Myrvold v. Raibow Fiberglass & Boat Repair, LLC

          ORDER RE MOTION TO DISMISS

          SHARON L. GLEASON, UNITED STATES DISTRICT JUDGE.

         Before the Court at Docket 5 is Defendant Raibow Fiberglass & Boat Repair, LLC's Motion to Dismiss. The motion has been fully briefed.^[1] Oral argument was not requested and was not necessary to the Court's decision.

         BACKGROUND

         The facts, presented here primarily from the perspective of Plaintiff Lyle Myrvold (“Mr. Myrvold”) at this initial stage of the case, ^[2] are as follows:

         On or about August 3, 2016, Mr. Myrvold reached an agreement (“Agreement”) with Defendant Raibow Fiberglass & Boat Repair, LLC, (“Raibow”) for repair work to be performed on Mr. Myrvold's vessel, the F/V NAKCHAMIK (“Vessel”).^[3] Under the terms of the Agreement, the parties agreed that the total cost of the work, $45, 035.00, would be paid in three installments: an initial payment of $15, 000.00 at the commencement of the work; a second payment of $15, 000.00; and a final payment of $15, 035.00 due upon completion of the work.^[4] An itemized list of the work to be performed (“Original Work”) and materials required was contained in Invoice 2016-0314.^[5]

         On August 9, 2016, Mr. Myrvold tendered the initial payment of $15, 000 to Raibow and delivered the Vessel to Raibow's property for the commencement of work.^[6] The parties agreed that all Original Work would be completed no later than May 1, 2017.^[7] On or about September 17, 2016, David Phillips, in his capacity as Raibow's sole member and manager, contacted Mr. Myrvold and requested immediate payment of the remaining balance under the Agreement.^[8] Mr. Myrvold alleges that he and Raibow subsequently agreed to an amended agreement (“Amended Agreement”), pursuant to which Raibow agreed to perform both the Original Work and additional work (“Additional Work”) not included on Invoice 2016-0314 for a slightly discounted price of $42, 500.00.^[9] Mr. Myrvold then maintains that he tendered an additional payment to Raibow in the amount of $27, 500.00 on September 7, 2016, representing the balance of the amount due under the Amended Agreement.^[10] Mr. Myrvold maintains that Raibow documented the discount and final payment in writing on a copy of Invoice 2016-0314 by indicating that all work was “paid in full” as of September 7, 2016.^[11]

         Mr. Myrvold alleges that as of May 1, 2017, neither the Original nor the Additional Work had been completed and the Vessel was in a state of disrepair on Raibow's property.^[12] Mr. Myrvold maintains that on May 9, 2017, Raibow generated a back-dated invoice, Invoice 2017-0108, that indicated that Mr. Myrvold owed Raibow an additional $19, 497.04.^[13] Raibow also informed Mr. Myrvold that the Vessel would remain in Raibow's possession and no further work would be performed on the Vessel until Mr. Myrvold tendered these additional funds.^[14] On May 12, 2017, Mr. Myrvold alleges that he visited Raibow's property and discovered that the Vessel was disassembled in several pieces; “neither the Original nor the Additional Work had been completed”; and the repair work that had been performed was of poor quality.^[15]

         Mr. Myrvold's Complaint also alleges, “on information and belief, ” that Raibow filed a Notice of Claim of Maritime Lien against the Vessel with the United States Coast Guard.^[16] Raibow maintains that it has the legal right to establish a maritime lien against the Vessel and to keep the Vessel at its place of business until Mr. Myrvold meets his contractual obligations.^[17]

         On November 22, 2017, Mr. Myrvold filed the instant Complaint, alleging that Raibow had violated the terms of the Amended Agreement.^[18] Mr. Myrvold alleged that at the time of filing, Raibow had not completed either the Original or Additional Work and the Vessel remained on Raibow's property in a state of disrepair.^[19] Mr. Myrvold seeks damages in admiralty for improper and defective workmanship and for an alleged failure to protect the Vessel from the elements. Mr. Myrvold also brings several claims under Alaska law.^[20] Mr. Myrvold seeks damages as well as a declaration that the Vessel is not subject to Raibow's maritime lien.^[21]

