signatories] would be rendered meaningless and the federal policy in favor of
arbitration effectively thwarted.”

199 F, Supp. 2d 746, 752 (S.D. Ohio 2002) (Rice, C.J.) (citing MS Dealer Serv. Corp. v.
Franklin, 177 F.3d 942, 947 (11th Cir. 1999)). In the case at bar, Southwest and Sirpilla have not
proactively moved to compel arbitration of the claims against them, but they have each filed a
consent to arbitrate. The Court finds it appropriate to arbitrate all of the claims in this case for
several reasons.

First and foremost, Plaintiff's claims against Southwest and Sirpilla are intimately founded
in and intertwined with the underlying contract obligations of Plaintiff and Heartland. The
Warranty clearly outlines the obligations of the parties and procedures to be followed in the event
warranty service and/or parts should become necessary:

If a problem occurs which the owner thinks is covered by this Limited Warranty,

the owner is responsible for contacting Heartland RV or an authorized Heartland

RV dealer by certified mail, telephone or email giving specific notice of the

problem(s) being experienced with the recreational vehicle. Such notice must be

sent to Heartland RV, LLC, 2831 Dexter Drive, Elkhart, IN 46514. Heartland RV

will arrange for repair or replacement parts if materials or workmanship are

identified as defective by Heartland RV. The owner is advised that he/she must

notify Heartland RV of any items believed to require warranty service. Heartland

RV reserves the right to cure all warranty claims. Warranty work, repairs or service

provided under this warranty conducted by any party not specifically authorized by

Heartland, is not covered by this Limited Warranty and WILL VOID THIS

LIMITED WARRANTY.

(Doc. 11-1, Warranty at 4). The record indicates that Plaintiff asserted his rights under the
Warranty by calling attention to numerous perceived defects and having repairs performed at both
Southwest and Sirpilla’s respective facilities. All of the repairs were performed pursuant to the
terms of the Warranty and at no cost to Plaintiff. (See Doc. 1-3 at Ex. C (Work Order # 97641),
Ex. D. (Work Order # 12385), and Ex. H (Work order # 13555)). Therefore, any claims against

Southwest or Sirpilla are naturally derived from, and intimately founded in, the contract


506 (citing Nat’! Found. for Cancer Research v. A.G. Edwards & Sons, Inc., 821 F.2d 772, 774
(D.C. Cir. 1987)).

Looking at the totality of the circumstances of the present case, the Court finds that
Heartland has not waived its right to invoke the Warranty’s mandatory arbitration clause. The
case was removed to this Court on July 26, 2018. (See Doc. 1, Not. of Removal). Heartland filed
its Motion to Stay and Compel Arbitration on September 12, 2018. (See Doc. 12, Mot. Stay). In
the interim, little to no discovery has taken place. (See generally Docs. 1-11). No issue has been
litigated on the merits. No trial date has been set for this matter. And Heartland has not asserted
a counterclaim. Further, Plaintiff will suffer little prejudice if this matter is sent to arbitration
pursuant to the valid arbitration agreement. The only factor weighing in favor pf Plaintiff is that
Heartland submitted its Answer and failed to invoke the arbitration provision. This alone is not
enough. As such, the Court finds that Heartland has not implicitly waived its right to invoke the
arbitration provision in the Warranty.

B. Stout Considerations

As mentioned above, the Court must undertake a four-party inquiry to determine whether
an arbitration agreement is enforceable:

(First, it must determine whether the parties agreed to arbitrate; second, it must
determine the scope of that agreement; third, if federal statutory claims are asserted,

it must consider whether Congress intended those claims to be nonarbitrable; and

fourth, if the court concludes that some, but not all, of the claims in the action are

subject to arbitration, it must determine whether to stay the remainder of the

proceedings pending arbitration.
Stout, 228 F.3d at 714.
1. The Parties Agreed to Arbitration.

