The opinion of the court was delivered by: FLANNERY
THOMAS A. FLANNERY, UNITED STATES DISTRICT JUDGE
In this matter, O & Y Landmark Associates of Virginia, a New York general partnership, petitions the court to compel three individuals to join an arbitration proceeding between petitioner and NF Associates, a District of Columbia general partnership.
The three respondents, Scott Nordheimer, Gary Nordheimer, and Myer Feldman, have guaranteed NF Associates' performance of its obligations under a joint venture agreement with O & Y Landmark.
For their part, respondents have moved to dismiss the petition or to stay its consideration. For the reasons stated below, the court will grant O & Y's petition and deny respondents' motion.
This court's authority to grant the petition is based upon Section 4 of the Federal Arbitration Act, 9 U.S.C. § 4, which provides:
§ 4. Failure to arbitrate under agreement; petition to United States District Court having jurisdiction for order to compel arbitration; notice and service thereof; hearing and determination
A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court . . . for an order directing that such arbitration proceed in the manner provided for in such agreement . . . .
While the facts alleged by the parties have a byzantine
quality, the major substantive legal issue before the court seems fairly straightforward: In personally guaranteeing NF Associates' performance, did respondents in their individual capacities enter into an agreement to arbitrate?
In this regard, it is undisputed that on or about December 31, 1980, petitioner and NF Associates entered into an Amended and Restated Agreement of Joint Venture of Woodlake Associates (Woodlake Joint Venture Agreement). The agreement has the following provision: "Section 10.3. Arbitration. . . . Any controversy or claim arising out of or relating to this Agreement shall be settled by arbitration . . . ."
Both parties also agree that at about the same time as NF Associates entered into the Woodlake Joint Venture Agreement, the three respondents executed a personal guaranty that they would:
jointly and severally, hereby undertake and guarantee that [NF Associates], or [respondents] for it, will fully and faithfully perform all the obligations of the Agreement on [NF Associates'] part to be kept and performed."
The guaranty contains no arbitration provision.
Respondents oppose the petition on technical, substantive, and "equitable" grounds. The court believes that none overcomes O & Y Landmark's right to have its petition granted.
Respondents first argue that Federal Rule of Civil Procedure 17(b), captioned "Capacity to Sue or be Sued," prevents O & Y Landmark from bringing this petition before the court.
The rule dictates that as a partnership, petitioner's "capacity to sue or be sued shall be determined by the law of the state in which the district court is held," Fed.R.Civ.P. 17(b). Respondents' view is that because the law of the District of Columbia does not permit a partnership to bring an action in its own name, O & Y Landmark's petition is fatally defective and should be dismissed. Respt's Mem. in Opp. at 9. Respondents cite two cases for this: Affie, Inc. v. Nurel Enterprises, Inc., 607 F. Supp. 220, 221 (D.D.C. 1984), and Day v. Avery, 179 U.S. App. D.C. 63, 548 F.2d 1018, 1022 (D.C.Cir. 1976), cert. denied, 431 U.S. 908, 97 S. Ct. 1706, 52 L. Ed. 2d 394 (1977).
This argument is correct as far as it goes. But, as O & Y Landmark points out, Rule 17(b) goes farther. After the language quoted above, the rule adds a critical qualification: " except (1) that a partnership or other unincorporated association, which has no such capacity by the law of such state, may sue or be sued in its common name for the purpose of enforcing for or against it a ...