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Creech v. Jem Pizza Group LLC

United States District Court, D. South Carolina, Charleston Division

March 16, 2017

Trina Creech, individually and on behalf of similarly situated persons, Plaintiff,
v.
JEM Pizza Group, LLC, JEM Restaurant Group of Florida, Inc., and Does 1-25, Defendants.

          FINDINGS OF FACT AND CONCLUSIONS OF LAW

          PATRICK MICHAEL DUFFY United States District Judge

         This matter is before the Court following an evidentiary hearing. For the reasons stated herein, the Court compels arbitration.

         BACKGROUND/PROCEDURAL HISTORY

         This action arises out of Trina Creech's employment by Defendant JEM Pizza Group, LLC. Creech is a former pizza delivery driver who worked for several different Pizza Hut franchises. Her lawsuit involves Pizza Hut's driver-reimbursement program. Pizza Hut pays its delivery drivers minimum wage, along with a per-delivery reimbursement designed to cover additional costs to the drivers. That reimbursement allegedly fails to fully compensate drivers for the vehicle costs they incur, including gas, repairs, insurance, and depreciation. Creech alleges that those costs caused her effective wage, and the wages of other similarly-situated delivery drivers, to fall below minimum wage.

         On December 27, 2017, the Court entered an Order that, among other things, compelled arbitration of this case subject to the terms of JEM Pizza Group's 2015 arbitration agreement. Creech filed a motion to reconsider that Order on January 4, 2017. After Creech's motion to reconsider was fully briefed, the Court granted Creech's motion to reconsider in a Text Order stating the following:

Out of an abundance of caution, and to provide a more developed record on appeal, the Court grants Plaintiff's motion to reconsider in order to hold the evidentiary hearing contemplated by § 4 of the Federal Arbitration Act. At that hearing, scheduled for Tuesday, March 14, at 2:00 PM, the Court will only consider evidence on the question of whether Plaintiff agreed to either the 2015 or 2016 arbitration agreements. AND IT IS SO ORDERED.

(Text Order, ECF No. 40.) Creech's motion to reconsider was based on a declaration in which she alleged that she never saw or signed the 2015 arbitration agreement.[1] Based on that declaration, Creech argued that the Court should reconsider its December 27 Order because she had created a genuine issue of material fact as to whether or not she had signed the 2015 arbitration agreement. Creech also asked the Court to hold that because she had created a genuine issue of material fact, she was not bound to arbitrate under the 2015 arbitration agreement.

         As discussed in the footnote below, the Court credited Creech with creating a genuine issue of material fact by granting her motion to reconsider. Nonetheless, holding that she was not bound to arbitrate under the 2015 arbitration agreement would be wholly inappropriate until after any genuine issue of material fact was resolved. See Dillon v. BMO Harris Bank, N.A., 787 F.3d 707, 716 (4th Cir. 2015) (“If unresolved questions of material fact prevent the court from ruling [on a motion to compel arbitration], . . . the court shall hold ‘an expeditious and summary hearing' to resolve those questions.” (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 22 (1983))).

         Section 4 of the Federal Arbitration Act (“FAA”), referenced by the Court's Text Order and by JEM Pizza Group in its response to Creech's motion to reconsider, provides that:

[i]f the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof. If no jury trial be demanded by the party alleged to be in default, or if the matter in dispute is within admiralty jurisdiction, the court shall hear and determine such issue. Where such an issue is raised, the party alleged to be in default may, except in cases of admiralty, on or before the return day of the notice of application, demand a jury trial of such issue, and upon such demand the court shall make an order referring the issue or issues to a jury in the manner provided by the Federal Rules of Civil Procedure, or may specially call a jury for that purpose.

9 U.S.C. § 4. As this Court recognized in Gordon v. TBC Retail Group, Inc., section 4 allows the party disputing arbitration to demand a jury trial to resolve issues of fact bearing on an arbitration agreement's enforceability. No. 2:14-cv-3365-DCN, 2016 WL 4247738, at *11 n.13 (D.S.C. Aug. 11, 2016). Here, Creech has never demanded such a jury trial in spite of numerous opportunities to do so.[2] As a result, the Court proceeded with an expeditious, non-jury evidentiary hearing to resolve the genuine issues of material fact. See Id. Having set forth the relevant background and procedural history of this case, the Court now makes the following findings of fact and conclusions of law based on a preponderance of the evidence introduced at the hearing.

         FINDINGS OF FACT

         1. Creech worked at JEM Pizza Group on three separate occasions: (1) 2006 to 2013; (2) September 2015 to December 2015; and (3) June 2016.

         2. During all those periods, JEM Pizza Group had a business practice of requiring every employee to complete new hire paperwork each time that the employee is hired, regardless of ...


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