In determining whether the parties agreed to arbitrate under the first prong of the Stout test,

the Court must apply the “applicable state law of contract formation.” Prachun v. CBIZ Benefirts


of consideration. Plaintiff has not raised any other arguments that suggest the terms of the
agreement were commercially unreasonable.

The Court’s conclusion on this point remains the same under both Indiana and Ohio law.
Based on the Warranty provision where “any and all claims, demands, causes of actions or disputes
arising out of or relating, in any way to this warranty or the recreational vehicle shall be resolved
exclusively in arbitration,” Plaintiff and Defendant agreed to arbitration. (Doc. 11-1, Warranty at
7). With both states having a strong legislative and judicial presumption in favor of arbitration,
Plaintiff has not brought forth sufficient evidence to conclude that the arbitration provision is
unconscionable and there was not a valid agreement to arbitrate,

2. Plaintiff’s Claims Are Within the Scope of the Arbitration Agreement.

In the Sixth Circuit, it is settled authority that any doubts regarding the scope of an
arbitration agreement should “be resolved in favor of arbitration unless it may be said with positive
assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted
dispute.” Nestle, 505 F.3d at 504. This Court has previously set forth a two-step process to
determine the scope of an arbitration agreement: ‘First, the Court must determine the breadth of
the arbitration agreement provision. Second, the Court must conclude whether the claims fit within
the scope of the provision.” Prachun, 2015 WL 5162522, at *3 (quoting Parsley v. Terminix Int'l
Co., L.P., No. C-3-97-394, 1998 WL 1572764, at *6 (S.D. Ohio Sept. 15, 1998) (Rice, C.J.)).

Plaintiff argues that his claims for violations of the CSPA and tortious breach of warranty
are not within the scope of the arbitration agreement. (Doc. 12, Resp. at 6-7). Both Ohio courts
and courts within the Sixth Circuit have held that CSPA claims are perfectly capable of being
arbitrated so long as the claimant may “effectively vindicate his or her statutory cause of action”

through arbitration.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991). See

10


with the agreement, provided the applicant for the stay is not in default in
proceeding with arbitration.

O.R.C. § 2711.02(B).

In Ohio, “[a]n arbitration clause in a contract is generally viewed as an expression that the
parties agreed to arbitrate disagreements within the scope of the arbitration clause, and, with
limited exceptions, an arbitration clause is to be upheld just as any other provision in a contract
should be respected.” Williams v. Aetna Finance Company, 83 Ohio St. 3d 464, 472, 700 N.E.2d
859 (1998); see also Council of Smaller Enterprises v. Gates, 80 Ohio St. 3d 661, 668, 687 N.E.2d
1352 (1998). One such exception involves unconscionability. “Unconscionability is generally
recognized to include an absence of meaningful choice on the part of one of the parties to a
contract, combined with contract terms that are unreasonably favorable to the other party.” Collins
v. Click Camera & Video, Inc., 86 Ohio App. 3d 826, 834, 621 N.E.2d 1294 (2d Dist. 1993)
(internal citations omitted).

In analyzing unconscionability, “the party asserting unconscionability bears the burden of
proving that the agreement is both procedurally and substantively unconscionable.” Hayes v.
Oakridge Home, 122 Ohio St.3d 63, 2009-Ohio-2054, 908 N.E.2d 408, { 20 (internal citations
omitted). In analyzing procedural unconscionability, “courts consider ‘the circumstances
surrounding the contracting parties’ experience . .. who drafted the contract . .. whether alterations
in the printed terms were possible, [and] whether there were alternative sources of supply for the
goods in question.”” Jd. at 413 (internal citations omitted). In analyzing substantive
unconscionability, “[aJn assessment of whether a contract is substantively unconscionable
involves consideration of the terms of the agreement and whether they are commercially
reasonable.” Jd. at 414 (internal citations omitted). “Factors courts have considered in evaluating

whether a contract is substantively unconscionable include the fairness of the terms, the charge for


