Court Opinion

ID: 3175278
Source: CourtListenerOpinion
Date Created: 2016-02-05 21:05:45.757739+00
Date Added: 2024-06-11T09:17:19.680226
License: Public Domain

NOT FOR PUBLICATION                             FILED
                    UNITED STATES COURT OF APPEALS                         FEB 05 2016

                                                                       MOLLY C. DWYER, CLERK
                            FOR THE NINTH CIRCUIT                        U.S. COURT OF APPEALS

GIB, LLC, a California limited liability         No. 14-55399
company,
                                                 D.C. No. 2:13-cv-07191-R-MRW
              Plaintiff-counter-defendant -
Appellant,
                                                 MEMORANDUM*
 v.

SALON WARE, INC., a foreign
corporation,

              Defendant-counter-claimant -
Appellee.

                    Appeal from the United States District Court
                       for the Central District of California
                     Manuel L. Real, District Judge, Presiding

                           Submitted February 2, 2016**
                              Pasadena, California

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before: WARDLAW and HURWITZ, Circuit Judges and RICE,*** Chief District
Judge.

      GIB, LLC appeals the district court’s grant of Salon Ware, Inc.’s motion to

compel arbitration. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we

reverse and remand for further proceedings.

      1. The district court erred in holding that GIB waived its right to a trial to

determine the enforceability of the written arbitration agreement. GIB challenged

the validity of the written agreement in several separate submissions to the district

court, starting with its complaint. The district court was required to resolve that

challenge pursuant to the procedures established by Section 4 of the Federal

Arbitration Act. See 9 U.S.C. § 4 (“If the making of the arbitration agreement . . .

be in issue, the court shall proceed summarily to the trial thereof. If no jury trial be

demanded . . . , the court shall hear and determine such issue.”).

      2. The district court also erred in holding that GIB was estopped from

challenging the enforceability of the written arbitration agreement. In some

circumstances, “a nonsignatory may be held to an arbitration clause.” Mundi v.

Union Sec. Life Ins. Co., 555 F.3d 1042, 1046 (9th Cir. 2009). Here, however, the

record does not demonstrate that GIB “knowingly exploit[ed]” or “claim[ed] the

        ***
             The Honorable Thomas O. Rice, Chief United States District Judge
for the Eastern District of Washington, sitting by designation.
                                           2
benefits of” the distributorship agreement. Id. at 1045–46 (quoting Comer v.

Micor, Inc., 436 F.3d 1098, 1101 (9th Cir. 2006)).

      3. Finally, the district court erred in compelling arbitration. A court may

“decide as a matter of law that the parties did or did not enter into” an arbitration

agreement “[o]nly when there is no genuine issue of fact concerning the formation

of the agreement.” Three Valleys Mun. Water Dist. v. E.F. Hutton & Co., Inc., 925

F.2d 1136, 1141 (9th Cir. 1991) (citation omitted). Here, GIB raised a genuine

issue of material fact by submitting a sworn declaration denying that the parties

had entered into a written agreement, and email correspondence between the

parties suggesting that they had a different, more informal, arrangement,. It was

also undisputed that GIB never signed the written agreement.

      REVERSED AND REMANDED.

                                           3