Johansson v. Central Properties, LLC ( 2018 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
WAYNE JOHANSSON,
Plaintiff,
v. Case No. 17-cv-1656 (CRC)
CENTRAL PROPERTIES, LLC et al.,
Defendants.
MEMORANDUM OPINION AND ORDER
This case confirms that parties entering an employment relationship would be wise to
spell out its terms in writing at the outset. Plaintiff Wayne Johansson worked for the real estate
brokerage firm Central Properties, LLC, for approximately seven months last year. When
relations soured, Johansson sued the company and its owner, Paul Sliwka, for unpaid wages. He
claims he was promised a $60,000 annual salary for serving as the company’s general manager,
some of which he is still due. The firm begs to differ. In its telling, Johansson was hired to be
no more than a commissioned sales agent and recruiter of other brokers, and he was never
entitled to wages. It also contends that Johansson’s claims must be arbitrated, rather than
litigated in this court, due to a provision in an agreement that the company claims Johansson
signed about halfway through his brief tenure.
After an initial round of briefing, the Court ordered limited discovery to sort out the facts
surrounding Johansson’s hiring and job responsibilities. The parties have completed that
discovery and submitted supplemental briefs. Based on the expanded record, it clear to the Court
that Johansson was not hired to perform typical general manager duties, that the parties entered
into a written employment agreement containing an arbitration provision, and that this dispute
falls within the scope of that provision. The Court will therefore grant Central Properties’
motion to compel arbitration and stay this case pending the conclusion of that process.
I. Legal Standard
In its supplemental briefing following discovery, Central Property moves for summary
judgment and, alternatively, to compel arbitration. But that puts the cart before the horse. If the
parties agreed to arbitrate Mr. Johansson’s claims, then the merits of the claims are not properly
before the Court. Giron v. Dodds, 35 A.3d 433, 437 (D.C. 2012). The Court will therefore begin
(and end) by analyzing whether Johansson and Central Properties entered into an agreement to
arbitrate their disputes and whether Johansson’s claims here fall within the scope of any such
agreement.
Under D.C. law, a written agreement to “submit to arbitration any existing or subsequent
controversy arising between the parties to the agreement is valid, enforceable, and irrevocable
except upon a ground that exists at law or in equity for the revocation of a contract.” D.C. Code
§ 16-4406(a).1 If a party to a suit makes a “showing that an arbitration agreement exists with
respect to a particular issue, the trial court shall order the parties to arbitrate and stay the court
1
The Court applies D.C. arbitration law rather than the Federal Arbitration Act (“FAA”)
since the relevant agreement here (which is further described below) specifies that disputes will
be “decided by neutral binding arbitration in accordance with the District of Columbia Uniform
Arbitration Act,” Mem. P. & A. Supp. Defs.’ Mot. Compel Arbitration Ex. A. See, e.g., Ford v.
NYLCare Health Plans of Gulf Coast, Inc., 141 F.3d 243, 249 (5th Cir. 1998) (holding that
identical language in contract referencing Texas law evinced the intent of the parties to displace
the FAA with Texas arbitration law). Neither party contests that D.C. law, rather than the FAA,
applies. While the agreement references the District of Columbia Uniform Arbitration Act
(“DCUAA”), that act was repealed and replaced by the Revised Uniform Arbitration Act
(“RUAA”) effective July 1, 2009. See Giron, 35 A.3d at 437 n.1. The Court will accordingly
apply the RUAA and its accompanying case law.
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proceedings pending the outcome of arbitration.” Giron, 35 A.3d at 437 (internal quotation
omitted).
The question of “whether an agreement to arbitrate exists or a controversy is subject to
agreement to arbitrate” is one for the Court to resolve. D.C. Code § 16-4406(b). In contrast, the
question of “whether a contract containing a valid agreement to arbitrate is enforceable” is for
the arbitrator and not the Court. Id. § 16-4406(c). D.C. law also adheres to the “severability”
doctrine. See Menna v. Plymouth Rock Assurance Corp., 987 A.2d 458, 465 n.30 (D.C. 2010)
(citing Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444–46 (2006)). Under that
doctrine, “even if ‘another provision of the contract, or . . . the contract as a whole,’ is invalid,
unenforceable, voidable, or void, that ‘does not prevent a court from enforcing a specific
agreement to arbitrate.’” Lefoldt v. Horne, LLP, 853 F.3d 804, 815 (5th Cir. 2017) (quoting
Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 70–71 (2010)) (alterations in original). Thus,
unless an arbitration clause is itself being challenged, challenges to the contract writ large are for
the arbitrator to resolve. Menna, 987 A.2d at 465 n.30.
