Goss v. Sun Constructors, Inc.
1:10-cv-00065
D.V.I.Apr 28, 2011Background
- Goss was hired by Sun Constructors, Inc. through Excel Group, Inc. in August 2009 after prior Sun employment earlier that year.
- Goss signed an arbitration agreement (and a dispute resolution agreement) on August 10, 2009 requiring arbitration of his claims.
- Goss alleges he was subjected to offensive racial remarks and retaliation, resulting in constructive discharge and a civil suit against Sun/Excel.
- Defendants move to compel arbitration arguing the agreement is valid and binding; Goss contends fraudulent inducement to sign.
- VI law governs contract formation and fraudulent inducement; the court applies a summary-judgment-like standard to arbitration-clause disputes.
- The court concludes Goss failed to prove fraudulent inducement; his signature shows assent, and the agreement covers his claims against Sun and related entities.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is there a valid arbitration agreement binding Goss? | Goss argues the agreement was fraudulent and not binding. | Sun/Excel contend the signed agreement is valid and enforceable. | Yes; the court finds a valid and binding arbitration agreement. |
| Did Goss prove fraudulent inducement to sign the arbitration agreement? | Langner misrepresented that forms protected HOVENSA and did not mention Sun as a party. | Misrepresentations were not proven; Langner's statements were not false and Goss had a duty to read. | No; Goss failed to establish fraudulent inducement. |
| Did Langner’s alleged omissions amount to nondisclosure of a material fact? | Langner deliberately omitted that Sun was a beneficiary and that arbitration could cover Sun’s claims. | No duty to disclose contents beyond the plain language; no deliberate suppression found. | No; no material nondisclosure proven. |
| Does the arbitration clause cover claims against Sun and related entities (including HOVENSA and contractors)? | Clause was ambiguous about who is covered; plaintiff argues it is limited to HOVENSA-related claims. | Language expressly includes claims against Sun, HOVENSA, and related contractors as intended beneficiaries. | Yes; the clause broadly covers claims against Sun and related parties. |
| Should the court compel arbitration and stay proceedings? | If not binding, case should proceed in court. | Arbitration should be compelled given binding agreement and lack of fraudulent inducement. | Arbitration compelled; proceedings stayed pending arbitration. |
Key Cases Cited
- Parilla v. IAP Worldwide Services, VI, Inc., 368 F.3d 269 (3d Cir. 2004) (fraud defenses may invalidate arbitration only if proven; contract formation standards apply)
- Gay v. CreditInform, 511 F.3d 369 (3d Cir. 2007) (fraudulent inducement analyzes reliance and knowledge of falsity in contract formation)
- Morales v. Sun Constructors, Inc., 541 F.3d 218 (3d Cir. 2008) (employee duty to learn contents of arbitration agreements; lack of oral disclosure does not evade contract)