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Thunderbird Resorts Inc. v. Zimmer

United States District Court, S.D. California

March 30, 2018

THUNDERBIRD RESORTS INC., a British Virgin Isles corporation Plaintiff,
MURRAY JO ZIMMER, an individual; ANGULAR INVESTMENTS CORPORATION, a Panama corporation; MITZIM PROPERTIES, INC., a Nevada corporation; and TALOMA ZULU, S.A., a Panamanian corporation; JACK RAY MITCHELL, an individual, Defendants.


          Hon. John A. Houston United States District Judge


         Currently pending before the Court is co-defendant Jack R. Mitchell's (“Mitchell”) motion to compel arbitration and to stay action. The motion has been fully briefed. On October 9, 2017, in light of the Hong Kong ICC Arbitration Award (“Arbitration Award”) dated September 26, 2017, Defendants Mitchell and Mitzim Properties, Inc. (“Mitzim”) filed a Supplemental Brief [Doc. No 92] including Mitchell's declaration and exhibit, requesting Thunderbird's First Amended Complaint (“FAC”) be stayed as to Mitzim and Mitchell and the Arbitration Award be domesticated and entered against Plaintiff Thunderbird. Plaintiff filed a response in Opposition [Doc. No 94]. After careful consideration of the parties' submissions, and for the reasons set forth below, this Court GRANTS Defendant Jack Mitchell's Motion to Compel Arbitration, and finds Defendant's request to enter the September 26, 2017 Arbitration Award against Thunderbird premature.


         1. Motion to Compel Arbitration

         Thunderbird and Mitchell entered into a settlement and termination of employment agreement (“Release Agreement” or “Settlement Agreement”) including an Arbitration Clause (Clause 12.5) which required the parties to resolve by arbitration “any and all disputes, claims, controversies and differences” between the parties “arising out of this Release Agreement.” See Doc. No. 78-2 at 12. It further outlines the “express[ ] intent of the parties” as follows:

[T]hat any and all Disputes between and among the parties (including their officers, directors, shareholders, employees, elected officials, etc.) regardless of the nature thereof, which have not been resolved or cured by the parties shall be submitted to Arbitration under the applicable Rules and Procedures of the International Chamber of Commerce.

Doc. No. 78-2 at 12-13.

         Mitchell argues that Plaintiff's claims fall “squarely within the scope of the arbitration provision, ” highlighting the Release Agreement's release and waiver provision:

         “THUNDERBIRD forever and fully releases and waives any and all claims, causes of action (contractual, criminal and/or tort), damages attorney's fees costs, liabilities or encumbrances of any kind it may now or in the future have against EMPLOYEE [Mitchell].” However, Thunderbird points to the last line of the same provision, which limits the application of the release to “all such matters existing on or before the date first written above [August 16, 2012].” Thunderbird contends that its claims are not covered by the arbitration clause because they relate and/or arise from Mitchell's conduct after he signed the settlement and release agreement and up through and until at least October 17, 2014. In addition, Thunderbird argues that Mitchell's motion should be denied chiefly because there are nonarbitrable claims alleged against him, including a claim for RICO, associated with the conduct of Mitchell and the other co-defendant conspirators that occurred after August 16, 2012. Plaintiff asserts that these claims are not subject to arbitration, but rather must be adjudicated in the Southern District of California.

         In deciding the arbitrability of the parties' disputes, the Supreme Court has outlined the District Courts' duties and set forth principles to which this Court is beholden. See AT&T Tech., Inc. v. Communications Workers of Am., 475 U.S. 643, 650 (1986).

“[A]rbitration 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. Whether a[n]… agreement creates a duty for the parties to arbitrate the particular grievance-is undeniably an issue for judicial determination. Unless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court… in deciding whether the parties have agreed to submit a particular grievance to arbitration, a court is not to rule on the potential merits of the underlying claims. [W]here the contract contains an arbitration clause, there is a presumption of arbitrability in the sense that “[a]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.”

AT & T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. at ...

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