The party seeking to compel arbitration first bears the burden of demonstrating that a
valid agreement to arbitrate exists. See, e.g., Signature Technology Solutions v. Incapsulate,
LLC, 58 F. Supp. 3d 72, 83 (D.D.C. 2014).2 If such an agreement exists, the Court must then
determine “whether the arbitration clause is susceptible of an interpretation that covers the
dispute.” Woodroof v. Cunningham, 147 A.3d 777, 787–88 (D.C. 2016) (internal quotation
omitted). In other words, if there is a valid arbitration agreement, “a presumption in favor of
2
The Court may rely on cases interpreting the FAA in construing the corresponding
provisions of the RUAA as long as there is no “material difference” in the relevant statutory
language. Giron, 35 A.3d at 438 n.3 (citation omitted).
3
arbitration attaches.” 2200 M Street LLC v. Mackell, 940 A.2d 143, 151 (D.C. 2007) (citation
omitted). The Court must require arbitration unless it has “positive assurance that the parties did
not intend the dispute sub judice to be resolved through arbitration.” Id. at 152 (internal
quotation omitted). “[A]ny ambiguity is construed in favor of arbitration.” Woodroof, 147 A.3d
at 789.
II. Analysis
Central Properties locates the parties’ intention to arbitrate their disputes in an
“independent contractor agreement” dated April 30, 2017 which appears to bear Johansson’s
signature. See Mem. P. & A. Supp. Defs.’ Mot. Compel Arbitration Ex. A. The agreement
provides that “[a]ny dispute or claim in law or equity between the Company and [Johansson]
arising out of this Agreement will be decided by neutral binding arbitration . . . and not by court
action.” Id. ¶ 8. Central Properties argues that the parties knowingly entered into the
independent contractor agreement, that the claims Johansson has raised here fall within the scope
of the agreement’s arbitration clause, and that the Court, under D.C. law, must enforce the
agreement and stay the case. The Court agrees.
A. Whether the parties entered into an agreement to arbitrate
While the parties bicker over precisely what duties Johansson was hired to perform,
neither disputes that an employment relationship existed. The question is whether the parties
intended for the independent contractor agreement, and in particular its arbitration clause, to
govern that relationship. As noted above, the document bears what appears to be Johansson’s
signature. Johansson does not admit to signing it, but the facts developed in discovery do not
raise a genuine factual dispute over whether the signature is his.
4
Again, Johansson started working at the company in January 2017. On Saturday, April
29, 2017, Paul Sliwka’s brother Ben, who handles administrative matters for the company,
informed Johansson by email that several documents were needed to complete his file. See
Mem. P. & A. Supp. Def.’s Mot. Summ. J. Ex. P. Those documents included (1) a signed
independent contractor agreement, (2) a signed policy statement, (3) a completed W9, (4) a job
description, and (5) a copy of his license. Id. Johansson promptly responded that he would get
Ben Sliwka the missing documents “first thing Monday.” Id.3 The signatures on the
independent contractor agreement are dated the very next day: Sunday, April 30, 2017. Ben
Sliwka further testified that he found the signed document on his desk Monday morning. B.
Sliwka Dep. 141:20–142:18.
While Ben Sliwka’s email to Johansson did not include any of these documents as
attachments, discovery revealed that Johansson had easy access to them. There was ample
testimony that printed copies of the independent contractor agreement and other documents were
kept in a drawer with recruiting and marketing materials in the office. See, e.g., B. Sliwka Dep.
87:20–88:14; P. Sliwka Dep. 182:17–184:10; Mem. P. & A. Supp. Def.’s Mot. Summ. J. Ex. O
(“Stallman Dep.”), at 67:4–68:4. In addition, Johansson testified that he used several computers
in the office, Johansson Dep. 38:11–20. Both Ben Sliwka and Central Properties employee
Allison Stallman also testified that all staff members—including Johansson—had keys to the
office. Stallman Dep. 13:4–12; B. Sliwka Dep. 19:6–11.
In sum, the record shows that the day before the independent contractor agreement was
signed, Ben Sliwka asked Johansson to submit a signed agreement and Johansson said he would
3
In his deposition, Johansson all but admits that he received this email from Ben Sliwka
and that he sent the reply email. See Johansson Dep. 115:9–117:10.
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return it first thing Monday. Johansson had access to copies of the agreement over the weekend.
In addition, Allison Stallman identified this agreement as the standard one used by the company.
Stallman Dep. 67:4–68:4. And Ben Sliwka testified that he was familiar with Johansson’s
signature and the one on the agreement “looked ordinary” to him. B. Sliwka Dep. 85:9–10.
