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Stuart v. Korey

United States District Court, W.D. Washington

April 26, 2017

ELBRIDGE H. STUART, III, Plaintiff,
v.
CAMP KOREY, Defendant.

          ORDER DENYING MOTIONS FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION TO STRIKE

          RICARDO S. MARTINEZ CHIEF UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         This matter comes before the Court on Defendant Camp Korey's Motion for Summary Judgment (Dkt. #10), Plaintiff Elbridge H. Stuart, III's Motion to Strike (Dkt. #13), and Mr. Stuart's Cross Motion for Summary Judgment (Dkt. #18). For the reasons below, the Court DENIES all three Motions.

         II. BACKGROUND

         Plaintiff Elbridge H. Stuart III is a director of the Elbridge and Debra Stuart Family Foundation and the manager of SCF Holdings, LLC (“SCF”), previously known as Carnation Farms, LLC, which is a subsidiary of the Foundation. Dkt. #17 at 1. Mr. Stuart is the great-grandson of Elbridge Stuart, who founded the Carnation Milk Company in 1899. Id. at 2. In 1985, Carnation was acquired by the Nestle Corporation. Id. This sale included the original Carnations Farm Site in Carnation, Washington. Id. In 2008, Nestle sold Carnation Farms to Defendant Camp Korey, a nonprofit organization that provides camping facilities for children with serious illnesses. Id. Mr. Stuart served on the board of directors for Camp Korey starting in 2007. Id. at 2.

         On December 21, 2009, SCF purchased Carnation Farms from Camp Korey and leased the property back to Camp Korey. Id. at 4. At this time, Mr. Stuart was still on the board of directors for Camp Korey.

         In April of 2016, Mr. Stuart resigned from the board and sent a notice of default to Camp Korey alleging, among other things, that Camp Korey had not performed certain maintenance and improvement projects ostensibly required by the lease. Dkts. #12 at 2; #12-1. This notice was sent “[o]n behalf of Carnation Farms LLC” and signed by Mr. Stuart. Dkt. #12-1. Eventually, counsel for Camp Korey and counsel representing SCF negotiated an Agreement to Mediate to Resolve Differences (“Agreement”) on May 27, 2016. Dkt. #12-5. The Agreement refers to disputes between “the parties” but does not define that term or list the parties to the Agreement. Id. The Agreement states “[a]ny disputes between the parties that are not resolved by September 30, 2016 shall be resolved by binding arbitration, by an arbitrator agreed to by counsel for the parties.” Id. The Agreement has only two signature lines, and is signed by Chris McReynolds for Camp Korey and Mr. Stuart for Carnation Farms LLC. Id.

         Mediation ultimately occurred with Mr. Stuart in attendance. The engagement letter for the mediation listed the parties as “Camp Korey/Carnation Farms, LLC/Elbridge Stuart.” Dkt. #12-8. Mr. Stuart's counsel submitted a mediation brief “on behalf of the Elbridge and Debra Stuart Family Foundation, its subsidiary, Carnation Farms LLC, and Elbridge (‘Bridge') Stuart.” Dkt. #12-9 at 1. This letter states “[t]he parties will arbitrate any remaining claims if they cannot be resolved at mediation, ” and appears to list Mr. Stuart as a party under a section titled “The Parties.” Id. at 3. Later, the letter reiterates “[t]he parties have agreed to arbitrate all claims if they cannot be resolved at mediation.” Id. at 9.

         The parties mediated but were unsuccessful and the dispute was scheduled for binding arbitration. On October 4, 2016, the arbitrator, Judge Kallas (ret.), issued a Report of Preliminary Hearing and Case Scheduling Order listing “Elbridge H. Stuart/Carnation Farms, LLC” as the Plaintiffs. Dkt. #11-5. Although the arbitration included claims between Carnation Farms LLC and Camp Korey, Camp Korey also brought cross-claims against Mr. Stuart personally.

         In this action, Mr. Stuart asserts that he was not subject to the Agreement, cannot be bound to arbitration, and seeks declaratory judgment. Dkt. #1. The parties have agreed to stay the arbitration until this action is resolved.

         Camp Korey now moves for summary judgment, arguing that extrinsic evidence establishes Mr. Stuart as a party to the Agreement, that he should be bound to the Agreement by equitable estoppel, and that he should be bound through agency theory. Dkt. #10. Mr. Stuart also moves for summary judgment based on the face of the Agreement and certain extrinsic evidence. Dkt. #18.

         III. DISCUSSION

         A. Plaintiff's Motion to Strike

         Mr. Stuart brought this action for the Court to determine whether his participation in a mediation binds him personally to the Agreement and its term requiring mandatory arbitration. In its Answer, Camp Korey alleges certain counterclaims. Dkt. #7. In doing so, Camp Korey relies on language from a mediation brief submitted “on behalf of the Elbridge and Debra Stuart Family Foundation, its subsidiary, Carnation Farms LLC (collectively referred to as the ‘Stuart Foundation'), and Elbridge (‘Bridge') Stuart.” Id. at ¶ 5.11. Camp Korey asserts that Mr. Stuart's counsel “made clear that any resolution in the mediation necessarily would have to include the claims Camp Korey was asserting against Mr. Stuart individually.” Id. at ¶ 5.12. Mr. Stuart now moves to strike these paragraphs under the mediation privilege and the terms of the mediation. Dkt. #13. The Court has reviewed Mr. Stuart's Motion to Strike Paragraphs 5.11 and 5.12 from Camp Korey's Answer pursuant to Rule 12(f) and determined that Mr. Stuart cannot rely on the mediation privilege or the terms of the mediation to strike these paragraphs because he has necessarily opened the door to such communications by bringing this action. See Bradfield v. Mid-Continent Cas. Co., 15 F.Supp.3d 1253, 1256-57 (M.D. Fla. 2014) (discussing mediation privilege); Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1162 (9th Cir. 1992). The Court is also convinced that Mr. Stuart has waived the mediation privilege with regard to ...


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