alternatively, Weyerhaeuser asks the Court to stay this case pending the resolution of it and Premier's arbitration. Graybar opposes the motion.

         II. DISCUSSION

         The instant motion presents multiple requests. First, Weyerhaeuser asks the Court to compel it and Premier to submit to binding arbitration regarding their dispute as to each party's performance of obligations under the Weyerhaeuser-Premier contract. Second, Weyerhaeuser asks the Court to also compel Graybar to submit to arbitration of its claims alongside Weyerhaeuser and Premier. Third, Weyerhaeuser alternatively asks the Court to stay this case pending the resolution of it and Premier's arbitration proceedings. The Court will address each request in turn.

         A. Arbitration Between Weyerhaeuser and Premier

          Weyerhaeuser submits that it and Premier's claims against one another fall within the scope of a valid arbitration agreement. Thus, Weyerhaeuser requests that the Court compel it and Premier to submit to binding arbitration as to those claims.[3]

         In addressing motions to compel arbitration, courts generally ask: (1) whether there is a valid arbitration agreement and (2) whether the particular dispute falls within the terms of that agreement. E.E.O.C. v. Woodmen of the World Life Ins. Soc., 479 F.3d 561, 565 (8th Cir. 2007). These two determinations are guided by a “liberal federal policy favoring arbitration agreements.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 25 (1991). The Court will separately determine whether a valid arbitration agreement exists and whether Weyerhaeuser and Premier's dispute falls within the scope of that agreement.

         1. Valid Arbitration Agreement

         The validity and enforceability of a purported arbitration agreement is governed by state contract law. Woodmen, 479 F.3d at 565. The essential elements of a valid arbitration agreement under Arkansas law are: (1) competent parties, (2) subject matter, (3) legal consideration, (4) mutual agreement, and (5) mutual obligations. Showmethemoney Check Cashers, Inc. v. Williams, 342 Ark. 112, 119-20, 27 S.W.3d 361, 366 (2000). Arbitration agreements are examined in the same way as other contractual agreements, and the same rules of construction and interpretation apply to arbitration agreements as apply to ...


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