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A federal district court in Kentucky denied a non-signatory's motion to compel arbitration because the claims against the non-signatory were not sufficiently "intertwined" with the dispute between the signatories to the agreement.
In Tres Jeanee, Inc. v. Brolin Retail Systems Midwest, Inc., No. 3:07 CV 139 H, 2007 WL 2071776 (W.D. Ky. July 17, 2007), Brolin agreed to install and maintain a software system in a restaurant owned by Tres Jeanee. The agreement contained an arbitration clause.
When the software system allegedly malfunctioned, Tres Jeanee sued Brolin and Micros, a third-party manufacturer of the system. Brolin and Micros moved to compel arbitration. Tres Jeanee argued that its claims against Micros were not subject to arbitration because Micros was not a party to the arbitration agreement.
The Court was unpersuaded by Micros' argument that the arbitration agreement was sufficiently broad to cover the claims against Micros. However, the Court acknowledged that a non-signatory may enforce an arbitration agreement where (1) a signatory has alleged "substantially interdependent and concerted misconduct by both the non-signatory and another signatory," or (2) a signatory "must rely on the terms of the written agreement in asserting its claims against the non-signatory."
In this case, however, the claims against Micros were neither intertwined with Brolin's contractual obligations nor dependent on the underlying agreement. Moreover, as the Court noted, the claims were premised on different theories: The claims against Brolin, which related to installation and maintenance, sounded in contract, while the claims against Micros sounded in tort.
Under these circumstances, the Court found that the claims were not sufficiently intertwined to allow Micros to enforce the arbitration agreement as a non-signatory.
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