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Vangura Kitchen Tops, Inc. D/B/A Vangura Surfacing Products v. C & C North America Inc. D/B/A Cosentino Usa and Cosentino Usa

March 5, 2013

VANGURA KITCHEN TOPS, INC. D/B/A VANGURA SURFACING PRODUCTS AND VANGURA LAMINATED PRODUCTS,
PLAINTIFF,
v.
C & C NORTH AMERICA INC. D/B/A COSENTINO USA AND COSENTINO USA, INC.,
DEFENDANT.



The opinion of the court was delivered by: Arthur J. Schwab United States District Judge

ELECTRONICALLY FILED

Memorandum Opinion on Motion to Dismiss Due to Arbitrability of Dispute (doc. no. 11)

I. Introduction

This dispute has a procedural history dating back to 2008, when Vangura Kitchen Tops. Inc. ("Vangura") filed a lawsuit in this Court against defendant, C & C North America d/b/a Cosentino USA (C & C) (among others), alleging breach of contract related to a sublicensing agreement, wherein C & C obtained the right to fabricate, promote, sell, install and service Silestone Products in Western Pennsylvania. See Civil Action Number 2:08-cv-1011. After two Court-ordered mediations, the parties reached a settlement of their claims, as well as a plan for resolution of future disputes that might arise as a result of their ongoing business relationship. In contemplation thereof, in May of 2009, the parties executed a Master Distribution/Distribution and Settlement Agreement (hereinafter "Settlement Agreement" or "2009 Settlement Agreement") that provides, inter alia, Vangura would be the exclusive Master Distributor to purchase Silestone Products from C & C, and could promote, market, and sell the same within the Western Pennsylvania area. That document, however, was not attached to the stipulation and dismissal with prejudice in the underlying action; rather, it has been attached as an exhibit to the instant motion. Doc. No. 13-1.

On January 11, 2012, Vangura initiated a civil action by filing a Petition to Enforce Settlement in the Court of Common Pleas of Allegheny County, Pennsylvania, at docket number GD 13-000961. C & C then removed this lawsuit to this Court. Doc. No. 1. In this action, Vangura alleges that C & C breached the terms of a subsequent 2012 Mediation Term Sheet entered into between the parties in November of 2012. In its complaint, Vangura seeks damages in the amount of $549,492.52, plus interest and other relief. Doc. No. 1-1. C & C denies that the 2012 Mediation Term Sheet constitutes an enforceable agreement, and seeks to compel arbitration of this dispute before Attorney Mark Shepard, pursuant to Paragraph 46 of the 2009 Settlement Agreement. Pending before this Court is Defendant's Motion to Dismiss under Fed. R. Civ. Pr. 12(b)(6)(doc. no. 12), and Plaintiff's response in opposition thereto (doc. no. 18).

II. Standard of Review

Defendant files this Motion to Dismiss under Fed. R. Civ. Pr. 12(b)(6), alleging failure to state a claim upon which relief may be granted. See Palcko v. Airborn Express Inc., 372 F.3d 588, 597 (3d Cir. 2004)("Our prior decisions support the traditional practice of treating a motion to compel arbitration as a motion to dismiss for failure to state a claim under which relief can be granted"). Given Defendant's use of many attached exhibits, in addition to the language of the applicable 2009 Settlement Agreement and the 2012 Mediation Term Sheet, this Court could not normally consider such documents on a motion to dismiss pursuant to Rule 12(b)(6). However, there is recent case law (which neither side mentions) that on a motion to compel arbitration, the Court shall employ the same standard of review as a motion for summary judgment. Control Screening LLC v. Technological Application and Production Co., 687 F.3d 163, 167 (3d Cir. 2012). On the one hand, Vangura seems to contend that documents outside of the pleadings may not be considered in the context of a Rule 12(b)(6) motion. However, on the other hand, Vangura also states that the facts are not in dispute, and in its response it goes so far as to rely on the same documents, including emails to and from Attorney Shepard, which are outside of the scope of the pleadings per se. Consistent therewith, the Court will employ the same standard of review as on a motion for summary judgment. Control Screening LLC, 687 F. 3d at 167. See also Youssef v. Dep't of Health and Senior Servs., 423 F.App'x 221, 224 (3d Cir. 2011)(citing Venuto v. Witco Corp., 117 F.3d 754, 757 (3d Cir. 1997)(When both sides rely on materials outside of the pleadings, the Court may treat a motion as a motion for summary judgment under Federal Rule of Civil Procedure 56).

