United States District Court, M.D. Georgia, Macon Division
T. TREADWELL, JUDGE
Culver, III, and Progressive Consulting Technologies Inc.
(the “Progressive Defendants”) have moved to
compel arbitration pursuant to an arbitration clause in a
Services Agreement allegedly executed by the Bibb County
School District (the “School District”). Doc. 70.
This Order addresses whether the alleged arbitration
agreement contains a delegation clause-a provision giving the
arbitrator the authority to resolve disputes relating to the
enforceability and validity of the agreement. If it does not,
then this Court must decide the issue of arbitrability. As
discussed below, the Court finds no delegation clause in the
December 15, 2016, the School District filed an eleven-count
complaint against Defendants Romain Dallemand, Thomas
Tourand, Progressive Consulting Technologies, Inc., Isaac
Culver, III, CompTech Computer Technologies, Inc., Allen J.
Stephen, III, Pinnacle/CSG, Inc., and Cory McFarlane. See
generally Doc. 1. That complaint asserted claims against
the Progressive Defendants for federal and state RICO
violations (Counts I and II), fraud (Count III), breach of
contract (Count V against Defendant Progressive but not
Culver), negligence (Count VIII), unjust enrichment (Count
IX), and inducing and aiding breach of fiduciary duty (Count
XI). See generally Id. In response to the
Progressive Defendants' motion to dismiss, or in the
alternative, to compel arbitration (Doc. 25), the School
District filed an amended complaint on April 3, 2017. See
generally Doc. 59. Notably, the amended complaint
alleges that the Services Agreement is void and thus asserts
a contract claim against the Progressive Defendants only in
the alternative. See Id. at ¶¶ 30, 56,
164, 169, 239, 331. The Progressive Defendants again moved to
dismiss, or in the alternative, to compel arbitration. Doc.
70. On July 18, 2017, the Court held a hearing to consider
various motions. See generally Doc. 98. At this
hearing, the Court announced it would deny the Progressive
Defendants' motion to dismiss but questioned the adequacy
of the parties' briefs on the arbitration issue.
Id. at 2. Thus, the Court instructed both parties to
submit supplemental briefs regarding the motion to compel
arbitration. Id. The parties complied. Docs. 120;
their supplemental brief do the Progressive Defendants claim
there is a delegation clause in the Services Agreement. Doc.
120 at 7. The failure to raise this issue earlier is
significant given that the School District contends the
Services Agreement was the very vehicle employed by the
Progressive Defendants and former District Superintendent and
Co-Defendant Romain Dallemand, who purportedly signed the
agreement on behalf of the School District, to defraud the
School District of millions of dollars. See, e.g.,
Doc. 121 at 10-12. Not surprisingly, the School District
claims that Dallemand, as the Progressive Defendants'
co-conspirator in their fraudulent scheme, could not by his
fraud bind the School District to a contract. Id. at
12-13. Moreover, apart from fraud, the School District argues
that Dallemand never had authority to sign the agreement
because the Board had not given him that authority.
Id. at 9.
enforceability of an arbitration agreement is a matter of
contract. First Options of Chicago, Inc. v. Kaplan,
514 U.S. 938, 944 (1995). However, the “question
whether the parties have submitted a particular dispute to
arbitration, i.e., the question of arbitrability, is an issue
for judicial determination unless the parties clearly and
unmistakably provide otherwise.” Howsam v.
Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002)
(emphasis added) (internal quotation marks, citations, and
alterations omitted). Parties may show their clear and
unmistakable intent to submit to an arbitrator the threshold
issue of arbitrability by including a delegation clause in
their arbitration agreement. See Rent-A-Center, West,
Inc. v. Jackson, 561 U.S. 63, 68-69 (2010) (“We
have recognized that parties can agree to arbitrate
‘gateway' questions of ‘arbitrability, '
such as whether the parties have agreed to arbitrate or
whether their agreement covers a particular
controversy.” (internal citations omitted)). If an
arbitration agreement contains a delegation clause, the
arbitrator, rather than the Court, determines arbitrability.
See Id. at 72.
Rent-A-Center, the United States Supreme Court
clearly stated what language constitutes a delegation clause;
a delegation clause exists when an arbitration agreement
expressly gives “the arbitrator exclusive authority to
resolve any dispute relating to the . . . enforceability . .
. of [the] Agreement.” Rent-A-Center, 561 U.S.
at 71 (internal quotation omitted). There is no real mystery
to this, and whether a delegation clause exists is generally
easy to determine. See, e.g., Jones v. Waffle House,
Inc., 866 F.3d 1257, 1263 (11th Cir. 2017) (noting that
the relevant arbitration agreement contained a delegation
clause which stated “[t]he Arbitrator, and not any
federal, state, or local court or agency, shall have
authority to resolve any dispute relating to the
interpretation, applicability, enforceability or formation of
this Agreement, including but not limited to any claim that
all or any part of this Agreement is void or
voidable.”); Parnell v. Cashcall, Inc., 804
F.3d 1142, 1147-48 (11th Cir. 2015) (holding that a
sub-provision defining the word “dispute” to
include “any issue concerning the validity,
enforceability, or scope of . . . the Arbitration
agreement” is an express delegation clause that
“unambiguously commits to the arbitrator the power to
determine the enforceability of the agreement to
arbitrate.”) (internal quotations omitted); Johnson
v. Keybank Nat'l Ass'n, 754 F.3d 1290, 1292
(11th Cir. 2014) (noting that the relevant agreement
contained a delegation clause which stated “[a]ny Claim
shall be resolved . . . by binding arbitration” and
defined a “Claim” as “any claim, dispute,
or controversy between you and us arising from or relating to
this Agreement . . . including, without limitation, the
validity, enforceability, or scope of this Arbitration
Provision or this Deposit Account
the Progressive Defendants belatedly contend that the first
sentence of the arbitration agreement contains a delegation
clause which is “broad in scope.” Doc. 120 at 7.
Indeed, what they contend to be the delegation clause is the
arbitration agreement itself.
Section 6.04 - Arbitration: Any controversy or claim
arising out of or relating to this Agreement, or breach
thereof, shall be settled by arbitration in accordance with
the Arbitration Rules of the state [sic.] of
Georgia. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction
thereof. Qualified Arbitrators shall be selected by the
parties in accordance with the Arbitration Rules of the state
[sic.] of Georgia. Each party shall have the right of
discovery as set forth in the Federal Rules of Civil
Procedure. The Arbitration shall be administered by a
mutually agreed upon third party.
70-2 at 4 (emphasis added). The Progressive Defendants cite
no authority supporting their assertion that the general
delegation of disputes to arbitration can also be a
delegation of the issue of arbitrability. Most certainly,
this is because none exists.
in this sentence shows unambiguous evidence that the parties
intended to commit the issue of arbitrability to an
arbitrator. The Supreme Court could not have been more
clear-that intent must be “clear and
unmistakable.” First Options, 514 U.S. at 944;
see also Rent-A-Center, 561 U.S. at 69 n.1 (noting
the requirement for “clear and unmistakable
evidence” to arbitrate arbitrability is a heightened
standard). Accordingly, the Court has the power to address
the validity and enforceability of the arbitration agreement.
Progressive Defendants do not address in their briefs the
standard the Court must use to resolve the arbitrability
issue; the School District does. The Progressive Defendants
shall respond to the School District's position on that
issue within fourteen days.