Court Opinion

ID: 28876
Source: CourtListenerOpinion
Date Created: 2010-04-25 09:31:10+00
Date Added: 2024-06-11T14:55:51.294478
License: Public Domain

UNITED STATES COURT OF APPEALS

                           FOR THE FIFTH CIRCUIT

                               No. 01-60522

               CONSECO FINANCE SERVICING CORPORATION,

                                                       Plaintiff-Appellee,

                                  VERSUS

                    MARY SHINALL and JOHNNIE PAYNE,

                                                   Defendants-Appellants.

           Appeal from the United States District Court
             for the Southern District of Mississippi
                            (01-CV-107)

                              October 1, 2002

Before SMITH, BENAVIDES, and PARKER, Circuit Judges.
PER CURIAM:*

      Appellants,   Mary    Shinall    and   Johnnie   Payne,   appeal   the

district court’s denial of their motion to dismiss and the orders

compelling arbitration and staying their state court action.             For

the reasons that follow, we affirm.

  *
   Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.

                                      -1-
                                     BACKGROUND

      In   the    summer     of     1999,       Appellants,     both     residents      of

Mississippi,      visited     Lakeland       Drive    Mobile      Home   Sales,    d/b/a

Lakeland Mobile Home Sales (hereinafter “Lakeland”) in Vicksburg,

Mississippi.      David Walters, also a resident of Mississippi and a

representative of Lakeland, assisted Appellants in viewing the two

homes on Lakeland’s lot available for sale.                     The home Appellants

decided to purchase was a used mobile home.                 Appellants made a down

payment and       Lakeland    agreed       to     finance   the    remainder      of   the

purchase.        In completing the purchase transaction, Appellants

executed    a    Manufactured       Home    Retail     Installment       Contract      and

Security     Agreement       (hereinafter           “Contract”)        containing       an

arbitration clause.           Although Lakeland agreed to finance the

purchase, the Contract was assigned to Conseco Finance Servicing

Corp.1 (hereinafter “Conseco Servicing”) shortly after it was

executed.

      The home was delivered to Appellants and set up on their lot,

however, Appellants did not approve of the home’s condition and

refused to occupy it.               Needless to say, the payments became

delinquent and the mobile home was repossessed.                     On May 30, 2000,

Appellants       brought     suit    against        Lakeland,      Walters,    Conseco

  1
   Conseco Finance Servicing Corp. is a Delaware corporation with
its principal place of business in St. Paul, Minnesota. At the
time of sale, Conseco Finance Servicing Corp. was known as Green
Tree Financial Servicing Corporation.

                                            -2-
Servicing,         and   Conseco   Finance      Corp.2   (hereinafter      “Conseco

Finance”) in the Circuit Court of Claiborne County, Mississippi,

seeking damages in connection with the purchase of the mobile home.

Appellants’ complaint asserted that the state court defendants made

misrepresentations with respect to the age, condition, and cost of

the mobile home.           In addition, the complaint asserted that the

defendants engaged in an egregious pattern and practice of fraud

and deception in the sale and financing of mobile homes.

          On June 29, 2000, Conseco Servicing and Conseco Finance

(collectively hereinafter “Conseco”) moved to dismiss the state

court action and to compel arbitration pursuant to the arbitration

clause in the Contract.            On July 19, 2000, Appellants moved the

state court to continue or stay, pending discovery on the issue of

arbitrability,           any   hearing    on    Conseco’s    motion   to    compel

arbitration.         Subsequently, the state court granted Appellants’

motion and entered an order on October 12, 2000, staying the

arbitration issue and permitting the parties to conduct full

discovery.          Shortly    thereafter,      Appellants   propounded    written

discovery to all defendants.

          On February 12, 2001, Conseco Servicing filed the instant suit

in       federal   court   seeking   an   order    to    compel   arbitration   of

Appellants’ state court claims and to stay the state court action

     2
   Conseco Finance Corp. is a Delaware corporation with its
principal place of business in St. Paul, Minnesota.       Conseco
Finance Corp. is the parent company of Conseco Servicing.