& Ins. Servs., Inc., No. 2:14-CV-2251, 2015 WL 5162522, at *3 (S.D. Ohio Sept. 3, 2015)
(Marbley, J.) (quoting Morrison v. Circuit City Stores, Inc., 317 F.3d 646, 666 (6th Cir. 2003));
see also Ackison Surveying, 2016 WL 4208146, at *1) (“Whether the parties’ contract evinces an
agreement to arbitrate is governed by principles of state contract law.”). Thus, “state-law contract
defenses like fraud, forgery, duress, mistake, lack of consideration or mutual obligation, or
unconscionability, may invalidate arbitration agreements.” Cooper v. MRM Inv. Co., 367 F.3d
493, 498 (6th Cir. 2004).

Heartland asserts that the parties reached a valid and binding contract, requiring that all
disputes that arose under or were related to the Warranty were subject to arbitration. Plaintiff
counters by asserting that a valid contract never existed between the parties because the Warranty
amounted to a contract of adhesion, and the Warranty’s terms were unconscionable. While the
Court is to apply state contract law to determine whether the parties entered into a binding contract,
the parties dispute which state’s law applies: Heartland asserts that Indiana law governs while
Plaintiff argues in favor of applying Ohio law. Regardless, Ohio and Indiana law are materially
similar on this matter and this Court finds that the Plaintiff has failed to show that he did not enter
into a valid contract under the laws of either state.

Under Ohio law, “[a] provision in any written contract . . . to settle by arbitration a
controversy that subsequently arises out of the contract . . . shall be valid, irrevocable, and
enforceable, except upon grounds that exist at law or in equity for the revocation of any contract.”
O.R.C. § 2711.01(A). Furthermore:

If any action is brought upon any issue referable to arbitration under an agreement

in writing for arbitration, the court in which the action is pending, upon being

satisfied that the issue involved in the action is referable to arbitration under an

agreement in writing for arbitration, shall on application of one of the parties stay
the trial of the action until the arbitration of the issue has been had in accordance


Courts are called to “examine arbitration language in a contract in light of the strong federal
policy in favor of arbitration, resolving any doubts as to the parties’ intentions in favor of
arbitration.” Nestle Waters N. Am., Inc. v. Bollman, 505 F.3d 498, 503 (6th Cir. 2007). As such,
the “party resisting arbitration bears the burden of proving that the claims at issue are unsuitable
for arbitration.” Green Tree Fin. Corp. Ala. v. Randolph, 531 U.S. 79, 91 (2000). Plaintiff claims
the warranty is a contract of adhesion, and therefore unconscionable, but has failed to present to
the Court Rule 56 evidence demonstrating that the Warranty was procedurally or substantively
unconscionable. Plaintiff failed to allege that the arbitration provision in the Warranty was non-
negotiable, unfair to him, or deprived him of any meaningful choice in the purchase of the RV. In
short, while the Warranty might be accurately described as being “boilerplate,” Plaintiff has not
sufficiently alleged that it was procedurally unconscionable.

As for substantive unconscionability, Plaintiff argues that the arbitration provision “denies
the Plaintiff his fundamental right to a trial by a jury of his peers . . . [and he received nothing in
return.]” (Doc. 12, Resp. at 16). This argument is unavailing because relinquishment of one’s
right to a jury trial is a natural and necessary consequence of agreeing to arbitrate disputes. Hayes
v. Oakridge Home, 122 Ohio St. 3d 63, 2009-Ohio-2054, 908 N.E.2d 408, 4 34 (citing Taylor Bldg.
Corp. of Am. v. Benfield, 117 Ohio St. 3d 352, 2008-Ohio-938, 884 N.E.2d 12, 455); see also
Sanford v. Castleton Health Care Ctr., LLC, 813 N.E.2d 411, 420 (Ind. Ct. App. 2004) (holding
that the constitutional right to trial by jury is not absolute and may be waived by entering into an
arbitration agreement). Plaintiff's final contention that he “received nothing in return” for
purportedly agreeing to arbitrate ignores the fact that Plaintiff received a limited one-year warranty

against defects. Therefore, Plaintiff cannot argue the arbitration provision is invalid due to a lack


UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION

THOMAS R. THIBAULT,
Plaintiff,
v. Case No. 2:18-cv-732

JUDGE GEORGE C. SMITH
Magistrate Judge Deavers
HEARTLAND RECREATIONAL
VEHICLES, LLC, et al.,

Defendants.

OPINION AND ORDER
This matter is before the Court on Defendant Heartland Recreational, LLC’s (“Heartland”)
Motion to Stay Proceedings and Compel Arbitration (Doc. 11). Plaintiff responded (Doc. 12) and
Heartland replied (Doc. 13). This matter is fully briefed and ripe for review. For the reasons that
follow, Defendant’s Motion to Stay Proceedings and Compel Arbitration is GRANTED.
I. BACKGROUND
Plaintiff Thomas R. Thibault initiated this suit against Defendants Heartland, Southwest
RV Centers, LLC (“Southwest”), and Sirpilla RV Centers, LLC (“Sirpilla”). (See Doc. 3, Am.
Compl.). Plaintiff brings this action against Defendants for alleged violations of the Ohio
Consumer Sales Practice Act, Ohio Revised Code § 1345.01, et seg. (“CSPA”); the Ohio
Revocation Acceptance Act, Ohio Revised Code § 1302.66; and the Magnuson-Moss Warranty
Act, 15 U.S.C. § 2301, et. seq. (id. at ¥] 43-44, 52, 63). Plaintiff also brings a claim of tortious

breach of warranty against Defendants. (/d. at 157). These claims arise from Plaintiff's purchase


3. Plaintiff ’s Federal Statutory Claim is Arbitrable.

While Plaintiff has argued that several of his state-law claims are not arbitrable, Plaintiff
did not raise any arguments regarding the arbitrability of his claim for violations of the Magnuson-
Moss Warranty Act, 15 U.S.C. § 2301, et seg. As such, this particular Stout consideration bears
no relevance to the Court’s analysis.

4, Proceedings Against the Non-Signatory Defendants Should be Arbitrated.

Having found that all of Plaintiffs claims against Heartland are subject to arbitration, the
fourth Stout inquiry for the Court to consider is whether Plaintiff's claims against non-signatory
Defendants Southwest and Sirpilla should be stayed or included in the arbitration proceedings.

Plaintiff argues that Defendants Southwest and Sirpilla were not signatories to the
Warranty, nor were they intended third-party beneficiaries of the warranty’s arbitration provision.
Heartland counters that “[t]he existence of a third party . . . does not bar arbitration[]” and that the
Warranty’s arbitration provision is sufficiently broad to extend to Southwest and Sirpilla. (Doc.
13, Rep. at 8-9). The Court agrees with Heartland. In the Sixth Circuit, “nonsignatories may be
bound to arbitration agreements under ordinary contract and agency principles.” Javitch v. First
Union Sec., Inc., 315 F.3d 619, 629 (6th Cir.2003) (citing Arnold v. Arnold Corp., 920 F.2d 1269,
1281 (6th Cir. 1990)). Typically, non-signatories may be subject to an arbitration agreement
between two contracting parties through one of the following five theories: (1) incorporation by
reference, (2) assumption, (3) agency, (4) veil-piercing/alter ego, and (5) estoppel. Javitch, 315
F.3d at 629 (citing Thomson-CSF v. Am. Arbitration Ass'n, 64 F.3d 773, 776 (2d Cir. 1995). These
theories are applicable where a signatory seeks to compel a non-signatory’s participation in
arbitration. Here, however, the situation is opposite; i.e., Plaintiff argues that his claims against

the non-signatory defendants are not arbitrable, and it is Southwest and Sripilla that seek to resolve


