DAVID C. GUADERRAMA, District Judge.
Presently before the Court is Third-Party Defendant North American Capacity Insurance Company's ("North American") "Motion to Compel Arbitration and Brief in Support" (ECF No. 22) ("Motion"). For the reasons that follow, the Court
On August 16, 2016, Plaintiff Sentry Select Insurance Company ("Sentry") filed a declaratory judgment complaint before this Court against Defendants Christian Ulises Ruiz ("Ruiz"), Rudolph Chevrolet, LLC ("Rudolph Chevrolet"), Rudolph Automotive, LLC d/b/a Rudolph Mazda ("Rudolph Mazda"), Marcelo Flores ("Flores"), and Lynn Crawford ("Crawford") (collectively, "Defendants"). See Pet. for Declaratory J., ECF No. 1. Therein, Sentry claims, and seeks declarations, that under a garage policy (hereinafter, the "Sentry Policy") it issued to Rudolph Chevrolet, LLC, it has no duty to defend or indemnify Defendants in connection with a lawsuit entitled Andrea Juarez, individually and as Permanent Guardian of Irma Vanessa Villegas, an incapacitated person v. Christian Ulises Ruiz, et. al., Cause No. 2015-DCV-0473, which is pending in the 384th Judicial District Court, El Paso, County, Texas (hereinafter, the "Underlying Lawsuit"). Id. ¶¶ 7, 33(B). The Underlying Lawsuit involves a 2013 auto accident that occurred on Rudolph Mazda's parking lot: a car driven by Ruiz struck Irma Vanessa Villegas (the plaintiff in the Underlying Lawsuit), causing her injuries. Id. ¶ 9. At the time of the accident, Ruiz and Villegas were employees of Rudolph Chevrolet or Rudolph Mazda, and had consumed alcohol; Rudolph Chevrolet's managers, Flores and Crawford, allegedly provided the alcohol. See id.
On November 14, 2016, Defendants filed their "Original Answer and Christian Ulises Ruiz, Rudolph Chevrolet, LLC, and Rudolph Automotive, LLC d/b/a Rudolph Mazda's Counter-claim and Third-Party Petition for Declaratory Judgment" (ECF No. 12) ("Rudolph's Answer"). Therein, Ruiz, Rudolph Chevrolet, and Rudolph Mazda (collectively "Rudolph") assert a counterclaim for declaratory judgment against Sentry and a claim for declaratory judgement against North American, which issued an indemnity policy (hereinafter "Nation American Policy") to Rudolph Chevrolet and includes coverage for Rudolph Mazda. Rudolph's Answer ¶ 8. ECF No. 12. Rudolph alleges that either or both the Sentry Policy and the North American Policy covers the claims made in the Underlying Lawsuit and therefore, both Sentry and North American have a duty to defend and/or indemnity Rudolph. Id. ¶ 17. North American filed its "Original Answer of North American Capacity Insurance Company" (ECF No. 20), denying any such duty. On April 6, 2017, North American filed the instant Motion.
By its Motion, North American asks the Court to compel arbitration of (1) Rudolph's claims against North American (hereinafter the "Rudolph-North American Claims") and (2) Sentry's claims against Defendants and Rudolph's counterclaims against Sentry (hereinafter the "Sentry-Defendants Claims"). Mot. at 13. In the "Certificate of Conference" section of the Motion, North American states that Sentry is opposed to arbitration and that Rudolph is not opposed to arbitration so long as "all of the claims in this action" are compelled to arbitration. Mot. at 14. Neither Sentry, nor Rudolph, filed a response to North American's Motion.
Pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (the "FAA"), North American seeks to compel arbitration of Rudolph's claims against North American, i.e., the Rudolph-North American Claims, as provided under an arbitration clause in the North American Policy. The FAA requires the Court to enforce an arbitration agreement in the same manner that it would enforce any other contract. See 9 U.S.C. §§ 1-16; Specialty Healthcare Mgmt., Inc. v. St. Mary Par. Hosp., 220 F.3d 650, 654 (5th Cir. 2000). Specifically, the FAA provides that:
In ruling on a motion to compel arbitration, a district court conducts a two-step analysis. Washington Mut. Fin. Grp., LLC v. Bailey, 364 F.3d 260, 263 (5th Cir. 2004). First, the court must "determine whether parties agreed to arbitrate the dispute." Klein v. Nabors Drilling USA L.P., 710 F.3d 234, 236 (5th Cir. 2013). That determination is guided by two questions "`(1) is there a valid agreement to arbitrate the claims and (2) does the dispute in question fall within the scope of that arbitration agreement?'" Klein, 710 F.3d at 236 (quoting Sherer v. Green Tree Servicing LLC, 548 F.3d 378, 381 (5th Cir. 2008)). Federal courts apply state law contract principles when determining the validity of an agreement to arbitrate. Webb v. Investacorp, Inc., 89 F.3d 252, 258 (5th Cir. 1996) (per curiam). Second, once the court finds that the parties did agree to arbitrate, it must then "consider whether any federal statute or policy renders the claims nonarbitrable." Washington Mut. Fin. Grp., LLC, 364 F.3d at 263.
Here, Rudolph Chevrolet and Rudolph Mazda, as insureds, are a party to the North American Policy, see App. in Supp. of Mot. at 6, 32, ECF No. 22-1, and so is North American, id. at 25. The policy provides, in relevant part:
Id. at 22 (§ IX.F ("Binding Arbitration")) (emphasis added). Further, the policy provides, "[w]e have no duty or obligation to defend you under this policy. Provided you comply with the provisions of paragraph II.F. below, we shall indemnify you . . . for all reasonable and necessary defense costs." App. in Supp. of Mot. at 11 (§ II.E). Rudolph claims that North American has a duty to defend and/or indemnify Rudolph. Rudolph's Answer at 6.
