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NOVA CTI CARIBBEAN v. EDWARDS

January 8, 2004.

NOVA CTI CARIBBEAN, Plaintiff,
v.
TARA L. EDWARDS, Defendant



The opinion of the court was delivered by: ROBERT KELLY, Senior District Judge

MEMORANDUM

Plaintiff Nova CTI Caribbean ("Nova CTI") filed a Complaint against Defendant Tara L. Edwards ("Edwards") alleging breach of contract and tortious interference with contractual relations. Presently before the Court is Edwards' Motion to Dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), 12(b)(3), 12(b)(5) and 12(b)(6). For the reasons that follow, Edwards' Motion will be granted.

1. BACKGROUND

  This case arose out of a June 1, 2002 Employment Agreement ("Agreement") entered into by the parties. Nova CTI is a Nevis corporation that has principal business offices in Philadelphia, Pennsylvania. In March, 2002, Nova CTI formed a joint venture with the corporate entity Nand Persuad LTD ("Nand Persuad") to create a telemarketing center in Guyana, South America. In furtherance of this venture, Nova CTI entered into the Agreement with Edwards to be the manager of the Guyana telemarketing center.

  Nova CTI expended $350,000 in investment funds for the purpose of establishing Page 2 the telemarketing center in Guyana. Moreover, Nova CTI made contacts with numerous United States companies for the purpose of bringing business to the telemarketing center in Guyana. Specifically, Nova CTI secured an agreement with Reed Business Information, U.S. ("RBI") to be one of the initial accounts to use the Guyana telemarketing center.

  Sometime after June 2002, the employment relationship between Nova CTI and Edwards began to deteriorate. On September 20, 2002, Edwards officially resigned from her employment with Nova CTI. Edwards immediately commenced an employment relationship with Nand Persuad.*fn1 At approximately the same time, the joint venture between Nova CTI and Nand Persuad ended and Nova CTI lost the RBI account to Nand Persuad.

  On September 22, 2003, Nova CTI filed a two Count Complaint against Edwards alleging breach of contract (Count I) and tortious interference with contractual relations (Count II). In relation to the breach of contract claim, Nova CTI alleges that Edwards breached a non-compete clause in the Agreement and "diverted the business opportunity of RBI from Nova CTI Caribbean to Nand Persuad International Communications." (Compl. ¶ 28). In terms of the tortious interference with contractual relations claim, Nova CTI alleges that Edwards intentionally and improperly interfered with Nova CTI's contractual relations with two separate entities. First, Nova CTI claims that Edwards' interference with the contractual relation with Nand Persuad caused Nand Persuad to abandon the joint venture with Nova CTI. Second, Nova CTI alleges that Edwards interfered with the business relationship between Nova CTI and RBI Page 3 by "securing a contract between RBI and Nand Persuad International Communications." (Id. ¶ 32).

  Notably, the Agreement that both Nova CTI and Edwards signed contained a provision relating to the arbitration of certain disputes. The provision states that "any . . . controversy, claim, or dispute arising out of or relating to the terms and conditions of this Agreement shall be settled by arbitration before a mutually selected arbitrator to be in the Country of Nevis." (Id., Ex. A., ¶ 8). Edwards has filed the instant Motion to Dismiss, arguing that pursuant to the arbitration clause of the Agreement and the Federal Arbitration Act ("FAA"), Nova CTI's claims "aris[e] out of or relat[e] to the terms and conditions of th[e] Agreement" and, therefore, should be settled by arbitration. ConsEdwards claims that this dispute should not be before this Court.

 2. STANDARD OF REVIEW

  As previously stated, Edwards has filed the instant Motion to Dismiss based on multiple grounds. Edwards argues this Court lacks subject matter jurisdiction over the instant case pursuant to the arbitration clause in the Agreement and the FAA. Because this Court finds that the mandatory arbitration clause is applicable to all of Nova CTI's claims, it will not address the other issues raised in the Motion to Dismiss.*fn2 See Federico v. Charterers Mut. Assurance Page 4 Ass'n Ltd., 158 F. Supp.2d 565, 576 (E.D. Pa. 2001).

  In relation to her argument under the arbitration clause in the Agreement, Edwards moves for dismissal of the Complaint pursuant to Rule 12(b)(1). A Rule 12(b)(1) motion deals with the issue of a court's subject matter jurisdiction. "The Motion would more properly have been brought under Rule 12(b)(6), because the existence of a valid arbitration clause does not technically deprive the Court of subject matter jurisdiction." Liveware Publ'g, Inc. v. Best Software, Inc., 252 F. Supp.2d 74, 78 (D. Del. 2003)(citing Nationwide Ins. Co. of Columbus, Ohio v. Patterson, 953 F.2d 44, 45 (3d Cir. 1991)). Instead, as one court noted, an arbitration clause "requires the Court to forego the exercise of jurisdiction in deference to the parties' contractual agreement to address in another forum those disputes which fall within the scope of the agreement to arbitrate." Id. at 79. Notwithstanding the appropriateness of a motion pursuant to Rule 12(b)(6), courts have allowed parties to petition for arbitration via a motion to dismiss for lack of subject matter jurisdiction. Thompson v. Nienaber, 239 F. Supp.2d 478, 483 (D.N.J. 2002). As in Thompson, the Court will allow Edwards to move pursuant to Rule 12(b)(1). The Court finds that the distinction between Rule 12(b)(1) and Rule 12(b)(6) is immaterial because pursuant to either ground, the arbitration clause requires arbitration of Nova CTI's claims.

  A motion to dismiss pursuant to Rule 12(b)(1) may present either a facial or a factual challenge to subject matter jurisdiction. Mortensen v. First Fed. Sav. and Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). In the instant Motion, Edwards makes a facial attack on the Complaint because the argument pursuant to Rule 12(b)(1) is based on the language of the arbitration clause in the Agreement, which is attached to Nova CTI's Complaint. When the Page 5 movant challenges subject matter jurisdiction based on the face of the complaint, the court must consider all allegations of the complaint as true and make all reasonable inferences in plaintiff's favor. Id.

 3. DISCUSSION

  Edwards relies on the FAA, as well as the arbitration provision contained in the Agreement, in arguing that this Court should dismiss Nova CTI's breach of contract and tortious interference with contractual relations claims. Edwards only response to this argument is to summarily request that this Court retain jurisdiction over the tortious interference with contractual relations claim if the Court finds that arbitration is appropriate. The Court concludes that the broad arbitration clause in the Agreement covers ...


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