JOEL NAZARA and CONNIE NAZARA v. FR LOG HOMES, INC., a Washington State corporation, DBA Caribou Creek Log Homes

* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JOEL NAZARA and CONNIE NAZARA,
Plaintiffs - Appellants,
v.
FR LOG HOMES, INC., a Washington
State corporation, DBA Caribou Creek
Log Homes,
Defendant - Appellee.
No. 10-16643
D.C. No. 1:10-cv-00177-HG-KSC
MEMORANDUM*
Appeal from the United States District Court
for the District of Hawaii
Helen W. Gillmor, Senior District Judge, Presiding
Argued and Submitted June 13, 2012
Honolulu, Hawaii
Before: SCHROEDER, CALLAHAN, and N.R. SMITH, Circuit Judges.
Joel and Connie Nazara (“the Nazaras”) appeal the district court’s dismissal
of their diversity action against FR Log Homes, Inc. We have jurisdiction under
28 U.S.C. § 1291 and 9 U.S.C. § 16. We affirm.
FILED
JUN 29 2012
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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“The Supreme Court has repeatedly held that, absent a contrary provision in
the . . . agreement, the existence and scope of a contract to arbitrate are questions
for the court to determine in the first instance.” Cal. Trucking Ass’n v. Bhd. of
Teamsters & Auto Truck Drivers, Local 70, 679 F.2d 1275, 1280 (9th Cir. 1981)
(citing United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S.
574, 582 (1960)). Here, the district court correctly concluded that the arbitration
clause encompasses the dispute at issue, because the clause states that “all disputes
between the parties” arising from the construction agreement must be arbitrated in
Boundary County, Idaho. See Schoenduve Corp. v. Lucent Techs., Inc., 442 F.3d
727, 732-33 (9th Cir. 2006). The district court also correctly determined that the
arbitration agreement is valid, because the enforceability of an arbitration provision
does not turn on state public policy. See Buckeye Check Cashing, Inc. v.
Cardegna, 546 U.S. 440, 446 (2006).
The Nazaras argue that the district court should have stayed proceedings
rather than dismissed the case. However, the mandatory language of Section 3 of
the Federal Arbitration Act, requiring a district court to enter an order staying
proceedings and compelling arbitration, is only triggered “on application of one of
the parties,” and the mandatory language of Section 4 is only triggered upon a
“petition” of a party. See 9 U.S.C. §§ 3, 4. Here, neither party petitioned the

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district court to stay proceedings or compel arbitration under the Federal
Arbitration Act. Therefore, the district court had discretion to grant FR Log
Homes’ motion to dismiss. See Sparling v. Hoffman Constr. Co., 864 F.2d 635,
637-38 (9th Cir. 1988).
The Nazaras also argue that the district court improperly compelled
arbitration in Idaho under Section 3 of the Federal Arbitration Act. However, the
district court’s order merely dismissed the action “without prejudice to Plaintiffs
submitting their claims to arbitration in Boundary County, Idaho.” This order did
not, by its terms, compel arbitration. It merely explains that, if the Nazaras want to
pursue this claim in arbitration, they are not prejudiced from doing so according to
the terms of the arbitration clause.
AFFIRMED.

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