                                          -3-
pending arbitration.    Appellants responded on February 23, 2001,

and moved the district court to dismiss, or in the alternative, to

stay the action pending resolution of the state court proceedings.

On May 3, 2001, Conseco Finance moved to intervene in the district

court action, compel arbitration of Appellants’ state court claims,

and stay the state court proceedings pending arbitration.

     The district court entered its Memorandum Opinion and Order on

June 8, 2001, denying Appellants’ motion to dismiss, ordering

Appellants to arbitrate their state court claims against Conseco

Servicing, and staying the state court proceedings relative to

Conseco Servicing. Similarly, on June 19, 2001, the district court

granted Conseco Finance’s motion to intervene and issued an order

compelling Appellants to arbitrate their state court claims against

Conseco Finance and staying the state court proceedings relative to

Conseco Finance.

     On appeal, Appellants contend that the district court erred

in: 1) failing to join necessary and indispensable state court

parties; 2) failing to abstain from exercising jurisdiction in

light of the parallel state court proceedings; 3) staying the state

court   proceedings   pursuant   to   the   “in   aid   of   jurisdiction”

exception to the Anti-Injunction Act; 4) failing to dismiss the

federal action due to collateral estoppel of the substantive issues

in dispute; 5) failing to dismiss the federal action in light of

Conseco’s waiver of any right to invoke federal jurisdiction; 6)

denying their motion for discovery; and 7) denying their request

                                  -4-
for a jury trial.

                         STANDARDS OF REVIEW

     We review de novo, a district court’s assumption of subject

matter jurisdiction.    See Local 1351 Int’l Longshoremens Assoc. v.

Sea-Land Serv. Inc., 214 F.3d 566, 569 (5th Cir. 2000).   We review

for an abuse of discretion, a district court’s determination

whether to exercise its jurisdiction and de novo, its underlying

legal conclusions.     See Safety Nat’l Cas. Corp. v. Bristol-Myers

Squibb Co., 214 F.3d 562, 564 (5th Cir. 2000).       Insofar as the

availability of the exceptions to the Anti-Injunction Act is an

issue of law, we review de novo, a district court’s injunction of

a state court action.     See Next Level Communications L.P. v. DSC

Communications Corp., 179 F.3d 244, 249 (5th Cir. 1999). We review

for an abuse of discretion, a district court’s decision whether to

issue an injunction that properly falls within the exceptions to

the Anti-Injunction Act.    See Rolex Watch USA, Inc. v. Meece, 158
F.3d 816, 823 (5th Cir. 1998).   We also review de novo, a district

court’s application of collateral estoppel and the decision to deny

a jury trial on factual issues in the context of an arbitration

agreement.   See Stripling v. Jordan Prod. Co., L.L.C., 234 F.3d
863, 868 (5th Cir. 2000) (citation omitted) (“[T]he application of

collateral estoppel is a question of law that we review de novo.”);

Avedon Eng’g, Inc. v. Seatex, 126 F.3d 1279, 1283 (10th Cir. 1997)

(citation omitted) (“We also review de novo a district court’s

                                 -5-
decision to deny a jury trial on the factual question of whether

the parties agreed to arbitrate.”).    We review a district court’s

discovery decisions for an abuse of discretion.         See Moore v.

Willis Indep. Sch. Dist., 233 F.3d 871, 876 (5th Cir. 2000).

                             DISCUSSION

      Appellants raise a number of issues on appeal.      We address

each in turn below.

                  I.   JURISDICTION TO HEAR APPEAL

      Before addressing the merits of the issues presented in this

appeal, we must first determine whether we have jurisdiction over

the district court’s orders compelling arbitration.     In Green Tree

Finance Corp.-Alabama v. Randolph, 531 U.S. 79 (2000), the Supreme

Court addressed the appealability of orders compelling arbitration

under the Federal Arbitration Act, 9 U.S.C. § 16(a)(3) (1999)

(hereinafter “the FAA”).3    The Supreme Court held in Green Tree

that, a district court’s order compelling arbitration is appealable

as a final decision under § 16(a)(3) if the underlying action is

dismissed.   See Green Tree, 531 U.S. at 86-87.      The FAA does not

define a “final decision” with respect to an arbitration.       Green

Tree instructs, however, that a final decision “is a decision that

ends the litigation on the merits and leaves nothing more for the

  3
   Section 16(a)(3) of the FAA states in relevant part: “(a) An
appeal may be taken from – . . . (3) a final decision with respect
to an arbitration that is subject to this title.”      9 U.S.C. §
16(a)(3).

