Blackburn, United States District Judge.
The matters before me are (1)
I have putative jurisdiction over this matter under 28 U.S.C. §§ 1331 (federal question) and 1367 (supplemental jurisdiction).
The decision whether to enforce an arbitration agreement involves a two-step inquiry. First, I must determine whether the parties agreed to arbitrate the dispute. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614, 626, 105 S.Ct. 3346, 3353, 87 L.Ed.2d 444 (1985); Williams v. Imhoff, 203 F.3d 758, 764 (10th Cir.2000). Second, I then must consider whether any statute or policy renders the claims non-arbitrable. Mitsubishi Motors Corp., 105 S.Ct. at 3355; Williams, 203 F.3d at 764.
This case arises out of the installation of the roofs of two Aurora, Colorado, condominium complexes, referred to herein collectively as "the insureds." After the roofs were damaged by hail in May 2014, the insureds elected to replace them with "impact resistant" shingles manufactured by defendant. The insureds hired a general contractor to do the work, who, in turn, subcontracted the work to Schall Construction, Inc. ("Schall"), which installed the shingles.
In September 2014, while the installation was still in progress, a second hail storm caused further damage to the roofs, both those portions that had been replaced with defendant's shingles and those that as yet had not. Thereafter, defendant's shingles were used to replace both the old roof and the new shingles damaged by the second storm.
At some point soon thereafter, the insureds became aware that defendant's shingles did not conform to their advertised "Class 4" impact rating. If they had, according to plaintiff, the damage from the September 2014 hail storm to the new shingles "should have been limited to shingles with unique support conditions such as those draped over ridges, hips and valleys." (Compl. ¶ 8(b).) The insureds made a claim against their insurance policy for the costs of removing and replacing the shingles. Plaintiff, their insurer, paid those claims. It now brings this lawsuit as subrogee of the insureds and asserts claims sounding in negligence, strict liability, breach of express and implied warranties, and misrepresentation.
By this motion, defendant moves to compel arbitration of all plaintiffs' claims pursuant to an arbitration clause included in a Limited Warranty which was printed on the wrapper of each bundle of shingles. Printed on the wrapper is a prominent, horizontal text box which reads "IMPORTANT, READ CAREFULLY BEFORE OPENING BUNDLE." Beneath this text is printed, relevantly, the following:
(Def. Motion App., Exh. A-1.) The paragraph concludes by advising, "[i]f you are not satisfied with the terms and conditions of this Limited Warranty, return all unopened marketable product to the original place of purchase for a refund." (Id.)
The Limited Warranty itself is printed in five columns to the left of this text box. It includes the following clause:
(Id. (typeface and emphases original).) Defendant maintains that this provision is valid and enforceable and thus requires all claims in this lawsuit be dismissed and referred to arbitration. I concur, and thus grant the motion.
In considering an arbitration clause, the court first must address the question of arbitrability vel non. An arbitration agreement is enforceable if (1) there is a valid agreement to arbitrate; and (2) the dispute falls within the scope of that agreement. See National American Insurance Co. v. SCOR Reinsurance Co., 362 F.3d 1288, 1290 (10th Cir.2004); Via Fone, Inc. v. Western Wireless Corp., 106 F.Supp.2d 1147, 1150 (D.Kan.2000). Plaintiff challenges the arbitration provision on both these bases.
Whether the parties agreed to arbitrate "is a threshold matter," Avedon Engineering, Inc. v. Seatex, 126 F.3d 1279, 1287 (10th Cir.1997), which is governed by state law, First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 1924, 131 L.Ed.2d 985 (1995); Hardin v. First Cash Financial Services, Inc., 465 F.3d 470, 475 (10th Cir.2006). Under Colorado law, a valid contract requires proof, inter alia, of a meeting of the minds as to all essential terms. Agritrack, Inc. v. DeJohn Housemoving, Inc., 25 P.3d 1187, 1192 (Colo.2001), as modified on denial of reh'g (Colo. July 2, 2001); I.M.A., Inc. v. Rocky Mountain Ariways, Inc., 713 P.2d 882, 888 (Colo.1986). Plaintiff argues that an essential element is lacking here because its insureds never saw any of the bundles of shingles to which the arbitration provision was affixed.
Because the insureds were principals of Schall, whether the insureds themselves actually consented to the arbitration clause is irrelevant. The wrapper affixed to each bundle of shingles specifically and conspicuously provided that opening the package would constitute acceptance of the terms of the Limited Warranty, including the arbitration clause, printed on the wrapper. By opening the bundles, Schall created a contract implied in fact.
Contrary to plaintiff's argument, there is nothing unconscionable in this result. Arbitration agreements are subject to the same defenses that apply to contracts generally, including unconscionability. Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 130 S.Ct. 2772, 2776, 177 L.Ed.2d 403 (2010). See also 9 U.S.C. § 2. Under Colorado law, several considerations inform the court's analysis of this issue, including whether there is evidence of
Vernon v. Qwest Commcations International, Inc., 925 F.Supp.2d 1185, 1194 (D.Colo.2013) (quoting Davis v. M.L.G. Corp., 712 P.2d 985, 991 (Colo.1986)).
