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Herndon v. Sherwood Construction Co., Inc.

United States District Court, N.D. Oklahoma

March 28, 2019

TIMOTHY HERNDON and KERRI HERNDON, Plaintiffs,
v.
SHERWOOD CONSTRUCTION CO., INC., Defendant.

          OPINION AND ORDER

          CLAIRE V. HAGAN, UNITED STATES DISTRICT JUDGE.

         Now before the Court are defendant Sherwood Construction Co., Inc's motions to compel arbitration, and to stay proceedings (Dkt. ## 10, 11).[1] On December 10, 2018, plaintiffs Timothy Herndon and Kerri Herndon filed a petition (Dkt. # 2-1) in the District Court of Creek County, Oklahoma, alleging three causes of action: (1) breach of contract for failure to pay for waste material; (2) breach of contract for failure to construct a berm; (3) and negligence. Defendant removed the action to this Court on January 16, 2019. Dkt. # 2. On January 25, 2019, defendant filed its motions to compel arbitration and to stay proceedings (Dkt. ## 10, 11). On February 15, 2019, plaintiffs filed a first amended complaint (Dkt. # 14), effectively dismissing their breach of contract claims and proceeding solely on the negligence claim. That same day, plaintiffs filed a response in opposition to defendant's motion (Dkt. # 15). Defendant filed a reply (Dkt. # 18).

         I.

         In 2017, the Oklahoma Turnpike Authority (OTA) hired defendant to provide construction services for two projects on the Turner Turnpike. Dkt. # 10, at 1. Defendant required the use of additional property for the disposal of rock, concrete, and earthen material created during its work on the projects. Id. at 2. On August 21, 2017, defendant entered into an agreement with plaintiffs, pursuant to which defendant would have the right of ingress and egress onto property owned by plaintiffs for the purpose of disposing such materials. Id. at 1. The agreement defines the work to be performed by defendant as follows:

3) DEFINING THE WORK.
Waste material will be placed in areas in or adjacent to the pond located on said property. Gravel from the existing driveway will be removed, stockpiled, and replaced on the new alignment upon completion of the work.

Dkt. # 10-1, at 1-2. Further, the agreement provides that “Sherwood will coordinate with OWNER [(plaintiffs)] and OWNER's contractor on the exact location of dirt placement.” Id. at 3. In addition, the parties amended the agreement by hand to include two additional obligations under the contract:

Sherwood agrees to pay owner .20 ¢ [sic] per cubic yard for waste material.
Sherwood agrees to build a berm around driveway between turnpike to serve as a sound barrier. Approx 6'-7' tall.

Id. Finally, the agreement provides that

[a]ll claims, disputes and other matters in question arising out of, or relating to, this agreement or the breach thereof shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then pertaining. This agreement to arbitrate shall be specifically enforceable under the prevailing arbitration law. The award rendered by the arbitrators shall be final, and judgment may be entered upon in any court having jurisdiction thereof.

Id. at 2. All parties signed the agreement and initialed the handwritten amendments. Id. at 3-4.

         II.

         The Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., [2] represents a strong public policy in favor of arbitration, and states that a “written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract . . . shall be valid, irrevocable, and enforceable . . . .” 9 U.S.C. § 2; Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662 (2010); Vaden v. Discover Bank, 556 U.S. 49, 58 (2009). A motion to compel arbitration calls for a two-step inquiry concerning the arbitrability of the dispute: (1) whether there is a valid arbitration agreement, and (2) whether the particular dispute falls within the scope of that ...


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