                                 -6-
court to do but execute the judgment.”           Id. at 86 (internal

quotations and citations omitted).       In a footnote to the opinion,

the Supreme Court expanded its holding beyond the specific facts

presented in Green Tree and stated that “[h]ad the District Court

entered a stay instead of a dismissal in this case, that order

would not be appealable.”      Id. at 87 n.2 (citing 9 U.S.C. §

16(b)(1)).

     In the instant case, Conseco contends that after granting

their motions to compel, the district court stayed its action and

thus, the orders are not appealable.        Although Conseco concedes

that the district court’s orders did not expressly state that the

action was stayed, Conseco maintains that insofar as the orders

generally granted their arbitration motions and insofar as they

requested a stay pursuant to 9 U.S.C. § 3, it logically follows

that the district court stayed the action.      Even a cursory reading

of   Conseco’s   Complaint   and    Petition   for   Order   Compelling

Arbitration and for Other Relief, the district court’s Memorandum

Opinion and Order of June 8, 2001, and the subsequent Order of June

19, 2001, however, reveals the flaws in Conseco’s contention.

     Conseco is correct in that the district court’s orders did not

expressly state that the district court action was stayed. Conseco

is incorrect, however, in interpreting the district court’s orders

as a stay of the district court action and in implying that they

requested a stay of the district court action.       Conseco’s request

                                   -7-
for   injunctive    relief    specifically    sought   to   enjoin   “all

proceedings on the part of Defendants, and their attorneys in the

State Court Action.”         Furthermore, the district court’s order

clearly provides that the stay accompanying the order compelling

arbitration applied only to the state court proceedings relative to

the parties in the instant suit. Because the district court action

was not stayed, Appellants’ district court motion to dismiss or to

stay pending the outcome of the state court proceedings was denied,

and the orders compelling Appellants to arbitrate their claims

against Conseco ended the litigation on the merits and left nothing

more for the district court to do but execute the judgment, we

conclude that the district court’s decision was a final decision

within the meaning of § 16(a)(3) and in accordance with Green Tree.

Thus, we have jurisdiction to hear the instant appeal.

                   II.   SUBJECT MATTER JURISDICTION

      Appellants argue that the district court erred in denying

their motion to dismiss.       Specifically, Appellants maintain that

Walters and Lakeland are indispensable parties to the instant

action because of their participation in the formation of the

Contract and should have been joined.        Appellants further maintain

that the joinder of Walters and Lakeland would have destroyed

diversity jurisdiction under 28 U.S.C. § 1332 due to their non-

diverse status as residents of Mississippi.        We disagree.

      Rule 19(a)(1) requires joinder if “in the person’s absence

                                   -8-
complete relief cannot be accorded among those already parties.”

FED. R. CIV. P. 19(a)(1).   When joinder of a person described in

Rule 19(a)(1) is not feasible because it will deprive the court of

subject matter jurisdiction, Rule 19(b) requires the court to

determine whether “the action should proceed among the parties

before it, or should be dismissed, the absent person being thus

regarded as indispensable.”      FED. R. CIV. P. 19(b).

   Contrary   to   Appellants’   contentions,   however,     Walters   and

Lakeland were not necessary and indispensable parties. Appellants’

state court complaint asserts that the Contract at issue was

procured through fraud and deceit.       Appellants, however, did not

specifically allege fraudulent inducement in the execution of the

arbitration agreement.    Under § 4 of the FAA, an allegation that

the entire contract was fraudulently induced does not call into

question the making of an agreement to arbitrate.         See Prima Paint

Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-04 (1967).

