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A federal court in Kansas refused to compel arbitration when the moving party could not produce a written agreement to arbitrate.
In Spaces, Inc. v. RPC Software, Inc., No. 06-2520-KHV, 2007 WL 675505 (D. Kan. Mar 01, 2007), Spaces, Inc. (Spaces) sued RPC Software, Inc. (RPC) for breach of contract and other claims stemming from the sale of computer software. RPC maintained that the parties executed a license agreement that included an arbitration provision. Accordingly, RPC moved to stay proceedings and compel arbitration of Spaces' claims. Spaces opposed the motion to compel, arguing that RPC could not prove that a written agreement to arbitrate, as required under the Federal Arbitration Act, existed.
Even though RPC pointed to affidavits by a Spaces' employee acknowledging the existence of an arbitration agreement, the Court found that a genuine issue of material fact existed as to whether Spaces entered into the agreement. RPC produced affidavits stating that not only did a written arbitration agreement exist, but that a Spaces employee signed it. Spaces produced affidavits stating that it maintained an oral agreement with RPC, and never entered into an agreement in writing.
Given this conflict, the Court denied RPC's motion, citing the lack of a written agreement to arbitrate. While federal policy clearly favors arbitration agreements, a party invoking arbitration bears "an initial summary judgment-like burden of establishing that it is entitled to arbitration."Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., 636 F.2d 51, 54, n.9 (3d Cir. 1980). While a signature is not required to enforce an arbitration agreement, the agreement does need to be in writing. Without meeting its burden of proving that a written arbitration agreement existed, RPC's motion failed.
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