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Justours, Inc. v. Bogenius Group, LLC

United States District Court, D. Nevada

August 25, 2017

JUSTOURS, INC., a Delaware corporation; PUERTO VALLARTA ACQUISITIONS, INC., a Delaware corporation, Plaintiffs,
v.
BOGENIUS GROUP, LLC, a California limited liability company; ANDREW BOGGERI, an individual; DOES I through X; and ROE CORPORATIONS I through X, Defendants.

          ORDER

          GLORIA M. NAVARRO, CHIEF-JUDGE UNITED STATES DISTRICT JUDGE

         Pending before the Court is the Motion to Compel Arbitration, (ECF No. 5), filed by Defendants Bogenius Group, LLC, and Andrew Boggeri (collectively “Defendants”). Plaintiff JusTours, Inc., (“Plaintiff”) filed a Response, (ECF No. 7), Defendants filed a Reply, (ECF No. 9), and Plaintiff filed a Surreply, (ECF No. 14). For the reasons discussed below, the Court GRANTS Defendants' Motion.

         I.BACKGROUND

         This case arises out of an agreement where Plaintiff purchased Defendants' assets for travel packages and event packages in Puerto Vallarta, Mexico. (Compl., ECF No. 1). Plaintiff sells these packages to college students and wanted to do business with Defendants due to them allegedly operating a “turn-key” spring break destination located in Puerto Vallarta. (Id. ¶¶ 7- 8). According to Plaintiff, Defendants made false representations to Plaintiff that they had exclusive relationships with vendors, businesses, and nightlife operators in Puerto Vallarta. (Id. ¶¶ 21-22). Plaintiff asserts that because of this, Defendants failed to deliver the assets required under the Asset Purchase Agreement (the “Agreement”), and have additionally failed to make the $30, 000.00 payment required under the Agreement. (Id. ¶ 23). Based on these allegations, Plaintiff asserts the following claims in its Complaint: (1) declaratory relief as to Plaintiffs' rescission of assert purchase and Agreement; (2) fraudulent misrepresentation; (3) negligent misrepresentation; (4) violation of Nevada's Deceptive Trade Practices Act; or (5) in the alternative, breach of the Agreement; and (6) in the alternative, breach of the implied covenant of good faith and fair dealing. (Compl. ¶¶ 35-79).

         In the instant Motion, Defendants argue that the Court should compel arbitration of these claims in accordance with the arbitration provision in the Agreement. (Mot. to Compel 3:4-5, ECF No. 5). Defendants assert that Plaintiff agreed, in a signed writing, to the terms of the Agreement on March 27, 2015. (Mot. to Compel 3:7-9); (see Agreement, Ex. A to Compl., ECF No. 5-1). The arbitration provision in relevant part states:

Arbitration. Any controversy or claim arising out of or relating to this Agreement or the Related Agreements, or the breach thereof, of or relating to any interpretation, construction, or performance of this Agreement, shall be settled by arbitration to be held in Las Vegas, Nevada or other location where Company's headquarters are located in accordance with the rules then in effect of the American Arbitration Association. The arbitration shall be conducted by a single arbitrator, and such arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator's decision in any court of competent jurisdiction. The prevailing party will be entitled to receive from the non-prevailing party all costs, damages and expenses, including reasonable attorney' fees, incurred by the prevailing party in connection with that action or proceeding.

(Agreement, Ex. A to Compl. § 9.13). Because of this arbitration policy, Defendants assert that this case should be stayed pending arbitration or, in the alternative, dismissed for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). (See Mot. to Compel 19-22).

         II. LEGAL STANDARD

         Section 2 of the Federal Arbitration Act (the “FAA”) provides that:

A written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . 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. “In enacting § 2 of the [FAA], Congress declared a national policy favoring arbitration and withdrew the power of the states to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration.” Southland Corp. v. Keating, 465 U.S. 1, 10 (1984). Courts place arbitration agreements “upon the same footing as other contracts.” Volt Info. Sciences, Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 478 (1989).

         Under the FAA, parties to an arbitration agreement may seek an order from the Court to compel arbitration. 9 U.S.C. § 4. The FAA “leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.” Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218 (1985). Thus, the Court's “role under the [FAA] is . . . limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.” Lee v. Intelius, Inc., 737 F.3d 1254, 1261 (9th Cir. 2013). If a district court decides that an arbitration agreement is valid and enforceable, then it should either stay or dismiss the claims subject to arbitration. Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1276-77 (9th Cir. 2006).

         III. DISCUSSION

         Plaintiff asserts that the arbitration clause in the agreement is void and unenforceable because the agreement was rescinded by Plaintiff and Defendants prior to this suit's filing. (Resp. 2:5-11). Additionally, Plaintiff asserts that if the provision is valid, then it is governed by Nevada law and Nevada law holds the provision void “because it does not contain a separate ...


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