Doleac v. Real Estate Professionals, LLC
| Docket Number: | 2004-CA-00902-SCT Linked Case(s): 2004-CA-00902-SCT |
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| Supreme Court: | Opinion Link Opinion Date: 09-15-2005 Opinion Author: Smith, C.J. Holding: Reversed and Remanded. |
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| Additional Case Information: |
Topic: Contract - Arbitration - Reference to American Arbitration Association rules - Separate agreements - Tort claims - Waiver Judge(s) Concurring: Waller and Cobb, P.JJ., Easley, Carlson and Dickinson, JJ. Non Participating Judge(s): Diaz, Graves and Randolph, JJ. Procedural History: Bench Trial Nature of the Case: CIVIL - TORTS-OTHER THAN PERSONAL INJURY & PROPERTY DAMAGE |
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| Trial Court: |
Date of Trial Judgment: 03-22-2004 Appealed from: Forrest County Chancery Court Judge: Sebe Dale, Jr. Disposition: Before trial, the Chancery Court of Forrest County granted a temporary restraining order, permitting REP to remain in possession of the leased premises. Doleac’s motion to dismiss the complaint and compel arbitration was denied by the chancellor. The chancellor found for REP. Case Number: 02-0687-GN-D |
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| Note: | The motion for rehearing filed by appellee is denied. The prior opinion is withdrawn, and this opinion is substituted therefor. | |
| Party Name: | Attorney Name: | |||
| Appellant: | Barry Doleac, The Doleac Company and The Doleac Building, LLC |
RAY T. PRICE |
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| Appellee: | Real Estate Professionals, LLC | RICHARD ANTHONY FILCE, ERIK M. LOWREY |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Contract - Arbitration - Reference to American Arbitration Association rules - Separate agreements - Tort claims - Waiver |
| Summary of the Facts: | The motion for rehearing is denied, and this opinion is substituted for the prior opinion. Real Estate Professionals, LLC sued Barry Doleac, The Doleac Company and The Doleac Building, LLC for breach of their Independent Contractor Agreement, tortious interference with business relations, breach of their Asset Purchase Agreement, trespass to chattels, conversion, and for punitive damages. The chancery court granted a temporary restraining order, permitting REP to remain in possession of the leased premises. Doleac’s motion to dismiss the complaint and compel arbitration was denied by the chancellor. The chancellor found for REP, and Doleac appeals. |
| Summary of Opinion Analysis: | Doleac argues that the chancery court erred in denying the motion to compel arbitration because the dispute arises out of contracts which contain an arbitration clause. In determining the validity of a motion to compel arbitration under the Federal Arbitration Act, courts consider whether there is a valid arbitration agreement and whether the parties’ dispute is within the scope of the arbitration agreement. There is a dispute as to whether the arbitration agreement is valid because the language of the arbitration agreement does not foreclose or preclude litigation. Specifically, the arbitration clause in the agreement states that “[a]ny dispute under this agreement, prior to litigation, shall be submitted to arbitration in Hattiesburg, Mississippi, pursuant to the rules of the American Arbitration Association.” This type of arbitration clause presents an issue of first impression. The arbitration clause specifically makes arbitration a condition precedent to any judicial action. Thus, the clause is valid and no judicial action can be maintained until arbitration has been pursued. Furthermore, the arbitration clause in question also states that the dispute shall be submitted to arbitration “pursuant to the rules of the American Arbitration Association.” Pursuant to cases from other circuits, including the Fifth Circuit, arbitration is binding and final since the arbitration clause in question references the American Arbitration Association rules. Three agreements were executed between the parties in this case: an Asset Purchase Agreement for REP to buy The Doleac Company; a Lease Agreement by which REP was to rent office space from The Doleac Building; and an Independent Contractor Agreement for Barry Doleac to work for REP for a period of five years. The Independent Contractor Agreement and the Lease Agreement do not contain an arbitration clause but the Asset Purchase Agreement does contain an arbitration clause. REP argues that because the LA and ICA do not contain an arbitration clause, any claims under those agreements are not subject to arbitration. However, the APA specifically incorporates the LA and the ICA. Under general principles of contract law, separate agreements executed contemporaneously by the same parties, for the same purposes, and as part of the same transaction, are to be construed together. Since the three separate agreements were executed at the same time, by the same parties, as part of the same transaction, they are to be construed as one instrument. REP also argues that the arbitration clause in question is narrow and does not include tort claims. The arbitration clause specifically states “any dispute under this agreement.” Since the tort claims arise under the agreements and all three agreements are subject to the arbitration clause, all claims brought by REP are to be referred to arbitration pursuant to the arbitration clause. REP argues and the chancery court found that Barry Doleac, The Doleac Company and The Doleac Building waived their right to arbitrate. The chancery court concluded that since Barry, The Doleac Company and The Doleac Building used self-help to lock REP out of the building instead of resorting to arbitration, they waived their right to arbitrate. The language of the LA as referenced in the APA provided that if there is a default by Lessee, “Lessor may re-take the same as if this lease had not been made.” The LA clearly identifies The Doleac Building as Lessor and Real Estate Professionals as Lessee. Therefore, the LA and APA specifically afforded Doleac Building, Doleac Company and Barry Doleac (as President of Doleac Company) the right to use self-help when REP defaulted. Other jurisdictions addressing this issue have held that taking possession of the collateral or other similar actions do not waive a party’s right to arbitration. Therefore, The Doleac Company and The Doleac Building’s actions of self-help did not waive the contractual right to arbitrate. |
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