B. C. Rogers Poultry, Inc. v. Wedgeworth


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Docket Number: 2000-IA-00184-SCT
Linked Case(s): 2000-IA-00184-SCT

Supreme Court: Opinion Link
Opinion Date: 09-15-2005
Opinion Author: Randolph, J.
Holding: Affirmed and Remanded

Additional Case Information: Topic: Contract - Arbitration - Retroactive application - Scope of agreement - Equitable estoppel
Judge(s) Concurring: Waller, P.J., Easley, Graves and Dickinson, JJ.
Non Participating Judge(s): Diaz, J.
Dissenting Author : Smith, C.J.
Dissent Joined By : Cobb, P.J., and Carlson, J.
Procedural History: Bench Trial
Nature of the Case: CIVIL - CONTRACT

Trial Court: Date of Trial Judgment: 01-19-2000
Appealed from: Smith County Circuit Court
Judge: Robert G. Evans
Disposition: On April 27, 1999, the Bank filed a Motion to Dismiss and joined Rogers’s motion to compel arbitration. The circuit court denied the motion to compel arbitration.
Case Number: 98-0258

Note: Motion for rehearing filed by Bank of Morton is denied. This Court's previous opinions are withdrawn, and these opinions are substituted therefor.

  Party Name: Attorney Name:  
Appellant: B. C. Rogers Poultry, Inc. and Bank of Morton




RONALD C. MORTON, GEORGE R. FAIR, LARRY SPENCER, LYNN P. LADNER RISLEY



 

Appellee: Tommy Wedgeworth JOHN W. CHRISTOPHER, EUGENE COURSEY TULLOS  

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Topic: Contract - Arbitration - Retroactive application - Scope of agreement - Equitable estoppel

Summary of the Facts: The motion for rehearing is denied, and these opinions are substituted for the original opinions. Tommy Wedgeworth sued B.C. Rogers Poultry, Inc. and the Bank of Morton. The Bank filed its answer with a multicount counterclaim against Wedgeworth. Rogers pled the affirmative defense of arbitration in its answer. Subsequently, Rogers filed a motion to stay claim and compel arbitration. The Bank filed a Motion to Dismiss and joined Rogers’ motion to compel arbitration. The circuit court denied the motion to compel arbitration, and the Supreme Court granted Rogers and the Bank permission to bring this interlocutory appeal.

Summary of Opinion Analysis: The Bank argues that the court erred in denying the motion to compel arbitration because the dispute arises out of the contract which contains the arbitration clause. Wedgeworth argues that his claims against the Bank originated before the contract and therefore are outside the scope of the contract containing the arbitration clause. The three-year term Broiler Growing Agreement contains no language revealing an intent by the parties to suggest, much less require, retroactive application of the arbitration clause to putative claims which arose prior to the date of the agreement. Of significance is the uncontested fact that during the years proceeding and following the execution of the Broiler Growing Agreement, the Bank and Wedgeworth entered into a series of other contracts, not one of which contained an arbitration clause. The plain text of the contract between Rogers and Wedgeworth, upon which the Bank relies, contains no language evidencing Wedgeworth’s intent to waive his fundamental right to a jury trial in a dispute with the Bank or Rogers for prior alleged wrongdoing. The events as alleged in the complaint occurred when the contractual relationships between Rogers and Wedgeworth, and separately between Wedgeworth and the Bank were governed by contracts that did not have arbitration clauses. Arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed to submit. The arbitration provision contained neither language that was broad enough to cover events which predated the contract’s execution, nor language which would broaden its application by containing terms such as “applies to all transactions occuring before or after execution” or “all transactions between us” or “all business with us.” Where such a clause exists, a legal basis to apply the arbitration clause retroactively may exist. This is not the case here. Not only does the arbitration clause not cover events which precede the execution of the contract, but the scope of the clause does not cover this dispute between Wedgeworth and the Bank. The agreement is entitled, “BROILER GROWING AGREEMENT” and sets forth what the company agrees to do and what the grower agrees to do in terms of the broiler flocks that are placed on the grower’s farm after a certain date and for a defined term of years. The disputes relating to the alleged tortious conduct did not arise under this Broiler Growing Agreement. The Bank was engaged in business and contractual relationships with Wedgeworth throughout the time frame of the events complained, and at any time it could have insisted on including arbitration clauses as to “all claims,” but it did not. Equitable estoppel will allow a nonsignatory to compel arbitration when the signatory to a written agreement containing an arbitration clause must rely on the terms of the written agreement in asserting its claims against a nonsignatory. This situation is not before us, as Wedgeworth is not relying on the terms of the Broiler Growing Agreement in asserting his claims against the Bank. Absent allegations of substantially interdependent and concerted misconduct between a non-signatory and a signatory who have a close legal relationship, the Mississippi law of equitable estoppel should first be examined to determine if conditions are present where equity should allow a non-signatory to compel arbitration. Equitable estoppel exists where there is a belief and reliance on some representation; a change of position as a result thereof; and detriment or prejudice caused by the change of position. There is no proof that the Bank relied to its detriment that Wedgeworth would arbitrate any claim he had against the Bank. The absence of reliance is self evident by the Bank’s failure to raise arbitration as an affirmative defense in its answer and then confirmed by its choice to litigate in court by invoking the jurisdiction of the court by filing its counterclaim, followed by discovery. To expand the doctrine of equitable estoppel would unfairly deny Wedgeworth access to the courts and force him to arbitrate his claims against the Bank, in spite of the fact that the Bank was not a party to the Broiler Growing Agreement that Wedgeworth entered into with Rogers.


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