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Thomas v. Jenkins

United States District Court, M.D. Tennessee, Nashville Division

November 4, 2016




         In this action that was removed from the Davidson County, Tennessee Circuit Court, the parties have filed several motions. After setting forth a very brief background, the Court will consider the Motions in the order filed.

         I. Background

         This case arises out of a two-vehicle crash that occurred on Interstate 65 in Nashville, Tennessee on July 5, 2015. According to the Complaint, Plaintiff Veronica Thomas was driving a 2012 Dodge Journey and Plaintiff Richard Thomas was a passenger in that vehicle when it was struck by another vehicle operated by Defendant Ryan Jenkins. Plaintiffs allege that either Defendant Ford Motor Company or Defendant Ford Motor Credit Company (collectively “Ford”) owned the vehicle driven by Mr. Jenkins, and that he was operating the vehicle in the course of business for Ford.

         At the time of the collision, Ford was insured under a policy written by American Road Insurance Company (the “Policy”), while Ms. Thomas's vehicle was insured by Allstate. After the crash, Allstate paid $14, 405.70 to Ms. Thomas for property damage to the vehicle. Allstate sought reimbursement, but American Road refused to pay, prompting Allstate to initiate an arbitration proceeding against American Road. Allstate procured an arbitration award against American Road for the amount requested.

         II. Motion to Vacate Arbitration Award (Docket No. 22)

         Ford's Motion to Vacate is premised on the theory that “the arbitrator exceeded her authority in entering an arbitration award that Ford must pay[.]” This is because, according to Ford, the policy it had with American Road provided for a $3 million dollar deductible which was not exceeded by Allstate's claim (effectively making Ford self-insured) and it did not consent to American Road arbitrating the claim. Ford's arguments fail.

         Generally, the validity of an arbitration agreement is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. In fact, Ford moves to vacate the award pursuant to 9 U.S.C. § 10(a)(4), which allows a district court to vacate an arbitration award “where the arbitrators exceeded their powers[.]” In doing so, however, Ford neglects to consider the preferatory language to that subsection, which states that the “court in and for the district wherein the award was made may make an order vacating the award upon the application of any party to the arbitration.” 9 U.S.C. § 10(a) (emphasis added). That is, “‘by the express terms of the statute, a nonparty to the arbitration generally has no standing to challenge the award.'” Marshall v. Wells Fargo Advisors, LLC, 2016 WL 4750194, at *1 (11th Cir. Sept. 13, 2016) (citation omitted) (collecting cases). Because “‘[a] federal court may set aside an arbitration award under the FAA only upon a finding that certain statutory or judicial grounds are present, ”' Uhl v. Komatsu Forklift Co., 512 F.3d 294, 305 (6th Cir. 2008) (citation omitted), and Ford has not shown those grounds to exist, its Motion to Vacate is subject to denial on this basis alone.

         The Court recognizes that “[s]ome circuits have specifically held that arbitrators exceed their powers when they determine rights and obligations of individuals who are not parties to the arbitration proceedings, ” NCR Corp. v. Sac-Co., 43 F.3d 1076, 1080 (6th Cir. 1995), but that has not been shown to be the case here. The arbitrator's “Automobile Decision” (Docket No. 22-3 at 1) by its very language bound American Road, not Ford.

         Ford also points to an “Automobile Arbitration Subrogation Agreement” which provides that “[n]o company shall be required, without its written consent, to arbitrate any claim or suit if: (a) it is not a signatory company nor has given written consent . . . or (g) under the insurance policy, settlement can be made only with the insured's consent.” (Docket No. 22-4 at 3). This document, however, is unsigned and the Court has know way of knowing who the signatories to the agreement were, let alone whether it was controlling. And if, as “Ford understands . . . American Road and Allstate are parties to the Arbitration Agreement, ” (Docket No. 23 at 3), the Court simply does not know whether consent to settle was required under the insurance agreement or given.

         Ford's Motion to Vacate will be denied.

         III. Motions to Strike (Docket Nos. 26, 27 & 28)

         Plaintiffs have filed a separate Motion to Strike certain defenses in the Answers filed by each Defendant. Defendant Ford Motor Credit Company (“FMCC”) has filed a memorandum in opposition in which the others join.

         Motions to strike are governed by Rule 12(f) of the Federal Rules of Civil Procedure which specifically contemplates striking “an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter” from pleadings. Fed.R.Civ.P. 12(f). “Motions to strike are viewed with disfavor and are not frequently granted.” Operating Engineers Local 324 Health Care Plan v. G & W Const. Co., 783 F.3d 1045, 1050 (6th Cir. 2015); (quoting Brown & Williamson Tobacco Corp. v. United States, 201 F.2d 819, 822 (6th Cir.1953)). Thus, a motion to strike a defense will be granted only if “it appears to a certainty that plaintiffs would succeed despite any state of the facts which could be proved in support of the defense and are inferable from the pleadings.” Id. Furthermore, “an affirmative defense ‘may be pleaded in general terms and will be held to be sufficient, and therefore invulnerable to a motion to ...

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