LONGHAUL & YOUNG, LTD. v. VALKEN, INC., No. 1:2016cv04739 - Document 9 (D.N.J. 2017)

Court Description: OPINION. Signed by Judge Joseph H. Rodriguez on 6/12/2017. (dmr)
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LONGHAUL & YOUNG, LTD. v. VALKEN, INC. Doc. 9 UNITED STATES DISTRICT COURT DISTRICT OF NEW J ERSEY LONGHAUL & YOUNG, : : Plaintiff, Hon. J oseph H. Rodriguez Civil Action No. 16-4739 v. : VALKEN, INC., : OPINION Defendant. : This m atter is before the Court on Defendant’s Motion to Dism iss pursuant to Fed. R. Civ. P. 12 (b)(6). The three-count Com plaint asserts claim s of breach of contract, unjust enrichm ent, and conversion. Plaintiff Longhaul & Young (“Longhaul”) is a Chinese corporation which issued two purchase orders to Defendant for paintball supplies. Defendant Valken, Inc. (“Valken”) is a New J ersey corporation. In short, Longhaul claim s that Valken failed to pay the balance of the purchase orders, despite having accepted the goods. Plaintiff filed suit on August 1, 20 16. Defendant m oves to dism iss on the basis that the “Term s and Conditions” of the Purchase Orders provide that any claim or dispute relating to the Purchase orders be resolved by arbitration or litigation, at the sole discretion of Valken. That clause states: D is p u te s an d Ap p licable Law . Seller and Valken expressly agree that . . . [a]ny claim s or disputes relating to this PO or any contract arising there from shall be resolved by arbitration or litigation at the sole an(sic) exclusive option of VALKEN. Arbitration proceedings shall be held in Swedesboro, NJ pursuant to the rules of the Am erican Arbitration Association. Com pl., Ex. B, ¶9. Valken argues that because it opts for arbitration, the Court should dism iss the federal com plaint and com pel arbitration as provided for in the contract. Longhaul 1 Dockets.Justia.com argues that it is not bound by the arbitration provision because it was not part of the orginial agreem ent between the parties. According to Longhaul, a valid oral contract was form ed: Valken an d Longhaul agreed on the price, quantity, and date of shipm ent, Longhaul shipped the paintballs on tim e, an d that although Valken received and accepted the paintballs, it never paid for them . Hoyt Yang, Longhauls’ General Manager, an d Vice President and Co-owner of Valken, J oe Colonese, began negotiations regarding two paintball shipm ents in August 20 15. Yang Aff. ¶4. Yang avers that, after several m onths, the parties cam e to an oral agreem ent and Longhaul received two Purchase Orders from Valken on J anuary 4, 20 16. Id.; see also Com pl., Exs. A1 & A2. Im portantly, Longhaul contends the “Term s and Conditions” sheet was not attached to the Purchase Orders. See Com pl., Ex. B. According to Yang, Longhaul m ade two shipm ents after receiving the Purchase Orders, on e of J anuary 29, 20 16 and one on February 2, 20 16. Yang Aff. ¶4. It is alleged that Valken received the shipm ents on March 8, 20 16 and March 10 , 20 16 respectively, but never m ade paym ent. Id. As a result, on April 21, 20 16, Longhaul requested a term s and con ditions sheet from Valken. Longhaul received Valken’s “Term s and Conditions” sheet on April 23, 20 16. Id.; Com pl., Ex. B. Yang affirm s that during his discussion s, Conoses never m entioned an y other Valken entities or subsidiaries. Id. Therefore, Longhaul argues that the “Term s and Conditions” sheet was not part of and did not becom e part of the contract and Longhaul is n ot bound by the arbitration provision. “Because [a]rbitration is a m atter of contract between the parties, a judicial m andate to arbitrate m ust be predicated upon the parties' consent.” Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764, 771 (3d Cir. 20 13) (quoting Par– Knit 2 Mills, Inc. v. Stockbridge Fabrics Co., Ltd., 636 F.2d 51, 54 (3d Cir. 1980 ) (internal quotations om itted)). “Before a party to a lawsuit can be ordered to arbitrate and thus be deprived of a day in court, there should be an express, unequivocal agreem ent to that effect.” Par– Knit Mills, 636 F.2d at 54. The Third Circuit recently settled the debate regarding which standard of review to apply to m otions to com pel arbitration. When a party m oves to com pel arbitration, the Third Circuit directs courts to apply a two-tier standard of review. See Guidotti, 716 F.3d 764. Where it is apparent on “the face of a com plaint, and docum ents relied upon in the com plaint,” that a party’s claim “[is] subject to an enforceable arbitration clause, a m otion to com pel arbitration should be considered under a Rule 12(b)(6) standard without discovery's delay.” Guidotti, 716 F.3d 776 (quoting Som erset, 8 32 F. Supp. 2d at 482). However, where it is unclear if an agreem ent to arbitrate controls, “or if the plaintiff has responded to a m otion to com pel arbitration with additional facts sufficient to place the agreem ent to arbitrate in issue, then the parties should be entitled to discovery on the question of arbitrability before a court entertains further briefing on [the] question.” Guidotti, 716 F.3d 776 (quoting Som erset, 8 32 F. Supp. 2d at 482) (internal quotations om itted). A court m ay, after lim ited discovery, entertain a renewed m otion to com pel arbitration under a sum m ary judgm ent posture. Guidotti, 716 F.3d 776. Here, Valken m oves under Fed. R. Civ. P. 12 (b) (6). As set forth above, Longhauls’ opposition and supporting docum ents call into question the validity of the arbitration agreem ent. As a result, the m otion to dism iss is denied and the parties are entitled to discovery on the question of arbitrability. Guidotti, 716 F.3d 776 3 For the reasons stated above, the Motion to Am end is granted. An appropriate Order shall issue. Dated: J une 12, 20 17 / s/ J oseph H. Rodriguez _ _ _ _ _ _ _ Hon. J oseph H. Rodriguez, UNITED STATES DISTRICT J UDGE 4