KABBA v. Equal Employment Opportunity Commission, Amicus Supporting Appellee. (2018)

Rent-A-Center., Inc. (“RAC”), appeals the district court's order denying its motion for summary judgment and to compel arbitration. RAC contends that it and Appellee Paul Kabba, who signed two arbitration agreements with RAC, showed a clear and unmistakable intent to have an arbitrator determine the arbitrability of Kabba's employment discrimination claims. RAC further contends that, even if the district court rather than an arbitrator had the authority to determine the threshold issue of arbitrability, Kabba's claims are arbitrable. We affirm.¹

We review de novo a district court's grant or denial of summary judgment. Grayson O Co. v. Agadir Int'l LLC, 856 F.3d 307, 314 (4th Cir. 2017). A court must grant summary judgment for the moving party when that party “shows that there is no genuine dispute as to any material fact and the [moving party] is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). In considering a motion for summary judgment, a court must not “weigh the evidence and determine the truth of the matter.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Rather, a court must draw any permissible inference from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). However, the nonmoving party must offer more than a mere “scintilla of evidence in support of [its] position.” Anderson, 477 U.S. at 252, 106 S.Ct. 2505.

“Where ordinary contracts are at issue, it is up to the parties to determine whether a particular matter is primarily for arbitrators or for courts to decide.” BG Grp. PLC v. Republic of Arg., 572 U.S. 25, 134 S.Ct. 1198, 1206, 188 L.Ed.2d 220 (2014). Unless the contract states otherwise, a court will presume that it, rather than an arbitrator, will decide any disputes regarding arbitrability, such as “whether the parties are bound by a given arbitration clause, or whether an arbitration clause in a concededly binding contract applies to a particular type of controversy.” Id. (internal quotation marks omitted). However, parties may overcome such a presumption by including a delegation provision in the agreement to have an arbitrator decide issues of arbitrability. Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 68-69, 130 S.Ct. 2772, 177 L.Ed.2d 403 (2010). Even so, “courts should not assume that the parties agreed to arbitrate arbitrability unless there is clear and unmistakable evidence that they did so.” Id. at 69 n.1, 130 S.Ct. 2772 (brackets and internal quotation marks omitted); accord First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). This “standard is exacting.” Peabody Holding Co., LLC v. United Mine Workers of Am., 665 F.3d 96, 102 (4th Cir. 2012). Moreover, this requirement “pertains to the parties’ manifestation of intent, not the agreement's validity.” Rent-A-Ctr., 561 U.S. at 69 n.1, 130 S.Ct. 2772.

RAC contends that the district court erred in concluding that Kabba and RAC did not clearly and unmistakably agree to arbitrate arbitrability. For support, RAC points to Rent-A-Center, in which “the United States Supreme Court found the exact delegation clause at issue in this case to be valid and enforceable.” (Appellant's Br. at 10 (emphasis omitted)). RAC's reliance on Rent-A-Center is misplaced, however, as the Supreme Court explicitly noted that that case concerned the validity of the arbitration agreement, not whether the parties manifested an intent to be bound by the arbitration agreement. See 561 U.S. at 70 n.2, 130 S.Ct. 2772 (“The issue of the agreement's validity is different from the issue whether any agreement between the parties was ever concluded, and ․ we address only the former.” (citation and internal quotation marks omitted) ). Thus, the mere fact that the Supreme Court upheld the exact agreement as valid in Rent-A-Center does not answer the question of whether the parties in this case manifested an intention to be bound by the same agreement. Instead, we must turn to Maryland's principles of contract formation.

In Maryland, “a manifestation of mutual assent is an essential prerequisite to the creation or formation of a contract.” Falls Garden Condo. Ass'n, Inc. v. Falls Homeowners Ass'n, Inc., 441 Md. 290, 107 A.3d 1183, 1189 (2015) (internal quotation marks omitted). “Manifestation of mutual assent includes two issues: (1) intent to be bound, and (2) definiteness of terms.” Id. at 1190 (internal quotation marks omitted). “Importantly, an acceptance may be manifested by actions as well as by words.” Galloway v. Santander Consumer USA, Inc., 819 F.3d 79, 85 (4th Cir. 2016) (citing Porter v. Gen. Boiler Casing Co., 284 Md. 402, 396 A.2d 1090, 1095 (1979) ). In addition, Maryland courts have “show[n] a persistent unwillingness to give dispositive and preclusive effect to contractual limitations on future changes to that contract.” Hovnanian Land Inv. Grp., LLC v. Annapolis Towne Ctr. at Parole, LLC, 421 Md. 94, 25 A.3d 967, 982 (2011). Indeed, “a party may waive, by its actions or statements, a condition precedent in a contract, even when that contract has a non-waiver clause.” Id. at 983.

We conclude that a reasonable juror could find from Kabba's and RAC's actions that the parties agreed to modify the 2002 and 2012 arbitration agreements at issue to exclude covering any disputes relating to Kabba's 2013 employment. See Falls Garden Condo. Ass'n, 107 A.3d at 1190; Hovnanian Land Inv. Grp., 25 A.3d at 982. Thus, because a reasonable juror could find that no arbitration agreement covers Kabba's 2013 employment, we conclude that there is not “clear and unmistakable evidence” that Kabba and RAC agreed to arbitrate any disputes relating to Kabba's 2013 employment. See Rent-A-Ctr., 561 U.S. at 69 n.1, 130 S.Ct. 2772 (brackets and internal quotation marks omitted). As a result, the district court did not err in concluding that it, rather than an arbitrator, had the authority to determine the arbitrability of Kabba's dispute regarding his 2013 employment based on the 2002 and 2012 arbitration agreements.

Turning next to whether Kabba's claims are arbitrable under the 2002 and 2012 agreements, we conclude that, because a reasonable juror could conclude that no arbitration agreement exists with respect to Kabba's claims arising from his 2013 employment, there is a genuine dispute of material fact precluding summary judgment. See Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 297, 130 S.Ct. 2847, 177 L.Ed.2d 567 (2010) (“[A] court may order arbitration of a particular dispute only where the court is satisfied that the parties agreed to arbitrate that dispute.”); Falls Garden Condo. Ass'n, 107 A.3d at 1190; Hovnanian Land Inv. Grp., 25 A.3d at 982.² More facts are needed to determine whether Kabba's claims are ultimately arbitrable. Thus, we conclude that the district court did not err in denying summary judgment and ordering discovery with respect to the parties’ intent regarding the arbitrability of Kabba's claims under the 2002 and 2012 agreements.

Accordingly, we affirm the district court's order. We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before this court and argument would not aid the decisional process.

AFFIRMED

FOOTNOTES

1.   Although not raised by the parties, we must first determine whether we have appellate jurisdiction over the district court's order denying summary judgment. See Porter v. Zook, 803 F.3d 694, 696 (4th Cir. 2015). We conclude that the denial of RAC's motion is immediately appealable. See Wheeling Hosp., Inc. v. Health Plan of Upper Ohio Valley, Inc., 683 F.3d 577, 586 (4th Cir. 2012).

2.   RAC argues for the first time on appeal that it offered a novation, which Kabba rejected, rather than a modification, but it did not make this argument in the district court. We do not consider arguments raised for the first time on appeal. See In re Under Seal, 749 F.3d 276, 285 (4th Cir. 2014).

PER CURIAM:

Affirmed by unpublished per curiam opinion. Unpublished opinions are not binding precedent in this circuit.