Furthermore, “the federal district court ascertains only whether

the arbitration clause covers the allegations at issue.          ‘If the

dispute is within the scope of the arbitration clause, the court

may not delve further into the merits of the dispute.’”          Snap-On

Tools Corp. v. Mason, 18 F.3d 1261, 1267-68 (5th Cir. 1994)

(quoting Mun. Energy Agency v. Big Rivers Elec. Corp., 804 F.2d
338, 342 (5th Cir. 1986) (citing Meridian v. Algernon Blair, Inc.,

721 F.2d 525, 528 (5th Cir. 1983)).

                                   -9-
     In the instant case, the only issue before the district court

was whether Appellants were to be compelled to arbitrate their

claims against Conseco. Information regarding the participation of

Walters and Lakeland in the formation of the Contract may have been

beneficial in an examination of the merits of the underlying state

court dispute, but were not necessary to determine whether the

allegations at issue were within the scope of the arbitration

clause.   Accordingly, the district court did not err in denying

joinder of Walters and Lakeland.

                         III.   ABSTENTION

     Appellants argue that the district court erred in failing to

abstain from hearing this case pursuant to the abstention doctrine

set forth in Colorado River Water Conservation District v. United

States, 424 U.S. 800 (1976) and further elucidated in Moses H. Cone

Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983).

Specifically, Appellants contend that the district court abused its

discretion in failing to abstain from hearing this case in light of

the procedural posture of the underlying proceedings and Conseco’s

improper federal litigation tactics.

     “The doctrine of abstention generally applies only to cases

involving considerations of proper constitutional adjudication or

regard for federal-state relations . . . in situations involving

the contemporaneous exercise of concurrent jurisdictions.”    Bank

One, N.A. v. Boyd, 288 F.3d 181, 184 (5th Cir. 2002) (internal

                                -10-
quotation       and   citation    omitted).     Colorado     River   instructs,

however, that considerations of wise judicial administration may

also serve as an appropriate basis for a federal district court’s

decision to refrain from exercising jurisdiction in favor of a

parallel state court proceeding.          See id.

      The district court’s orders do not explain its decision to

exercise jurisdiction.           Nevertheless, we begin our analysis with

the federal court’s virtually unflagging obligation to exercise the

jurisdiction conferred upon them.             See id.     “Abstention from the

exercise of federal jurisdiction is the exception, not the rule.”

Id. at 813.       “Abdication of the obligation to decide cases can be

justified under [the abstention] doctrine only in the exceptional

circumstances where the order to the parties to repair to the state

court would clearly serve an important countervailing interest.”

Id.

      There is no hard and fast rule for determining whether to

dismiss     a    federal    action    because    of     parallel   state    court

litigation. Factors relevant to the decision, however, include: 1)

which court       first    assumed   jurisdiction     over   the   res;    2)   the

inconvenience of the federal forum; 3) the desirability of avoiding

piecemeal litigation; 4) the order in which jurisdiction was

obtained by the concurrent fora; 5) whether and to what extent

federal law provides the rules of decision on the merits; and 6)

the adequacy of the state court proceeding in protecting the rights

                                       -11-
of the party invoking federal jurisdiction.               See id. at 818; Moses

H. Cone, 460 U.S. at 23, 26; Black Sea Inv., Ltd. v. United

Heritage Corp.,      204 F.3d 647,    650   (5th    Cir.    2000)   (citation

omitted).     No single factor is dispositive.            Rather, the decision

whether to abstain requires a careful balancing of these factors as

they apply in a given case.

     The first factor is not applicable to the instant case as

there   has   been   no    exercise   of   jurisdiction         over   any    res   or

property.     With respect to the second factor, Appellants assert

that the federal forum is inconvenient due to the geographic

distance between Claiborne County (the location of the state court

action) and Hinds County (the location of the federal court action)

and thus, this factor weighs in favor of exercising jurisdiction.

