6:14-cv TMC Date Filed 05/16/14 Entry Number 10 Page 1 of 7

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1 6:14-cv TMC Date Filed 05/16/14 Entry Number 10 Page 1 of 7 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA GREENVILLE DIVISION Milton Jones, Jr., Walter Davis and Angela Webb, Plaintiffs, v. CertusBank, N.A., Benjamin Weinger and 3- Sigma Value Financial Opportunities, L.P., Defendants. NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION C.A. No. 6:14-cv TMC Defendant CertusBank, N.A. (hereinafter CertusBank, by and through counsel, respectfully moves the Court for an order compelling arbitration of all claims asserted by Plaintiffs Milton Jones, Jr., Walter Davis and Angela Webb (collectively Plaintiffs against CertusBank in the above-captioned action pursuant to Rule 7, FED. RULES CIV. PROC., and the Federal Arbitration Act ( FAA, 9 U.S.C. 1 et seq. This motion is made on the following grounds: Consistent with Adkins v. Labor Ready, Inc., 303 F.3d 496 (4th Cir. 2002, arbitration should be compelled because CertusBank can demonstrate the following: (1 there is a dispute between the parties; (2 there is a written agreement that includes an arbitration provision that purports to cover the dispute; (3 there is a relationship of the transaction at issue to interstate commerce; and (4 one party has refused to arbitrate the dispute. Adkins v. Labor Ready, Inc., 303 F.3d at

2 6:14-cv TMC Date Filed 05/16/14 Entry Number 10 Page 2 of 7 I. There is a dispute between the parties. The existence of a dispute is obvious. The parties are now embroiled in litigation, which would not otherwise be the case. Therefore, the first element is met. II. There is a written agreement that includes an arbitration provision that purports to cover the dispute. Plaintiffs each signed an Amended and Restated Executive Employment Agreement (hereinafter Agreement. See, Affidavit of Colletta E. Bryce, Exhibit 1, Jones Agreement, Attachment A; Davis Agreement, Attachment B; Webb Agreement, Attachment C. Plaintiffs Agreements are a written agreement requiring arbitration of the dispute at issue. See, Section Q. ARBITRATION, p. 15, 47. The three Agreements are substantially identical with the exception of job titles, compensation, and gender of certain possessive pronouns. Plaintiffs arbitration provisions each state: Any dispute, controversy, or claim arising out of or relating to this Agreement or breach thereof, or arising out of or relating in any way to the employment of the Executive or the termination thereof, shall be submitted to arbitration in accordance with the Employment Dispute Arbitration Rules of the American Arbitration Association. Judgment upon the award rendered by the arbitrator may be entered in any court of competent jurisdiction. In reaching his decision, the arbitrator shall have no authority to ignore, change, modify, add to or delete from any provision of this Agreement, but instead is limited to interpreting this Agreement. Notwithstanding the arbitration provisions set forth in this Agreement, the Executive and the Employer acknowledge and agree that nothing in this Agreement shall be construed to require the arbitration of any claim or controversy arising under the NONINTERFERENCE provisions of this Agreement. These provisions shall be enforceable by any court of competent jurisdiction and shall not be subject to this Paragraph of the Agreement. The Executive and the Employer further acknowledge and agree that nothing in this Agreement shall be construed to require arbitration of any claim for workers compensation or unemployment compensation. Exhibit 1, Jones Agreement, Attachment A, p. 15, Section Q, 47; Davis Agreement, Attachment B, p. 15, Section Q, 47; Webb Agreement, Attachment C, p. 15, Section Q, 47. 2

