Jameson v. Ringside Development Company

Background

Kevin Jameson, a franchisee, sued Ringside Development Company, doing business as Bio One Colorado, Inc., and other defendants. The complaint alleges several causes of action based on Ringside’s allegedly fraudulent representations about its products. Jameson also alleges that Ringside’s equipment and chemicals were substandard and caused harm.

The Franchise Agreement contains a three-step alternative-dispute-resolution procedure: the parties must first meet face-to-face, then mediate if that meeting does not resolve the dispute, and ultimately arbitrate if mediation fails. Ringside moved to stay the lawsuit while the parties used that contractually required process. Jameson argued that the parties had not mutually agreed to the arbitration agreement’s forum-selection and choice-of-law provisions, and that Ringside had not satisfied mandatory conditions precedent to arbitration.

The Court’s Analysis

The court first considered whether a valid contract existed. It found clear outward signs of mutual assent because Jameson signed the Franchise Agreement, initialed the alternative-dispute-resolution section, and acknowledged in his opposition that arbitration was required if the conditions precedent were met. The court therefore found that a valid contract existed.

The court next considered whether the parties had delegated questions of arbitrability—the authority to decide whether a dispute must be arbitrated and whether the arbitration agreement applies—to the arbitrator. The agreement incorporated the JAMS arbitration rules, which assign jurisdiction and arbitrability disputes to the arbitrator. The agreement also stated that the arbitrator would decide factual, procedural, and legal questions relating to the dispute, including whether the arbitration article applied and was enforceable. The court held that these provisions were clear and unmistakable evidence that the parties agreed to arbitrate arbitrability.

Because of that delegation, the court held that the arbitrator, not the court, must decide Jameson’s arguments about the arbitration location and governing law. Jameson had not separately challenged the delegation provision or the JAMS rules, and the court stated that he could raise those arguments before the arbitrator. The court also held that whether the parties satisfied the required face-to-face meeting and other pre-arbitration steps was an arbitrability issue reserved for the arbitrator.

Disposition

The court vacated the scheduled hearing and GRANTED Ringside’s motion to stay. It stayed the lawsuit pending alternative dispute resolution. The court expressly stated that Jameson’s substantive arguments were not before it, so the order did not resolve the underlying claims.