Howard v. Ferrellgas Partners, L.P.
2014 U.S. App. LEXIS 6415
| 10th Cir. | 2014Background
- FAA favors arbitration but only if the parties agreed to arbitrate; arbitration is a matter of contract, not imposed arbitrarily.
- Ferrellgas sought to compel arbitration of Mr. Howard’s class-action-like propane-pricing claims; district court engaged in extensive discovery and multiple motions to determine if an arbitration agreement existed.
- District court found unresolved material facts about the formation of any arbitration agreement and denied Ferrellgas’s motion to compel arbitration.
- Court held the FAA contemplates a summary-trial-style resolution when there are no genuine disputes of material fact, but here disputed facts precluded a decision on arbitrability.
- Record showed disputed content of the initial phone call and subsequent modifications, raising questions whether the oral agreement covered all future dealings or only initial delivery and tank rental.
- Choice of law issue remained open: whether Kansas law should govern contract formation or whether California/Washington law could apply under rolling-contract theories and where the last act of formation occurred.
- Remand was required for trial to resolve the unresolved factual questions and to determine the governing law and whether the parties agreed to arbitrate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether material facts on arbitration consent exist | Howard contends no arbitration agreement existed | Ferrellgas contends an agreement to arbitrate was formed | Material facts unresolved; remand for trial warranted |
| What law governs contract formation | Kansas law should apply | California/Washington law could govern via rolling theory | Kansas law applies absent clear showing of another state's law; remand to determine last act of formation |
| Whether rolling contract theory applies | Rolling theory should treat written terms as forming the contract | Rolling theory is controversial and not clearly adopted by Kansas | Rolling contract theory not controlling; district court’s choice of Kansas law preserved; remand to resolve where last act occurred |
Key Cases Cited
- Hancock v. American Tel. & Tel. Co., 701 F.3d 1248 (10th Cir. 2012) (summary-judgment-like determination of arbitrability when no material facts exist)
- ISC Holding AG v. Nobel Biocare Fin. AG, 688 F.3d 98 (2d Cir. 2012) (distinction between simple framework and complex pre-trial practice in FAA context)
- Hill v. Gateway 2000, Inc., 105 F.3d 1147 (7th Cir. 1997) (rolling/continuing formation theory origins)
- ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996) (rolling contract formation concepts in commerce)
- Klocek v. Gateway, Inc., 104 F. Supp. 2d 1332 (D. Kan. 2000) (express consent requirements under contract formation)
- Wachter Mgmt. Co. v. Dexter & Chaney, Inc., 144 P.3d 747 (Kan. 2006) (Kansas rejects rolling contract formation theory)
- In re K.M.H., 169 P.3d 1025 (Kan. 2007) (choice-of-law principles and last act theory)