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Julian v. Rollins, Inc.

United States District Court, M.D. Florida, Tampa Division

February 7, 2017

JAMES A. JULIAN, Plaintiff,
v.
ROLLINS, INC., Defendant.

          ORDER

          JAMES S. MOODY. JR. UNITED STATES DISTRICT JUDGE.

         James Julian entered into a Service Agreement and a separate Finance Agreement with Orkin Pest Control. The Service Agreement contained an arbitration clause; the Finance Agreement did not. Orkin assigned the Finance Agreement to Defendant Rollins, Inc., which Julian is suing for alleged statutory violations. Now Rollins moves to compel arbitration. Because the arbitration clause extends to the Finance Agreement under Florida law, Rollins' motion to compel arbitration should be granted.

         BACKGROUND

         On November 11, 2014, Julian entered into a termite pest control service contract (the “Service Agreement”) with Orkin. (Doc. 9, p. 4). Rather than paying the full contract price for the Service Agreement, Julian entered into a separate financing contract (the “Finance Agreement”) the same day. (Doc. 9, pp. 6-7). Orkin then assigned the Finance Agreement to Rollins, Inc. (Doc. 1, ¶ 30; and Doc. 10).

         The Service Agreement between Julian and Orkin contains an arbitration clause, which provides in pertinent part as follows:

MEDIATION/ARBITRATION: ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE SERVICES PERFORMED BY ORKIN UNDER THIS AGREEMENT OR ANY OTHER AGREEMENT, REGARDLESS OF WHETHER THE CONTROVERSY OR CLAIM AROSE BEFORE OR AFTER THE EXECUTION, TRANSFER, OR ACCEPTANCE OF THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO ANY TORT AND STATUTORY CLAIMS, AND ANY CLAIMS FOR PERSONAL, OR BODILY INJURY OR DAMAGE TO REAL OR PERSONAL PROPERTY, SHALL BE SETTLED BY BINDING ARBITRATION. UNLESS THE PARTIES AGREE OTHERWISE, THE ARBITRATION SHALL BE ADMINISTERED UNDER THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION (“AAA”) AND SHALL BE CONDUCTED BY AAA.… THE CUSTOMER AND ORKIN AGREE THAT THE ARBITRATOR SHALL FOLLOW THE SUBSTANTIVE LAW, INCLUDING THE TERMS AND CONDITIONS OF THIS AGREEMENT. THE ARBITRATOR'S POWERS TO CONDUCT ANY ARBITRATION PROCEEDING UNDER THIS AGREEMENT SHALL BE LIMITED AS FOLLOWS: ANY ARBITRATION PROCEEDING UNDER THIS AGREEMENT WILL NOT BE CONSOLIDATED OR JOINED WITH ANY ACTION OR LEGAL PROCEEDING UNDER ANY OTHER AGREEMENT OR INVOLVING ANY OTHER PREMISES, AND WILL NOT PROCEED AS A CLASS ACTION, PRIVATE ATTORNEY GENERAL ACTION, OR SIMILAR REPRESENTATIVE ACTION … CUSTOMER AND ORKIN ACKNOWLEDGE AND AGREE THAT THIS ARBITRATION PROVISION IS MADE PURSUANT TO A TRANSACTION INVOLVING INTERSTATE COMMERCE AND SHALL BE GOVERNED BY THE FEDERAL ARBITRATION ACT.…

(Doc. 9). The Service Agreement also specifically references the Finance Agreement in the “Method of Payment” section, which has a check in the box next to “FINANCED - See Separate Finance Agreement.” (Doc. 9). The Finance Agreement does not contain an arbitration clause.

         Julian now claims that the Finance Agreement is usurious and that Rollins violated federal and Florida statutes protecting consumers when collecting on the Finance Agreement. In response, Rollins moves to compel arbitration pursuant to the arbitration clause in the Service Agreement.

         LEGAL STANDARD

         The Federal Arbitration Act (“FAA”) provides that a written arbitration agreement in any contract involving commerce “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. “The FAA places arbitration agreements on equal footing with all other contracts and sets forth a clear presumption-‘a national policy'-in favor of arbitration.” Parnell v. CashCall, Inc., 804 F.3d 1142, 1146 (11th Cir. 2015) (citing Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443 (2006)); accord AT & T Mobility LLC v. Concepcion, 563 U.S. 333, 337-39 (2011); Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 72 (2010); Inetianbor v. CashCall, Inc., 768 F.3d 1346, 1349 (11th Cir. 2014).

         “Importantly, parties may agree to commit even threshold determinations to an arbitrator, such as whether an arbitration agreement is enforceable. The Supreme Court has upheld these so-called ‘delegation provisions' as valid.” Rent-A-Center, 561 U.S. at 68- 70. And the Eleventh Circuit and the majority of other Circuits hold that explicit delegation provisions are unnecessary to delegate the issue of arbitrability to the arbitrator. Rather, incorporation of the arbitration rules is sufficient. See Terminix Int'l Co. v. Palmer Ranch Ltd., 432 F.3d 1327, 1332-33 (11th Cir. 2005); U.S. Nutraceuticals, LLC v. Cyanotech Corp., 769 F.3d 1308, 1311 (11th Cir. 2014). In Terminix, the Eleventh Circuit considered whether an arbitration clause stating “arbitration shall be conducted in accordance with the Commercial Arbitration Rules then in force of the American Arbitration Association” delegated the question of arbitrability to the arbitrator. 432 F.3d at 1332. The Eleventh Circuit concluded that “[b]y incorporating the AAA Rules … into their agreement, the parties clearly and unmistakably agreed that the arbitrator should decide whether the arbitration clause is valid.” Id.

         The arbitration clause here incorporates the AAA Rules. Accordingly, Terminix compels the Court to delegate the question of arbitrability to the arbitrator. Cyanotech, 769 F.3d at 1311 (quoting Terminix and holding, “But when parties incorporate the rules of the Association into their contract, they ‘clearly and unmistakably agree[ ] that the arbitrator should decide whether the arbitration clause [applies].'). See Supply Basket, Inc. v. Glob. Equip. Co., No. 1:13-CV-3220-RWS, 2014 WL 2515345, at *2 (N.D.Ga. June 4, 2014) (noting that incorporation of AAA rules generally, without identifying any particular subject-specific rules was sufficient to provide “clear and unmistakable evidence of intent to delegate the determination of arbitrability to the arbitrator.”).

         Finally, motions to compel arbitration are reviewed under the summary judgment standard. See Johnson v. KeyBank Nat'l Assoc.,754 F.3d 1290, 1294 (11th Cir. 2014) (describing an order compelling arbitration as “summary-judgment-like” because it is “‘a summary disposition of the issue of whether or not there has been a meeting of the minds on the agreement to arbitrate'”) (quoting Magnolia Capital Advisors, Inc. v. Bear Stearns & Co., 272 F. ...


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