Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Maronian v. American Communications Netw Ork

July 23, 2008

IN THE MATTER OF ANDRE MARONIAN, AN INDIVIDUAL; REBELLION, INC., A NEVADA CORPORATION; JAMESON FORTE, AN INDIVIDUAL; JAMESON FORTE, LLC, A NEW YORK LIMITED LIABILITY COMPANY; AND VINCENT BOVENZI, AN INDIVIDUAL, PETITIONERS,
v.
AMERICAN COMMUNICATIONS NETW ORK, INC., A MICHIGAN CORPORATION, RESPONDENT.



The opinion of the court was delivered by: Charles J. Siragusa United States District Judge

DECISION AND ORDER

INTRODUCTION

This action involves a commercial dispute between a telecommunications company and its former independent sales representatives, primarily involving alleged breaches of non-solicitation covenants. After Respondent commenced an arbitration proceeding in Michigan, Petitioners commenced this action, seeking to stay the arbitration. Now before the Court is Petitioners' motion [#19] for summary judgment and Respondent's cross-motion [#21] for the same relief. For the reasons that follow, both applications are granted in part and denied in part.

BACKGROUND

Unless otherwise indicated, the following are the undisputed facts of the case. Respondent, American Communications Network, Inc. ("ACN") is a telecommunications company, which distributed its products through multi-level marketing ("MLM")*fn1 , as opposed to using a salaried sales staff. In this regard, ACN contracted with Independent Representatives ("IRs"), who operated within the MLM system, by selling products and recruiting new IRs. Petitioners all worked as IRs for ACN at various times. In that capacity, Petitioners "earned commissions by independently soliciting customers and recruiting IRs to sign-on with ACN." (Petitioners' Verified Petition ¶ 11). Petitioners maintain that they essentially were independent contractors, inasmuch as they were required to develop their own sales techniques and pay their own expenses. (Id. at ¶ ¶ 10-14).

According to ACN, it generally had its IRs sign a pre-printed contract ("IR Agreement") containing an arbitration provision with a Michigan forum selection clause.

However, ACN admits that petitioner Vincent Bovenzi's ("Bovenzi") IR agreement contained no arbitration clause. One of the two remaining Petitioners, Andre Maronian ("Maronian"), never signed an IR agreement in his individual capacity. However, Maronian signed an IR agreement on behalf of Petitioner Rebellion, Inc. ("Rebellion"), a corporation of which he is the sole officer and shareholder. Rebellion's IR agreement contains a clause requiring that disputes between the parties be arbitrated in Southfield, Michigan. (Rebellion Agreement ¶ 19). The remaining Petitioner, Jameson Forte ("Forte"), signed an IR Agreement containing a Michigan arbitration clause in his individual capacity on December 7, 1999. (Forte Agreement ¶ 22). Subsequently, Forte formed Jameson Forte, LLC ("Forte, LLC"), a New York limited liability company, and on January 17, 2003 Forte, on behalf of Forte LLC, signed a new IR Agreement containing a Michigan arbitration clause. (Forte LLC Agreement ¶ 21).

The IR agreements also contained a provision stating that, notwithstanding the arbitration clauses, ACN could seek preliminary or permanent injunctive relief in any court. (See, e.g., Forte Agreement ¶ 22). The IR agreements further stated that a document entitled "Policies and Procedures" was incorporated into the agreements by reference, and that ACN had the right to modify the Policies and Procedures. However, the Policies and Procedures documents stated that, in the event of a conflict between the IR agreements and the Policies and Procedures, the IR agreements would govern. And finally, the IR agreements contained a non-compete provision, that prohibited IRs from soliciting ACN's customers.

In December 2006 the parties terminated their business relationship, although they dispute the reasons for the termination. Petitioners contend that they were merely exploring other business opportunities, and that when ACN learned of it, ACN launched a pre-emptive campaign to defame Petitioners. On the other hand, ACN contends that Petitioners had already made plans to leave ACN and work for a competitor, and that, in violation of their IR agreements, Petitioners were soliciting ACN customers and other IRs to switch to the competitor. In any event, on December 20, 2006, Maronian, Forte and Bovenzi gave ACN written notice that they were terminating the IR agreements.

In January 2007, ACN commenced an action against Petitioners in the State of Michigan, Oakland County Circuit Court, asserting claims for breach of contract and misappropriation of trade secrets, and seeking money damages and injunctive relief. (Petitioner's Verified Petition, Exhibit B). Petitioners removed the action to the United States District Court for the Eastern District of Michigan, Southern Division. Subsequently, Petitioners moved to dismiss for lack of personal jurisdiction. On March 8, 2007, ACN voluntarily discontinued the action without prejudice.

On or about March 7, 2007, ACN commenced an arbitration proceeding against Petitioners in Oakland County, Michigan. In the arbitration demand, ACN stated, inter alia, that Petitioners "breached the terms of the non-solicitation clauses in their IR agreements." (Petitioner's Verified Petition Exhibit D). The arbitration demand further stated that the demand was made pursuant to an arbitration agreement dated November 16, 2006. (Id.). ACN did not attach copies of any IR agreements to the demand, but instead, attached a copy of ACN's Policies and Procedures. (Id.). Subsequently, Petitioners have participated in the Michigan arbitration proceeding with regard to preliminary matters, but have consistently maintained that they are not required to arbitrate.

On May 18, 2007, Petitioners commenced the subject action in New York State Supreme Court, Monroe County, seeking to stay the Michigan arbitration, pursuant to § 7503(b) of the New York Civil Practice Law & Rules ("CPLR").*fn2 In support of their application to stay the Michigan arbitration, Petitioners alleged that "there is no valid agreement compelling them to arbitrate disputes." (W orrall Supporting Affirmation ¶ 2).

On June 22, 2007, ACN removed the case to this Court on the basis of diversity jurisdiction, pursuant to 28 U.S.C. § § 1332(a), 1441 and 1446. On June 29, 2007, ACN filed a motion [#3] to dismiss or transfer venue, pursuant to Federal Rule of Civil Procedure ("FRCP) 12(b)(3) and/or 28 U.S.C. § 1406. By Decision and Order [#14] filed on January 14, 2008, the Court denied that application.

On March 11, 2008, Petitioners filed the subject summary judgment motion [#19]. Petitioners' raise three arguments in support of their application. First, they contend that Maronian, Forte and Bovenzi are not parties to an arbitration agreement in their individual capacities. Second, they maintain that any arbitration agreements between ACN and Rebellion and Forte LLC, to the extent that they are contained in ACN's Policies and Procedures, are unenforceable, because they lack mutuality of obligation. And third, Petitioners contend that ACN ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.