James Kimberlin v. Renasant Bank

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 08a0577n.06
Filed: September 25, 2008
United States Court of Appeals
FOR THE SIXTH CIRCUIT
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No. 07-6040
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James Kimberlin, *
*
Plaintiff - Appellee, *
* Appeal from the United States
v. * District Court for the Western
* District of Tennessee.
Renasant Bank, *
*
Defendant - Appellant. *
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Before MARTIN, GRIFFIN, and JOHN R. GIBSON,* Circuit Judges.
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JOHN R. GIBSON, Circuit Judge.
James Kimberlin filed suit in the Circuit Court of Shelby County, Tennessee,
alleging various causes of action arising out of his employment. Renasant Bank
removed the action and filed a motion to compel arbitration and stay the case,
asserting that Kimberlin should be forced to engage in arbitration because he agreed
to do so in a Dual Employment Contract he signed. Kimberlin resisted, arguing that
*
The Honorable John R. Gibson, United States Circuit Judge for the Eighth
Circuit Court of Appeals, sitting by designation.
Renasant Bank cannot force him to arbitrate because it was not a party to the contract.
The magistrate judge denied Renasant Bank’s motion and the district court affirmed
the ruling. Renasant Bank appeals from the district court’s order that affirmed the
magistrate judge’s order denying its motion to compel arbitration and stay the case.
Renasant Bank asserts on appeal that it is entitled to arbitration under the
Contract on a theory of equitable estoppel. Kimberlin argues that the magistrate
judge and the district court correctly denied Renasant Bank’s motion. Moreover,
Kimberlin urges dismissal of the appeal for lack of jurisdiction under the Federal
Arbitration Act (“FAA”), 9 U.S.C. § 16(a)(1)(B). Because this Circuit has recently
adopted a jurisdictional rule that precludes an interlocutory appeal in the absence of
a written agreement between the parties, we will DISMISS the appeal.
James Kimberlin was hired as an Investment Services Manager by The Peoples
Bank & Trust Company in Tupelo, Mississippi. His offer letter described his main
responsibilities as cultivating and servicing a book of business consisting of financial
products offered by the Bank and serving as a coach and mentor. After he began
work, he entered into a Dual Employment Contract for a Licensed Representative
whereby he became an employee of both The Peoples Bank & Trust Company and
The Peoples Insurance Agency, Inc. Under the contract he was licensed to market
and sell products offered by The Peoples Insurance Agency, Inc. to customers of The
Peoples Bank & Trust Company. However, The Peoples Bank & Trust Company was
not a party to the contract, which was entered into only between Kimberlin and The
Peoples Insurance Agency, Inc.
The Peoples Bank & Trust Company purchased Renasant Bank and changed
the name of the entire bank to Renasant Bank. Kimberlin continued his employment
under the same terms and conditions, and he remained under the supervision of the
person who had hired him, Mr. Stacy Spearman. The Peoples Insurance Agency, Inc.
changed its name to Renasant Insurance, Inc. Renasant Insurance, Inc. is a wholly-
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owned subsidiary of Renasant Bank. We will refer to these entities as “Insurance”
and “the Bank.”
Kimberlin filed an action against the Bank in state court alleging violations of
the Americans with Disabilities Act, the Tennessee Human Rights Act, the Family
and Medical Leave Act, the Tennessee Public Protection Act, defamation, breach of
contract, and breach of good faith and fair dealing. All of these claims arise out of
a single set of operative facts concerning Kimberlin’s employment and his suspension
therefrom. The Bank removed the action and filed a motion to compel arbitration and
stay the case, asserting that the arbitration provision in the Dual Employment
Contract entered into between Kimberlin and The Peoples Insurance Agency required
Kimberlin to arbitrate his claims against the Bank. The district court referred the
matter to a magistrate judge who entered an order denying the Bank’s motion. The
district court affirmed, and the Bank brought this interlocutory appeal under 9 U.S.C.
§ 16.
Kimberlin argues that this court has no jurisdiction under 9 U.S.C. § 16 to
entertain the Bank’s appeal. The statute is a limited grant of jurisdiction which
permits interlocutory appeal of an order denying a motion to compel arbitration under
9 U.S.C. § 4. Section 4 allows a party to petition a district court for an order to
compel arbitration when another party allegedly fails, neglects, or refuses to arbitrate
“under a written agreement for arbitration.” As Kimberlin points out, the Dual
Employment Contract (the written agreement the Bank relies upon) was between
Kimberlin and The Peoples Insurance Agency, Inc. The Peoples Bank & Trust
Company was not a party to the contract.
