Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Ruiz v. Millennium Square Residential Association

United States District Court, District of Columbia

January 13, 2016

JULIO LAMBOY RUIZ, Plaintiff,
v.
MILLENNIUM SQUARE RESIDENTIAL ASSOCIATION, et al., Defendants.

MEMORANDUM OPINION AND ORDER

JOHN D. BATES UNITED STATES DISTRICT JUDGE

Plaintiff Julio Lamboy Ruiz believes he obtained all the necessary approvals for certain architectural modifications he made to his condominium unit. The defendant owners’ associations disagree and want Ruiz to return the unit to its original condition. The question before the Court today, however, is not which party is right-it is simply whether Ruiz must submit this dispute to arbitration. Although Ruiz acknowledges that an arbitration agreement in the condominium bylaws appears to cover this dispute, he contends that the arbitration procedures are so unfair as to be unconscionable, and thus the agreement cannot be enforced. But several of Ruiz’s objections provide no basis for finding the arbitration provision unconscionable. And even though defendants have effectively conceded that, when read properly, the provision governing the selection of the arbitrators is unconscionable, the proper course is to sever that provision and enforce the heart of the parties’ agreement: to arbitrate this dispute. The Court will therefore grant defendants’ motion to compel arbitration.

BACKGROUND

Because most of the details of the parties’ dispute are not relevant to the issue presently before the Court, a short summary of the case will suffice. According to his complaint, Ruiz owns a condominium unit at the Millennium Square condominium complex in northwest Washington, D.C. Compl. [ECF No. 1] ¶ 1. The complex is managed by defendants Millennium Square Residential Association and Millennium Square Unit Owners Association-for sake of simplicity, “the Associations”-who also enforce the condominium’s bylaws. Id. ¶¶ 3-6.

In 2014, Ruiz sought to make a number of architectural modifications to the balconies and roof deck of his unit. Id. ¶ 9. He says he presented the relevant architectural plans to the Associations and properly sought their permission to proceed with the project. Id. ¶¶ 11-35. The Associations agreed to the modifications, or at least did not disapprove them within the time allotted by the bylaws, so Ruiz went ahead and had the work done. Id. In June 2015, however, the Associations sent Ruiz a letter stating that a number of the modifications had not been included in the plans he had submitted; in the Associations’ view, these modifications had never been approved, and so needed to be removed. Id. ¶¶ 39-41; Ex. 8 to Compl. [ECF No. 1-11]. Ruiz then filed this suit, which seeks a judgment declaring that the modifications do not violate the condominium’s bylaws and may remain in place. Compl. ¶¶ 45-53.

In response to Ruiz’s complaint, the Associations have filed a motion asking the Court to stay the case and to compel Ruiz to arbitrate the dispute. Defs.’ Mot. to Compel Arbitration [ECF No. 9]. Arbitration, they say, is required by the condominium’s bylaws and therefore by the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq. Defs.’ Mem. Supp. Mot. [ECF No. 9-1] at 5- 7. Two provisions of the bylaws are relevant. Section 11.6, governing “Additions, Alterations, Renovations or Improvements, ” sets forth the mechanism for unit owners to seek approval for structural modifications. Ex. 7 to Compl. [ECF Nos. 1-7 to 1-10] at 63-64. It further provides that, “[i]n the event of any dispute which cannot be mutually resolved . . . such dispute . . . shall be submitted to arbitration in accordance with Section 19.2 of these Bylaws.” Id. at 64. Section 19.2(b), in turn, describes the arbitration process. It reads in full:

Arbitration.

Arbitration pursuant to these Bylaws shall consist of the appointment of an independent arbitrator by the members of the Board of Directors who are Residential Unit owners, the appointment of a second independent arbitrator by the members of the Board of Directors who are Commercial Unit owners and the appointment of the third arbitrator by the two previously appointed arbitrators. These arbitrators shall be requested to reach a decision within thirty (30) days after their appointment. The cost of arbitration shall be paid by the losing party unless the arbitrators determine that the cost should be a Common Expense. If the arbitrators determine that the action of the Board of Directors, the Unit Owners Association, the Residential Executive Committee, the Residential Association, the Commercial Executive Committee or the Commercial Association violates the Condominium instruments or has so prejudiced a Unit owners’ [sic] interests, such action shall not be taken.

Id. at 101.

Ruiz opposes the Associations’ motion. See Pl.’s Opp’n [ECF No. 10]. He does not deny that, as a general matter, he is bound by the terms of the bylaws. Nor does he deny that the disagreement over his modifications is a “dispute” covered by Section 11.6 and thus subject to arbitration. Instead, he argues that the arbitration system created by Section 19.2 is so unfair that it is unconscionable as a matter of contract law, and that the agreement to arbitrate is therefore unenforceable.

LEGAL STANDARD

When considering a motion to compel arbitration, the proper legal standard for the district court is the same one used in resolving summary judgment motions under Federal Rule of Civil Procedure 56(c), “as if it were a request for summary disposition of the issue of whether or not there had been a meeting of the minds on the agreement to arbitrate.” Aliron Int’l, Inc. v. Cherokee Nation Indus., Inc., 531 F.3d 863, 865 (D.C. Cir. 2008) (internal quotation marks omitted); see also Brown v. Dorsey & Whitney, LLP, 267 F.Supp.2d 61, 66-67 (D.D.C. 2003). The party seeking to compel arbitration must present “evidence sufficient to demonstrate an enforceable agreement to arbitrate.” Hill v. Wackenhut Servs. Int’l, 865 F.Supp.2d 84, 89 (D.D.C. 2012) (internal quotation marks omitted). The burden then shifts to plaintiffs to show that there is a genuine issue of material fact as to the making of the agreement. Id. “The Court will compel arbitration if the pleadings and the evidence show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fox v. Comput. World Servs. Corp., 920 F.Supp.2d 90, 96 (D.D.C. 2013) (internal quotation marks omitted).

DISCUSSION

The FAA provides that “[a] written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. In his initial opposition, Ruiz did not contest the Associations’ premise that the bylaws are a contract within the scope of the FAA; he instead argued only that the arbitration agreement was not a valid provision of that contract. In supplemental briefing invited by the Court, however, Ruiz now argues that the bylaws are outside the FAA’s scope entirely because they concern “real property located wholly within the District of Columbia and, as such, do not affect interstate commerce.” Pl.’s Supp. Mem. [ECF No. 13] at 4. But “commerce” under the FAA is broader than Ruiz realizes: it covers not only “commerce among the several States, ” but also commerce “in the District of Columbia.” 9 U.S.C. § 1 (emphasis added). Hence, the fact that the contract involves a transaction occurring entirely within D.C. does not remove it from the FAA’s reach.[1]

Ruiz’s primary argument remains that, even if the bylaws are a contract covered by the FAA, the arbitration agreement is not valid. “Like other contracts, ” arbitration agreements subject to the FAA “may be invalidated by generally applicable contract defenses, such as fraud, duress, or unconscionability.” Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 68 (2010) (internal quotation marks omitted). Whether an arbitration agreement is unconscionable is primarily a question of state contract law, see Perry v. Thomas, 482 U.S. 483, 492 n.9 (1987); Hoffman v. Citibank (S. Dakota), N.A., 546 F.3d 1078, 1082 (9th ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.