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Welk Resort Sales, Inc. v. Bryant

United States District Court, W.D. Missouri, Southern Division

March 13, 2018

WELK RESORT SALES, INC., Plaintiff,
v.
SHEENA BRYANT, Defendant.

          ORDER

          SARAH W. HAYS UNITED STATES MAGISTRATE JUDGE.

         I. BACKGROUND

         On May 5, 2017, Sheena Bryant filed suit in Taney County, Missouri, against Welk Resort Group, Inc. (hereafter Welk), Jim White and Steve Pulaski alleging violations of the Missouri Human Rights Act arising out of her employment with Welk. (Doc. #1-1 (Sheena Bryant v. Welk Resort Group. Inc., et al., Case No. 1746-CC00082)) On June 30, 2017, pursuant to the Federal Arbitration Act (FAA), Welk Resort Group, Inc. filed the instant action in this Court, as well as a Motion to Compel Arbitration and to Stay the State Court Action. (Doc. ##1, 2) Paragraph 9 of the Complaint alleges that “[o]n December 11, 2015, in connection with her employment at Welk, Bryant executed an acknowledgement and Arbitration Agreement offered by Welk….” (Doc. # 1 at ¶ 9) In response, Bryant denied this allegation, and in response to paragraph 10 of the Complaint specifically denied signing the Arbitration Agreement. (Doc. # 6 at ¶¶ 9 and 10)

         In the motion to compel arbitration, Welk argues that at the time Ms. Bryant was hired, she executed both an acknowledgement of Welk's Arbitration Agreement and the Arbitration Agreement. (Doc. #3, at 2, 4-5) The Arbitration Agreement specifically applies to all employment-related disputes and claims. (Doc. #1, at ¶10) Welk admits that it has been unable to find a signed Arbitration Agreement. (Doc. #3, at 5) Nevertheless it points to a Memorandum that contains an acknowledgment of receipt of the Memorandum and the Arbitration Agreement, which was signed by Bryant, as proof that Bryant entered into an arbitration agreement. (Doc. #3, at 5; Doc. #1-2) Welk argues that the FAA mandates that the parties' arbitration agreement be enforced. (Doc. #3, at 3-4) Welk further argues that the state court proceeding should be stayed pending arbitration. (Doc. #3, at 6)

         Bryant argues that Welk has the burden of showing that there is an arbitration agreement and has failed to do so. (Doc. #7, at 2) Therefore Bryant requests that this Court deny Welk's Motion to Compel Arbitration. In response, Welk argues that the Memorandum contains an agreement to arbitrate and that the parties accepted the agreement through their conduct of employing Ms. Bryant. (Doc. #8)

         II. LEGAL ISSUES

         A. Applicable Legal Standards

         Pursuant to section 4 of the Federal Arbitration Act, a court, faced with a motion to compel arbitration

shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. . . If the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof.

9 USC § 4. In determining whether arbitration should be compelled, the court's first task is to determine whether the parties entered into a valid arbitration agreement. Nebraska Mach. Co. v. Cargotec Sols., LLC, 762 F.3d 737, 740 (8th Cir. 2014). Whether a valid arbitration agreement exists is a matter of state law. Donaldson Co. v. Burroughs Diesel, Inc., 581 F.3d 726, 731 (8th Cir. 2009). Therefore, Missouri substantive law governs whether the parties entered into a valid arbitration agreement.

         As set forth in Clemmons v. Kansas City Chiefs Football Club, Inc., 397 S.W.3d 503 (Mo.Ct.App. 2013), the party seeking to compel arbitration has the burden of proving the existence of a valid and enforceable arbitration agreement. Clemmons v. Kansas City Chiefs Football Club, Inc., 397 S.W.3d 503, 505-06 (Mo.Ct.App. 2013). A valid arbitration agreement must meet the essential elements of a contract under Missouri law. Id. at 506. “The essential elements of a valid contract include offer, acceptance, and bargained for consideration.” Johnson v. McDonnell Douglas Corp., 745 S.W.2d 661, 662 (Mo. banc 1988)).

         B. Legal Effect of the Unsigned Arbitration Agreement

         This Court will first address whether the unsigned Arbitration Agreement is sufficient to show a valid contract. The Arbitration Agreement provided to the Court by Welk purporting to be that which Bryant signed provides a full description of the claims subject to arbitration, provides a waiver for jury trial and representative/class action proceedings, and provides a detailed procedure for arbitration. (Doc. #1-2, at 6-8) At the end of the document there is a place for the employee to sign and date and a place for Welk to sign and date. (Doc. #1-2, at 8) As noted earlier, Welk is unable to find a signed agreement. The failure to submit a signed agreement, however, is not fatal to Welk's claim. Heritage Roofing, LLC v. Fischer, 164 S.W.3d 128, 134 (Mo.Ct.App. 2005). Nevertheless, Welk must submit some evidence that the parties intended to form a contract. Baier v. Darden Restaurants, 420 S.W.3d 733, 738 (Mo.Ct.App. 2014).

         As evidence that the Arbitration Agreement was signed, Welk submitted the Declaration of Lynn Brown, the Human Resources Manager for Welk's Branson location. (Doc. #1-2, at ¶3) According to Brown, “Welk offered arbitration agreements to candidates at its Branson location who sought and were offered employment with the company.” (Doc. #1-2, at ¶5) Brown also stated that “[t]he Arbitration Agreement and acknowledgment attached hereto as Tab 1 is a true and accurate copy of the Arbitration Agreement and ...


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