We disagree.     The question is not whether the federal forum is

inconvenient, but rather “whether the inconvenience of the federal

forum [to the parties] is so great that this factor points toward

abstention.”    Evanston Ins. Co. v. Jimco, Inc., 844 F.2d 1185, 1193

(5th Cir. 1988).      Because Claiborne County and Hinds County are

neighboring counties, any inconvenience would be minor. Thus, this

factor weighs in favor of exercising jurisdiction.                       The third

factor also weighs in favor of exercising jurisdiction.                      Although

it is generally desirable to avoid piecemeal litigation when

possible, the FAA “requires piecemeal resolution when necessary to

give effect to an arbitration agreement.”               Moses H. Cone, 460 U.S.

                                      -12-
at 20.

      Mindful of the Supreme Court’s caution against giving “too

mechanical a reading to the ‘priority’ element,” we find that the

fourth factor, the order in which jurisdiction was obtained by the

concurrent fora, weighs slightly in favor of abstention.    Id. at

21.   The state court action was filed almost nine months prior to

the federal action.   Furthermore, the state court had issued an

order permitting discovery and Appellants had propounded written

discovery.

      The only question before the district court was whether

Appellants should be compelled to arbitrate their state court

claims against Conseco. “The FAA establishes that, ‘as a matter of

federal law, any doubts concerning the scope of arbitrable issues

should be resolved in favor of arbitration . . . .’” Bank One,

N.A., 288 F.3d at 186 (quoting Moses H. Cone, 460 U.S. at 15).

Thus, the fifth factor, whether and to what extent federal law

provides the rules of decision on the merits, weighs in favor of

the district court exercising jurisdiction.   The sixth factor, the

adequacy of the state proceedings in protecting the rights of the

party invoking federal jurisdiction is a neutral factor.       See

Evanston Ins. Co., 844 F.2d at 1193 (explaining that the adequacy

of the state proceedings “can only be a neutral factor or one that

weighs against, not for, abstention”). Although the FAA represents

federal policy, enforcement of it is left in large part to the

                               -13-
state courts.             See Moses H. Cone, 460 U.S. at 26 n.32.

     Because         no     single    factor     is   dispositive     and   the    weight

accorded to any single factor depends upon the circumstances of the

particular case, ending our analysis with these six factors would

present    a    fairly        close   call     due    to   the   state   court’s    prior

assumption of jurisdiction.                  Yet, the balance would still tip

slightly in favor of the district court exercising jurisdiction.

A determination of whether exceptional circumstances warranting

abstention          are    present    in   any    given      case,   however,     is   not

restricted to an examination of these six factors alone.                        Although

not called into play in Moses Cone, there, the Supreme Court

instructed that “the vexatious or reactive nature of either the

federal or the state litigation may influence the decision whether

to defer to a parallel state litigation under Colorado River.”

Moses H. Cone, 460 U.S. at 26 n.20.

     Relying on the arbitration provision in the Contract, Conseco

countered Appellants’ state court complaint with a motion to compel

arbitration.          Appellants opposed Conseco’s arbitration motion and

moved the court for a stay or continuance of any hearing on

Conseco’s motion in order to allow the parties to take discovery

relevant       to    the     enforceability      of    the   arbitration    provision.

Finding Appellants’ motion well taken, the state court entered an

order on or about October 11, 2000, permitting full discovery and

staying any hearing on Conseco’s motion to compel arbitration

                                             -14-
pending discovery.       On February 12, 2001, displeased with the

course of progress in the state court action and four months after

the state court stayed, pending discovery, any hearing on the

motion to compel arbitration, Conseco Servicing filed the instant

federal suit to compel arbitration.

     Conseco’s resort to the federal courts, nearly nine months

after the initiation of the state court action and four months

after the entry of an adverse order, appears at first glance to be

an abuse of the federal courts.            Conseco was free to pursue

compulsion of arbitration in a parallel federal action upon being

served in the state court action.         Conseco elected, however, to

pursue arbitration in state court.          Only after the state court

issued   an   order,    not   limiting    discovery   to   the   issue   of

arbitrability, but permitting full discovery and staying any action

on the motion to compel arbitration, did Conseco decide to resort

to the federal courts.