3 6:14-cv TMC Date Filed 05/16/14 Entry Number 10 Page 3 of 7 Plaintiffs Agreements clearly cover this lawsuit as Plaintiffs claims against CertusBank are ones arising out of or relating in any way to their employment with CertusBank. Landers v. FDIC, 739 S.E.2d 209 (S.C. 2013, is particularly informative with respect to the broad application of arbitration provisions to claims arising out or relating to an employment agreement. In Landers, a bank executive sued the bank for: (i breach of contract/constructive termination; (ii slander/slander per se; (iii intentional infliction of emotional distress; (iv illegal proxy solicitation pursuant to S.C. Code Ann (i; and (v wrongful expulsion as a director. Landers, 739 S.E.2d at 212. As in this case, the bank sought to enforce the arbitration agreement in the executive s employment agreement. Id., at 210. Although the trial court held only the breach of contract claim was subject to arbitration, the South Carolina Supreme Court reversed, holding all causes of action subject to arbitration. Id., at 201, 218. The South Carolina Supreme Court noted an arbitration clause covering disputes arising out of or relating to the contract should be construed broadly. Id. at , citing Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 398 (1967. See also, Am. Recovery Corp. v. Computerized Thermal Imaging, Inc., 96 F.3d 88, 93 (4th Cir. 1996(Such broad clauses are capable of an expansive reach.. Further, in analyzing this significant relationship courts must determine whether the factual allegations underlying the claim are within the scope of the arbitration clause, regardless of the legal label assigned to the claim. Id. citing J.J. Ryan & Sons, Inc. v. Rhone Poulenc Textile, S.A., 863 F.2d 315, at 319 (4 th Cir. 1988; Zabinski, v. Bright Acres Assocs., 553 S.E.2d 110, 118 (S.C As in Landers, whether or not the claims asserted by Plaintiffs are specifically based upon their Agreements, they bear a significant relationship to their arbitration agreements and all causes of action should be arbitrated. 3

4 6:14-cv TMC Date Filed 05/16/14 Entry Number 10 Page 4 of 7 Even if there were any question as to whether the arbitration provision in the Agreement covers this dispute, arbitration should be compelled. The heavy presumption of arbitrability requires that when the scope of the arbitration clause is open to question, a court must decide the question in favor of arbitration. Tenaglia v. Ryan s Family Steak Houses, Inc., 2003 U.S. Dist. LEXIS 26322, *37 (D.S.C. May 8, 2003 (quoting Long v. Silver, 248 F.3d 309, 316 (4 th Cir A party s request to arbitrate an issue may not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Id. III. There is a relationship of the transaction at issue to interstate commerce. It is undisputed that Plaintiffs have refused to arbitrate their claims against CertusBank consistent with the terms of their respective Agreements. As such, only the third element in determining whether to compel arbitration, whether there is a relationship of the transaction at issue to interstate commerce, requires further discussion. Plaintiffs Complaint itself makes plain that essentially everything about Plaintiffs employment with CertusBank bore a relationship to interstate commerce. Consider Plaintiffs own allegations: In 2010, they founded CertusBank, a new national bank. Entry No. 1 at 1 (emphasis added. In just three short years, Plaintiffs grew CertusBank from four (4 to seven hundred (700 employees, launched banking operations in four southern states and amassed control of over $1.7 billion in assets. Id. Plaintiffs are residents of South Carolina, North Carolina, and Georgia, respectively. Entry No. 1 at 4, 1 through 5, 3. CertusBank is a Delaware corporation with a presence in twelve states and headquarters in South Carolina. Entry No. 1 at 5, 4 (emphasis added. CertusBank was born out of a shelf charter received subject to a business plan that was endorsed by many members of the United States Congress that would 4

