MEMORANDUM DECISION AND ORDER DENYING MOTION TO DISMISS AND ALTERNATIVE MOTION TO STAY AND COMPEL ARBITRATION

David Nuffer, United States District Judge.

Defendant Maskcara Industries, Inc. ("Maskcara"), has filed a motion to dismiss ("Motion")1 on the basis of a forum-selection provision in the parties' contract, or alternatively to stay the proceedings here while the parties pursue arbitration required under another clause in the contract. Plaintiff Kirsten Tyrrel ("Tyrrel") disputes Maskcara's interpretation of the forum-selection provision and argues that the arbitration provision cannot be invoked due to an unsatisfied condition precedent —or has been waived. As explained below, the Motion is DENIED. The action will not be dismissed or stayed for arbitration.

BACKGROUND ...1281

DISCUSSION ...1285

I. The Motion to Dismiss is Denied...1285

II. The Motion to Stay Pending Arbitration is Denied ...1287

ORDER ...1290

BACKGROUND

Except as noted, the following facts are undisputed:

1. Maskcara is a company based in St. George, Utah.2 According to the Complaint, "Maskcara is a `network marketing' or multi-level marketing company that markets a variety of beauty products, including eye, facial, and skin products."3 Tyrell alleges that she was a successful distributor for Maskcara,4 but that Maskcara has wrongfully suspended her and denied her commissions based on false pretenses.5

2. Tyrrel concedes that "Maskcara's Policies and Procedures [i.e., the Agreement] and Maskcara's Compensation. Plan, together with any application she may have signed when she joined Maskcara, constitute a contract between the parties."6

3. Under the Agreement, Tyrrel agreed that "[j]urisdiction and venue of any matter not subject to arbitration shall reside exclusively in Washington County, State of Utah."7

4. Under the Agreement, Tyrrel also agreed that any dispute with Maskcara arising from or related to the Agreement would be resolved through mandatory mediation and arbitration:

5. In this action, Tyrrel asserts the following claims against Maskcara: Intentional Interference with Existing and Potential Economic Relations; Breach of Contract; Breach of Covenant of Good Faith and Fair Dealing; and Injunctive Relief.9

6. All of Tyrrel's claims against Maskcara arise out of or relate to the Agreement.10

7. In early June 2019, Tyrrel received a letter dated May 31, 2019, informing her that she was suspended from her Maskcara business.11 Within a few weeks, on June 19, 2019, Tyrrel sent a letter formally demanding a mediation under the Agreement (and proposing Brent Manning or Mark James as potential mediators).12

8. The parties dispute whether Maskcara "meaningfully engage[d]" with Tyrrel, or had reasonable time to do so, in the mediator selection process prior to June 28, 2019, when Tyrrel initiated a mediation through AAA.13

9. Maskcara did not meet AAA's deadline to submit Maskcara's preference for mediators, to the AAA Case Administrator.14

10. AAA appointed James Holbrook as mediator on July 23, 2019. Both before and after that occurred, Maskcara indicated a willingness to engage Brent Manning as mediator (who was not on the AAA list of mediators provided by AAA and whom Maskcara had initially not agreed to use, although Tyrrel suggested him).15

11. The parties did not ultimately agree to a non-AAA mediator and Maskcara did not respond to a July 26, 2019 email in which Tyrrel's counsel asked when Maskcara would be available to mediate. The same email suggested that Maskcara had been "stonewall[ing]" Tyrrel's attempts "to schedule a mediation...."16

12. Subsequently, Maskcara was unable to assure its participation in the premediation scheduling conference set for August 14, 2019, which was reset for August 27, 2019. Maskcara then failed to provide available dates for a mediation at that scheduling conference, or until September 3, 2019 (which was six days past the August 28, 2019 deadline set by the mediator for doing so).17

13. A mediation was scheduled for October 22, 2019. This date is 91 days after the mediator was appointed by AAA. On October 18, 2019, Maskara's counsel emailed that his mother had just had a stroke the night before and that he would "need to be with her over the next few days"; that the scheduled mediation would therefore need to be "postpone[d]"; and that Maskcara would "like to reset as soon as possible."18 When Tyrrel's counsel objected, saying that Tyrrel "would like to proceed with the mediation scheduled for [October 22, 2019]," Maskcara's counsel replied that Maskcara was "available for the mediation on November 4th and if that date doesn't work, we are willing to look at another that does."19

14. Following this exchange, Mr. Holbrook wrote counsel an email stating as follows:

15. In reply, Tyrrel "agree[d] that the Dispute Resolution provision ha[d] been waived and that the October 22nd mediation should be vacated."21

DISCUSSION

I. The Motion to Dismiss is Denied

Maskcara argues that this action should be dismissed on forum non conveniens grounds. "A valid forum-selection clause should be given controlling weight in all but the most exceptional cases."22 "[W]hen venue is specified, such as when the parties designate a particular county or tribunal, and the designation is accompanied by mandatory or obligatory language, a forum selection clause will be enforced as mandatory."23

Here, the forum selection provision provides: "[j]urisdiction and venue of any matter not subject to arbitration shall reside exclusively in Washington County, State of Utah."24 Maskcara argues that this "clause is essentially identical to the clause at issue in [Excell, Inc. v. Sterling Boiler & Mech., Inc.,]25—and both [the Excell and Agreement] clauses provide for a mandatory forum in state court."26 The Excell court held that a provision stating that "[j]urisdiction shall be in the State of Colorado, and venue shall lie in the County of El Paso, Colorado" was "mandatory and require[d] that any breach of contract action be brought and litigated in the District Court of El Paso County, Colorado."27 The court rejected the argument that the provision would also extend to the "federal district court that sits in El Paso County," reasoning as follows:

As Tyrrel has emphasized, however, the provision here "does not specify whether venue lies in federal or state court," but "merely provides that venue shall be in Washington County."29 Tyrrel asserts that "if a contract's forum-selection clause specifies a particular county, venue may be proper in both federal and state court."30 Applying this rule here, Tyrrel concludes that "venue is proper because this case is assigned to the Southern Region of the Central District of Utah, and venue for Southern Region cases are within Washington County because there is a federal courthouse in St. George, Utah."31 St. George is in Washington County. Tyrrel supports this argument by discussing some Tenth Circuit district court opinions and cases from other circuits.32 In a footnote at the conclusion of this discussion, Tyrrel contrasts her preferred case law with Excell and argues that Excell is "flawed:"

Excell held that any reference to "county" in a forum selection clause requires an action to be brought in state court. After Excell was decided, Tenth Circuit analysis of forum selection provisions has distinguished between language of sovereignty and language of geography. In American Soda, decided eight years after Excell, the court explained: "If the contract language refers to the state courts to the exclusion of the federal courts, it is a term of sovereignty. If, on the other hand, it encompasses [a particular state's] state courts and the federal court sitting in the [particular state], it is a term of geography."34

The provision at issue in American Soda required that disputes be resolved in "courts of the State of Colorado,"35 which the court said "refer[red] to sovereignty rather than geography."36 Courts of the State of Colorado are Colorado State Courts, so American Soda affirmed the district court's order remanding the case to Colorado State Court.

American Soda contrasted the provision it considered with the provision at issue in Basicomputer Corp. v. Scott.37 Basicomputer Corp. held "that a forum selection clause requiring disputes to be brought `in courts in the State of Ohio' did not exclude the federal district court for the Northern District of Ohio, which ... was unquestionably in Ohio[.]"38 Under American Soda, a clause referring to courts "of" a state is a reference to sovereignty, while a clause referring to courts "in" a state (or by extension, a county) is a geographic reference. American Soda referred to cases "interpreting language other than `courts of the State,' including Basicomputer Corp.39 Those cases support Tyrrel's view of the language in the Agreement forum selection clause. American Soda and these cases differentiate the geographic preposition "in," from the possessive preposition "of," which implies sovereignty. Under the American Soda analysis, the Excell clause ("[j]urisdiction shall be in the State of Colorado, and venue shall lie in the County of El Paso, Colorado") is clearly geographical. Excell would not have been remanded to state court under the American Soda analysis.

The plain language of the provision at issue here places jurisdiction and venue "in Washington County, State of Utah,"40 which is a geographical specification, rather than identification of a particular sovereign. In addition, the Agreement states that jurisdiction and venue "shall reside" in Washington County. "Reside" is a geographical term. Because this federal court sits within Washington County, venue is proper in this court as well as in state courts in Washington County. Maskcara's request to dismiss this action based on the forum-selection clause is accordingly DENIED.

II. The Motion to Stay Pending Arbitration is Denied

Alternatively, Maskcara asks that this action be stayed pending arbitration. As Maskcara notes, (1) the parties agreed to arbitrate "any controversy or claim arising out of or relating to the Agreement, or the breach thereof,"41 and (2) this action involves only claims "arising out of or relating to the Agreement."42 Maskcara invokes the Federal Arbitration Act and related case law to support its position that the broad arbitration provision in the Agreement is binding,43 and that this action should be stayed pending the parties' arbitration proceedings.44

In response, Tyrrel does not dispute the validity or scope of the parties' agreement to arbitrate, but argues that she cannot be compelled to arbitrate here for two reasons: (1) mediation within 60 days of the mediator's appointment is a condition precedent to arbitration that has not been satisfied here, and (2) equitable considerations demonstrate that Maskcara has waived the right to arbitration. It is only necessary to consider the first of these arguments.

Mediation Within 60 Days of the Mediator's Appointment Is an Unsatisfied Condition Precedent to Arbitration.

The parties dispute whether good-faith mediation within 60 days of the mediator's appointment is a condition precedent to arbitration under the Agreement.45 In support of her position that this precondition was not met, Tyrrel references Maskcara's "deliberate[] delay[s]" in her efforts to engage in mediation,46 and Mr. Holbrook's observation that Maskcara had apparently "waived a condition precedent to arbitration...."47 She argues that, because this precondition was not satisfied, "[Tyrrel] cannot now be compelled to arbitration."48

On the other hand, Maskcara emphasizes the Agreement's statement that the "arbitration provision applies to claims that were not successfully resolved through the foregoing mediation process."49 Because none of the claims here were resolved by mediation, Maskcara asserts that "Plaintiff's next step was arbitration,"50 as Mr. Holbrook suggested in the same email cited by Tyrrel.51

Neither side has cited any authority to support its position, but Tyrrel is correct. The Dispute Resolution provisions in the Agreement are mandatory:

Mandatory provisions like these have been held to impose mediation as a condition precedent to arbitration, meaning that the right to arbitration does not arise until the condition has been satisfied.53 The arbitration and mediation provisions are not severable but part of an integral dispute resolution process. Because the condition of completion of mediation within 60 days of the mediator's appointment has not been satisfied, Maskcara has no enforceable right to arbitrate the parties' dispute unless that failure is excused. Because Maskcara has articulated no theory to excuse satisfaction of the precondition,54 its request to compel arbitration and stay these proceedings is DENIED.

ORDER

For the foregoing reasons, IT IS HEREBY ORDERED that the Motion to Dismiss or, in the Alternative, to Stay and Compel Arbitration Under the Federal Arbitration Act,55 is DENIED.