United States District Court, W.D. North Carolina, Charlotte Division
S. Cayer United States Magistrate Judge
MATTER is before the Court on Defendant's “Motion
to Stay Litigation Pending Arbitration” (document #3)
as well as the parties' briefs and exhibits.
matter has been referred to the undersigned Magistrate Judge
pursuant to 28 U.S.C. § 636(b)(1), and this Motion is
now ripe for consideration.
claims arise from the June 30, 2015 merger between A Brand
Company, LLC, and Brand Alliance, Inc., and their respective
shareholders. These entities executed a Merger Agreement. In
its Complaint, Plaintiff alleges that it is “the
successor entity arising out of” the subject merger.
Document #1-1 at 10.
5, Section 5.3 of the Merger Agreement expressly states that
will first attempt to settle for a period of ten days any
dispute arising out of or relating to this Agreement through
good faith negotiation in the spirit of mutual cooperation
between their respective Representatives with authority to
resolve the dispute. If the Parties are unable to settle
or resolve any dispute, the dispute shall be arbitrated and
finally resolved pursuant to JAMS Expedited Arbitration
predecessors also agreed to submit to the jurisdiction of the
Province of Ontario courts, with any disputes arising from
the Merger Agreement being governed by the laws of the
Province of Ontario and the laws of Canada applicable in that
Province without regard to conflict of laws.
to the merger, Roy was employed by Plaintiff's Canadian
predecessor as its Chief Executive Officer. He negotiated the
Merger Agreement on behalf of that entity and its
shareholders. After the merger, Roy became Plaintiff's
Executive Chairman pursuant to a two-year employment
December 21, 2016, Plaintiff and its U.S. shareholders served
a notice of claims pursuant to Article 6, Section 6.3 of the
Merger Agreement. In the notice of claims, Plaintiff asserted
claims for fraud and misrepresentation in connection with the
merger negotiations. The notice specifically sought the
rescission of various executives' employment agreements,
including Roy's. In short, Plaintiff's claims arise
from and relate to the Merger Agreement.
January 30, 2017, Plaintiff's Board of Directors
terminated Roy's employment agreement for
January 31, 2017, Plaintiff initiated the present action in
Mecklenburg County Superior Court by filing an Application
and Order Extending Time to File Complaint.
February 6, 2017, Roy filed a Notice of Action with the
Superior Court of Ontario, seeking damages for breach of
contract and wrongful dismissal.
February 20, 2017, Plaintiff filed its Complaint in state
court, asserting claims for fraud, breach of fiduciary duty,
breach of employment agreement, breach of implied covenant of
good faith and fair dealing, unjust enrichment and violation
of North Carolina's Unfair and Deceptive Trade Practices
Act. Plaintiff's Complaint further seeks to declare
Roy's employment agreement void pursuant to the North
Carolina Declaratory Judgment Act.
March 28, 2017, Defendant removed Plaintiff's state court
action to this Court on the basis of diversity jurisdiction