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Key Contracting, Inc. v. Contech International, LLC

United States District Court, D. Oregon

May 7, 2018

KEY CONTRACTING, INC., et al., Plaintiffs,
v.
CONTECH INTERNATIONAL, LLC, et al., Defendants.

          ORDER

          Michael H. Simon United States District Judge

         Plaintiffs, Key Contracting, Inc. (“Key Contracting”) and Key Equipment, LLC (“Key Equipment”), have sued Defendants, Contech International, LLC (“Contech”), Curb Dog Equipment, Inc. (“Curb Dog”), Robert D. Johnson, Stuart D. Johnson, and Darrell Ketch. As alleged in Plaintiffs' First Amended Complaint, Key Contracting performs concrete curb construction for commercial businesses. ECF 2 at 2, ¶ 4. Defendant Contech, which is now dissolved, was a manufacturer or distributor of “Slipform Concrete Curb Machines.” ECF 2 at 2, ¶ 5. Defendant Curb Dog, which also is a manufacturer or distributor of these machines, is the successor to Contech and engages in the substantial continuation of Contech's business. Id. at ¶ 6. Defendants Robert Johnson and Stuart Johnson are the majority owners of Contech. Id. at ¶ 7. Defendant Darrell Ketch is the majority owner, director, and officer of Defendant Curb Dog. Id. at ¶ 9.

         On or about September 9, 2016, Plaintiffs purchased from Defendant Contech a PCM-6500 Slipform Concrete Curb Machine, commonly referred to as a “Phoenix Curb Machine.” Id. at ¶ 11. When Plaintiffs purchased the Phoenix Curb Machine from Contech, Ketch was the sales representative employed by Contech. Id. at ¶ 8. This lawsuit involves a dispute that arises out of the sale of this Phoenix Curb Machine. Plaintiffs assert claims of fraudulent inducement, negligent misrepresentation, and breach of express warranty. Defendants move to dismiss, or in the alternative to stay proceedings and compel arbitration, on the ground that the dispute is subject to mandatory binding arbitration.

         When Plaintiffs purchased the Phoenix Curb Machine at issue, the parties entered into a written sales agreement (“Agreement”) that included the following relevant terms:

         10. MISCELLANEOUS

a. This Agreement, and all matters arising out of or relating to this agreement, shall be governed by the laws of the State of Oregon, County of Multnomah (exclusive of conflict of laws principles) . . . .
b. Any legal action or proceeding relating to this Agreement shall be instituted solely in a state or federal court in Portland, Oregon. Company and Customer agree to submit to the jurisdiction of, and agree that venue is proper in, these courts in any such legal action or proceeding.
. . . .
11. DISPUTE RESOLUTION
a. Dispute resolution between Company and Customer: Company and Customer [a]gree that all claims, controversies and disputes between them (hereinafter collectively referred to as “Claims”), relating directly or indirectly to this Equipment Sales Agreement shall be resolved in accordance with the procedures set forth herein.
b. Company and Customer agree that Claims between them shall be submitted to mediation either through: (1) the special mediation program administered by Arbitration Services of Portland Oregon or, (2) any other impartial private mediator(s) or program(s) so long as such services are available in Multnomah County, Oregon as selected by the Company.
c. All Claims that have not been resolved by mediation, or otherwise, shall be submitted to final and binding private arbitration in accordance with Oregon Laws. . . . By consenting to this provision Company and Customer are agreeing that disputes arising under this Agreement shall be heard and decided by one or more neutral arbitrators and Company and Customer are giving up the right to have the matter tried by judge or jury. The right to appeal an arbitration decision is limited under Oregon law.

ECF 25 at 13, 15.

         Under the Federal Arbitration Act (“FAA”), a provision in “a contract evidencing a transaction involving commerce” that agrees to settle disputes arising out of that transaction through arbitration “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. “Involving commerce” is defined broadly and neither party disputes ...


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