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Wojtalewicz v. Pioneer Hi-Bred Int'l, Inc.

United States District Court, D. Nebraska

March 13, 2013

TODD WOJTALEWICZ, husband and wife, and KENDRA WOJTALEWICZ, husband and wife, Plaintiffs,
v.
PIONEER HI-BRED INTERNATIONAL, INC., an Iowa corporation, Defendant

For Todd Wojtalewicz, husband and wife, Kendra Wojtalewicz, husband and wife, Plaintiffs: David A. Domina, DOMINA LAW GROUP, Omaha, NE; Jason B. Bottlinger, DOMINA LAW FIRM, Omaha, NE.

For Pioneer Hi-Bred International, Inc., an Iowa corporation, Defendant: Carolyn A. Gunkel, Ross W. Johnson, FAEGRE, BAKER LAW FIRM - IOWA, Des Moines, IA; Jacob D. Bylund, FAEGRE BAKER DANIELS LLP, Des Moines, IA.

OPINION

Warren K. Urbom, United States Senior District Judge.

Page 716

MEMORANDUM AND ORDER ON THE PLAINTIFFS' STATEMENT OF OBJECTIONS TO THE MAGISTRATE JUDGE'S ORDER AND MOTION TO STAY

On December 3, 2012, the defendant, Pioneer Hi-Bred International, Inc. (Pioneer), filed a " Motion to Stay and Compel Arbitration of the Claims of Kendra Wojtalewicz and the Claims Assignors." (See ECF No. 28.) This motion was granted by United States Magistrate Judge Cheryl R. Zwart in a memorandum and order dated January 23, 2013. (See ECF No. 40.) Now before me are the " Plaintiffs' Statement of Objections to Magistrate Judge's Order," (ECF No. 41), and the " Plaintiffs' Motion to Stay Proceedings Pending Resolution of Objections to Magistrate Judge's Order Compelling Arbitration," (ECF NO. 42.) For the reasons set forth below, the plaintiffs' objections will be overruled, and their motion to stay will be denied.

I. BACKGROUND[1]

On January 16, 2012, the plaintiffs, Todd and Kendra Wojtalewicz, filed a complaint on their own behalf and as assignees of 1) their sons Trey and Cole Wojtalewicz, and 2) crop-share landlords Gerald Wojtalewicz and Quarfing Pleasant View Farm, LLC (Quarfing).[2] (E.g., Compl. ¶ 1, ECF No. 1-2.) Generally, the plaintiffs allege that a defect in Pioneer's seed corn caused the plaintiffs' and their assignors' 2011 corn crops to fail. (E.g., id. ¶ ¶ 3, 5, 19-20.3.)

Todd ordered seed from Pioneer for the 2011 crop season. Sometime prior to the 2011 crop season, Pioneer mailed to Todd a terms and conditions sheet that stated, in relevant part, as follows:

NOTICE ARBITRATION/CONCILIATION/MEDIATION REQUIRED BY SEVERAL STATES: Under the seed laws of several states ARBITRATION, CONCILIATION or MEDIATION is required as a prerequisite to maintaining a legal action based upon the failure of seed to which this notice is attached to produce as represented. The purchaser shall file a complaint . . . along with the required filing fee . . . with the Commissioner/Director/Secretary of Agriculture, Seed Commissioner, or Chief Agricultural Officer within such time as to permit inspection of the crops, plants or trees by the designated agency and the seedsmen from whom the seed was purchased. A copy of the complaint shall be sent to the seller by certified or registered mail or as otherwise provided by state statute. PLEASE CONSULT PURCHASER'S STATE DEPARTMENT OF AGRICULTURE FOR SPECIFIC REQUIREMENTS BEFORE ANY LEGAL ACTION IS INITIATED. Failure to follow this procedure could limit Purchaser's legal rights, including the remedy recoverable, depending

Page 717

on the law of Purchaser's state. NOTICE OF BINDING ARBITRATION: In addition to the mandatory arbitration required by several states, Purchaser and Pioneer agree that any claim or civil action of any nature arising out of or relating to the performance or quality of this product shall be submitted to binding arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules. The place of arbitration shall be Des Moines, Iowa, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Disputes concerning or relating to the use restrictions and limited licenses associated with this product, or concerning or related to intellectual property rights of Pioneer in or related to this product, or claims or causes of action brought by Pioneer against the Purchaser for failure to pay for this product, are not subject to this NOTICE OF BINDING ARBITRATION.

(E.g., Brax Aff. ¶ ¶ 7-8, 10, ECF No. 10-2; 2010 Terms and Conditions Sheet ¶ 19, ECF No. 10-3. See also Morrissey Aff. ¶ ¶ 3-5, 7, ECF No. 30-4; 2011 Terms and Conditions Sheet ¶ 19, ECF No. 30-4.) Similar language has also appeared on the back of all Pioneer seed corn bags since 2006, including the bags that were sold to Todd for the 2011 crop season. (E.g., Brax Aff. ¶ ¶ 15-16, ECF No. 10-2.) In addition, the invoice that Todd received from Pioneer in 2011 states, " By the purchasing of the products listed on this invoice, you hereby consent to the jurisdiction of the state or federal courts in Polk County, Iowa in the event of litigation concerning this purchase. If binding arbitration is required (see bag), the place of the arbitration will be Des Moines, Iowa." (E.g., Invoice at 2, ECF No. 10-4.)

On March 16, 2012, Pioneer filed a motion to stay all proceedings in this court and compel the plaintiffs to initiate arbitration in accordance with the terms outlined above. (See generally ECF No. 10.) On June 9, 2012, the magistrate judge concluded that the Federal Arbitration Act (FAA), 9 U.S.C. § 2, applies to this case; that a valid arbitration agreement existed between Todd and Pioneer; and that the subject matter of the plaintiffs' complaint falls within the scope of the arbitration agreement. (Mem. & Order at 5-11, ECF No. 21.) The magistrate judge wrote,

Todd Wojtalewicz must arbitrate his claims against Pioneer. But on the current record, the court cannot decide whether the claims of co-plaintiff Kendra Wojtalewicz, or the claims assigned to the plaintiffs by Trey, Cole, and Gerald Wojtalewicz or [Quarfing] Farms are subject to arbitration. If an assignor's claim is subject to arbitration, it remains subject to arbitration when pursued by an assignee.
However, the parties have not briefed, and the court has not found, law stating that claims which were not subject to arbitration automatically become so when assigned to an assignee with related claims that must be arbitrated. The factual record does not explain the relationship between the parties as it relates to the purchase of Pioneer seed corn. For example, although Todd Wojtalewicz placed the seed corn order for the assignors, it is unclear whether he did so as their agent or as the agent/Sales Representative for Pioneer. Nitro Distributing Inc. v. Alticor, Inc.,453 F.3d 995. 999 (8th Cir. ...

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