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November 16, 1989


The opinion of the court was delivered by: FLANNERY



 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. *fn1" 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. *fn2" 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 *fn3" 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? *fn4"

 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. *fn5" 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 substantive right existing under the Constitution or laws of the United States . . . ." (Emphasis added.)

 The court has previously quoted Moses H. Cone Memorial Hosp. v. Mercury Const., 460 U.S. 1, 25 n. 32, 74 L. Ed. 2d 765, 103 S. Ct. 927 (1983): "The Arbitration Act is something of an anomaly in the field of federal-court jurisdiction. It creates a body of substantive federal law establishing and regulating the duty to honor an agreement to arbitrate, yet it does not create any independent federal-question jurisdiction under 28 U.S.C. § 1331 (1976 ed. Supp. V) or otherwise." (Emphasis added.)

 Additionally, one of respondents' own cases undermines their argument. The Day court stated that Rule 17(b)'s term "'substantive rights' has been interpreted to embrace every manner of claim for relief -- whether constitutional . . . [or] statutory, e.g., Petrol Shipping Corp. v. Kingdom of Greece, 2 Cir. 360 F.2d 103, cert. denied, 385 U.S. 931, 87 S. Ct. 291, 17 L. Ed. 2d 213 (1966) . . . (suit to compel arbitration under Federal Arbitration Act)." Day, 548 F.2d at 1022 n. 11. Thus, this circuit specifically recognizes that Section 4 of the Federal Arbitration Act creates a substantive federal right for purposes of Rule 17(b) (1). On this authority, the court rules that O & Y Landmark may bring this petition in its own name. Respondents' first objection fails.


 Respondents' second and substantive objection to the petition also is unavailing. The Nordheimers and Feldman contend that they have never entered in a personal capacity into a "written agreement for arbitration." Respondents argue that unless they have, they may not be compelled to arbitrate under 9 U.S.C. § 4. According to respondents, the only agreement they have entered into in an individual capacity is the guaranty of NF Associates' performance of the Woodlake Joint Venture. That guaranty having no arbitration clause, respondents contend that there is no written agreement to arbitrate *fn6" to serve as the basis for compelling them as individuals to participate in the arbitration.

 In response, petitioner contends that the guaranty itself may be read as an agreement to arbitrate. In support, O & Y Landmark cites: Compania Espanola de Petroleos, S.A. v. Nereus Shipping, S.A., 527 F.2d 966 (2d Cir. 1975), cert. denied, 426 U.S. 936, 96 S. Ct. 2650, 49 L. Ed. 2d 387 (1976), and Antco Shipping Co., Ltd. v. Sidermar S. p. A., 417 F. Supp. 207 (S.D.N.Y. 1976).

 Both cases dealt with shipping contracts containing arbitration clauses. In both instances, a third party had executed a written guaranty for the performance of one of the contracting parties. Although neither guaranty contained a specific clause agreeing to arbitrate, both courts held that the guaranty bound the guarantor to fulfil the agreement to arbitrate written into the underlying contract. In essence, the two courts viewed the guaranty as incorporating the contract's agreement to arbitrate. The Nereus court felt that "although the guaranty does not explicitly restate the specific obligations" of the underlying contract whose performance had been guaranteed, "such iteration [is] unnecessary in view of the broad language of the guaranty." Nereus, 527 F.2d at 973.

 In Nereus, the guarantor undertook that upon the guaranteed party's "default in payment or performance of its obligations under the [contract], we will perform the balance of the contract and assume the rights and obligations of [the guaranteed party] on the same terms and conditions as contained in the [contract]." Id. at 969-70. The Nereus court stated that:


"whether a guarantor is bound by an arbitration clause contained in the original contract necessarily turns on the language chosen by the parties in the guaranty. We are aided in our construction of the language here by prior decisions which make clear that where an arbitration clause is applicable by its own terms to all disputes and is not limited to those arising between the [the original parties to the underlying contract], the agreement to arbitrate binds 'not only the original parties, but also all those who subsequently consent to be bound by the terms of the contract.'"


Id. at 973. (Citations omitted.).

 In compelling the guarantor to arbitrate, the Nereus court pointed to language binding the guarantor to "perform the balance of the contract" and "assume the rights and obligations" of the guaranteed party. Id. at 973-74. *fn7"

 In Antco, the guaranty provided: "In the event that Antco fails to perform its duties and obligations . . . under the contract . . ., then [the guarantor] hereby guarantees to fulfill and perform any and all legal obligations that Antco may be liable for" under the contract. Antco, 417 F. Supp. at 210-11.

 Citing Nereus, the Antco court also held that the guarantor had to participate in the arbitration. Id. at 218-19. The District Judge in Antco rejected the argument that Nereus turned on the guarantor's agreement "to assume" the obligations and rights of the guaranteed party. "I do not regard the presence or absence of that particular word as crucial to the decision. Each case must turn upon the fair construction of the language used by the parties in its entirety." Id. at 219. In particular, the Antco court stressed that the "parties went to the effort of expanding the guaranty so as to include 'any and all legal obligations that Antco may be liable for'" as a contracting party. Id.

