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Rosales v. Coca-Cola Southwest Beverages LLC

United States District Court, W.D. Texas, El Paso Division

April 3, 2019

GILBERT ROSALES, Plaintiff,
v.
COCA-COLA SOUTHWEST BEVERAGES LLC, Defendant.

          MEMORANDUM OPINION AND ORDER SETTING JURY TRIAL REGARDING ARBITRABILITY

          PHILIP R. MARTINEZ, UNITED STATES DISTRICT JUDGE

         On this day, the Court considered Defendant Coca-Cola Southwest Beverages LLC's [hereinafter "Defendant"] "Motion to Dismiss and Compel Arbitration" (ECF No. 10) [hereinafter "Motion to Compel"], on January 24, 2019; Plaintiff Gilbert Rosales's [hereinafter "Plaintiff'] "Response to Defendant's Motion to Dismiss and Compel Arbitration, with Objections to Defendant's Proffers of Evidence" (ECF No. 14) [hereinafter "Response"], filed on February 7, 2019; and Defendant's "Reply in Support of its Motion to Dismiss and Compel Arbitration" (ECF No. 17) [hereinafter "Reply"], filed on February 14, 2019, in the above-cap tioned cause. After due consideration, the Court is of the opinion that a jury trial should be set to determine whether the parties agreed to arbitrate this dispute, for the reasons that follow.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         This case arises out of an employment dispute. Plaintiff was employed by Defendant as a maintenance mechanic. Am. Compl. 2, Jan. 3, 2019, ECF No. 7. Plaintiff is over fifty-five years old and was born with the disability of having an extra vertebra. Id. at 2-3. Plaintiff alleges that managers and employees employed by Defendant harassed and discriminated against him on the basis of age. Id. at 3. Additionally, Plaintiff asserts that he faced discrimination and retaliation because of his disability. Id. at 4-5. Plaintiff filed suit in state court on October 8, 2018, alleging disability and age discrimination and retaliation in violation of state and federal law. Not. of Removal 1-2, Nov. 20, 2018, ECF No. 1. On November 20, 2018, Defendant removed the case to federal court. Id.

         The instant Motion to Compel was filed on January 24, 2019. In its Motion to Compel, Defendant alleges that a valid and enforceable arbitration agreement exists and requires that Plaintiffs claims be submitted to arbitration. Mot. 1. Defendant provides its Dispute Resolution Agreement, which expressly applies to disputes arising under the "Americans With Disabilities Act, Age Discrimination in Employment Act, . . . and state statutes, if any, addressing the same or similar subject matters." Id. Ex. A (Dispute Resolution Agreement), § 1.

         Additionally, Defendant provides an affidavit of Lisa Marie Cano, who is a "Human Resources Business Partner and Q custodian of records." Id. Ex. 1. In the affidavit, Ms. Cano testifies that, during the onboarding process, Plaintiff was provided an opportunity to review the Dispute Resolution Agreement and either electronically sign or opt-out of the agreement within 30 days. Id. Further, Ms. Cano testifies that Plaintiff accessed the Dispute Resolution Agreement electronically as part of an online module completed at Defendant's facility. Id. Ms. Cano asserts that Defendant entered his unique employee identification No. to access the module. Id. According to Ms. Cano, after completing the module, Plaintiff had the "option to accept" and then "executed the Agreement." Id. Defendant also provides an electronic printout that contains Plaintiffs name and employee identification No. and purportedly reflects that Plaintiff completed the computer module containing the company's Dispute Resolution Agreement on October 24, 2017. Id. Ex. C. According to Ms. Cano, the record was created in the ordinary course of business. Id. Ex. 1.

         Plaintiff does not dispute that his claims are in the scope of the alleged agreement. See Resp. However, Plaintiff avers that Defendant has failed to establish that a valid, electronically signed arbitration agreement exists. Id. at 3. Plaintiff denies viewing or signing any physical or electronic Dispute Resolution Agreement. Id. at 4, Ex. C. Additionally, Plaintiff asserts that Defendant's proffered evidence demonstrating that Plaintiff viewed and signed the arbitration agreement should not be admissible because it contains hearsay and violates the best evidence rule. Id. at 5-6.

