438 F.Supp.3d 1279
D. Utah2020Background
- Plaintiff Kirsten Tyrrel was a Maskcara distributor who alleges Maskcara suspended her and withheld commissions; she and Maskcara are parties to Maskcara’s Policies & Procedures/Compensation Plan (the Agreement).
- The Agreement requires (1) good-faith, confidential mediation to occur within 60 days of the AAA-appointed mediator, then (2) arbitration for claims not resolved by mediation; it also provides that jurisdiction and venue for matters not subject to arbitration shall reside exclusively in Washington County, Utah.
- Tyrrel requested mediation in June 2019; AAA appointed a mediator in late July 2019, but the parties did not complete mediation within the 60-day window and the mediator concluded the mediation deadline had passed.
- Maskcara moved to dismiss based on the forum-selection clause or, alternatively, to stay and compel arbitration under the FAA; Tyrrel opposed, arguing the forum clause permits federal venue and that the mediation deadline was a condition precedent (not satisfied) and/or Maskcara waived arbitration.
- The court denied dismissal (found the clause geographic and federal venue in Washington County proper) and denied the motion to compel/stay, holding the 60-day mediation requirement is a mandatory condition precedent to arbitration that was not satisfied and was unexplained by Maskcara.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability/scope of forum-selection clause (dismissal) | Tyrrel: clause is geographic (venue "in Washington County") and permits federal court located in Washington County; venue is proper here. | Maskcara: clause is mandatory and requires exclusive forum in Washington County state court; case should be dismissed. | Court: Clause is geographic (not a sovereign-only reference); federal court in Washington County qualifies; motion to dismiss denied. |
| Whether arbitration must be compelled despite mediation requirement | Tyrrel: mediation within 60 days of mediator appointment is a mandatory condition precedent; it was not satisfied, so arbitration cannot be compelled. | Maskcara: arbitration applies to claims not resolved by mediation; plaintiff should proceed to arbitration and court should stay the case. | Court: The mediation deadline is a mandatory condition precedent to arbitration; it was not satisfied and Maskcara offered no excuse; motion to compel/stay denied. |
| Waiver of arbitration | Tyrrel: Maskcara delayed/stonewalled and thus waived arbitration. | Maskcara: denies waiver, points to participation and mediation scheduling efforts. | Court: Did not rely on waiver doctrine; resolved dispute on unsatisfied condition precedent and denied Maskcara relief; waiver not necessary to decide. |
Key Cases Cited
- Excell, Inc. v. Sterling Boiler & Mech., Inc., 106 F.3d 318 (10th Cir. 1997) (county-language in forum clause may be read to require state-court forum)
- Am. Soda, LLP v. U.S. Filter Wastewater Grp., Inc., 428 F.3d 921 (10th Cir. 2005) (distinguishes forum clauses that reference sovereignty ("of") from geographic references ("in"))
- Basicomputer Corp. v. Scott, 973 F.2d 507 (6th Cir. 1992) (language like "courts in the State of X" can include federal courts)
- Kemiron Atl., Inc. v. Aguakem Int’l, Inc., 290 F.3d 1287 (11th Cir. 2002) (mediation requirement can be a condition precedent to arbitration)
- Pre-Paid Legal Servs., Inc. v. Cahill, 786 F.3d 1287 (10th Cir. 2015) (discusses waiver/default in FAA §3 context)
- Kelvion, Inc. v. PetroChina Canada Ltd., 918 F.3d 1088 (10th Cir. 2019) (forum-selection clauses should be given controlling weight except in exceptional cases)