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Kukoyi v. FedEx Corp.

United States District Court, S.D. Texas, Houston Division

July 31, 2019

TRAMELL KUKOYI, et al., Plaintiff,
v.
FEDEX CORPORATION, et al., Defendants.

          MEMORANDUM AND ORDER

          NANCY F. ATLAS, SENIOR UNITED STATES STATES DISTRICT JUDGE

         Before the Court in this breach of contract lawsuit is Defendant FedEx Ground Package System, Inc.'s (“FedEx”) Motion to Compel Arbitration and Dismiss Claims (“Motion to Compel” or “Motion”) [Doc. # 3], with a supporting Memorandum of Law [Doc. # 4].[1] Plaintiffs filed a response, [2] and Defendant FedEx replied.[3] The Motion is ripe for decision. Based on the parties' briefing, pertinent matters of record, and relevant legal authority, the Court grants Defendant FedEx's Motion.

         I. BACKGROUND

         Defendant FedEx Ground Packaging System, Inc. (“FedEx Ground”) is a motor carrier that provides small package information, transportation, and delivery services. FedEx Ground services its network by contracting with other business for the physical pick-up and delivery of packages. To that end, FedEx and Plaintiff Pronto Shipping and Packaging Services, Inc. (“Pronto”) entered into a Linehaul Contractor Operating Agreement (“Linehaul Agreement”) on September 16, 2015.[4]

         The Linehaul Agreement contains a Pennsylvania choice-of-law provision.[5]Plaintiff Tramell Kukoyi, the founder and CEO of Pronto, signed the Linehaul Agreement and its addenda for Pronto. Neither Plaintiff Kukoyi individually nor Defendant Devin Flippo was a party to the Linehaul Agreement.

         On August 23, 2016, FedEx and Pronto executed a signature page to memorialize the companies' agreement to multiple addenda to the Linehaul Agreement.[6] Plaintiff Kukoyi signed on behalf of Pronto.

         Among the addenda is Addendum 23, which contains a mandatory arbitration provision. In pertinent part, it states:

The Parties[, FedEx Ground and Pronto, ] agree that any dispute . . . including any claim or controversy between the parties arising since the effective date of this Addendum and out of or relating in any way to this Agreement and/or the relationship between the Parties resulting from the Agreement . . . shall be determined by final binding arbitration. . . . THE PARTIES ACKNOWLEDGE THAT THE RIGHT TO A COURT TRIAL AND TRIAL BY JURY IS OF VALUE. BY SIGNING THIS AGREEMENT, THE PARIES KNOWINGLY AND VOLUNTARILY WAIVE SUCH RIGHT FOR ANY DISPUTE, SUBJECT TO THE TERMS OF THIS AGREEMENT TO ARBITRATE.[7]

         Addendum 23 also contains a delegation clause: “The arbitrator shall have exclusive authority to resolve any Dispute concerning the formation, existence, validity, enforceability, interpretation, or scope of this agreement to arbitrate.”[8]

         Plaintiffs filed this lawsuit in Texas State Court on January 8, 2019.[9]Plaintiffs allege that, in contravention of the Linehaul Agreement, FedEx Ground began denying Pronto drivers access to FedEx pick-ups in “[e]arly 2017.”[10]Plaintiffs assert claims for breach of contract under the Linehaul Agreement, promissory estoppel, tortious interference with existing contract, tortious interference with prospective relations, fraud, and violations of the Texas Deceptive Trade Practices Act (“DTPA”). Defendants timely removed on June 10, 2019.[11]

         II. DISCUSSION

         FedEx seeks an order from this Court compelling the parties to arbitration and dismissing this lawsuit without prejudice. FedEx contends that Addendum 23 constitutes a valid arbitration agreement between FedEx and Pronto under Pennsylvania law; the arbitration agreements covers this lawsuit because it was entered into on August 23, 2016, covers disputes between the parties “arising since [its] effective date, ” and Plaintiffs alleged claims arose in “early 2017”; Plaintiff Kukoyi is bound by Addendum 23 through the doctrine of equitable estoppel; and Addendum 23's delegation clause requires an arbitrator to determine the gateway questions of arbitrability.[12]

         Plaintiffs' argue that Addendum 23 does not bind them to arbitration of this lawsuit because the Addendum 23 was not signed by either party.[13] The record submitted by FedEx demonstrates Plaintiffs' assertion is incorrect. On August 23, 2016, FedEx and Pronto executed a signature page that memorialized their agreement to multiple addenda to the Linehaul Agreement, including Addendum 23.[14]

         Plaintiffs have failed to respond to FedEx's other points, and accordingly have forfeited their right to contest these issues. See Magee v. Life Ins. Co. of N. Am., 261 F.Supp.2d 738, 748 n.10 (S.D. Tex. 2003) (“[F]ailure to brief an argument in the district court waives that argument in that court.”). The Court will order this case be submitted to binding arbitration and will dismiss this lawsuit without prejudice. See Alford v. Dean Witter Reynolds, Inc.,975 F.2d 1161, 1164 (5th Cir. 1992) (“The weight of authority clearly supports dismissal of the case when all of the issues raised in the district court must be submitted to arbitration.”); Vujasinovic & Beckcom, PLLC v. Cubillos, No. H-15-2546, 2016 WL ...


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