911 So.2d 483 (Miss. 2005), 2000-IA-00184, B.C. Rogers Poultry, Inc. v. Wedgeworth

Docket Nº2000-IA-00184-SCT.
Citation911 So.2d 483
Party NameB.C. ROGERS POULTRY, INC. and Bank of Morton v. Tommy WEDGEWORTH.
Case DateSeptember 15, 2005
CourtSupreme Court of Mississippi

Page 483

911 So.2d 483 (Miss. 2005)

B.C. ROGERS POULTRY, INC. and Bank of Morton

v.

Tommy WEDGEWORTH.

No. 2000-IA-00184-SCT.

Supreme Court of Mississippi

September 15, 2005

Page 484

Ronald C. Morton, Clinton, George R. Fair, Larry Spencer, Jackson, Lynn P. Ladner Risley, attorneys for appellants.

John W. Christopher, Eugene Coursey Tullos, Raleigh, attorneys for appellee.

EN BANC.

Page 485

ON MOTION FOR REHEARING

RANDOLPH, JUSTICE,

¶ 1. The motion for rehearing is denied. This Court's previous opinions are withdrawn, and these opinions are substituted therefor.

¶ 2. Tommy Wedgeworth sued B.C. Rogers Poultry, Inc. ("Rogers") and the Bank of Morton ("Bank") in the Circuit Court of Smith County, Mississippi. 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 on March 5, 1999. 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, and we granted Rogers and the Bank permission to bring this interlocutory appeal, see M.R.A.P. 5. Before briefing was complete on this appeal, Rogers filed for bankruptcy. The bankruptcy proceeding has concluded, and all claims against Rogers have been discharged. Therefore, the issue before this Court is whether the trial court erred in denying the Bank's motion to compel arbitration. We affirm the trial court's denial of the motion to compel arbitration.

FACTS

¶ 3. Wedgeworth was a contract poultry grower for Rogers. Since the 1960's, the Wedgeworth family had contracted with Rogers to grow chickens owned and ultimately processed by Rogers, for a fee. Rogers and Wedgeworth had entered into numerous Broiler Growing Agreements which designated what each parties' obligations were with respect to the growing and processing of the chickens. The Broiler Growing Agreements generally provided that Rogers would supply chickens, feed, and advice to Wedgeworth, and Wedgeworth would provide housing and labor to care for Rogers's chickens. Wedgeworth would then be paid by Rogers based upon the efficiency at which the flock of birds converted pounds of feed to pounds of meat. The contract under which the Bank seeks to compel arbitration was between Wedgeworth and Rogers and was executed on February 5, 1997. It was for a stated term of three years and contained this arbitration clause:

ARBITRATION

ALL DISPUTES OR CONTROVERSIES ARISING UNDER THIS AGREEMENT, INCLUDING TERMINATION THEREOF, SHALL BE DETERMINED BY A THREE MEMBER ARBITRATION PANEL (THE "PANEL") SELECTED BY THE PARTIES TO THIS AGREEMENT, IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT, AND SUCH DISPUTE OR CONTROVERSY SHALL BE JUDGED PURUSANT TO THE RULES AND PROCEDURES OF THE AMERICAN ARBITRATION ASSOCIATION (AAA), AND THE FINDINGS OF SUCH PANEL SHALL BE FINAL AND BINDING ON ALL THE PARTIES TO THIS AGREEMENT. Each party to any dispute hereunder shall appoint an arbitrator, qualified by the AAA, to serve on the panel, with the third panel member to be selected by the two appointed members. Each party shall pay the fees, costs, and expenses associated with the arbitrator selected by that party, and the fees, costs, and expenses associated with the third arbitrator shall be shared equally by both parties, as accrued. In the event of a final adjudication by the panel, all fees, costs, and expenses incurred by the successful party as a result of the dispute, including

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attorneys fees and arbitrator fees, shall be bourn by the unsuccessful party.

The parties agree and recognize that the business of raising, processing, and producing poultry products is extensively involved in interstate commerce, and that various loans and extensions of credit made to GROWER and COMPANY are directly related thereto. The parties stipulate that the Federal Arbitration Act is applicable to the agreement. THE PARTIES STIPULATE THAT THE PROVISIONS OF THIS ARBITRATION CLAUSE SHALL BE A COMPLETE DEFENSE TO ANY SUIT, ACTION, OR PROCEEDING INSTITUTED IN ANY FEDERAL, STATE, OR LOCAL COURT OR BEFORE ANY ADMINISTRATIVE TRIBUNAL WITH RESPECT TO ANY CONTROVERSY OR DISPUTE ARISING DURING THE PERIOD OF THIS AGREEMENT AND WHICH IS ARBITRABLE AS SET FORTH IN THIS AGREEMENT. The arbitration provisions of this agreement shall, with respect to such controversy or dispute, survive the termination or expiration of this agreement.

