Palmer, et al. v. Pittman


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Docket Number: 2009-CA-01864-COA
Linked Case(s): 2009-CA-01864-COA ; 2009-CA-01864-COA
Court of Appeals: Opinion Link
Opinion Date: 11-08-2011
Opinion Author: Ishee, J.
Holding: Affirmed
Additional Case Information: Topic: Real property - Arbitration provision - Non-signatory to contract - Third-party beneficiary
Judge(s) Concurring: Lee, C.J., Irving and Griffis, P.JJ., Myers, Barnes, Roberts, Maxwell and Russell, JJ.
Dissenting Author : Carlton, J.
Procedural History: Motion to Compel Arbitration
Nature of the Case: CIVIL - REAL PROPERTY
Trial Court: Date of Trial Judgment: 10-28-2009
Appealed from: Hinds County Circuit Court
Judge: Tomie Green
Disposition: DENIED MOTION TO DISMISS AND/OR COMPEL ARBITRATION
Case Number: 251-09-456CIV
  Party Name: Attorney Name:   Brief(s) Available:
Appellant: Dell Palmer, Palmer Holdings, LLC d/b/a Realty Executives and Tanja Adams




 C. LOUIS CLIFFORD IV ROGER L. MCGEHEE JR. DANIEL D. WARE



  
  • Appellant #1 Brief
    		•
    Appellee: Tammie R. Pittman, Jacob S. Pittman and Shawn M. Pittman DONALD W. BOYKIN  
    Synopsis provided by:

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    Topic: Real property - Arbitration provision - Non-signatory to contract - Third-party beneficiary
    Summary of the Facts: Tammie Pittman, Jacob Pittman, and Shawn Pittman entered into a contract for the purchase of a home in Florence. The contract listed Realty Executives as the Pittmans’ exclusive real-estate agent. Included in the contract was an arbitration agreement requiring the Pittmans and the seller of the property, Sean Farnham, to enter into arbitration in the event that any disputes arose out of the contract. The arbitration provision made no mention of Realty Executives or any other agent. Two years later, the Pittmans filed suit against Realty Executives, its authorized agent Tanja Adams, and its parent company, claiming that Realty failed to disclose to the Pittmans certain problems with the home and that the Pittmans detrimentally relied on Realty with regard to the purchase of the home. Thereafter, Realty filed a motion to dismiss the Pittmans’ action or, in the alternative, compel arbitration pursuant to the contract. The circuit court denied the motion on the ground that the arbitration provision in the contract specifically stated that it only applied to the Pittmans and Farnham. Realty appeals.
    Summary of Opinion Analysis: Nowhere in the arbitration provision does it mention Realty or any party other than the Pittmans, as the “Buyer,” and Farnham, as the “Seller.” As such, on its face, the arbitration provision does not apply to Realty, and the Pittmans are not required to arbitrate their dispute with Realty by arbitration. Realty, however, argues that as a matter of law, the Pittmans should be required to arbitrate the matter, because a non-signatory to a contract may have standing to compel arbitration if there is a close legal relationship with a signatory to the contract. Realty references a document it signed along with Farnham that defined it as a “Disclosed Dual Agent.” The Pittmans did not sign Document One. Additionally, Document One clearly states in all capital letters: “THIS IS NOT A CONTRACT. THIS IS AN ACKNOWLEDGMENT OF DISCLOSURE.” Thus, it is not a legally binding contract. Realty also claims it should be considered a third-party beneficiary to the contract. Realty states that it directly benefitted from the contract; therefore, it was a “party” to the agreement and should be considered a party to the arbitration agreement. Realty and the Pittmans had ample opportunity to provide language in the contract to their liking. In fact, Realty was specifically listed in the contract as the Pittmans’ agent, and the terms of the contract granted Realty 5% of the total sale price of the home. As such, Realty could have easily revised the terms of the contract to include themselves in the arbitration provision. However, Realty and the Pittmans chose not to include Realty in the arbitration agreement. As such, Realty cannot now claim that although it had the option to include itself in the arbitration provision and chose not to, that it should now be an applicable party. Realty’s role in the contract is clear.


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