5 6:14-cv TMC Date Filed 05/16/14 Entry Number 10 Page 5 of 7 permit CertusBank to participate as a purchaser in [Federal Deposition Insurance Corporation] failed-bank auctions. Entry No. 1 at 2 & 6, (emphasis added. Plaintiffs business plan revolved around the framework of acquiring a base of distressed or failed banks or assets along the Interstate corridor from North Carolina to northern Florida and then growing CertusBank out from its base and into a national banking institution that would one day go public through a public offering. Entry No. 1 at 2 (emphasis added. The decision was made to locate CertusBank s headquarters from Charlotte, North Carolina to Greenville, South Carolina for a host of reasons, including its central location along the I-85 corridor and the vibrant Greenville economy. Entry No. 1 at 15, 56 (emphasis added. For nearly a year and a half, [Plaintiffs] commuted from Atlanta and Charlotte to Greenville, South Carolina (and elsewhere living separate and apart from their families in hotel rooms often times for six nights a week, while personally maintaining the financial burdens of their homes in Charlotte, NC. Entry No. 1 at 17-18, 72 (emphasis added. Plaintiffs Complaint also makes clear in this context that their job duties encompassed this multi-state footprint. Jones was the Chairman, President and Chief Executive Officer of CertusBank s predecessor entity, Blue Ridge Holdings, Inc. ( BRHI. Exhibit 1, Jones Agreement, Attachment A, pp. 1 & 3, 9. Davis was the Vice Chairman and Chief Credit Officer of BRHI. Exhibit 1, Davis Agreement, Attachment B, pp. 1 & 3, 9. Webb was the Executive Vice President, Treasurer, and Assistant Secretary of BRHI. Exhibit 1, Webb Agreement, Attachment C, pp. 1 & 3, 9. Thus, Plaintiffs executive positions involved the global management of CertusBank, which Plaintiffs themselves have shown to be an interstate operation. It is inconceivable that operation of a bank of the scope, and intended scope, of CertusBank would not satisfy the interstate commerce requirement of the FAA. Indeed, money laundering cases have shown that simply drawing a check on a bank has been held to implicate interstate commerce. United States v. Jackson, 935 F.2d 832 (7th Cir This is particularly so given the FAA represents a liberal federal policy favoring arbitration agreements. Moses H. 5

6 6:14-cv TMC Date Filed 05/16/14 Entry Number 10 Page 6 of 7 Cone Mem l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, (1983. Similarly, due regard must be given to the federal policy favoring arbitration, and ambiguities as to the scope of the arbitration clause itself must be resolved in favor of arbitration. Volt Info. Scis., Inc. v. Bd. of Trs., 489 U.S. 468 (1989. Further, it is well settled that the interstate character of a defendant s business is sufficient to bring an arbitration agreement within interstate commerce. Allied-Bruce Terminix Co. v. Dobson, 513 U.S. 265, 273 (1995 (holding that FAA governed arbitration agreement between pest control agency and homeowner because company operated interstate and used raw materials purchased from out of state.. See also, Brown v. Ryan s Family Steak Houses, Inc., 2004 U.S. Dist. LEXIS at 7, fn. 3 (D.S.C (finding interstate commerce where the defendant was a Delaware corporation with multiple locations in multiple states and is involved in interstate procurement of food products and advertising.. For the foregoing reasons, CertusBank respectfully requests that this Court enter an Order granting CertusBank s motion to compel arbitration as to all claims asserted by Plaintiffs against CertusBank herein, thereby staying this matter pending completion of arbitration pursuant to Section 3 of the FAA, which states: 9 USC 3. If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration. CertusBank affirms, pursuant to Local Rule 7.02, that prior to filing this motion it conferred or attempted to confer with counsel for Plaintiffs and attempted, without success, in 6

7 6:14-cv TMC Date Filed 05/16/14 Entry Number 10 Page 7 of 7 good faith to resolve the matters contained in this motion. Plaintiffs counsel has refused CertusBank s demand for arbitration. Further, CertusBank affirms, pursuant to Local Rule 7.04 that a full explanation of this motion as set forth in Local Civil Rule 7.05 is contained within this motion and an additional memorandum would serve no useful purpose. s/ Charles E. McDonald III Charles E. McDonald III (#6767 L. Gray Geddie, Jr. (#1020 OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C. 300 N. Main Street (29601 PO Box 2757 Greenville, South Carolina ( (telephone ( (facsimile charles.mcdonald@ogletreedeakins.com grey.geddie@ogletreedeakins.com May 16, 2014 Attorneys for Defendant, CertusBank, N.A. 7