 This court finds these two cases persuasive and holds that the language of respondents' guaranty here must be given the same effect as in Nereus and Antco. The arbitration clause here, "any controversy or claim arising out of or relating to this Agreement shall be settled by arbitration" is just as broad as that in both Nereus and Antco : "Any and all differences and disputes of whatsoever nature arising out of this [contract] shall be put to arbitration . . . ." Similarly, there is no practical legal distinction between the language of any of the guaranties. In particular, the guaranty here includes the words that NF Associates, " or the undersigned for it, will fully and faithfully perform all of the obligations " that NF associates agreed would be "kept and performed." (Emphasis added.) In the words of the Antco court, "if there is a substantial difference" among the language of the various guaranties, "it requires a keener judicial eye than mine to perceive it." Antco, 417 F. Supp. at 218.

 Respondents cite only one arguably relevant case *fn8" to support their view that guarantors may not be compelled to arbitrate if the guaranty has no arbitration clause, Buy-Rite Costume Jewelry, Inc. v. Albin, 676 F. Supp. 433 (D.R.I. 1988). *fn9"

 This court does not find Buy-Rite applicable. First, the opinion does not quote the language of the guaranty at issue, so it cannot be compared to those cited above. To the extent that we are informed about the guaranty, it appears that the guaranteed performance only encompassed making good on installment payments due in the bulk sale of a costume jewelry company. Id. at 424. Whether the guaranty included the sort of expanded obligations discussed in Nereus, Antco, and here is unclear. As this court has noted, the language of the respondents' guaranty concerning such obligations is among the decisive points in this case.

 Second, this case arises under a different section of the Federal Arbitration Act and is in an entirely different posture than Buy-Rite. In Buy-Rite, there was no arbitration proceeding pending, and the defendant seeking the stay had waived his right to compel arbitration by pursuing a state action instead. Id. at 435. Thus, few, if any, of the considerations that commended themselves to the Buy-Rite court confront this court.

 Third, Nereus is the considered view of an appeals court having significant experience with large, complex arbitration issues. Antco was decided by a district court with a great deal of background in commercial arbitration. This court finds these two cases more relevant to the issues facing it. Respondents' cases do not overcome the law favoring petitioner. *fn10"

 Based upon the foregoing, the court decides that respondents did agree to arbitrate personally and may be compelled to join the arbitration in their individual capacities. *fn11"


 Respondents' final argument is an appeal to the court to exercise its "equitable discretion" to dismiss this petition or to stay it pending the outcome of a civil action respondents have brought in the District of Columbia Superior Court. *fn12" Respt's Mem. in Opp. at 17. This, too, fails.

 Respondents fear that if this court compels them to join the Woodlake arbitration, the larger interests behind O & Y Landmark will be able to "fragment the resolution of disputes arising out of the [dozen] joint ventures, [and] respondents will be severely hampered, if not barred, from presenting any set-offs and counterclaims flowing from the admitted use by certain ventures of funds belonging to other ventures." Id. at 19. Respondents add:


"Staying this action in deference to the Superior Court proceeding, in which all interested parties are joined and all issues can be resolved, will not only conserve judicial resources, it will also conserve the parties' resources. Respondents position is simply not akin to petitioner's when it comes to financing the multiplicity of proceedings that will flow from Petitioner's decision not to consolidate disputes as to all twelve entities into one arbitration, but to proceed in a piecemeal fashion."

 Id. at 18-19.

 In essence, respondents suggest that this petition is but a small skirmish in just one battle in a larger war. They ask the court to order a cease-fire in the skirmish so that respondents and their allies can marshall their forces and engage petitioner and its confederates in a legal Armageddon.

 To bolster their resort to the court's equitable discretion, respondents cite Colorado River Water Conservation District v. United States, 424 U.S. 800, 47 L. Ed. 2d 483, 96 S. Ct. 1236 (1976). Respondents assert that in Colorado River the "Supreme Court outlined the factors to be considered in determining whether a federal court should defer to concurrent state court proceedings." Respt's Mem. in Opp. at 17. According to respondents, chief among these factors is the avoidance of piecemeal litigation. Id. at 18. Respondents contend that the Colorado River factors "have been found" applicable to a petition to compel arbitration, citing Moses H. Cone Memorial Hosp. v. Mercury Const., 460 U.S. 1, 13, 74 L. Ed. 2d 765, 103 S. Ct. 927 (1983).

 Here again, respondents are impaled on their own case. In the first place, the Supreme Court in Cone did exactly the opposite of what respondents urge this court to do. Instead, the Supreme Court affirmed a federal circuit court's decision to: (1) reverse a stay of a petition to compel arbitration; and, (2) enter an order to arbitrate. Id. at 29.