The posture of this case, therefore, is that a non-signatory to a written
agreement for arbitration is attempting to compel a signatory to the agreement to
submit his claims to arbitration. The non-signatory, the Bank, asserts that Kimberlin
should be equitably estopped from opposing arbitration. The Bank relies upon
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Javitch v. First Union Securities, Inc., 315 F.3d 619 (6th Cir. 2003), stating that this
court has adopted a “two strand” approach whereby non-signatories can compel
arbitration.1 While that is a generous reading of the Javitch holding, it is unnecessary
to analyze the case’s application because this court need not consider the equitable
estoppel doctrine. The panel decision in Carlisle v. Curtis, Mallet-Prevost, Colt &
Mosle, LLP, 521 F.3d 597 (6th Cir. 2008), obviates such consideration.
The procedural posture of the parties in Carlisle matches that of Kimberlin, the
Bank, and Insurance. Carlisle considered the jurisdictional issue involved in this case
as a matter of first impression. The plaintiffs in Carlisle were signatories to written
arbitration agreements with one of the defendants, Bricolage Capital LLC. Bricolage
sought a stay of the proceedings pending arbitration of the dispute, but soon thereafter
Bricolage filed a bankruptcy petition and obtained an automatic stay. The remaining
defendants who were not parties to the arbitration agreements sought to step into
Bricolage’s shoes and compel arbitration on a theory of equitable estoppel. The
district court denied the motion on substantive grounds.
The defendants in Carlisle attempted to invoke this court’s jurisdiction under
Section 16 of the FAA. In its decision, the panel considered opposing views of the
Second Circuit on one hand and the District of Columbia and Tenth Circuits on the
other and found the analysis of the latter two more persuasive.
Section 4 [of the FAA] does not merely require that there be a written
agreement somewhere in the picture . . . but that the motion to compel
be based on an alleged failure to arbitrate under that written agreement.
1
The first is when a signatory relies on the term of the written agreement in
asserting its claims against a non-signatory. The second is when the signatory raises
allegations of substantially interdependent and concerted misconduct by the non-
signatory and at least one signatory. (Appellant’s brief at 18, quoting 1 Thomas H.
Oehmke, Commercial Arbitration § 11:1 (3d ed. 2007)).
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Even assuming that the issues involved in the [underlying] litigation and
the [plaintiff v. non-party] arbitration are identical, intertwined, closely
related, whatever – a matter of hot dispute – the litigation may not be
stayed under Section 3 because the issues in the litigation are not
referable to arbitration under an agreement.
Carlisle, 521 F.3d at 601 (quoting DSMC Inc. v. Convera Corp., 349 F.3d 679, 683,
684 (D.C. Cir. 2003). Section 3 of the FAA addresses a motion to stay, while section
4 addresses a motion to compel arbitration. Denials of both are subject to
interlocutory appeal under section 16,2 and both require an agreement in writing.3
The Carlisle court continued to quote DSMC with approval.
[T]he [DSMC] court emphasized the need for jurisdictional rules that
are, to the extent possible, clear, predictable, bright-line rules that can
be applied to determine jurisdiction with a fair degree of certainty from
the outset. Asking whether the parties are signatories to a written
agreement to arbitrate satisfies these criteria, . . . while the application
of equitable estoppel – if permitted in this context – requires a
multifactor factual and legal inquiry to determine whether the issues to
be litigated by the non-signatory and signatory are sufficiently
intertwined with the issues subject to arbitration.
Id. (quoting DSMC at 683-84). The appeal was thus dismissed. Id. at 602. Because
the Bank is not a signatory to the Dual Employment Contract entered into between
2
9 U.S.C. § 16(a)(1) (“An appeal may be taken from an order (A) refusing a
stay of any action under section 3 of this title, (B) denying a petition under section 4
of this title to order arbitration to proceed . . .”).
3
9 U.S.C. § 3 (“If any suit or proceeding be brought in any of the courts of the
United States upon any issue referable to arbitration under an agreement in writing
for such arbitration, . . .”); 9 U.S.C. § 4 (“A party aggrieved by the alleged failure,
neglect, or refusal of another to arbitrate under a written agreement for arbitration
may petition any United States district court . . .”).
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Kimberlin and The Peoples Insurance Agency, we likewise have no jurisdiction to
consider the Bank’s appeal from the denial of its motion to compel Kimberlin to
submit his claims against the Bank pursuant to the arbitration provision in the
Contract.
The appeal is DISMISSED.
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