Hedeen v. Autos Direct Online, Inc., 2014-Ohio-4200, 19 N.E. 3d 957, 9 46 (“arbitrating a CSPA
claim does not deprive the claimant of any remedies prescribed by R.C. Chapter 1345.”) (citing
Smith v. Ohio State Home Servs., Inc., 9th Dist. Summit Nos. 16441 and 16445, 1994 WL 200801
(May 25, 1994)); Deck v. Miami Jacobs Bus. Coll. Co., No. 3:12-CV-63, 2013 WL 394875, at *7
(S.D. Ohio Jan. 31, 2013) (Black, J.) (rejecting plaintiffs’ public-policy based argument that they
should not be required to arbitrate CSPA claim because, inter alia, the high costs of arbitration
and evidence in CSPA cases should be evaluated by a jury rather than an arbiter, noting that Ohio
courts have rejected the same arguments) (citing Gustavus, L.L.C. v. Eagle Invests., 2d Dist.
Montgomery No. 24899, 2012-Ohio-1433, 4 35 (“[t]he FAA trumps a state statute and any policy
against arbitration in the statute when they act as an obstacle to the accomplishment of Congress’s
objectives in enacting the FAA.”)).

In the present case, the arbitration provision states that “any and all claims, demands,
causes of actions or disputes arising out of or relating in any way to this warranty or the
recreational vehicle shall be resolved exclusively in arbitration.” (Doc. 11-1, Warranty at 7)
(emphasis added). This language is very broad and evinces a clear intent to have all RV-related
claims arbitrated, but this Court’s inquiry does not end there. Plaintiffs claims must still fall
within the breadth of the arbitration provision, no matter how broad it may appear on its face. To
make this determination, the Court must “focus on the factual allegations in the complaint rather
than the legal causes of action asserted, to determine whether the claims raised by Plaintiff stem
from performance of the agreement.” Prachun, 2015 WL 5162522, at *3 (quoting Parsley, 1998
WL 1572764, at *6). Here, all of Plaintiff’s claims relate to the purchase, condition, or repair of
the RV itself. In the Court’s view, Plaintiff's claims are inarguably related to the Warranty and/or

the RV. As such, these claims are subject to the terms of the arbitration provision.

1


the service rendered, the standard in the industry, and the ability to accurately predict the extent of
future liability.” Jd. (internal citations omitted).

Under Indiana law, “[a] written agreement to submit to arbitration is valid, and enforceable,
an existing controversy thereafter arising is valid and enforceable, except upon such grounds as
exist at law or in equity for the revocation of any contract.” Ind. Code Ann. § 34-57-2-1(a). The
Indiana Arbitration Act “may be cited as the Uniform Arbitration Act.” Ind. Code Ann. at § 34-
57-2-22. The legislative purpose of this Act is “to provide a more efficient, expeditious manner
in which to resolve disputes than traditional litigation.” Groves v. Groves, 704 N.E.2d 1072, 1076
(Ind. Ct. App. 1999) (citing Angell Enterprises, Inc. v. Abram & Hawkins Excavating Co., Inc.,
643 N.E.2d 362, 366 (Ind. Ct. App. 1994),

The disputed arbitration provision reads as follows:

7. DISPUTE RESOLUTION

At the option of Heartland RV, any and all claims, demands, causes of action or
disputes arising out of or relating in any way to this warranty or the recreational
vehicle shall be resolved exclusively in arbitration in accordance with the Indiana
Arbitration Act (IC 34-57-1-1, et seq.), the Uniform Arbitration Act (IC 34-57-2-2,
et seq.), and the Indiana Rules for Alternative Dispute Resolution, Rules 3.1
through 3.5. There shall be one (1) arbitrator appointed by the Elkhart Circuit or
Superior Court, Elkhart County, Indiana, who shall be an attorney with professional
experience in the recreational vehicle industry. All costs and expenses of the
arbitration will be paid by the party against whom the arbitrator rules; however,
each party will bear its own attorneys’ fees.