         In addition to challenging the arbitration agreement's validity, Plaintiff raises procedural challenges to Defendant's Motion. Plaintiff contends that, even if this case must be arbitrated, the proper procedure for enforcing an arbitration agreement is a stay-rather than dismissal-of the action. Id. at 11. Further, Plaintiff asserts that Defendant has waived the right to arbitration by removing the case to federal court. Id. at 12.

         II. LEGAL STANDARD

         The Federal Arbitration Act ("FAA") § 2 provides that:

A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

9 U.S.C. § 2. This provision "reflect[s] both a liberal policy favoring arbitration'. . . and the 'fundamental principle that arbitration is a matter of contract."' AT&T Mobility LLC v. Conception, 563 U.S. 333, 339 (2011) (quoting first Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983), and then Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 67 (2010)).

         When considering a motion to compel arbitration pursuant to the FAA, courts employ a two-step analysis. "First, a court must 'determine whether the parties agreed to arbitrate the dispute in question.'" Tittle v. Enron Corp., 463 F.3d 410, 418 (5th Cir. 2006) (quoting Webb v. Investacorp., Inc., 89 F.3d 252, 258 (5th Cir. 1996)). "Second, a court must determine 'whether legal constraints external to the parties' agreement foreclosed the arbitration of those claims."' Fleetwood Enters., Inc. v. Gaskamp, 280 F.3d 1069, 1073 (5th Cir. 2002) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Ply mouth, 473 U.S. 614, 628 (1985)).

         The first step of the analysis-whether the parties agreed to arbitrate the dispute in question-consists of two distinct prongs: "(1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls within the scope of that arbitration agreement."[1] Tittle, 463 F.3d at 418-19 (quoting Webb, 89 F.3d at 258). "[I]n determining whether the parties agreed to arbitrate a certain matter, courts apply the contract law of the particular state that governs the agreement." Washington Mut. Fin. Grp., LLC v. Bailey, 364 F.3d 260, 264 (5th Cir. 2004).[2]

         III. ANALYSIS

         A. Plaintiffs Evidentiary Challenges

         Plaintiff offers two challenges regarding the admissibility of Defendant's record reflecting Plaintiffs purported electronic acknowledgment of the arbitration agreement:[3] (i) that Defendant's record is hearsay and fails to satisfy the business records exception and (ii) that Defendant's record fails to satisfy the best evidence rule. Ultimately, the Court concludes that Defendant's record depicting Plaintiffs acknowledgment of the arbitration agreement is admissible.

         i. Defendant's record satisfies the business records exception to the hearsay rule.

         "Hearsay" is a statement that "a party offers in evidence to prove the truth of the matter asserted in the statement." Fed.R.Evid. 801(c)(2). Hearsay is not admissible unless an exception to the hearsay rule applies. See Fed.R.Evid. 802.

         Defendant avers that the exhibits attached to the affidavit are "not hearsay" because they are instead "communications relevant to the making of a contract." Resp. 6. Signed contracts may be admissible as non-hearsay to show that the document exists but not for the truth of the matter asserted therein. See Kepner-Tregoe, Inc. v. Leadership Software, Inc., 12 F.3d 527, 540 (5th Cir. 1994) ("Signed instruments such as wills, contracts, and promissory notes are writings that have independent legal significance and are not hearsay.").

         Here, the printout does not appear to have independent legal significance, and it is not a signed instrument. Instead, Defendant offers the document to show the truth of the matter that it asserts. Specifically, in part, the printout contains the following information: "SB011724 Gilberto Rosales Dispute Resolution Agreement 10/24/2017 21:22." Defendant provides the printout in order to demonstrate that the information it contains is true-that is, that a person using Plaintiffs unique employee number, which is associated with Plaintiffs name, accessed the Dispute Resolution Agreement module and then completed the module on October 24, 2017. Since the document is offered to prove its truth, the Court is of the opinion that Defendant's record is hearsay.

         Although the record is hearsay, the Court is of the opinion that the printout should nonetheless be admissible for purposes of the Motion to Compel because the document satisfies the business records exception. An exception to the hearsay rule exists for "records of a regularly conducted ...


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