Filed: Jul. 03, 2017
Latest Update: Mar. 03, 2020
Summary: United States Court of Appeals For the Eighth Circuit _ No. 16-2125 _ Zetor North America, Inc. lllllllllllllllllllll Plaintiff - Appellee v. Brent Rozeboom, individually, and as Director of Alberni Enterprises doing business as Ridgeway Enterprises; Glenda Rozeboom, individually lllllllllllllllllllll Defendants Ridgeway Enterprises, a private trust company lllllllllllllllllllll Defendant - Appellant Antonie Rozeboom; Alberni Enterprises lllllllllllllllllllll Defendants Alan Scott Peterson, indi
Summary: United States Court of Appeals For the Eighth Circuit _ No. 16-2125 _ Zetor North America, Inc. lllllllllllllllllllll Plaintiff - Appellee v. Brent Rozeboom, individually, and as Director of Alberni Enterprises doing business as Ridgeway Enterprises; Glenda Rozeboom, individually lllllllllllllllllllll Defendants Ridgeway Enterprises, a private trust company lllllllllllllllllllll Defendant - Appellant Antonie Rozeboom; Alberni Enterprises lllllllllllllllllllll Defendants Alan Scott Peterson, indiv..
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United States Court of Appeals
For the Eighth Circuit
___________________________
No. 16-2125
___________________________
Zetor North America, Inc.
lllllllllllllllllllll Plaintiff - Appellee
v.
Brent Rozeboom, individually, and as Director of Alberni Enterprises doing
business as Ridgeway Enterprises; Glenda Rozeboom, individually
lllllllllllllllllllll Defendants
Ridgeway Enterprises, a private trust company
lllllllllllllllllllll Defendant - Appellant
Antonie Rozeboom; Alberni Enterprises
lllllllllllllllllllll Defendants
Alan Scott Peterson, individually, and as Executive Trustee of Ridgeway Enterprises
lllllllllllllllllllll Defendant - Appellant
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No. 16-2249
___________________________
Zetor North America, Inc.
lllllllllllllllllllll Plaintiff - Appellee
v.
Brent Rozeboom, individually, and as Director of Alberni Enterprises doing
business as Ridgeway Enterprises; Glenda Rozeboom, individually
lllllllllllllllllllll Defendants - Appellants
Ridgeway Enterprises, a private trust company; Antonie Rozeboom; Alberni
Enterprises; Alan Scott Peterson, individually, and as Executive Trustee of
Ridgeway Enterprises
lllllllllllllllllllll Defendants
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Appeals from United States District Court
for the Western District of Arkansas - Harrison
____________
Submitted: February 8, 2017
Filed: July 3, 2017
____________
Before SMITH,1 BENTON and SHEPHERD, Circuit Judges.
____________
BENTON, Circuit Judge.
Zetor North America, Inc., sued Ridgeway Enterprises and its associates for
trademark infringement. Years before, Zetor settled a dispute with Ridgeway over
similar infringement. The settlement agreement included an arbitration clause, which
1
The Honorable Lavenski R. Smith became Chief Judge of the United States
Court of Appeals for the Eighth Circuit on March 11, 2017.
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Ridgeway seeks to enforce. The district court2 denied Ridgeway’s motion to compel
arbitration. Zetor N. Am., Inc. v. Rozeboom, 2016 WL 1611599 (W.D. Ark. April
22, 2016). Having jurisdiction under 28 U.S.C. § 1292(a)(1) and 9 U.S.C.
§ 16(a)(1)(c), this court affirms.
I.
Zetor was granted a license to use the Zetor mark and promotional materials
in the United States. Ridgeway Enterprises3 sells tractor parts but is not an authorized
Zetor dealer. According to Zetor, Ridgeway advertises, markets, sells, and distributes
new and used parts using the Zetor mark without clearly distinguishing which are
genuine, causing consumer confusion about the source and quality of the parts. Zetor
also alleges that Ridgeway’s use of Zetor photos and promotional materials infringes
its copyright.