Finally, Ben Sliwka testified that he did not fabricate or falsify the agreement, id. 141:20–
142:18, and there is nothing in the record to suggest otherwise. Based on this evidence, a
reasonable jury could conclude that Johansson signed the agreement.
While Johansson does not acknowledge signing the agreement, he does not present
sufficient evidence to create a genuine issue of fact on this point. In his deposition, Johansson
consistently testified that he does not recall signing the agreement. See Johansson Dep. 136:16–
138:19, 177:18–12. But he never affirmatively stated, in either his deposition or affidavits, that
he did not sign it; he only states that he has no knowledge of how it was signed and does not
admit he signed it. See Pl.’s Opp’n Defs.’ Suppl. Br. Supp. Mot. Compel Arbitration Ex. 6
(“Supplemental Johansson Decl.”), at ¶ 12. Thus, Johansson’s testimony does not create a
factual conflict with the circumstantial evidence: not recalling signing the document is perfectly
consistent with having signed it. In the absence of any further evidence that Johansson did not
sign the agreement, the Court concludes that there is no genuine issue of fact regarding whether
he did so.4 The Court thus concludes that Johansson and Central Properties entered into a
written agreement to arbitrate.
4
Johansson also makes much of inconsistencies in Paul Sliwka’s testimony regarding
who signed the independent contractor agreement on behalf of Central Properties. But the Court
here applies a summary judgment standard. See, e.g., Wolff v. Westwood Management, LLC,
503 F. Supp. 2d 274, 278 (D.D.C. 2007). Under D.C. law, as under federal law, the Court does
not weigh credibility on a summary judgment standard. See, e.g., Tolu v. Ayodeji, 945 A.2d
596, 601 (D.C. 2008). And Johansson cannot create a genuine issue of fact by “respond[ing]
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B. Whether the dispute falls within the scope of the arbitration agreement
Since the Court has concluded that the parties entered into an agreement to arbitrate their
disputes, a presumption of arbitrability attaches and Johansson must present “positive
assurances” that his claims fall outside the scope of the arbitral agreement. 2200 M Street LLC,
940 A.2d at 152. He has not done so.
In his opposition to Central Properties’ initial motion to compel arbitration, Johansson
maintained that he “only worked as Defendants’ General Manager and his claims in this action
exclusively address Defendants’ failure to pay Plaintiff wages for General Manager work duties
and Defendants’ termination of Plaintiff from the position of General Manager.” [ECF 10 at 2].
As the dispute was initially framed, then, the question whether Johansson’s claims fell within the
scope of the arbitration provision in the independent contractor agreement turned on whether that
agreement was intended to cover the typical duties of a general manager. Discovery has now
shown, however, that Johansson was not hired to perform those types of duties.
Rather, the record is undisputed that Johansson agreed to serve—and did in fact serve—
as a recruiter of real estate agents for Central Properties. See, e.g., Mem. P. & A. Supp. Def.’s
Mot. Summ. J. Ex. E (“Johansson Dep.”), at 92:5–10, 94:2–3, 133:5–7, 151:6–9; id. Ex. B (“P.
Sliwka Dep.”), at 99:1–7; id. Ex. A (“B. Sliwka Dep.”), at 60:17–20. And while Johansson used
the title “General Manager,” he did so only as a strategy to enhance his ability to recruit agents.
See, e.g., Johansson Dep. 150:22–151:4; P. Sliwka Dep. 96:11–21; B. Sliwka Dep. 59:3–13;
simply with general attacks upon the defendant’s credibility, but rather must identify affirmative
evidence from which a jury could conclude” the facts are in his favor. Crawford-El v. Britton,
523 U.S. 574, 600 (1998); see also Bradshaw v. District of Columbia, 43 A.3d 318, 323 (D.C.
2012) (“The non-moving party cannot meet that burden and avoid summary judgment merely by
impugning the honesty of the moving party’s witness.” (internal quotation and alterations
omitted)).
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Stallman Dep. 61:2–10. Johansson’s own testimony confirms that he recruited other brokers and
handled some administrative matters, but not much else. See, e.g., Johansson Dep. 118:8–119:5,
194:16–195:15. Johansson did not, for example, manage company operations or supervise
employees, duties that one would typically associate with a general manager.
Admittedly, certain aspects of the parties’ working relationship remain hotly contested.
For one, the parties dispute whether Johansson’s responsibilities included real estate sales as well
as his recruiter duties. Johansson testified in his deposition that he never intended to be a real
estate agent and told Paul Sliwka that from the start. Johansson Dep. 43:4–10. Sliwka, by
contrast, says that Johansson agreed to serve as a real estate agent from the outset. P. Sliwka
Dep. 77:15–78:11; see also B. Sliwka Dep. 95:3–8. The parties also dispute how Johansson was
to be paid. Compare, e.g., P. Sliwka Dep. 94:20–95:95:18 with, e.g., Johansson Dep. 72:8–12.