Summary judgment under Fed.R.Civ.P. 56(c) is appropriate A>if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.@ Woodside v. School Dist. of Philadelphia Bd. of Educ., 248 F.3d 129, 130 (3d Cir. 2001), quoting Foehl v. United States, 238 F.3d 474, 477 (3d Cir. 2001) (citations omitted). In deciding a summary judgment motion, the court must Aview the evidence . . . through the prism of the substantive evidentiary burden@ to determine Awhether a jury could reasonably find either that the plaintiff proved his case by the quality and quantity of the evidence required by the governing law or that he did not.@ Anderson v. Consolidated Rail Corp., 297 F.3d 242, 247 (3d Cir. 2002), quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254 (1986).

When the non-moving party will bear the burden of proof at trial, the moving party's burden can be Adischarged by >showing= -- that is, pointing out to the District Court -- that there is an absence of evidence to support the non-moving party's case.@ Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). If the moving party has carried this burden, the burden shifts to the non-moving party who cannot rest on the allegations of the pleadings and must Ado more than simply show that there is some metaphysical doubt as to the material facts.@ Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); Petruzzi's IGA Supermarkets, Inc. v. Darling-Delaware Co., 998 F.2d 1224, 1230 (3d Cir. 1993). Thus the non-moving party cannot rest on the pleadings, but instead must go beyond the pleadings and present Aspecific facts showing that there is a genuine issue for trial,@ Fed.R.Civ.P. 56(e), and cannot rely on unsupported assertions, conclusory allegations, or mere suspicions in attempting to survive a summary judgment motion. Williams v. Borough of W. Chester, 891 F.2d 458, 460 (3d Cir.1989) (citing Celotex, 477 U.S. at 325 (1986)). The non-moving party must respond Aby pointing to sufficient cognizable evidence to create material issues of fact concerning every element as to which the non-moving party will bear the burden of proof at trial.@ Simpson v. Kay Jewelers, Div. Of Sterling, Inc., 142 F. 3d 639, 643 n. 3 (3d Cir. 1998), quoting Fuentes v. Perskie, 32 F.3d 759, 762 n.1 (3d Cir. 1994).

AIn considering a motion for summary judgment, a district court may not make credibility determinations or engage in any weighing of the evidence; instead, the non-moving party's evidence >is to be believed and all justifiable inferences are to be drawn in his favor.= Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).@ Marino v. Industrial Crating Co., 358 F.3d 241, 247 (3d Cir. 2004.) See also Doe v. County of Centre, PA, 242 F.3d 437, 446 (3d Cir. 2001) (Court must view facts in the light most favorable, draw all reasonable inferences, and resolve all doubts, in favor of the nonmoving party ).

III. Factual Background

The crux of the current dispute centers upon Paragraph 46 of the 2009 Settlement Agreement relating to Dispute Resolution/Arbitration, and whether the 2012 Mediation Term Sheet is a valid contract which should be resolved under Paragraph 46 of the 2009 Settlement Agreement. Doc. No. 13-1. C & C argues that Vangura and C & C entered into a valid arbitration agreement (under Paragraph 46 of the Settlement Agreement), and that this dispute, over whether the 2012 Mediation Term Sheet even constitutes a valid agreement, also falls within the scope of the arbitration agreement in Paragraph 46. Vangura, however, contends on the contrary, and argues that the 2012 Mediation Term Sheet constitutes a valid contract that exists separately from Paragraph 46 of the Settlement Agreement and is not covered by Paragraph 46 thereof.

Paragraph 46 of the Settlement Agreement contains an arbitration clause which states as follows:

46. Dispute Resolution/Arbitration. Any dispute, controversy or claim arising out of or relating to this Agreement, including American Silestone's reporting requirements pursuant to ...


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