None of the previous contracts between Wedgeworth and Rogers contained an arbitration clause. Further, this clause did not state that it was applicable to disputes which existed before its execution.

¶ 4. Preceding and following the execution of the Broiler Growing Agreement, the Bank and Wedgeworth entered into a series of other contracts, none of which contained an arbitration clause.1 There was no evidence presented that any of the Bank/Wedgeworth contracts were simultaneously executed or were part of a global transaction.

¶ 5. On December 1, 1998, Wedgeworth filed a suit in the Circuit Court of Smith County, Mississippi. Wedgeworth asserts that beginning in 1982, Rogers and the Bank forced and coerced him to assign collateral and/or borrow money on Rogers's behalf. Furthermore, Wedgeworth alleged that the defendants violated the provisions of Miss.Code Ann. § 75-21-1 in their formation of trusts and combines in restraint and hindrance of trade. Wedgeworth also alleges that in 1995-1996, Rogers interfered with a sale of Wedgeworth's farm in retaliation for the grower legislation lobbying efforts of Wedgeworth's sister. Wedgeworth further alleges that in April of 1996, Rogers forced and coerced him to make upgrades to his farm and equipment which was also in retaliation for the lobbying efforts of his sister.

ANALYSIS

¶ 6. The Bank asserts that the trial court erred in denying the motion to compel arbitration because the dispute arises out of the contract which contains the arbitration clause. Wedgeworth alleges that his claims against the Bank originated before the contract and therefore are outside the scope of the contract containing the arbitration clause.

¶ 7. We review de novo the grant or denial of a petition to compel arbitration. East Ford, Inc. v. Taylor, 826 So.2d 709, 713 (Miss.2002).

I. Did the circuit court err in denying the Bank's motion to compel arbitration?

A. The arbitration clause does not apply retroactively to conduct which occurred prior to the execution of the

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February 5, 1997 Broiler Growing Agreement.

¶ 8. Our law requires this Court to accept the plain meaning of a contract as the intent of the parties if no ambiguity exists. I.P. Timberlands Operating Co. v. Denmiss Corp., 726 So.2d 96, 108 (Miss.1998). Furthermore, "[c]ontracts are solemn obligations and the Court must give them effect as written." Id. We agree with the U.S. Supreme Court that, "we do not override the clear intent of the parties, or reach a result inconsistent with the plain text of the contract, simply because the policy favoring arbitration is implicated." EEOC v. Waffle House, Inc., 534 U.S. 279, 294, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002). Here, the language of the Broiler Growing Agreement does not include a single word or phrase which expresses an intent by the parties that the arbitration clause should be applied retroactively to conduct occurring prior to its execution. Au contraire, the plain language states otherwise.

9.The first paragraph of the Broiler Growing Agreement reads as follows: "Effective for broiler flocks placed on GROWER'S farm on or after 2-5-1997 or after execution of this Agreement by GROWER and COMPANY whichever occurs later." (emphasis added). The Broiler Growing Agreement was executed by the grower, Wedgeworth, and the company, Rogers, on February 5, 1997. The Bank was neither a party to the contract, nor a signatory to the contract or any other related contract on that date. Furthermore, the plain language of section six clearly reads as follows: "for a term of three years."2

¶ 10. 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. This Court remains unconvinced, as the law requires, that Wedgeworth knowingly, intelligently, and voluntarily waived his fundamental right to a jury trial, when all contracts in effect at the time of the alleged tortious conduct, regardless of whether the contracts were between the Bank and Wedgeworth or Rogers and Wedgeworth, failed to contain arbitration clauses. See D.H. Overmyer Co. v. Frick Co., 405 U.S. 174, 184, 92 S.Ct. 775, 31 L.Ed.2d 124 (1972). 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.

¶ 11. Wedgeworth alleges that Rogers and/or the Bank tortiously interfered with a proposed sale of Wedgeworth's farm and forced and coerced Wedgeworth to make upgrades to his farm. The events as alleged in the complaint occurred in 1995-1996 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. The U.S. Supreme Court has stated that, "arbitration is a matter of contract and a party

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cannot be required to submit to arbitration any...

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