With the record now clear that Johansson did not perform general manager duties,
Johansson’s objections to the motion to compel arbitration rest on the argument that the
arbitration provision is part of an agreement related to a real estate agent position, which is
distinct from his recruiter job. But this argument runs headlong into Johansson’s version of the
facts. Johansson insists that he never intended to serve as a real estate agent and never in fact
assumed that role. See, e.g., Supplemental Johansson Decl. ¶¶ 6–10; Johansson Dep. 43:4–10,
91:15–19. But if that is so, how could the agreement be intended to cover anything other than
his position as a recruiter? Johansson alleges that he only ever entered into one agreement with
Central Properties and testified that his job duties did not change after the independent contractor
agreement was signed. See Johansson Dep. 145:3–16. The logical conclusion is that the
independent contractor agreement, notwithstanding its reference to a “sales associate,” was
intended to cover the one and only employment relationship Johansson and Central Properties
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entered into. This dispute—which centers on Johansson’s compensation for services rendered
under that relationship—clearly “arises out of” that agreement.
Even if the Court construes the independent contractor agreement to apply to a real estate
agent position that Johansson says he never held, it still concludes that Johansson has failed to
present positive assurances that this dispute is beyond the scope of the arbitration clause. For
one, the text of the independent contractor agreement does not explicitly exempt these claims, in
contrast to its express exclusion of other kinds of disputes. See Mem. P. & A. Supp. Defs.’ Mot.
Compel Arbitration Ex. A, at ¶ 8 (exempting, inter alia, wrongful death suits or small claims
court suits). Moreover, the phrase “arising out of” is a broad one. See, e.g., Invista North
America S.À.R.L. v. Rhodia Polyamide Intermediates S.A.S., 503 F. Supp. 2d 195, 206–07
(D.D.C. 2007). The underlying merits of Johansson’s claims—whether he was to be
compensated with a salary or solely through commissions—are clearly intertwined with the
employment relationship set forth in the independent contractor agreement, regardless whether
Johansson’s duties included sales or simply recruiting other brokers. Given this interconnection,
the arbitration clause is clearly “susceptible of an interpretation that covers the dispute.”
Woodroof, 147 A.3d at 787–88.
Finally, Johansson’s focus on what terms are missing from the agreement—such as any
term related to pay—implicates issues that fall within the arbitrator’s purview under the
severability doctrine. What impact the absence of a term related to Johansson’s salary or the
omission of any discussion of his recruiter duties from the written independent contractor
agreement has on its enforceability is thus for the arbitrator to address in the first instance.
In sum, Johansson has failed to provide positive assurances that his claims fall outside the
scope of the arbitral agreement, particularly in light of the factual record and Johansson’s
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position that he only ever had a single working relationship with Central Properties. Under D.C.
law, the Court must construe any ambiguities in favor of arbitration.
C. Arbitration of Johansson’s claims against Paul Sliwka
Johansson further argues that even if his claims against Central Properties should be
arbitrated, those against Defendant Paul Sliwka are not subject to the agreement and arbitration.
The Court disagrees. “Under the doctrine of estoppel, a signatory to an arbitration agreement
may be compelled to arbitrate with a non-signatory when the non-signatory is seeking to resolve
issues that are intertwined with an agreement that the signatory has signed.” Fox v. Computer
World Services Corp., 920 F. Supp. 2d 90, 103 (D.D.C. 2013); see also, e.g., Kelleher v. Dream
Catcher LLC, 278 F. Supp. 3d 221, 225–26 (D.D.C. 2017). Johansson raises the same claims
against Sliwka that he does against Central Properties and seeks damages against both
defendants jointly and severally. See Compl. ¶¶ 27–49. As such, the claims against Sliwka are
sufficiently intertwined with the agreement Johansson made with Central Properties to fall within
the doctrine of estoppel.
***
At the end of the day, Johansson and Central Properties both intended to enter into an
employment relationship. As part of that relationship, Johansson signed an employment
agreement with a binding arbitration clause. District of Columbia law requires the Court to
enforce that arbitral agreement.
For the foregoing reasons, it is hereby
ORDERED that [9] Defendant’s Motion to Stay Case and Compel Arbitration is
GRANTED. It is further
ORDERED that this case be stayed while the parties undergo arbitration. It is further
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ORDERED that the parties file a joint status report every 90 days commencing
November 27, 2018.
SO ORDERED.
CHRISTOPHER R. COOPER
United States District Judge
Date: August 29, 2018
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