     “The Supreme Court has noted that ‘the vexatious or reactive

nature of either the federal or the state litigation may influence

the decision whether to defer to a parallel state litigation under

Colorado River.’”      Allen v. La. State Bd. of Dentistry, 835 F.2d
100, 105 (5th Cir. 1988) (quoting Moses H. Cone, 460 U.S. at 18

n.20).   We are mindful, however, that “[a] party who could find

adequate protection in state court is not thereby deprived of its

right to the federal forum, and may still pursue the action there

                                   -15-
since there is no ban on parallel proceedings.” Evanston Ins. Co.,
844 F.2d at 1193.

      The sequence of events in this case demonstrate that Conseco’s

initial position in state court and its resort to the federal

courts were consistent with the policy of the FAA to move the case

out of court and into arbitration as quickly as possible.              There

was   no   improper   forum   shopping    or    attempt   to   undermine   the

authority of the state court to enforce its order.              Although the

question is close, we find that this case does not present the

exceptional circumstances necessary to abstain from exercising

jurisdiction in favor of the ongoing proceedings in state court.

Accordingly, the district court did not abuse its discretion in

exercising jurisdiction.

                IV.    STAY OF STATE COURT PROCEEDINGS

      Appellants argue that the district court erred in staying the

state court proceedings, insofar as they related to the parties to

the federal court action, pursuant to the “in aid of jurisdiction”

exception to the Anti-Injunction Act, 28 U.S.C. § 2283.                    More

exactly, Appellants contend that the “in aid of jurisdiction”

exception is inapplicable to the instant case because: 1) there is

no property or res involved; and 2) the case was not removed from

state court, but rather filed in federal court as a totally

separate and independent proceeding.           Appellants, however, fail to

cite any controlling authority for this argument and we find it

                                   -16-
totally without merit.

      Section 2283 states that “[a] court of the United States may

not grant an injunction to stay proceedings in a State court except

as expressly authorized by Act of Congress, or where necessary in

aid   of   its   jurisdiction,      or   to   protect    or   effectuate     its

judgments.”      28   U.S.C.    §   2283.     Often     referred   to   as   the

relitigation exception, the “necessary in aid of its jurisdiction,

or to protect or effectuate its judgments” exception, is applicable

when “the claims or issues which the federal injunction insulates

from litigation in state proceedings actually have been decided by

the federal court.”     Chick Kam Choo v. Exxon Corp., 486 U.S. 140,

148 (1988).      The stay at issue here properly falls within the

exception for injunctions.           Accordingly, we find no abuse of

discretion on the part of the district court in staying the state

court proceedings.

                        V.     Collateral Estoppel

      Appellants maintain that the district court erred in failing

to dismiss this action because Conseco was collaterally estopped

from litigating the substantive issues involving arbitration as a

result of the state court’s discovery order.             We disagree.

      Under Mississippi law, “[c]ollateral estoppel provides that an

issue of ultimate fact which was a valid and final judgment may not

be re-litigated between the same parties in a subsequent suit.”

Farris v. State, 764 So. 2d 411, 423 (Miss. 2000) (citing Ashe v.

                                     -17-
Swenson, 397 U.S. 436, 443 (1970). “Where the elements of estoppel

have been satisfied, the court’s inquiry is not whether the court’s

order was erroneous, but only that it was the final judgment of the

case.”    State ex rel. Moore v. Molpus, 578 So. 2d 624, 642 (Miss.

1991) (internal quotation and citation omitted).               In the present

case, the state court’s discovery order did not adjudicate all of

the claims of the parties.       As such, it was interlocutory in nature

and not a final judgment on the merits.           See MISS R. CIV. P. 54(a);

Cunningham v. Mitchell, 535 So. 2d 589, 592 (Miss. 1988) (holding

that   order   compelling   discovery      was   not    an   appealable   final

judgment).     Accordingly, this assignment of error lacks merit.

                      VI.   WAIVER OF ARBITRATION

       Appellants assert that Conseco’s resort to the federal courts

after receiving an adverse ruling in the state court constituted

reactive and vexatious conduct resulting in a waiver of any right

to invoke federal jurisdiction.       “Fifth Circuit precedent places a

‘heavy burden’ on a party claiming waiver of arbitration rights.”

