Weingarten Realty Investors v. Miller
661 F.3d 904
| 5th Cir. | 2011Background
- WRI and Miller Sheriden, LLC formed a joint venture and WRI loaned $75,000,000 to the venture under a Loan Agreement.
- Section 7.21 of the Loan Agreement requires arbitration for disputes arising from the Note or related Loan Documents; Miller signed a Limited Guarantee for half the loan but did not sign the Loan Agreement individually and the Limited Guarantee contains no arbitration clause.
- The promissory note was amended twice; amendments refer to 'Loan Documents' as including guarantees, but the Limited Guarantee is not listed as a Loan Document in the Loan Agreement.
- When the joint venture defaulted on the extended maturity date, WRI sued Miller under the Limited Guarantee; Miller sought arbitration.
- The district court ruled Miller was not entitled to arbitration because he was not a party to a Loan Document; Miller appealed for arbitration and a stay, which the court denied.
- Weingarten argues no automatic stay exists and, under the circumstances, Miller is not entitled to a stay.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Automatic stay on appeal of denial of arbitration | Miller contends appeal divests district court of jurisdiction and automatically stays proceedings. | WRI argues there is no automatic stay and district court may proceed unless a stay is granted. | No automatic stay; court may stay only on discretionary four-factor grounds |
| Arbitration coverage of the Limited Guarantee | Miller contends Limited Guarantee should be read as a Loan Document so arbitration applies. | WRI argues Limited Guarantee is not a Loan Document and not covered by the arbitration clause. | Limited Guarantee is not a Loan Document; arbitration not compelled |
| Equitable estoppel and non-signatory arbitration | WRI argues equitable estoppel allows arbitration to proceed despite Miller not signing the Loan Agreement. | Miller contends estoppel does not apply because the Limited Guarantee is not intertwined with the Loan Agreement. | Equitable estoppel does not apply here |
| Four-factor stay analysis | Miller should be granted a stay if likelihood of success or equities favor him. | WRI argues no irreparable injury, stay would delay, and equities do not favor a stay. | District court correctly denied stay; four factors do not support a stay |
Key Cases Cited
- Moses H. Cone Memorial Hosp. v. Mercury Construction Corp., 460 U.S. 1 (1983) (arbitrability is severable from merits; review on appeal of arbitrability does not decide merits)
- Griggs v. Provident Consumer Discount Co., 459 U.S. 56 (1982) (jurisdiction transfers depend on whether issues on appeal overlap with merits; arbitrability may be separable or not)
- Grigson v. Creative Artists Agency, LLC, 210 F.3d 524 (5th Cir.2000) (non-signatories may invoke arbitration in rare circumstances)
- Alaska Electrical Pension Fund v. Flowserve Corp., 572 F.3d 221 (5th Cir.2009) (district court may proceed on certain merits while an appeal is pending if issues are legally distinct)
- Hilton v. Braunskill, 481 U.S. 770 (1987) (four-factor test for stays)
- C.B.S. Employees Federal Credit Union v. Donaldson, 716 F. Supp. 307 (W.D. Tenn. 1989) (four-factor stay analysis may apply to discretionary stays)
- Digital Equipment Corp. v. Desktop Direct, Inc., 511 U.S. 863 (1994) (builds on limits of immunities and arbitration scope)