Plaintiff's argument in this regard is rather superficial and underdeveloped, which in itself would absolve the court of the obligation to address it substantively. See Center for Biological Diversity v. Pizarchik, 858 F.Supp.2d 1221, 1230 n. 11 (D.Colo.2012) (court does not consider "cursory, unsupported, or otherwise inadequately briefed arguments") (citation and internal quotation marks omitted). Moreover, by addressing only the second, third, and sixth factors cited above, plaintiff's arguments are premised entirely on issues of procedural unconscionability. See Cook v. PenSa, Inc., 2014 WL 3809409 at *11 (D.Colo. Aug. 1, 2014). Because plaintiff cannot prevail unless it demonstrates both procedural and substantive unconscionability, Vernon, 925 F.Supp.2d at 1194-95, its argument is essentially a non-starter.
Nevertheless, even when considered substantively, plaintiff's suggestion of unconscionability does not bear scrutiny. The second factor does not suggest that the arbitration agreement is unconscionable because, as already discussed, the insureds' lack of opportunity to read the Limited Warranty is irrelevant where their subagent accepted the terms thereof by his actions within the scope of his agency on their behalf. See Hoekman v. TAMKO Building Products, Inc., 2015 WL 9591471 at *6 (E.D.Cal. Aug. 26, 2015). For the same reason, the fact that the insureds were "two steps removed" from Schall does not convince the court that there was undue surprise. See id. Such a claim might have more traction had Schall unilaterally chosen the shingles without input from the
Finally, regarding the third factor, although the Limited Warranty is indeed printed in small type, the printing is of the same size as the majority of the other printing on the packaging. See Rocky Mountain Chocolate Factory, Inc. v. SDMS, Inc., 2007 WL 4268962 at *7 (D.Colo. Nov. 30, 2007) (provision "in normal print consistent with other clauses in the contract" not inconspicuous). In addition, and unlike much of the other printing on the wrapper, the arbitration clause itself is printed entirely in capital letters, employs bold-face type for emphasis, and is specifically pointed out by the prominent text box just to its right, which itself both warns the user of the consequences of opening the package and specifically references the arbitration provision. I cannot find the agreement unconscionable given these circumstances.
Accordingly, the arbitration agreement is valid and enforceable. The only remaining question, therefore, is whether the claims raised in this lawsuit are within the scope of that agreement. National American Insurance Co., 362 F.3d at 1290. Although plaintiff argues that its claims do not come within the scope of the arbitration agreement, I find and conclude that issue must be resolved by the arbitrator.
The agreement provides that arbitration will be conducted according to the rules of the Judicial Arbitration and Mediation Service ("JAMS"). Rule 11(b) of the JAMS Comprehensive Arbitration Rules and Procedures provides that "[j]urisdictional and arbitrability disputes, including disputes over the ... scope of the agreement under which Arbitration is sought ... shall be submitted to and ruled on by the Arbitrator." Rule 11(b),
Although the Tenth Circuit has not addressed this issue directly, it has intimated that a district court may dismiss when all claims are arbitrable and the movant specifically requests dismissal rather than a stay. See Armijo v. Prudential Insurance Co. v. America, 72 F.3d 793, 796-97 (10th Cir.1995) (finding appellate jurisdiction over order dismissing case in which all claims referred to arbitration; distinguishing Adair Bus Sales, Inc. v. Blue Bird Corp., 25 F.3d 953, 954-55 (10th Cir.1994), because defendant had not requested dismissal). Those two prerequisites are satisfied here. I therefore find it proper to dismiss plaintiff's claims and this action.
1. That
2. That, with the consent of the magistrate judge, the
3. That the parties shall proceed to arbitrate plaintiff's claims against defendant as provided by the arbitration clause of the Limited Warranty;
4. That all pending pretrial deadlines are vacated;
5. That the combined Final Pretrial Conference/Trial Preparation Conference scheduled for February 3, 2017 at 11:00 a.m., and the trial scheduled to commence on February 27, 2017, are vacated;
6. That all claims for relief and causes of action brought by plaintiff against defendant in this lawsuit are dismissed; and
7. That this case is closed.
My determination instead tracks those of the federal district courts which have found this specific arbitration clause valid and enforceable, which decisions I find persuasive. See Hoekman, 2015 WL 9591471; Overlook Terraces, Ltd. v. TAMKO Building Products, Inc., 2015 WL 9906298 (W.D.Ky. May 21, 2015); Krusch v. TAMKO Building Products, Inc., 34 F.Supp.3d 584 (M.D.N.C.2014).
9 U.S.C. § 3.