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Johansson v. Central Properties, LLC

United States District Court, District of Columbia

August 29, 2018

CENTRAL PROPERTIES, LLC et al., Defendants.



         This case confirms that parties entering an employment relationship would be wise to spell out its terms in writing at the outset. Plaintiff Wayne Johansson worked for the real estate brokerage firm Central Properties, LLC, for approximately seven months last year. When relations soured, Johansson sued the company and its owner, Paul Sliwka, for unpaid wages. He claims he was promised a $60, 000 annual salary for serving as the company's general manager, some of which he is still due. The firm begs to differ. In its telling, Johansson was hired to be no more than a commissioned sales agent and recruiter of other brokers, and he was never entitled to wages. It also contends that Johansson's claims must be arbitrated, rather than litigated in this court, due to a provision in an agreement that the company claims Johansson signed about halfway through his brief tenure.

         After an initial round of briefing, the Court ordered limited discovery to sort out the facts surrounding Johansson's hiring and job responsibilities. The parties have completed that discovery and submitted supplemental briefs. Based on the expanded record, it clear to the Court that Johansson was not hired to perform typical general manager duties, that the parties entered into a written employment agreement containing an arbitration provision, and that this dispute falls within the scope of that provision. The Court will therefore grant Central Properties' motion to compel arbitration and stay this case pending the conclusion of that process.

         I. Legal Standard

         In its supplemental briefing following discovery, Central Property moves for summary judgment and, alternatively, to compel arbitration. But that puts the cart before the horse. If the parties agreed to arbitrate Mr. Johansson's claims, then the merits of the claims are not properly before the Court. Giron v. Dodds, 35 A.3d 433, 437 (D.C. 2012). The Court will therefore begin (and end) by analyzing whether Johansson and Central Properties entered into an agreement to arbitrate their disputes and whether Johansson's claims here fall within the scope of any such agreement.

         Under D.C. law, a written agreement to “submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract.” D.C. Code § 16-4406(a).[1] If a party to a suit makes a “showing that an arbitration agreement exists with respect to a particular issue, the trial court shall order the parties to arbitrate and stay the court proceedings pending the outcome of arbitration.” Giron, 35 A.3d at 437 (internal quotation omitted).

         The question of “whether an agreement to arbitrate exists or a controversy is subject to agreement to arbitrate” is one for the Court to resolve. D.C. Code § 16-4406(b). In contrast, the question of “whether a contract containing a valid agreement to arbitrate is enforceable” is for the arbitrator and not the Court. Id. § 16-4406(c). D.C. law also adheres to the “severability” doctrine. See Menna v. Plymouth Rock Assurance Corp., 987 A.2d 458, 465 n.30 (D.C. 2010) (citing Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444-46 (2006)). Under that doctrine, “even if ‘another provision of the contract, or . . . the contract as a whole,' is invalid, unenforceable, voidable, or void, that ‘does not prevent a court from enforcing a specific agreement to arbitrate.'” Lefoldt v. Horne, LLP, 853 F.3d 804, 815 (5th Cir. 2017) (quoting Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 70-71 (2010)) (alterations in original). Thus, unless an arbitration clause is itself being challenged, challenges to the contract writ large are for the arbitrator to resolve. Menna, 987 A.2d at 465 n.30.

         The party seeking to compel arbitration first bears the burden of demonstrating that a valid agreement to arbitrate exists. See, e.g., Signature Technology Solutions v. Incapsulate, LLC, 58 F.Supp.3d 72, 83 (D.D.C. 2014).[2] If such an agreement exists, the Court must then determine “whether the arbitration clause is susceptible of an interpretation that covers the dispute.” Woodroof v. Cunningham, 147 A.3d 777, 787-88 (D.C. 2016) (internal quotation omitted). In other words, if there is a valid arbitration agreement, “a presumption in favor of arbitration attaches.” 2200 M Street LLC v. Mackell, 940 A.2d 143, 151 (D.C. 2007) (citation omitted). The Court must require arbitration unless it has “positive assurance that the parties did not intend the dispute sub judice to be resolved through arbitration.” Id. at 152 (internal quotation omitted). “[A]ny ambiguity is construed in favor of arbitration.” Woodroof, 147 A.3d at 789.

         II. Analysis

         Central Properties locates the parties' intention to arbitrate their disputes in an “independent contractor agreement” dated April 30, 2017 which appears to bear Johansson's signature. See Mem. P. & A. Supp. Defs.' Mot. Compel Arbitration Ex. A. The agreement provides that “[a]ny dispute or claim in law or equity between the Company and [Johansson] arising out of this Agreement will be decided by neutral binding arbitration . . . and not by court action.” Id. ¶ 8. Central Properties argues that the parties knowingly entered into the independent contractor agreement, that the claims Johansson has raised here fall within the scope of the agreement's arbitration clause, and that the Court, under D.C. law, must enforce the agreement and stay the case. The Court agrees.

         A. Whether the parties entered into an agreement to arbitrate

         While the parties bicker over precisely what duties Johansson was hired to perform, neither disputes that an employment relationship existed. The question is whether the parties intended for the independent contractor agreement, and in particular its arbitration clause, to govern that relationship. As noted above, the document bears what appears to be Johansson's signature. Johansson does not admit to signing it, but the facts developed in discovery do not raise a genuine factual dispute over whether the signature is his.

         Again, Johansson started working at the company in January 2017. On Saturday, April 29, 2017, Paul Sliwka's brother Ben, who handles administrative matters for the company, informed Johansson by email that several documents were needed to complete his file. See Mem. P. & A. Supp. Def.'s Mot. Summ. J. Ex. P. Those documents included (1) a signed independent contractor agreement, (2) a signed policy statement, (3) a completed W9, (4) a job description, and (5) a copy of his license. Id. Johansson promptly responded that he would get Ben Sliwka the missing documents “first thing Monday.” Id.[3] The signatures on the independent contractor agreement are dated the very next day: Sunday, April 30, 2017. Ben Sliwka further testified that he found the signed document on his desk Monday morning. B. Sliwka Dep. 141:20-142:18.

         While Ben Sliwka's email to Johansson did not include any of these documents as attachments, discovery revealed that Johansson had easy access to them. There was ample testimony that printed copies of the independent contractor agreement and other documents were kept in a drawer with recruiting and marketing materials in the office. See, e.g., B. Sliwka Dep. 87:20-88:14; P. Sliwka Dep. 182:17-184:10; Mem. P. & A. Supp. Def.'s Mot. Summ. J. Ex. O (“Stallman Dep.”), at 67:4-68:4. In addition, Johansson testified that he used several computers in the office, Johansson Dep. 38:11-20. Both Ben Sliwka and Central ...

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