Zetor and Ridgeway had a similar dispute in 2008. Becoming aware of similar
tactics, Zetor sent a cease and desist letter. The dispute was resolved by a settlement
agreement with an arbitration provision. That provision stated that the parties would
“attempt in good faith to resolve any controversy arising out of or relating to this
Agreement.” If that failed, the controversy would go to mediation “in accordance
with American Arbitration Association [sic] or may proceed directly to arbitration.”
2
The Honorable Timothy L. Brooks, United States District Judge for the
Western District of Arkansas.
3
Brent and Glenda Rozeboom own Ridgeway Enterprises. Antonie G.
Rozeboom allegedly owns the property from which Ridgeway operates. Alberini
Enterprises is associated with the Rozebooms. Alan Scott Peterson is the Executive
Trustee of Ridgeway Enterprises. These parties are referred to collectively as
“Ridgeway.”
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Under the Agreement, “Ridgeway acknowledge[d] the validity of the mark
ZETOR” and “that only Zetor and its authorized resellers and licensees may use the
Zetor Mark in advertising, promotional, and sales materials.” In paragraph 2,
Ridgeway agreed to “permanently cease and desist the use of the ZETOR Mark,
except” to describe the compatibility of its products with a Zetor product, subject to
several restrictions. Ridgeway also transferred to Zetor a domain name it used,
zetorusa.com. Both Zetor and Ridgeway released all claims “that occurred prior to
the effective date of this Agreement.”
In 2014, Zetor became aware of allegedly trademark-infringing conduct by
Ridgeway. Zetor sent another cease and desist letter. Ridgeway did not respond.
Zetor sued Ridgeway for trademark infringement and dilution, injury to business
reputation, unfair competition, copyright infringement, deceptive trade practices, and
civil conspiracy, adding claims as under Arkansas anti-dilution laws, the Arkansas
Deceptive Trade Practice Act, and common law. In its answer, Ridgeway included
“arbitration and award” in a list of affirmative defenses. However, Ridgeway did not
move to compel arbitration until after the case progressed: The parties had completed
preliminary discovery and participated in a case-management hearing and settlement
conference; Zetor had added defendants and moved to compel discovery.4
The district court, finding the arbitration provision inapplicable to Zetor’s new
claims, denied Ridgeway’s motion to compel arbitration. It did not address Zetor’s
argument that the settlement agreement was void due to fraudulent inducement in its
formation. Ridgeway appeals.
4
On appeal, Zetor now argues that Ridgeway waived arbitration by not moving
to compel at the beginning of the case. Because the district court did not address this
argument, this court declines to do so in the first instance. See Metro. Prop. & Cas.
Ins. Co. v. Calvin, 802 F.3d 933, 939 (8th Cir. 2015) (an appellate court may, but
need not, consider alternative arguments on appeal).
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II.
The contract-interpretation-based denial of a motion to compel arbitration is
reviewed de novo. Unison Co. v. Juhl Energy Dev., Inc., 789 F.3d 816, 818 (8th Cir.
2015). The Federal Arbitration Act—which governs here—reflects “a liberal federal
policy favoring arbitration.” AT&T Mobility LLC v. Concepcion,
563 U.S. 333, 339
(2011) (internal quotation marks omitted). But it is a “fundamental principle that
arbitration is a matter of contract.”
Id. (internal quotation marks omitted). Therefore,
“a party cannot be required to submit to arbitration any dispute which he has not
agreed so to submit.” Howsam v. Dean Witter Reynolds, Inc.,
537 U.S. 79, 83
(2002). See also
Unison, 789 F.3d at 818.
“[T]he liberal federal policy favoring arbitration agreements requires that a
district court,” faced with a broad arbitration clause “send a claim to arbitration as
long as the underlying factual allegations simply touch matters covered by the
arbitration provision.” Unison, 789 F.3d at 818 (internal quotation marks and
alterations omitted). Arbitration clauses covering claims “arising out of” or “relating
to” an agreement are broad.
Id. at 819.
