Ragab v. Howard
2016 U.S. App. LEXIS 20895
10th Cir.2016Background
- Plaintiff Ragab entered a business relationship with Ultegra Financial and its CEO in 2013; parties executed six related agreements (Consulting, Purchase, Operating, Assignment, Employment, Non‑Circumvention/Confidentiality).
- Each of the six agreements contained an arbitration clause, but the clauses conflicted on key procedural points (governing rules, arbitrator selection, notice period, fee/attorney‑fee allocation).
- Ragab sued in 2015 for misrepresentation and violations of consumer credit repair statutes; the district court found his claims fell within the scope of all six agreements.
- Defendants moved to compel arbitration; the district court denied the motion, concluding no meeting of the minds as to arbitration because of irreconcilable conflicts among the arbitration provisions.
- The Tenth Circuit reviewed de novo, affirmed the denial of the motion to compel arbitration, and held a summary trial was unnecessary on the formation question.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether conflicting arbitration provisions across multiple contracts show no meeting of the minds to arbitrate | Ragab argued the conflicts render arbitration clauses unenforceable because parties never agreed on essential arbitration terms | Defendants argued a liberal federal policy favors arbitration; parties intended to arbitrate and one clause or procedural defaults can fill gaps | Held: Conflicting, specific arbitration terms across six agreements precluded finding mutual assent to a single arbitration procedure; no agreement to compel arbitration |
| Whether a court may pick one arbitration clause to enforce when contracts conflict | Ragab: court should not choose among inconsistent clauses; doing so would create terms parties never agreed to | Defendants: courts may enforce one clause (e.g., the one with a merger clause) or allow plaintiff to invoke any clause covering his claims | Held: No contract language showed one agreement superseded the others; court cannot arbitrarily select one clause without violating other agreements |
| Whether general or vague arbitration clauses would permit enforcement here | Ragab: presence of multiple detailed, conflicting clauses distinguishes this case from ones enforcing vague clauses | Defendants: some cases enforce minimal arbitration promises; procedural gaps can be filled by statute or courts | Held: Distinct: multiple specific, inconsistent clauses cannot be treated like a single vague clause to be completed by statute; parties did not agree on essential terms |
| Whether a summary trial was required or the court could decide formation as a matter of law | Ragab: factual disputes required a summary trial under 9 U.S.C. §4 | Defendants: no material factual disputes; only legal application remained | Held: No genuine factual disputes about the agreements’ content; determination whether conflicts defeated mutual assent was a legal question that could be decided without a summary trial |
Key Cases Cited
- Howsam v. Dean Witter Reynolds, 537 U.S. 79 (2002) (federal policy favors arbitration and courts defer to arbitrators on procedural questions when parties agreed)
- Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (liberal federal policy favoring arbitration)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state rules that single out arbitration for disfavored treatment)
- First Options of Chi., Inc. v. Kaplan, 514 U.S. 938 (1995) (state‑law principles govern whether parties agreed to arbitrate)
- United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960) (a party cannot be compelled to arbitrate absent agreement)
- Armijo v. Prudential Ins. Co. of Am., 72 F.3d 793 (10th Cir. 1995) (standard of review and presumption favoring arbitration; summary‑judgment‑like inquiry for arbitrability)
- Guthrie v. Barda, 533 P.2d 487 (Colo. 1975) (Colorado enforces even brief arbitration promises; procedural gaps may be supplied by statute)
- NAACP of Camden Cty. E. v. Foulke Mgmt. Corp., 24 A.3d 777 (N.J. Super. Ct. App. Div. 2011) (conflicting arbitration clauses can be too confusing to constitute mutual assent)