City Coll. Inc. v. Moore Sorrento Llc

• Decision Date: 01 November 2010
• Docket Number: No. 106,107.,106,107.
• Citation: 246 P.3d 726,2010 OK CIV APP 127
• Parties: CITY COLLEGE, INC., Plaintiff/Appellee,v.MOORE SORRENTO, LLC, Defendant/Appellant.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

246 P.3d 726

2010 OK CIV APP 127

CITY COLLEGE, INC., Plaintiff/Appellee,

v.MOORE SORRENTO, LLC, Defendant/Appellant.

No. 106,107.

Court of Civil Appeals of Oklahoma, Division No. 2.

June 18, 2010.Rehearing Denied July 16, 2010.Certiorari Denied Nov. 1, 2010.

Released for Publication by Order of the Court

of Civil Appeals of Oklahoma, Division No. 2.

Appeal from the District Court of Cleveland County, Oklahoma; Honorable Gary Snow, Trial Judge.AFFIRMED.Barry K. Roberts, Stanley M. Ward, Norman, OK, for Plaintiff/AppelleeRussell L. Mulinix, Amy G. Piedmont, Mulinix Ogden Hall Andrews & Ludlam, PLLC, Oklahoma City, OK, for Defendant/AppellantJANE P. WISEMAN, Chief Judge.

¶ 1 Moore Sorrento, LLC (Landlord) appeals the trial court's order confirming the October 3, 2007, arbitration award, confirming the December 20, 2007, final order including attorney fees, and denying Landlord's motion to vacate the award. Based on our review of the facts and applicable law, we find the trial court correctly confirmed the arbitration panel's award and denied Landlord's motion to vacate.

FACTS AND PROCEDURAL BACKGROUND

¶ 2 On November 16, 2006, City College, Inc. (Tenant), filed an application in district court asking the court to appoint arbitrators pursuant to a written lease agreement between Tenant and the original lessor, Superflea Outlets, LLC. The original lessor had assigned this lease to Moore Sorrento before this lawsuit arose.

¶ 3 After Tenant failed to pay the January 2007 rent, Landlord served a “Notice to Quit” stating Tenant had ten days to pay $23,965 to cure its default or surrender possession of the premises. Not having received payment, Landlord filed a separate forcible entry and detainer action on February 1, 2007, seeking possession of the premises.

¶ 4 On February 8, 2007, in the arbitration lawsuit, the parties stipulated to an order appointing arbitrators, and the trial court entered an order appointing James C. Elder, Ronald E. Stakem, and Ben T. Benedum “to determine and adjudicate the issues, claims, and disputes between the parties, except the issue of whether or not [an] FE & D eviction is subject to arbitration.” Over Landlord's objections, the trial court later consolidated the forcible entry and detainer action with the arbitration action finding the arbitration provision controlled all issues between the parties.

¶ 5 On March 8, 2007, Landlord filed a motion to reconsider the trial court's ruling consolidating the actions and compelling the parties to arbitrate. On April 5, 2007, however, the parties entered into an “Agreed Journal Entry of Possession” stipulating that the lease agreement would terminate on April 15, 2007, and that upon termination, possession of the premises would be transferred to Landlord “free and clear of further claims to the possession thereof of City College, Inc. except for all issues raised by City College, Inc. in its Arbitration Petition and the Answer of Moore Sorrento, LLC thereto.” The parties also agreed that “[a]ll issues related to rent alleged by Moore Sorrento ... as well as the entitlement to court costs and attorney's fees arising from the claims asserted by each party” would be determined in the arbitration proceedings.

¶ 6 After several days of arbitration, the arbitrators issued a written award on October 3, 2007, in favor of Tenant stating in part as follows:

IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED that an award and judgment be entered in favor of City College, Inc. against Moore Sorrento, LLC in the amount of $845,871.08 in actual damages, and for City College, Inc. against Moore Sorrento, LLC for the expenses of arbitration in the amount of $37,282.06, ... [and] against Moore Sorrento, LLC for a reasonable attorney's fee, ... and an order for the benefit of the arbitration panel against Moore Sorrento, LLC that it pay arbitrators' fees to the date of this order in the amount of $12,000....

On December 20, 2007, the arbitrators issued a “Final Order, Including Award of Attorney's Fees” in which the arbitration panel (Panel) awarded Tenant $53,545 in attorney fees.

¶ 7 Tenant then filed a motion with the trial court to confirm both the arbitration and attorney fee awards. In response, Landlord requested vacation of the arbitration and attorney fee awards because (1) evident partiality existed on the part of one of the arbitrators on the Panel, (2) the Panel exceeded its powers, and (3) there was no enforceable arbitration agreement.

¶ 8 The trial court granted Tenant's motion to confirm and denied Landlord's motion to vacate the award.

¶ 9 Landlord appeals.

