Filed: Mar. 22, 2017
Latest Update: Mar. 22, 2017
Summary: ORDER FRANK D. WHITNEY , Chief District Judge . THIS MATTER is before the Court on the parties' Joint Motion for Partial Voluntary Dismissal Without Prejudice (Doc. No. 32), the parties' responses to the Court's Order to show cause why certain claims should not be dismissed with prejudice (Doc. Nos. 35, 37, and 40), and Defendant's Motion for Partial Stay Pending Arbitration (Doc. No. 36). The Court DENIES the Joint Motion for Partial Voluntary Dismissal and GRANTS Defendant's Motion for
Summary: ORDER FRANK D. WHITNEY , Chief District Judge . THIS MATTER is before the Court on the parties' Joint Motion for Partial Voluntary Dismissal Without Prejudice (Doc. No. 32), the parties' responses to the Court's Order to show cause why certain claims should not be dismissed with prejudice (Doc. Nos. 35, 37, and 40), and Defendant's Motion for Partial Stay Pending Arbitration (Doc. No. 36). The Court DENIES the Joint Motion for Partial Voluntary Dismissal and GRANTS Defendant's Motion for P..
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ORDER
FRANK D. WHITNEY, Chief District Judge.
THIS MATTER is before the Court on the parties' Joint Motion for Partial Voluntary Dismissal Without Prejudice (Doc. No. 32), the parties' responses to the Court's Order to show cause why certain claims should not be dismissed with prejudice (Doc. Nos. 35, 37, and 40), and Defendant's Motion for Partial Stay Pending Arbitration (Doc. No. 36). The Court DENIES the Joint Motion for Partial Voluntary Dismissal and GRANTS Defendant's Motion for Partial Stay.
The parties in this case assert claims and counterclaims arising out of two contracts: the "Circle K Contract" and the "Pantry Contract." Both parties agree that all claims arising out of or related to the Pantry Contract should be settled by arbitration. Though the parties jointly requested that this Court dismiss those claims without prejudice pursuant to Fed. R. Civ. P. 41(a)(2), it was unclear to the Court why the Court should not dismiss those claims with prejudice, and the Court ordered the parties to show cause as to why dismissal with prejudice would be inappropriate.
Following additional briefing by the parties, the Court agrees with Defendant that a voluntary dismissal with prejudice could operate as a final adjudication on the merits and preclude arbitration of those claims. See Harrison v. Edison Bros. Apparel Stores, 924 F.2d 530, 534 (4th Cir. 1991) ("A voluntary dismissal with prejudice under Fed. R. Civ. P. 41(a)(2) is a complete adjudication on the merits of the dismissed claim."). Such a result, which would potentially leave Defendant without any forum in which to pursue claims arising out of or related to the Pantry Contract, would clearly prejudice Defendant.
The Fourth Circuit has "recognized that `[w]hen a valid agreement to arbitrate exists between the parties and covers the matter in dispute, the FAA commands the federal courts to stay any ongoing judicial proceedings and to compel arbitration.'" Aggarao v. MOL Ship Mgmt. Co., 675 F.3d 355, 375 (4th Cir. 2012) (quoting Hooters of Am., Inc. v. Phillips, 173 F.3d 933, 937 (4th Cir. 1999)).1 A stay of the claims arising out of or related to the Pantry Contract pending arbitration of those claims would preserve the parties' rights to have the Pantry Contract claims decided on the merits, and it would preserve the Court's jurisdiction over those claims in the event it becomes necessary for the Court to enforce an arbitration award. Accordingly, the Court will grant Defendant's Motion for Partial Stay as detailed below.
IT IS, THEREFORE, ORDERED that:
1. The parties' Joint Motion for partial Voluntary Dismissal Without Prejudice (Doc. No. 32) is DENIED;
2. Defendant's Motion for Partial Stay Pending Arbitration (Doc. No. 36) is GRANTED. The Court stays proceedings on all claims arising out of or related to the Pantry Contract for twelve (12) months from the date of this Order.2 The parties shall submit reports to the Court every ninety (90) days regarding the status of arbitration. Failure to do so will result in Court action; and
3. All claims that do not arise out of or relate to the Pantry Contract shall proceed pursuant to the dates and deadlines set in the Pretrial Order and Case Management Plan (Doc. No. 15).
IT IS SO ORDERED.