In the event that Heartland RV does not elect to submit any dispute to arbitration
or the foregoing arbitration provision is found to be unenforceable, the exclusive
jurisdiction for deciding any and all claims, demands, causes of action or disputes
arising out or relating in any way to this warranty or the recreational vehicle shall
be the Elkhart Circuit or Superior Court, Elkhart County, State of Indiana. By
executing this warranty, the retail purchaser agrees to the jurisdiction of the courts
set forth above.

(Doc. 11-1, Warranty at 7).


A. Heartland Has Not Waived Its Right to Compel Arbitration

Plaintiff argues that Heartland waived its right to arbitrate by failing to assert such a right
when it filed its Answer to the Amended Complaint. (Doc. 12, Resp. at 7-8). For the reasons that
follow, the Court finds that Heartland has not waived its right to enforce the arbitration clause
contained in the Warranty.

There is a “strong presumption in favor of arbitration” and “waiver of the right to
arbitration is not to be lightly inferred.” Reidy v. Cyberonics, Inc., No. 1:06-CV-249, 2007 WL
496679, at *4 (S.D. Ohio 2007) (Dlott, J.) (citing O./. Distrib. Inc. v. Hornell Brewing Co., 340
F.3d 345, 355 (6th Cir. 2003)). However, a party may implicitly waive its right to arbitration
“when the party actively participates in litigation or acts inconsistently with its rights to proceed
with arbitration.” Mantaline Corp. v. PPG Indus., Inc., 225 F.3d 659 (6th Cir. 2000) (quoting
Siam Feather & Forest Prods. Co., Inc. v. Midwest Feather Co., Inc., 503 F. Supp. 239, 242 (S.D.
Ohio 1980) (Rubin, C.J.)) (internal quotes omitted). To determine whether a party has waived its
right to enforce an arbitration provision, the court may consider the following factors:

1) filing responsive pleadings while not asserting a right to arbitration; 2) filing

pretrial motions; 3) engaging in extensive discovery; 4) using discovery methods

not available in arbitration; 5) litigating issues on the merits; 6) the length of delay

in invoking an arbitration right and seeking a stay; 7) the proximity of the trial date;

8) the prejudice to the opposing party; and 9) whether the party has filed a

counterclaim.

Konica Minolta Bus. Sols., U.S.A., Inc. v. Allied Office Prods, Inc., et al., No. 2:06-CV-71, 2006
WL 3827461, at *11 (S.D. Ohio Dec. 27, 2006) (Graham, J.) (citing Systran Fin. Servs. Corp. v.
Giant Cement Holding, Inc., 252 F. Supp. 2d 500, 506 (N.D. Ohio 2003)). No one factor is

dispositive, rather a court must determine whether, under the totality of the circumstances, “the

defaulting party has acted inconsistently with the arbitration right.” Systran, 252 F. Supp. 2d at


obligations of Heartland and Plaintiff. Plainly stated, all of Plaintiffs claims against Southwest
and Sirpilla presume the existence of the Warranty.

Second, Heartland’s relationships with Southwest and Sirpilla are sufficiently close to
warrant arbitration. Neither Heartland nor Plaintiff argue that work performed by Southwest or
Sirpilla was outside the scope of the Warranty. As noted above, all repairs were performed at no
cost to Plaintiff. These facts, coupled with the Warranty language pertaining to defects/repairs,
support the inference that Southwest and Sirpilla were Heartland-approved dealers and/or service
providers acting as agents of Heartland for the purposes of satisfying Heartland’s obligations under
the Warranty. As such, the claims against Southwest and Sirpilla and largely interdependent on
the claims against Heartland.