North American contends that the scope of the arbitration provision is very broad, and that the Rudolph-North American Claims fall within that scope. See Mot. ¶¶ 13, 14. It therefore argues that the Rudolph and North American agreed to arbitrate their disputes at issue in this case. See id. ¶¶ 2, 15. Rudolph has not filed a brief in response to the instant Motion. See Local Rule CV-7(e) ("If there is no response filed within the time period prescribed by this rule, the court may grant the motion as unopposed."). Accordingly, and upon review of Rudolph's Answer and the relevant provisions in the North American Policy, the Court finds that Rudolph and North American agreed to arbitrate. Moreover, there is no evidence of any federal statute or policy that would prevent these claims from being arbitrable. Therefore, the Rudolph-North American Claims should be subjected to arbitration.
North American also asks the Court to compel arbitration of Sentry's claims against Defendants and Rudolph's counterclaim against Sentry, i.e., the Sentry-Defendants Claims. As a ground for the request, North American relies on the "intertwined claims" theory of equitable estoppel adopted in Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524 (5th Cir.2000). Mot. ¶ 9.
Since Grigson was decided, the Fifth Circuit has made clear that "this version of estoppel only applies to keep a signatory from avoiding its arbitration agreement." USHealth Grp., Inc., 636 F. App'x at 199 (emphasis in original) (citing Bridas S.A.P.I.C. v. Gov't of Turkmenistan, 345 F.3d 347, 361 (5th Cir. 2003)); see also Janvey v. Alguire, 847 F.3d 231, 242 (5th Cir. 2017) (per curiam) ("The `intertwined claims' theory governs motions to compel arbitration when a signatory-plaintiff brings an action against a nonsignatory-defendant asserting claims dependent on a contract that includes an arbitration agreement that the defendant did not sign."). More, the Fifth Circuit clarified that "the reverse does not hold true: a signatory may not use the same logic to estop a non-signatory from avoiding arbitration." USHealth Grp., Inc., 636 F. App'x at 199 (emphasis added) (citing Bridas S.A.P.I.C., 345 F.3d at 361)).
Grigson's equitable estoppel theory does not apply here. North American and Rudolph (more specifically, Rudolph Chevrolet and Rudolph Mazda) are signatories to the agreement containing the arbitration clause, i.e., the North American Policy, on which North American attempts to rely. App. in Supp. of Mot. at 6, 25, 32. However, Sentry is a non-signatory to that agreement. Further, Sentry opposes arbitration. Mot. at 14. Consequently, the Court denies North American's request to compel the Sentry-Defendants Claims to arbitration. See Janvey, 847 F.3d at 242 ("The `intertwined claims' theory . . . does not govern the present case, where a signatory-defendant seeks to compel arbitration with a nonsignatory-plaintiff.").
As an additional or alternative ground for arbitration, North American appeals to this Court's "inherent discretion." Mot. ¶¶ 22-23. Assuming without deciding that the Court has such discretion to compel Sentry to arbitration, it declines to exercise it here. See Al Rushaid v. Nat'l Oilwell Varco, Inc., 757 F.3d 416, 424 (5th Cir. 2014) (hereinafter Al Rushaid I) ("`In order to be subject to arbitral jurisdiction, a party must generally be a signatory to a contract containing an arbitration clause.'" (quoting Bridas S.A.P.I.C., 345 F.3d at 353)); Vinewood Capital, LLC, 295 F. App'x at 730 ("Although there is a strong and liberal policy favoring arbitration and the enforcement of arbitration agreements, `courts may require a party to submit a dispute to arbitration only if the party has expressly agreed to do so.'" (quoting Pers. Sec. & Safety Sys., Inc. v. Motorola Inc., 297 F.3d 388, 392 (5th Cir. 2002))).
Finally, North American requests that the Court stay "the claims in this case," that is, the claims asserted by all parties. See Mot. f24. It argues that disposition of the Sentry-Defendants Claims and that of the Rudolph-North American Claims depend on the resolution of the same factual issue pending in the Underlying Lawsuit: i.e., whether the incident and injuries occurred in the scope of the employment of Ruiz and Villegas. See id. ¶¶ 18, 24. Although each set of claims may depend on the resolution of that factual issue, there is nothing, and North American has not pointed to anything, to suggest that the disposition of the Sentry-Defendants Claims is contingent upon the disposition of the Rudolph-North American Claims.
Consequently, the Court denies North American's request to stay the Sentry-Defendants Claims. See Al Rushaid I, 757 F.3d at 424 ("Our conclusion [that the claims between two signatories should be subjected to arbitration] does not, however, necessarily require the district court to compel any of the other parties to arbitrate their dispute or to stay proceedings." (emphasis added)); see also Al Rushaid v. Nat'l Oilwell Varco, Inc., 814 F.3d 300, 306 (5th Cir. 2016) (hereinafter Al Rushaid II) (That the claims would be split among multiple arbitrations and court proceeding "is an inevitable and permissible consequence where one of multiple defendants asserts a right to arbitrate." (citing Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 220-21 (1985) (noting that private arbitration agreements must be enforced even if the result is piecemeal or bifurcated litigation))). If North American "had truly prioritized [its] desire to try the case efficiently, [it] could have foregone arbitration." Cf. Al Rushaid II, 814 F.3d at 306. However, because the Court grants North American's request to compel arbitration of the Rudolph-North American Claims, it will stay all proceedings as to these claims, pending the outcome of arbitration.
For the foregoing reasons,