The opinion of the court was delivered by: MARSH
On July 1, 1972 the plaintiffs, citizens of Pennsylvania, and the defendant, a Delaware corporation with its principal place of business in New Jersey, entered into an "Agency Agreement," a copy of which is attached to the complaint and designated as Exhibit A.
The defendant was in the business of transporting automobiles from one point to another within the continental United States and, by the aforementioned agreement, appointed the plaintiffs as its local agents in the Pittsburgh area. The agreement was to remain in effect for one year and was automatically renewable for each succeeding year as long as the conditions set forth therein were met.
The defendant notified the plaintiffs on or about May 18, 1973 that it had chosen to terminate plaintiffs' agency and did so on June 1, 1973. The plaintiffs allege that they conducted the defendant's business from July 1, 1972 until the termination by the defendant.
On November 14, 1974, plaintiffs filed this diversity action, seeking damages in excess of $10,000, complaining that the defendant unjustly terminated the agreement.
Relying on the broad arbitration clause in paragraph 18 of the agreement, the defendant made a demand for arbitration upon the plaintiffs on December 10, 1974, however, plaintiffs failed to act on this demand. Defendant then asserted plaintiffs' failure to act as an affirmative defense in its answer filed December 13, 1974.
The very nature of the interstate automobile transport business, which is the subject of the contract between the parties, indicates that this agreement is one which evidences a transaction involving commerce as defined in 9 U.S.C. § 1. The arbitration clause contained in the agreement is a written provision as contemplated in § 2. Thus, the issues presently before the court are:
I. Is the controversy in this litigation a matter which is subject to arbitration under the agreement?
II. Is the defendant in default in proceeding with arbitration?
Paragraph 18 of the agreement in question states:
"Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be ...