Finally, it is in the best interest of judicial economy to have all claims arbitrated together.
The Court has already discussed the interconnectedness of the claims against all three defendants.
If the Court were to compel Plaintiff to arbitrate its claims against Heartland, but not Southwest
and Sirpilla, it would invite the potential for inconsistent outcomes and would surely subject the

parties to unnecessary costs and delays.

15


v. Focus Fiber Sols., LLC, No. 2:15-CV-2044, 2016 WL 4208145, at *1 (S.D. Ohio Aug. 10, 2016)
(Marbley, J.) (citing Stout v. J.D, Byrider, 228 F.3d 709, 714 (6th Cir. 2000)). Any doubts
concerning the scope of arbitrable issues should be resolved in favor of arbitration. /d. at *1;
Moses H. Cone Mem’! Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983). In evaluating
motions to compel arbitration, “courts treat the facts as they would in ruling on a summary
judgment motion, construing all facts and reasonable inferences that can be drawn therefrom in
light most favorable to the non-moving party.” Jones v. U-Haul Co. of Mass. & Ohio Inc., 16 F.
Supp. 3d 922, 930 (S.D. Ohio 2014) (Graham, J.). The Court has four tasks:

[Flirst, it must determine whether the parties agreed to arbitrate; second, it must

determine the scope of that agreement; third, if federal statutory claims are asserted,

it must consider whether Congress intended those claims to be nonarbitrable; and

fourth, if the court concludes that some, but not all, of the claims in the action are

subject to arbitration, it must determine whether to stay the remainder of the

proceedings pending arbitration.
Stout, 228 F.3d at 714.

Ill. DISCUSSION

Heartland has moved this Court to stay proceedings pending arbitration and asserts that
Plaintiff's claims are subject to the arbitration provision set forth in the Warranty. (Doc. 11, Mot.
Stay at 6-7). Plaintiff argues that the arbitration agreement should not be enforced because: (1) the
warranty is a contract of adhesion; (2) the statutory violation claims under Ohio Revised Code
§ 1345.01 and tortious breach of warranty claim are not arbitrable; (3) Heartland waived its right
to arbitrate by failing to assert such when it filed its Answer to the Amended Complaint; and

(4) Defendants Southwest and Sirpilla were not intended third-party beneficiaries of the warranty’s

arbitration provision.


of a 2017 Heartland North Peak 29BH recreational vehicle (“RV”) that was manufactured by
Heartland. (/d. at J 19).

This action was originally brought in state court and was later removed to this Court on
July 26, 2018. (See Doc. 1, Not. of Removal). Heartland now asks this Court to stay this action
and compel arbitration. (Doc. 11, Mot. to Stay at 1). Heartland contends that Plaintiff freely
entered into an agreement to arbitrate “any and all claims, demands, causes of action or disputes
arising out of or relating in any way . . . [to] the recreational vehicle” by way of a limited warranty
contained in the vehicle’s Owner’s Manual. (Doc. 11-1, Warranty at 7). The Warranty also
contained a forum selection clause naming Elkhart Circuit or Superior Court in Elkhart County,
Indiana the exclusive jurisdiction should Heartland elect to decline the arbitration provision
identified above. (/d.). Heartland alone had the option to decline arbitration as a means of dispute
resolution. (/d.). Plaintiff asserts the following arguments in opposition: (1) the Warranty is a
contract of adhesion; (2) that claims for violations of Ohio Revised Code § 1345.01 and tortious
breach of warranty are not arbitrable; (3) Heartland waived its right to arbitration by filing an
Answer to the Plaintiff's Amended Complaint; and (4) Sirpilla and Southwest are not intended
beneficiaries of the Warranty’s arbitration provision. (Doc. 12, Resp. at 4-9).

