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SBP LLLP v. Hoffman Construction Co. of America

United States District Court, D. Idaho

December 20, 2019

SBP LLLP, an Idaho limited liability limited partnership; JRS PROPERTIES III LP, an Idaho limited partnership; and J.R. SIMPLOT FOUNDATION, INC., an Idaho corporation, Plaintiffs,
v.
HOFFMAN CONSTRUCTION COMPANY OF AMERICA, an Oregon corporation, Defendant.

          MEMORANDUM DECISION AND ORDER

          DAVID C. NYE U.S. DISTRICT COURT JUDGE

         I. INTRODUCTION

         Pending before the Court is Defendant Hoffman Construction Company of America's (“Hoffman”) Motion to Dismiss. Dkt. 6. On December 12, 2019, the Court held oral argument and took the motion under advisement. Upon review, and for the reasons set forth below, the Court finds good cause to DENY Defendant's Motion to Dismiss at this time because there are factual disputes as to whether the parties agreed to arbitrate.

         II. BACKGROUND

         From 2009 to 2012, Hoffman entered into three separate contracts with SBP LLLP (“SBP”), JRS Properties III LP (“JRS”), and J.R. Simplot Foundation, Inc. (“Foundation”) (collectively, the “Plaintiffs”) to demolish and construct certain improvements on real property located in Ada County.

         In 2009, Hoffman and SBP entered into a written contract based on a standard form agreement drafted by the American Institute of Architects (“AIA”), specifically the AIA Document A121-2003, [1] as modified by the parties (“SBP Agreement”). Dkt. 9-3. On or about July 28, 2009, Hoffman signed the agreement that, for a specified price, it would work as a construction manager for the construction of certain improvements on real property located in Ada County and owned by SBP; SBP subsequently signed the agreement on or about October 14, 2009.

         In February 2010, Hoffman and Foundation entered into a written contract based on the AIA Document A121-2003 standard form agreement, as modified by the parties (“Foundation Agreement”). Dkt. 9-1. Hoffman agreed that, for a specified price, it would work as a construction manager for the construction of certain improvements on real property located in Ada County and owned by Foundation.

         In January 2012, Hoffman and JRS entered into a written contract based on the AIA Document A133-2009 standard form agreement, as modified by the parties (“JRS Agreement”). Dkt. 9-6. Hoffman agreed that, for a specified price, it would work as a construction manager for the demolition and subsequent construction of certain improvements on real property located in Ada County and owned by JRS.

         On May 31, 2019, Hoffman filed a demand for arbitration and mediation with the American Arbitration Association, claiming breach of contract damages for costs it had incurred associated with delays to the contracted construction on all three projects. On July 1, 2019, Hoffman filed an amended demand for arbitration and mediation.

         On June 14, 2019, Plaintiffs filed a complaint in District Court for the Fourth Judicial District of Idaho. On June 17, Plaintiffs filed an amended complaint in which they alleged two causes of action. The first cause of action requested a judicial declaration under Idaho Code § 10-1201 that the SBP Agreement, Foundation Agreement, and JRS Agreement (collectively “the Agreements”) do not include agreements to arbitrate with Hoffman. The second cause of action requested a stay of Hoffman's arbitration demand under Idaho Code § 7-902(b).

         On July 11, 2019, Hoffman removed the case to this Court on diversity jurisdiction grounds pursuant to 28 U.S.C. § 1332. Hoffman is an Oregon corporation and Plaintiffs are Idaho companies and partnerships. The underlying action concerns Hoffman's arbitration claim for $4, 665, 988.65.

         On July 18, 2019, Hoffman filed the pending motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1). The motion is now ripe.

         III. APPLICABLE LEGAL STANDARD

         In its response to Hoffman's motion to dismiss for lack of subject matter jursidiction, Plaintiffs observe that Hoffman relied on evidence outside the pleadings in its motion. Accordingly, Plaintiffs argue that Hoffman's motion to dismiss is in fact a motion to compel arbitration and therefore should be reviewed under a motion for summary judgment standard. In its reply, Hoffman implicitly concedes that Plaintiffs are correct. See Dkt. 13, at 8. (“While a summary judgment standard may properly apply to this motion . . . .”). When the Court asked during oral argument if the pending motion might be more properly construed as a motion to compel, both parties agreed, and Hoffman explicitly acknowledged the Court has subject-matter jurisdiction over the case.

         Although the pending motion is formally styled as motion to dismiss, the Court considers it a motion to compel under 9 U.S.C. § 4 of the Federal Arbitration Act (“FAA” or the “Act”).[2]

         IV. LEGAL STANDARD

         “The district court, when considering a motion to compel arbitration which is opposed on the ground that no agreement to arbitrate has been made between the parties, should give to the opposing party the benefit of all reasonable doubts and inferences that may arise.” Three Valleys Mun. Water Dist. v. E.F. Hutton & Co., 925 F.2d 1136, 1141 (9th Cir. 1991) (quoting Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., Ltd., 636 F.2d 51, 54 & n.9 (3d Cir. 1980)). Thus, however the original motion was formally styled, a motion to compel arbitration is decided according to the standard similar to the one used by district courts in resolving summary judgment motions pursuant to Federal Rule of Civil Procedure Rule 56. Concat LP v. Unilever, PLC, 350 F.Supp.2d 796, 804 (N.D. Cal. 2004) (citation omitted).[3]

         Summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The Court's role at summary judgment is not “to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Zetwick v. Cty. of Yolo, 850 F.3d 436, 441 (9th Cir. 2017) (citation omitted). In considering a motion for summary judgment, the Court must “view[ ] the facts in the non-moving party's favor.” Id. To defeat a motion for summary judgment, the respondent need only present evidence upon which “a reasonable juror drawing all inferences in favor of the respondent could return a verdict in [his or her] favor.” Id. (citation omitted).

         The Court must enter summary judgment if a party “fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The respondent cannot simply rely on an unsworn affidavit or the pleadings to defeat a motion for summary judgment; rather the respondent must set forth the “specific facts, ” supported by evidence, with “reasonable particularity” that precludes summary judgment. Far Out Productions, Inc. v. Oskar, 247 F.3d 986, 997 (9th Cir. 2001).

         V. DISCUSSION

         1. Governing Law

         As a threshold matter, the parties initially disputed whether federal or state law governs. Hoffman relied on the Federal Arbitration Act, 9 U.S.C. §§ 1 to 16, in moving to compel, but Plaintiffs originally contended that Idaho's Uniform Arbitration Act governs. See Idaho Code §§ 7-901-902. The Court will resolve this dispute for the sake of clarity, but “it is largely an academic one because the federal and state acts are “‘virtually identical.'” Burch-Lucich v. Lucich, No. ...


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