Coliseum Ford Inc v. Ford Dealer Computer

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 02-20318
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COLISEUM FORD INC

Plaintiff-Counter Defendant–Appellee,

v.

FORD DEALER COMPUTER SERVICES INC, also known as Dealer Computer
Services Inc

Defendant-Counter Claimant– Appellant

_________________________________________________________________

Appeal from the United States District Court
for the Southern District of Texas
No. H-01-CV-2293
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January 8, 2003

Before KING, Chief Judge, and DEMOSS and CLEMENT, Circuit Judges.

PER CURIAM:*

Ford Dealer Computer Services, Inc. (DCS) seeks to recover

damages from Coliseum Ford Inc. (Coliseum Ford) for breach of a

long-term computer contract (the Agreement). The Agreement

contains an arbitration clause which is set out below. DCS filed

an arbitration demand, following which Coliseum Ford filed an

application to stay arbitration in a Texas state district court.

*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
The suit was removed to federal district court, and DCS then

filed a motion to compel arbitration. The district court agreed

with Coliseum Ford that the dispute was not arbitrable and denied

DCS’s motion to compel arbitration. DCS appeals. We reverse.

Respectfully, we disagree with the district court’s

interpretation of the arbitration clause in the Agreement, which

reads as follows:

Except as provided otherwise in this Agreement, all
disputes, claims, controversies and other matters in
question between the parties to this Agreement, arising
out of, or relating to this Agreement, or to the breach
thereof, including any claim in which either party is
demanding monetary damages of the nature including
negligence, strict liability or intentional acts and
omissions by either party, and which cannot be resolved
by the parties, shall be settled by arbitration in
accordance with the arbitration procedure described
below. Collection of any accrued amounts owed by
Dealer to FDCS (and not disputed in writing with
specificity within a reasonable period from the invoice
date) shall not be subject to this arbitration
procedure. This arbitration procedure shall in no way
limit FDCS’ remedies as provided in Section 12.

As we read the clause, the sentence excepting from arbitration

collection of accrued amounts owed by Coliseum Ford to DCS is

designed to deal with the collection of undisputed amounts

regularly invoiced under the Agreement. The fact that it speaks

in terms of “collection,” “not disputed” and “invoice” supports

that interpretation. The clause is not designed to deal with

what is essentially a breach of contract claim, as to which the

amount of damages owing is disputed and which is not the subject

of an invoice.

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 Accordingly, we reverse the order of the district court

entered February 14, 2002 denying DCS’s motion to compel

arbitration and remand for entry of an order compelling

arbitration. Costs shall be borne by Coliseum Ford.

REVERSED.

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