II. STANDARD OF REVIEW

Under the Federal Arbitration Act (“FAA”), arbitration contracts “shall be valid,
irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation
of any contract.” 9 U.S.C. § 2. Ifa party who signed an arbitration contract fails or refuses to
arbitrate, the aggrieved party may petition the court for an order directing the parties to proceed in
arbitration in accordance with the terms of the agreement. 9 U.S.C. § 4. The Court must then

“determine whether the parties agreed to arbitrate the dispute at issue.” Ackison Surveying, LLC


Plaintiff's claims against them through arbitration. As the Second Circuit has noted, “it matters
whether the party resisting arbitration is a signatory or not.” Merrill Lynch Inv. Managers v.
Optibase, Ltd., 337 F.3d 125, 131 (2d Cir. 2003) (citing Thomson-CSF, 64 F.3d at 779). The
Eighth Circuit summarized that “{a] willing nonsignatory seeking to arbitrate with a signatory that
is unwilling may do so under what has been called an alternative estoppel theory which takes into
consideration the relationships of persons, wrongs, and issues, [bJut a willing signatory seeking to
arbitrate with a non-signatory that is unwilling must establish at least one of the five theories
described in [Thomson-CSF]. CD Partners, LLC vy. Grizzle, 424 F.3d 795, 799 (8th Cir. 2005)
(citing Merrill Lynch, 337 F.3d at 131).

This same approach has been recogized in this District. See Reilly v. Meffe, 6 F. Supp. 3d
760, 777 (S.D. Ohio 2014) (Graham, J.) (“Conversely, a signatory can be compelled to arbitrate at
the nonsignatory’s insistence ‘because of the close relationship between the entities involved, as
well as the relationship of the alleged wrongs to the nonsignatory’s obligations and duties in the
contract . . . and [the fact that] the claims were intimately founded in and intertwined with the
underlying contract obligations.”” (citing Thomson-CSF, 64 F.3d at 779)). Similarly, in Orcutt v.
Kettering Radiologists, Inc., the Court stopped short of using the term “alternative estoppel,” but
acknowledged that equitable estoppel allows a non-signatory to compel arbitration under two
circumstances:

First, equitable estoppel applies when the signatory to a written agreement

containing an arbitration clause “must rely on the terms of the written agreement in

asserting [its] claims” against the nonsignatory. When each of a signatory’s claims

against a nonsignatory “makes reference to” or “presumes the existence of” the

written agreement, the signatory’s claims “arise[ ] out of and relate [ ] directly to

the [written] agreement,” and arbitration is appropriate. Second, “application of

equitable estoppel is warranted . . . when the signatory [to the contract containing

the arbitration clause] raises allegations of . . . substantially interdependent and

concerted misconduct by both the nonsignatory and one or more of the signatories
to the contract.” Otherwise, “the arbitration proceedings [between the two

13


IV. CONCLUSION
Having found that: 1) Heartland did not waive its right to arbitrate, 2) the parties entered
into a valid arbitration agreement; 3) Plaintiff's claims are within the scope of that arbitration
agreement; 4) Plaintiff's federal statutory claim is arbitrable, and 5) all claims—including those
against Southwest and Sirpilla—are arbitrable, Heartland’s Motion to Stay Litigation and Compel
Arbitration is GRANTED!. This action is STAYED in its entirety pending arbitration of the
parties’ dispute.

The Clerk shall remove Document 11 from the Court’s pending motions list.

IT IS SO ORDERED.

/s/ George C. Smith
GEORGE C. SMITH, JUDGE

UNITED STATES DISTRICT COURT

' Despite all of Plaintiff's claims being subject to the arbitration agreement, the Court will stay proceedings—as
opposed to dismissing this action—in furtherance of the FAA’s underlying policy “to move the parties to an arbitrable
dispute out of court and into arbitration as quickly and easily as possible.” Moses H. Cone Mem'l Hosp. v. Mercury
Constr, Corp., 460 U.S. 1, 22 (1983). However, the parties should be advised that the Courts intends to give full force
and effect to the Warranty’s forum selection clause, should any disputes arise following the conclusion of the parties’
arbitration.