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Tianjin Free Trade Zone Yongxing Parallel Imported Automotive Trading Co., Ltd. v. Executive Coach Builders, Inc.

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

July 30, 2018

TIANJIN FREE TRADE ZONE YONGXING PARALLEL IMPORTED AUTOMOTIVE TRADING CO., LTD., Plaintiff,
v.
EXECUTIVE COACH BUILDERS, INC., et al., Defendants.

          ORDER

          DOUGLAS HARPOOL, UNITED STATES DISTRICT JUDGE.

         Before the Court is Defendants' Motion to Dismiss and Compel Arbitration. (Doc. 8). Defendants request that the Court dismiss this action and compel arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq and the valid arbitration agreement contained in the parties' contracts at issue in this matter. Plaintiff has filed a response arguing that the arbitration agreement should not be enforced and that only defendant Damin Investments, LLC executed the documents. Defendants' Motion is ripe for review.

         BACKGROUND

         For purposes of analyzing the pending Motion to Compel Arbitration, the relevant facts taken from Plaintiff's Verified Complaint are summarized as follows:

         Plaintiff entered into an agreement with Defendants to purchase certain high-end new vehicles from Defendants to be shipped to Plaintiff in China at Defendants' expense. Plaintiff states “pursuant to the terms of the Agreement” Defendants would acquire, sell and transport vehicles to Plaintiff in China. Defendants formed Damin Investments, LLC to facilitate export of the vehicles.

         Plaintiff states on January 5, 2016, “as the first phase of the Agreement, ” the parties executed a document entitled Export Sales Contract, which “confirmed the Agreement” and provided “specific details regarding the first shipment of Vehicles Defendants were to acquire, sell and transport…” Plaintiff attached the Export Sales Contract to its Verified Complaint. (Doc. 1-2 “Ex. A”). Plaintiff transferred $150, 000.00 to Defendants as a deposit.

         On or about February 23, 2016, “as the second phase of the Agreement, ” the parties signed a second document entitled Export Sales Contract, which “again confirmed the Agreement and provided specific details regarding the second shipment of vehicles….” Plaintiff attached the Export Sales Contract to its Verified Complaint. (Doc. 1-3 “Ex. B”). Plaintiff transferred $180, 000.00 to Defendants as a deposit.

         Plaintiff contends that despite the written agreements, and the transfer of the deposits, Defendants failed and refused to perform their obligations under the “Agreement.” Plaintiff brings claims for Breach of Contract; Fraud; Negligent Misrepresentation; Conversion; and Civil Conspiracy. Defendants argue, pursuant to the contracts at issue, Plaintiff's claims should be compelled to arbitration.

         DISCUSSION

         The Supreme Court has stated that arbitration is a matter of contract and a party cannot be required to submit a dispute to arbitration if he did not agree to submit it. Int'l Ass'n of Bridge, Structural, Ornamental & Reinforcing Ironworkers, Shopman's Local 493 v. EFCO Corp. & Const. Products, 359 F.3d 954, 955-56 (8th Cir. 2004); citing, United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960). The Court must first determine whether there is a valid and binding arbitration agreement between the parties. That issue is a matter of contract. See Newspaper Guild of St. Louis, Local 36047, TNG-CWA v. St. Louis Post Dispatch, LLC, 641 F.3d 263, 266 (8th Cir. 2011) (internal citation omitted). When deciding whether to compel arbitration, the Court must first ask whether a valid agreement to arbitrate exists between the parties. Id. The Court “must engage in a limited inquiry to determine whether a valid agreement to arbitrate exists between the parties and whether the specific dispute falls within the scope of that agreement.” Express Scripts, Inc. v. Aegon Direct Mktg. Servs., Inc., 516 F.3d 695, 699 (8th Cir. 2008) (internal citation omitted). Arbitration is a matter of contract, and “arbitrators derive their authority to resolve disputes only because the parties have agreed” to it. Id. at 700 (internal citation omitted). If an agreement does exist, the Court can determine whether the dispute falls within the scope of that agreement. United Steelworkers of Am. v. Duluth Clinic, Ltd., 413 F.3d 786, 788 (8th Cir.2005). Further, unless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator. AT & T Technologies, Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 649, 106 S.Ct. 1415, 1418, 89 L.Ed.2d 648 (1986).

         Defendants argue the terms of the parties' contracts are clear with regard to the issues of arbitrability. The Export Sales Contracts state, in part:

In the course of executing this contract, all disputes not resolved by amicable agreement shall be settled by Arbitration in Missouri. The Arbitration court in Missouri's awards shall be final and binding to both parties. The arbitration fee and other charges shall be borne by the losing party, unless otherwise agreed.

(Doc. 1-2; 1-3).

         Plaintiff's opposition to the Motion to Compel argues that the Export Sales Contracts provide the “specific details regarding the export and shipment of vehicles” and that these documents are simply “purchase orders” under the “Agreement.” Plaintiff contends the Export Sales Contracts are “merely a device utilized by the parties to facilitate the export/shipping aspect of the ‘Agreement,' but they are not the ‘Agreement' ...


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