STANDARD OF REVIEW

¶ 10 We review de novo “[t]he question as to the existence of valid enforceable agreements to arbitrate.” Oklahoma Oncology & Hematology PC v. U.S. Oncology, Inc., 2007 OK 12, ¶ 19, 160 P.3d 936, 944; see also Hirsch Holdings, LLC v. Hannagan–Tobey, LLC, 2008 OK CIV APP 79, ¶ 12, 193 P.3d 970, 973. In reviewing an arbitrator's decision, the trial court must give the arbitrator great deference and “cannot review the merits of the award, including any of the factual or legal findings.” Fraternal Order of Police, Lodge 142 v. City of Perkins, 2006 OK CIV APP 122, ¶ 4, 146 P.3d 829, 830 (citing City of Yukon v. International Ass'n of Firefighters, Local 2055, 1990 OK 48, ¶ 8, 792 P.2d 1176, 1179). “Where there is a valid arbitration agreement, the courts will submit the dispute to arbitration; and where the arbitrator's award is within the submission and the authority established by the arbitration agreement, the courts will enforce the award.” Sooner Builders & Invs., Inc. v. Nolan Hatcher Constr. Servs., LLC, 2007 OK 50, ¶ 13, 164 P.3d 1063, 1068 (citing Voss v. City of Oklahoma City, 1980 OK 148, ¶ 6, 618 P.2d 925, 928).

ANALYSIS

I. Enforceability of the Arbitration Provision

¶ 11 Because this issue involves whether this case should have proceeded to arbitration, we will address it first. Landlord presses three reasons why the arbitration provision in the lease agreement should not be enforced: (1) there is no agreement that the arbitration provision is the mandatory means by which to resolve a dispute; (2) the Panel lacked jurisdiction to determine a forcible entry and detainer action; and (3) Tenant's failure to pay rent terminated the lease agreement thus terminating any arbitration requirement.

¶ 12 “To assure that the parties have consented to arbitration, the courts will decide whether there is a valid enforceable arbitration agreement, whether the parties are bound by the arbitration agreement, and whether the parties agreed to submit a particular dispute to arbitration.” Oklahoma Oncology, 2007 OK 12 at ¶ 22, 160 P.3d at 944–45. Courts will not require arbitration when the parties have not agreed to it because “ ‘arbitration is a matter of consent, not coercion.’ ” Farrell v. Concept Builders, Inc., 2008 OK CIV APP 34, ¶ 7, 208 P.3d 483, 485 (quoted citation omitted).

¶ 13 Oklahoma contract law applies in determining whether the parties have agreed to arbitrate. Rogers v. Dell Computer Corp., 2005 OK 51, ¶ 19, 138 P.3d 826, 831. “The courts will read the provisions of a contract in their entirety to give effect to the intention of the parties as ascertained from the four corners of the contract, and where the language is ambiguous, it will be interpreted in a fair and reasonable sense.” Oklahoma Oncology, 2007 OK 12 at ¶ 27, 160 P.3d at 946 (citation omitted). “The courts will decide, as a matter of law, whether a contract provision is ambiguous and interpret the contract provision as a matter of law, where the ambiguity can be cleared by reference to other provisions or where the ambiguity arises from the contract language and not from extrinsic facts.” Id. (citation omitted). We must interpret the contract to “carry out the intention of the parties at the time the contract was made.” Oxley v. General Atlantic Res., Inc., 1997 OK 46, ¶ 14, 936 P.2d 943, 945.

¶ 14 Landlord argues that because the lease agreement allows it the right to exercise other remedies, the arbitration provision is not mandatory.¹ The “other remedies” cited by Landlord are:

35. Landlord's Remedies. On the occurrence of any Default by Tenant, Landlord has the option to do any one or more of the following without any further notice or demand, in addition to and not in limitation of any other remedy permitted by Law, in equity, or by this Lease....The lease agreement then lists remedies under this paragraph including but not limited to allowing the landlord to apply the tenant's deposit against any amounts owed to it or to remedy a default, terminating the lease, or reletting the premises. The lease also provides: “The rights granted to or reserved by Landlord in this Lease are cumulative of every other right or remedy which Landlord might otherwise have at law or in equity and the exercise of one or more rights or remedies will not prejudice the concurrent or subsequent exercise of other rights or remedies.” ² Landlord argues that given these “cumulative remedies, the Lease does not give rise to a presumption that the parties agreed that arbitration would be mandatory.”

¶ 15 Tenant argues Landlord waived this issue because it never raised it before the Panel, raising it only after the award during the proceedings on attorney fees. In its final order, the Panel found that Landlord had waived this argument because it raised this issue for the first time “in opposition to an award of attorney's fees.” Even if we found in favor of Landlord on this issue, it is a distinction without a difference as more fully explained below.

¶ 16 Landlord next argues the arbitration panel lacked subject matter jurisdiction to determine the forcible entry and detainer action it filed on February 1, 2007. After Tenant failed to pay the January 2007 rent, Landlord served a “Notice to Quit” stating Tenant had ten days to pay $23,965 to cure its default or surrender possession of the premises. When it...