         On January 3, 2018, Raibow filed the instant motion, alleging that Mr. Myrvold and Raibow had entered into a valid arbitration agreement, and therefore the Court must dismiss the action and compel arbitration. Raibow attached to the motion, as Exhibit A, an unsigned document titled “Repair Agreement, ” which Raibow describes as a “sample Repair Agreement that Raibow's administration makes all Vessel Owners sign prior to the commencement of work.”^[22] The sample document contains a clause containing language requiring that all disputes arising out of the Agreement are to be “determined by binding arbitration in Seward before one arbitrator.”^[23]

         In its motion to dismiss, filed on January 3, 2018, Raibow stated that it was “having a hard time locating the executed contract.”^[24] With its reply on the motion, Raibow provides an affidavit of David Phillips, in which he states, “[I]t is my recollection that a Repair Agreement exactly replicating the one attached to the Motion to Dismiss was signed by myself and Mr. Myrvold on that date. My copy of Repair Agreement that was entered into and signed by both of us on or about August 3, 2016 was placed in my office safe on that date.”^[25] Mr. Phillips also explains that the safe was stolen from Raibow's office in November 2017.^[26]

         Mr. Myrvold maintains that the parties never signed an agreement like the one offered by Raibow and that the only written record of the agreement was the original Invoice 2016-0314, and as amended on or around September 7, 2016.^[27] In Mr. Myrvold's affidavit, he asserts that “on August 3, 2016, I entered into an oral agreement with Phillips, on behalf of Raibow.”^[28] Mr. Myrvold denies the existence of an original signed Repair Agreement, maintaining that “[t]he parties in this action did not discuss or review the terms set forth in such form, did not accept such written terms, and did not execute the form with the intent to be bound thereby.”^[29]

         DISCUSSION

         I. Jurisdiction

         Mr. Myrvold asserts that this Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331 and 28 U.S.C. § 1333.^[30]

         II. Nature of the Motion to Dismiss

         Raibow purports to bring the motion under Fed R. Civ. Proc. 12(b)(6) and 12(b)(3). However, Rule 12(b)(6) is not applicable, as the asserted basis for dismissal is not the failure to state a claim upon which relief can be granted, but is instead Raibow's assertion that the parties agreed to a valid arbitration clause.^[31] Raibow contends that both the Federal Arbitration Act and a similar state statute require dismissal of Mr. Myrvold's case in favor of arbitration.^[32] Rule 12(b)(3) is also not applicable here because Raibow does not appear to be challenging the propriety of venue in this particular district court.^[33]Furthermore, the case that Raibow cites for the general proposition that “an arbitration clause is [a] ‘specialized kind of forum-selection clause, '” Weyerhaeuser Co. v. W. Seas Shipping Co., focused on whether a federal court may order the consolidation of two separate maritime arbitrations when a party objects to joint arbitration.^[34] Here, the parties' present dispute is not focused on how to arbitrate; rather, it is focused on whether to arbitrate at all. Thus, the Court will treat the motion as a motion to dismiss so as to compel arbitration pursuant to the FAA.

         III. Application of the Federal Arbitration Act

         Raibow is correct that valid arbitration clauses are enforceable under federal and state law.^[35] Under the Federal Arbitration Act,

A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof . . . shall be valid, irrevocable, and enforceable.^[36]

         However, “[i]t is axiomatic that ‘arbitration is a matter of contract and a party cannot be required to submit [to arbitration] any dispute which he has not agreed so to submit.'”^[37]Therefore, “a party who contests the making of a contract containing an arbitration provision cannot be compelled to arbitrate the threshold issue of the existence of an agreement to arbitrate.”^[38] “[W]hen one party disputes ‘the making of the arbitration agreement, ' the Federal Arbitration Act requires that ‘the court proceed summarily to the trial thereof' before compelling arbitration under the ...