 Second, while acknowledging that the danger of piecemeal litigation "was paramount" in Colorado River, the Cone court stated "there is no force to [that] consideration" in an arbitration case. The court added:


It is true, therefore, that if [one party] obtains an arbitration order for its dispute, [the other party] will be forced to resolve these related disputes in different forums. This misfortune, however, is not the result of any choice between the federal and state courts; it occurs because the relevant federal law requires piecemeal litigation to give effect to an arbitration agreement. Under the Arbitration Act, an arbitration agreement must be enforced notwithstanding the presence of other persons who are parties to the underlying dispute but not to the arbitration agreement.

 Id. at 20. (Emphasis in original; footnotes omitted).

 Third, the Cone court also made clear that avoidance of piecemeal litigation was the paramount factor in Colorado River only because "the primary policy of the statute" at issue, the McCarran Amendment, 43 U.S.C. § 633, "was the avoidance of piecemeal litigation." Cone at 20 n. 22. (Emphasis in original.) Cone states this is not so with arbitration. *fn13"

  Fourth, the other Colorado River factors give this court no more reason to defer arbitration until resolution of the Superior Court action than they did the Supreme Court in Cone. First, neither this court nor Superior Court has jurisdiction over any res or property. Id. at 19. Second, whether resolved in Superior Court or in arbitration, the decision will be made in the District of Columbia, so no forum is more convenient to one party than the other. Id. Last, O & Y Landmark actually filed this petition a day before respondents and their entities brought the Superior Court action. To the extent that the first forum to obtain jurisdiction plays a role in deciding whether this court should defer to the state court, this factor cuts in favor of petitioner, not respondents. Id. at 21. Cone suggests that winning a race to the courthouse is not the criterion for decision. *fn14" Instead, this factor should be gauged by how much progress has been made in the two actions. Id. at 21-22. This court is about to make a final decision; the same cannot be said for Superior Court.

 Ultimately, for this court to defer to Superior Court would fly in the face of what the Cone court called "Congress' clear intent in the Arbitration Act, to move the parties to an arbitrable dispute out of court and into arbitration as quickly and easily as possible." Id. at 22. A dismissal or stay here would frustrate "the statutory policy of rapid and unobstructed enforcement of arbitration agreements." Id. at 23. The law stated in Cone compels this court to deny respondents motion to dismiss or stay.

 As a last consideration, not only is the law against respondents, but the equities are too. Respondents came surprisingly late to their discovery that only the Superior Court can deliver the full measure of justice that they now think the galaxy of disputes in this matter demands. Indeed, some twelve months elapsed between the petitioner's call for arbitration and respondents' recognition that the alleged breach of the master agreement dictated bringing an action in Superior Court. During this time, it appears that respondents were quite willing to arbitrate so long the arbitration took up issues relating to all twelve joint ventures. Respt's Mem. in Opp. at 6-7. Respondents must have known that a consolidated arbitration cannot repair the alleged breach of the master agreement and so cannot provide the one, comprehensive resolution of all disputes that respondents now claim to need. Even now, if respondents fear multiple, expensive arbitrations with inconsistent outcomes and loss of set-offs and counterclaims, they have an obvious course open to them. It appears to the court that it is not so much equity being argued here, but strategy. This court can no more be guided in its decision by respondents' desire that a massive battle determine the outcome of the war than it can by petitioner's alleged preference for a campaign of skirmish and attrition.

 In short, the court holds that the law does not permit it to dismiss or stay the petition, and the equities do not warrant it.


 In conclusion, the court holds that: (a) O & Y Landmark may bring this petition in its own name; (b) respondents agreed in their personal capacities to arbitrate disputes under the Woodlake Joint Venture Agreement when they guaranteed NF Associates' performance of the agreement; and, (c) there is no basis at law or in equity for dismissing the petition or staying it. Therefore, the court will grant the petition to compel Scott Nordheimer, Gary Nordheimer, and Myer Feldman to participate in the pending arbitration between NF Associates and O & Y Landmark of Virginia. The court further denies respondents' motion to dismiss or stay the petition. An appropriate order accompanies this opinion.

 ORDER-November 16, 1989, Filed

 This matter came before the court on a petition to compel arbitration under 9 U.S.C. § 4 and on respondents' motion to dismiss or stay the petition. Upon consideration of the petition, petitioner's memorandum in support of the petition, respondents' memorandum in opposition to the petition, petitioner's reply, respondents' reply, respondents' supplemental memorandum, argument at the hearing on the petition held November 6, 1989, the entire record herein, and for the reasons stated in the accompanying memorandum opinion, it is by the court this 16th day of November 1989

 ORDERED that the petition in this matter be, and it hereby is, granted; and it is further

 ORDERED that respondents' motion be, and it hereby is, denied; and it is further

 ORDERED that Scott Nordheimer, Gary Nordheimer, and Myer Feldman, respondents in this matter, shall participate in a personal capacity in the pending arbitration between O & Y Landmark Associates of Virginia and NF Associates, AAA No. 16-115-00460-88 as from the date of this order.

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