Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Davis v. Seva Beauty, LLC

United States District Court, W.D. Washington, Seattle

September 13, 2017

ANNA A. DAVIS, et al., Plaintiffs,
v.
SEVA BEAUTY, LLC, et al., Defendants.

          ORDER

          THOMAS S. ZILLY, UNITED STATES DISTRICT JUDGE.

         THIS MATTER comes before the Court on defendants' motion to stay this action pending arbitration, docket no. 17. By Minute Order entered July 13, 2017, docket no. 38, the Court granted defendants' motion in part and deferred it in part. This Order explains the Court's reasons for granting the motion to stay with respect to plaintiffs' claims against defendant SEVA Beauty, LLC (“SEVA”) and addresses the deferred portion of the motion.[1]

         Background

         Plaintiffs are disgruntled franchisees who, between 2013 and 2016, entered into contracts with SEVA, a franchisor of salons housed in Walmart stores across the country. Plaintiffs allege various violations of certain state laws governing franchises and seek rescission of their agreements. See Am. Compl. at §§ III & VI (docket no. 2) (citing the Washington Franchise Investment Protection Act, the Michigan Franchise Investment Law, the Minnesota Franchise Act, and the Illinois Franchise Disclosure Act of 1987). They also seek actual and treble or punitive damages, as well as costs and attorney's fees. See id. at § VI. Plaintiffs assert their claims against SEVA, as well as its sole members Vasilios Maniatis and Sonal Maniatis, its Chief of Staff Kari Comrov, its Senior Director of Operations or Director of Spa Operations Bree Viscia, and its former Director of Operations Jonathan Kittner. See id. at ¶¶ 16-19, 53, 62, 71, & 80. Defendants contend that all of plaintiffs' claims must be arbitrated pursuant to the terms of the respective agreements with SEVA.

         Discussion

         In enacting the Federal Arbitration Act (“FAA”), Congress endorsed a federal policy favoring arbitration agreements. See Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). Section 2 of the FAA treats an arbitration provision in a written contract as “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. As with any other contract, the parties' intentions control, but those intentions are liberally construed in favor of arbitration. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985). Any doubts regarding arbitrability, whether stemming from interpretation of the contract language or the assertion of waiver, delay, or similar defense, are resolved in favor of arbitration. Id. (quoting Moses H. Cone, 460 U.S. at 24-25). In resisting defendants' motion to stay this action pending arbitration, plaintiffs contend that the Court, not the arbitrator, must determine the arbitrability of plaintiffs' claims, and that plaintiffs' prayer for rescission as a remedy for violation of certain state franchise laws constitutes an equitable claim falling outside the scope of the arbitration provisions at issue.

         Whether the parties agreed to arbitrate arbitrability is a question for the Court unless the parties “clearly and unmistakably” provided otherwise. AT&T Techns., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 649 (1986); Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015). Incorporation of the American Arbitration Association (“AAA”) rules can constitute “clear and unmistakable” evidence that the parties agreed to arbitrate arbitrability. Brennan, 796 F.3d at 1130. Express contractual language or “a course of conduct demonstrating assent” is also “clear and unmistakable” evidence of an agreement to arbitrate arbitrability. Mohamed v. Uber Techns., Inc., 848 F.3d 1201, 1208 (9th Cir. 2016) (quoting Momot v. Mastro, 652 F.3d 982, 988 (9th Cir. 2011)). In Mohamed, the Ninth Circuit held that, with one exception, [2] the question of arbitrability had been delegated by the parties to the arbitrator. 848 F.3d at 1206, 1209. The parties' agreement required arbitration of all disputes that “otherwise would be resolved in a court of law, ” including those “arising out of or relating to interpretation or application of” the arbitration provision. Id. at 1208-09.

         Each plaintiff in this action entered into one of three forms of franchise agreement with SEVA. Plaintiffs Punardeep Sandhu and Amarjeet Randhawa, who are the only members of plaintiff PR Spas & Salons, LLC (“PR Spas”), signed a contract (Form 1) containing a provision that reads in relevant part:

Except as qualified below, any dispute between you and us . . . arising under, out of, in connection with or in relation to this Agreement . . . must be submitted to binding arbitration under the authority of the Federal Arbitration Act and must be determined by arbitration administered by the American Arbitration Association pursuant to its then-current commercial arbitration rules and procedures. . . . Any issue as to whether a matter is subject to arbitration will be determined by the arbitrator. . . .

Defs.' Ex. A (docket no. 17-1 at 3-4).

         Plaintiffs (i) Anna A. Davis and Christiana Grace, LLC, (ii) Jason and Karen Bleick and Beauty in Spokane, LLC, (iii) Gregory and Robin Kelly and Avatar2026 Holdings, Inc., (iv) Thomas Cuthbert, Laura Charboneau, and Midwest Beauty, Inc., and (v) Mivas, LLC (owned by Travis Hawkes and Michael D. Payne) are subject to an arbitration clause (Form 2) that provides as follows:

Except as qualified below and in Section 10.03, any dispute between you and us . . . arising under, out of, in connection with or in relation to (a) this Agreement, . . . [or] (e) the scope or validity of the arbitration obligation under this Section 10.02, [3] shall be submitted to binding arbitration under the authority of the Federal Arbitration Act and must be determined by arbitration administered by the American Arbitration Association pursuant to its then-current commercial arbitration rules and procedures. . . . Any issue as to whether a matter is subject to arbitration will be determined by the arbitrator. . . .

Defs.' Exs. B(1)-B(5) (docket nos. 17-2 - 17-6, each at 7).

         Plaintiffs Ryan Landon Hollis, who has purchased three SEVA franchises, and On Call Enterprises, Inc., in which Michael and Susan Call are the sole shareholders, each executed a franchise agreement (Form ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.