Snap-On    Tools   Corp., 18 F.3d     at    1267   (citation   omitted).

“Accordingly, we indulge a presumption against finding waiver.”

Id. (citing Walker v. J.C. Bradford & Co., 938 F.2d 575, 577 (5th

Cir. 1991). Insofar as we have already found that Conseco’s resort

to the federal courts did not amount to reactive and vexatious

conduct warranting abstention, we similarly find no waiver of any

right to seek compulsion of arbitration in federal court.

                                    -18-
                        VII.    DENIAL OF DISCOVERY

     Appellants contend that the district court erred in denying

discovery    relative   to     the   enforceability   of   the   arbitration

agreement.    Specifically, Appellants argue that their defenses of

fraud and unconscionability turn upon factual questions and thus,

they should be entitled to conduct discovery.          We disagree.

     “[I]n FAA suits, the federal courts conduct ‘an expeditious

and summary hearing, with only restricted inquiry into factual

issues’ bearing on the making of the arbitration agreement.” Snap-

On Tools Corp., 18 F.3d at 1265 n.4 (citing Moses H. Cone, 460 U.S.

at 22). Appellants allegations of fraud and unconscionability were

not directed specifically at the arbitration agreement, but at the

Contract in general.         A general allegation that a contract was

fraudulently procured does not call into question the making of an

agreement to arbitrate.        See Prima Paint Corp., 388 U.S. at 403-04.

The issue before the district court was not whether the arbitration

agreement was unconscionable or procured by fraud, but whether

Appellants should be compelled to arbitrate their claims against

Conseco.    The discovery sought by Appellants was not necessary to

answer the question before the district court.             Accordingly, we

find that the district court did not abuse its discretion in

denying discovery.

                          VIII.      TRIAL BY JURY

     Appellants argue that they are entitled to a jury trial under

                                      -19-
§ 4 of the FAA relative to the issue of arbitrability and that the

district   court   erred   in   compelling    arbitration.    Appellants

essentially put forth two arguments.4          First, Appellants contend

that they “did not knowingly, voluntarily and intellectually waive

their right to a trial by jury.”          In support of this contention,

Appellants maintain that they were fraudulently induced to sign the

Contract containing the arbitration clause and therefore, cannot be

compelled to arbitrate any of the claims that have been asserted in

state court because the Contract was procured through fraud,

trickery, and deceit.      As we have stated throughout this opinion,

however, an allegation that the contract, as a whole, was procured

by fraud does not call into question the making of an agreement to

arbitrate.   “Under Supreme Court precedent, a party must challenge

the making of the agreement to arbitrate itself in order to create

a jury-triable issue.”     Dillard v. Merrill Lynch, Pierce, Fenner &

Smith, Inc., 961 F.2d 1148, 1154 n.9 (5th Cir. 1992) (internal

quotation omitted) (citing Prima Paint Corp., 388 U.S. at 403-04).

      Second, Appellants assert that because they requested a jury

trial in both the state and federal court actions, the FAA requires

that they receive one.     This argument is not persuasive.     “A party

  4
   We note that Appellants also contend that the “district court
erred in not holding the arbitration agreement unconscionable, or
alternatively, allowing discovery on this issue.” Appellants fail,
however, to show why the arbitration agreement was unconscionable
but rather, make only unsupported general allegations directed at
the Contract as a whole.     Accordingly, we find this argument
lacking in merit.

                                   -20-
to an arbitration agreement cannot obtain a jury trial merely by

demanding one.”      Id. (citation omitted).             Even if Appellants’s

allegations of fraud and unconscionability were taken as true,

there would be no legal basis for submitting the issue to a jury.

Thus,   we   find   no    error   in   the    district      court’s   denial    of

Appellants’ request for a jury trial.

                                  CONCLUSION

     For the reasons stated above, we AFFIRM the district court’s

Memorandum Opinion and Order of June 8, 2001, and the subsequent

Order   of   June   19,   2001,   staying     the   state    court    action   and

compelling Appellants to arbitrate their claims against Conseco.

                                       -21-