Here, Ridgeway agreed to “permanently cease and desist” its allegedly
infringing use of the Zetor mark. Thus, according to Ridgeway, Zetor’s current
claims “aris[e] out of or relat[e] to” the Agreement and are bound by the arbitration
provision. Ridgeway concludes that “the underlying factual allegations [ ] ‘touch
matters covered by’ the arbitration provision.” 3M Co. v. Amtex Sec., Inc., 542 F.3d
1193, 1199 (8th Cir. 2008), quoting Mitsubishi Motors Corp. v. Soler Chrysler-
Plymouth, Inc.,
473 U.S. 614, 625 n.13 (1985).
Ridgeway relies on the 3M case, where this court upheld the enforcement of
an arbitration clause because “[e]very claim in Amtex’s original complaint fell
squarely within the scope of the arbitration clause,” and additional claims “include[d]
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factual allegations regarding” contract terms. Id. 3M had contracted with Amtex to
“provid[e] various administrative, technical, and professional services.”
Id. at 1195.
The contract “detailed the duration, scope of services, and contract price for
services.”
Id. The parties “agreed to arbitrate any dispute regarding the existence,
cause, or value of any change to the scope of services Amtex was to provide.”
Id. at
1196. Amtex demanded an equitable adjustment for uncompensated services outside
the scope of the agreement.
Id. at 1199. The arbitration agreement applied “[i]n the
event [the parties] cannot agree on . . . whether a variation has occurred.”
Id. (first
and second alterations in original) (internal quotation marks omitted). This court held
that “they agreed to arbitrate a very broad range of disputes regarding the existence,
cause, or value of any change to the scope of services,” and thus the claims were
arbitrable.
Id.
Unlike the 3M case, Zetor’s claims have no relation to the terms of the
Agreement. Despite the language obliging Ridgeway to “permanently cease and
desist” its allegedly infringing use of the Zetor mark, the Agreement resolved an
existing dispute; it did not create a relationship between the parties to be governed
by the terms of the Agreement. Zetor released its claims arising out of Ridgeway’s
sales practices, and Ridgeway agreed to cease its conduct. Zetor and Ridgeway each
released all claims “that occurred prior to the effective date of [the] Agreement.” The
Agreement’s releases encompass Ridgeway’s alleged infringement up to the effective
date only. The district court noted any claims covered by the Agreement—arising
before the effective date of October 15, 2008—are time-barred. Zetor does not
attempt to revive any of these claims or assert any claim that depends on the existence
of the Agreement.
Zetor does not allege Ridgeway violated the terms of the Agreement. While
the alleged wrongful conduct is similar to the conduct that led to the Agreement,
Zetor’s claims rest on independent trademark and copyright grounds, which have no
relation to the terms of the Agreement and in no way depend on its existence. This
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independent alleged violation of Zetor’s trademark rights does not “aris[e] out of or
relat[e] to” the terms of the Agreement. Because the Agreement covers only conduct
that occurred before its 2008 effective date—not the current conduct—Zetor’s claims
do not “touch matters covered by the arbitration provision.” Id. (internal quotation
marks omitted), quoting Mitsubishi
Motors, 473 U.S. at 625 n.13. Zetor is not
attempting to enforce the terms of the Agreement; it is suing to enforce trademark and
unfair competition laws that are independent of the Agreement. The complaint did
not mention the Agreement, and Zetor did not sue to bring Ridgeway into compliance
with its terms.
Ridgeway maintains that the provisions in paragraph 2 of the Agreement create
a relationship governing future conduct between the parties. That paragraph,
however, requires only that Ridgeway stop its objectionable sales practices, subject
to certain exceptions. It does not create a structure of forward-looking rights and
obligations enforceable through arbitration.
The plain language of the contract does not apply to wholly independent claims
arising several years later. Ridgeway’s interpretation of its requirement to cease
infringing the Zetor mark would bind the parties—in perpetuity—to arbitrate any
dispute about trademark, copyright, and consumer-deception law. As the district
court found, this “reading of the Agreement and arbitration clause is patently
unreasonable and contrary to the clear and unambiguous language of the contract
itself.” Zetor, 2016 WL 1611599, at *3. Because “a party cannot be required to
submit to arbitration any dispute which he has not agreed so to submit,” Zetor cannot
be compelled to arbitrate claims wholly unrelated to the Agreement. See
Howsam,
537 U.S. at 83.
*******
The judgment is affirmed.
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