United States District Court, W.D. Pennsylvania
HOLTEC INTERNATIONAL and HOL TEC MANUFACTURING DIVISION, INC., Plaintiffs,
PANDJIRIS, INC., ARC MACHINES, INC., and JOHN DOES 1-10, Defendants.
OPINION RE: ECF NO. 52 AND 55
Maureen P. Kelly Chief Magistrate Judge
FACTUAL AND PROCEDURAL BACKGROUND
January 20, 2017, Plaintiff Holtec International and Holtec
Manufacturing Division, Inc. ("Holtec") initiated
this civil action in the United States District Court for the
District of New Jersey against Defendants Pandjiris, Inc.
("Pandjiris"), Arc Machines, Inc. ("AMI")
and John Does 1-10, by the filing of a Civil Action
Complaint. ECF No. 1. On April 4, 2017, an order was issued
directing the transfer of this case to the United States
District Court for the Western District of Pennsylvania. ECF
August 11, 2017, Holtec filed an Amended Complaint asserting
three claims: Count I - breach of
contract/quasi-contract/unjust enrichment/promissory estoppel
against all Defendants; Count II - third party beneficiary
against AMI; and Count III - U.C.C. against all Defendants.
ECF No. 51. The claims asserted in the Amended Complaint
arise from the sale by Pandjiris to Holtec of two welding
manipulator systems. Pandjiris ordered certain equipment
and/or component parts from AMI, a subcontractor.
Id. ¶ 11. In January 2013, the manipulators
were shipped by Pandjiris and installed at Holtec's
facility in Turtle Creek, Pennsylvania, under the supervision
of and with the technical assistance of Pandjiris and AMI.
Id. ¶ 16. Thereafter, Holtec alleges that it
experienced continuous problems with the welding
manipulators. Id. ¶ 17. Holtec further alleges
that the machines never operated properly and ultimately had
to be replaced. Id. ¶¶ 18-29.
before the Court is Defendant Pandjiris, Inc.'s Motion to
Dismiss Plaintiffs' First Amended Complaint or, in the
Alternative, to Stay. ECF No. 52. Pandjiris also filed a
Memorandum in Support. ECF No. 53. Pandjiris asserts that the
contract that Holtec relies upon to support their claims
contains a binding arbitration provision that applies to all
disputes relating to or arising out of the sale and purchase
of the products at issue. As such, Pandjiris seeks to have
this Court order that Holtec's claims fall under the
parameters of the arbitration provision, and requests that
the Court dismiss or stay all claims so that the parties
arbitrate the claims in Ohio, the agreed forum, with the
American Arbitration Association. Id. at 1.
addition, Defendant AMI filed a Motion to Dismiss
Plaintiffs' Amended Complaint and Memorandum of Law in
Support. ECF Nos. 55 and 56. AMI argues that the Amended
Complaint should be dismissed in its entirety pursuant to
Fed.R.Civ.P. 12(b)(6) because Holtec has failed to plead the
requisite elements of its claims. ECF No. 55 at 1.
response, Holtec filed an Omnibus Response in Opposition to
Defendants' Second Motions to Dismiss and Memorandum of
Law. ECF Nos. 60 and 61. The Court takes particular note
that, in the Omnibus Response in Opposition, Holtec notifies
the Court that it will stipulate that the arbitration
provision the Pandjiris, Inc. Terms and Conditions of Sale
(the "Terms and Conditions") is controlling. As
such, Holtec has respectfully requested that this federal
action be stayed and that all claims be globally
transferred to arbitration. ECF No. 61 at 4.
reasons that follow, Pandjiris' Motion to Dismiss and/or
Stay will be granted and all claims between Holtec and
Pandjiris are to be arbitrated in Ohio. As to AMI, it will
not be compelled to arbitration. The instant federal action
will be stayed pending conclusion of the arbitration between
Holtec and Pandjiris in Ohio. As such, the AMI Motion to
Dismiss is denied without prejudice to refile once the stay
of this action is lifted.
forth in the Amended Complaint, between May and July 2012,
Holtec and Pandjiris exchanged several communications
regarding the terms of their agreement for the purchase of
the two welding manipulator systems. ECF No. 51. Many of the
communications became part of and were attached to the Holtec
Purchase Order. ECF No. 51-1 at 1-5. Attached to the Purchase
Order was the Pandjiris Terms and Conditions. Id. at
18 - 26. The Terms and Conditions of Sale set forth an
explicit arbitration provision, as follows:
220. Agreement to Arbitrate Customer agrees
that all disputes between the Seller and customer (and their
respective affiliates) relating in any way or arising in any
way out of Seller's Quotation(s) and/or Purchaser's
Purchase Order(s), whether pleaded in contract or tort, at
law or in equity, and whether for damages or equitable
relief, shall be settled by arbitration administered by the
American Arbitration Association ("AAA") in
accordance with the AAA's Commercial Arbitration Rules,
except to the extent that such rules conflict with any
express provision of this Agreement and judgment entered on
an award by the arbitrator(s) may be entered by any court
having jurisdiction thereof. Customer agrees that the
location of any arbitration as provided for in this paragraph
shall be conducted in Ohio, and Customer waives any right to
contest or object to the location of the arbitration in Ohio.
Any such arbitration shall be conducted by a panel of three
(3) arbitrators. The costs of any arbitration shall be borne
equally by the parties, unless a majority of the panel
concludes that either party has acted in bad faith. The
decision of the majority of the panel shall be final,
conclusive and binding upon the parties to the maximum extent
permitted by law.
Id. at 26.
STANDARD OF REVIEW
' [a]rbitration is a matter of contract between the
parties, ' a judicial mandate to arbitrate must be
predicated upon the parties' consent." Guidotti
v. Legal Helpers DebtResolution. L.L.C.. 716
F.3d 764, 771 (3d Cir. 2013), quoting Par-Knit Mills.
Inc. v. Stockbridge Fabrics Co.. Ltd.. 636 F.2d 51, 54
(3d Cir. 1980). Thus, although the Federal Arbitration Act
(the "FAA"), 9 U.S.C. § 1, et seq.,
permits the enforcement of a contract to arbitrate, it
requires that a court first satisfy itself that the making of
the agreement to arbitrate is not in issue. Id.,
citing 9 U.S.C. § 4. In determining whether an
agreement to arbitrate was actually reached, the United
States Court of Appeals for the Third Circuit has found that
the appropriate ...