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Heuvel v. Expedia Travel

United States District Court, E.D. California

November 6, 2017




         Plaintiff is proceeding in this action pro se, and the case was accordingly referred to the undersigned by Local Rule 302(c)(21). This matter is before the court on a motion to compel arbitration from the only remaining defendant, Expedia Travel. ECF No. 63. The court has considered defendant's motion, plaintiff's opposition (ECF No. 58), defendant's reply (ECF No. 69), and all related documents. For the reasons that follow, the undersigned recommends that defendant's motion be GRANTED, and because arbitration will resolve all of plaintiff's claims, that this case be DISMISSED.

         I. Background

         Plaintiff initially filed this lawsuit in state court against defendants British Airways and Expedia Travel, and defendant British Airways removed the case to this court on March 18, 2016. ECF No. 1. British Airways successfully moved to dismiss plaintiff's initial and first amended complaints. ECF Nos. 15 and 25. Plaintiff filed his second amended complaint (“SAC”) on August 5, 2016. Plaintiff's SAC alleged that Expedia, which plaintiff referred to as a “Travel Agency” (ECF No. 26 at 2), “knowingly sold [him] a travel ticket” and “affirmed there would be a full refund of [the] airline ticket with proof of a doctors M.D. note or statement[.]” ECF No. 26 at 4. Plaintiff also attached what appears to be a bank statement from October 14, 2015 showing a purchase from Expedia in the amount of $1, 257.88. Id. at 8.

         Plaintiff and British Airways stipulated to the dismissal of British Airways from this case on August 25, 2016. ECF No. 30. An order was entered dismissing British Airways, but not Expedia, on August 26, 2016. ECF No. 31. Defendant Expedia was first summoned in this case on September 20, 2016. ECF No. 35. Expedia, the only remaining defendant, moved to dismiss the SAC on October 13, 2016 on the grounds of insufficient service of process and that the SAC failed to state a claim. ECF No. 36. Expedia's motion was denied. ECF Nos. 48 and 52.

         In denying Expedia's motion to dismiss, the undersigned found that plaintiff's SAC, liberally construed in light of his pro se status, stated a claim for breach of contract and fraud. ECF No. 48 at 5-6. Specifically, the court found plaintiff's complaint alleged the existence of a contract, and alleged plaintiff's performance by purchase of an airline ticket. ECF No. 48 at 5. Plaintiff alleged damages in a letter attached to his SAC that stated “The amount to return is $1, 200.00 and some change. I need this money as soon as possible you have caused injury from the hardship of unexpected trauma caused by actions I was not made aware of.” Id.

         The undersigned also found that the SAC successfully alleged a fraud claim against Expedia. ECF No. 48 at 6. The court found that plaintiff's allegations that Expedia failed to refund his purchased ticket upon receipt of a doctor's note after it “affirmed there would be a full refund of [his] airline ticket with proof of a doctors M.D. note” and “knew the flight scheduled was to possibly be cancelled due to hardship of medical problem” as stating a claim of fraud under California law. Id., ECF No. 26 at 4. The undersigned's findings and recommendations were adopted by the District Court judge in this case over defendant Expedia's objections. ECF Nos. 51 and 52. On September 26, 2017, Expedia filed the instant motion to compel arbitration. ECF No. 63.

         II. Standard to Compel Arbitration

         The Federal Arbitration Act (“FAA”) limits the district court's role in deciding a motion to compel arbitration “to determining (1) whether a valid agreement to arbitrate exists and, if it does (2) whether the agreement encompasses the dispute at issue.” Cox v. Ocean View Hotel, Corp., 533 F.3d 1114, 1119 (9th Cir. 2008) (internal citation and quotation omitted). The party moving to compel arbitration bears the burden of demonstrating that these two elements are satisfied. Ashbey v. Archstone Prop. Mgmt., Inc., 785 F.3d 1320, 1323 (9th Cir. 2015). If a valid arbitration agreement exists, the district court must enforce the arbitration agreement according to its terms. Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004).

         A party may, however, waive its right to arbitration. United States v. Park Place Assocs., Ltd., 563 F.3d 907, 921 (9th Cir. 2009). Waiver of the right to arbitration is disfavored, and a party asserting waiver bears a heavy burden of proof. Fisher v. A.G. Becker Paribas Inc., 791 F.2d 691, 694 (9th Cir. 1986). “A party seeking to prove waiver of a right to arbitration must demonstrate: (1) knowledge of an existing right to compel arbitration; (2) acts inconsistent with that existing right; and (3) prejudice to the party opposing arbitration resulting from such inconsistent acts.” Id., Martin v. Yasuda, 829 F.3d 1118, 1124 (9th Cir. 2016).

         If the right to arbitration is not waved and a court finds it appropriate to compel arbitration, the court can either stay or dismiss the pending action. Sparling v. Hoffman Constr. Co., Inc., 864 F.2d 635, 638 (9th Cir. 1988), Horne v. Starbucks Corp., No. 216CV02727MCECKD, 2017 WL 2813170, at *3 (E.D. Cal. June 29, 2017). Where all claims are encompassed by the arbitration agreement, dismissal as opposed to a stay is proper. Horne, 2017 WL 2813170, at *3.

         III. Analysis

         A. Arbitration Must be Compelled

         The parties entered into a valid arbitration agreement when plaintiff purchased an airline ticket from defendant, and plaintiff's claims are encompassed by the agreement. Thus, arbitration must be compelled. To determine whether an arbitration agreement is valid, satisfying the first prong of the court's analysis, the district court looks to “general state-law principles of contract interpretation, while giving due regard to the federal policy in favor of arbitration.” Wagner v. Stratton Oakmont, Inc., 83 F.3d 1046, 1049 (9th Cir. 1996), Villarreal v. Perfection Pet Foods, LLC, No. 116CV01661LJOEPG, 2017 WL 1353802, at *4 (E.D. Cal. Apr. 10, 2017). Because the agreement to arbitrate is a contract, a court will not grant a motion to compel arbitration unless it finds that there is a “clear ...

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