Ellington v. Napleton's Mid-Rivers Motors, ED 106338
| Citation | 560 S.W.3d 72 |
| Decision Date | 02 October 2018 |
| Docket Number | No. ED 106338,ED 106338 |
| Parties | Corey ELLINGTON, Respondent, v. Napleton’s Mid-Rivers MOTORS, et al., Appellants. |
| Court | Court of Appeal of Missouri (US) |
FOR APPELLANT: James R. Holland II, Samantha J. Monsees, 4900 Main Street, Suite 650, Kansas City, MO 64112.
For Respondent: Brandy D. Barth, 555 Washington Ave., Suite 420, St. Louis, MO 63101.
Defendants Napleton's Mid-Rivers Motors, Inc. d/b/a Napleton's Mid-Rivers Chrysler Dodge Jeep Ram, Ted Hantek, Frank Shaffer and Tim Dodson (collectively, "Defendants") appeal from the trial court's denial of their motion seeking to compel arbitration in a lawsuit filed by plaintiff Corey Ellington ("Plaintiff") against Defendants for an alleged violation of Missouri's service letter statute, Section 290.140, et seq. We reverse and remand.
I. Background
Plaintiff was employed by Defendant Napleton's Mid-Rivers Motors, Inc. d/b/a Napleton's Mid-Rivers Chrysler Dodge Jeep Ram ("Napleton's") from October 6, 2014, to August 4, 2016. On October 6, 2014, the beginning of Plaintiff's employment, Plaintiff and Napleton Mid Rivers Imports, Inc. d/b/a Napleton's Mid Rivers Kia ("Napleton Kia") entered into a Mutual Agreement to Arbitrate Employment Claims ("Arbitration Agreement"). Napleton Kia and Napleton's are affiliates of the Napleton Automotive Group.
The Arbitration Agreement states, in pertinent part:
Any controversy, claim or dispute between Employee and Dealership (including, any present or former employee, agent, officer, director, parent, subsidiary, affiliate, successor, or assign of Napleton ), arising out of Employee's employment or termination of employment, must be resolved only through binding arbitration. This includes, but is not limited to, any claims or violations arising under.... federal, state, or local statutes or ordinances , and/or any claim of unjust or tortious discharge or any claim of fraud, negligence, personal injury, or intentional or negligent infliction of emotional distress as to which [Plaintiff] otherwise would have the right to pursue litigation including the right to a trial by jury .
(emphasis added).
The Arbitration Agreement also states, "[t]his Agreement to arbitrate disputes survives the termination of Employee's employment with Napleton ." (emphasis added). It expressly covers "[a]ny controversy, claim or dispute between [Plaintiff] and [Napleton Kia] as well as its affiliate[s], (which would include Napleton's)" "arising out of [Plaintiff's] employment or termination of employment." Additionally, just above Plaintiff's signature on the Arbitration Agreement is the following in bold, capitalized letters: "THIS CONTRACT CONTAINS A BINDING ARBITRATION
PROVISION WHICH MAY BE ENFORCED BY THE PARTIES WHICH I HAVE READ, UNDERSTAND AND AGREE ."
After Plaintiff was terminated on August 4, 2016, he requested in writing a Missouri service letter, by letter sent certified U.S. Mail and via email, dated September 12, 2016. He referenced the Missouri service letter statute, Section 290.140, RSMo. The letter was delivered and signed for by Defendant Shaffer on September 15, 2016. Defendant failed to respond to Plaintiff's service letter within the 45 days as required by the Missouri service letter statute until May 23, 2017, more than eight months after the service letter was received.
On or around November 8, 2016, Plaintiff filed a Charge of Discrimination with the Missouri Commission on Human Rights ("MCHR") and the Equal Employment Opportunity Commission ("EEOC") alleging discrimination on the basis of his race and retaliation against Defendants Napleton Mid-Rivers Chrysler Dodge Jeep Ram, Napleton Mid-Rivers Kia, Napleton Mid-Rivers Honda, Frank Shaffer, Ted Hantek, and Tim Dodson. On August 25, 2017, Plaintiff filed his Petition for Damages in the Circuit Court of St. Charles County, alleging race discrimination and retaliation in violation of the Missouri Human Rights Act ("MHRA") (Counts I and II) and violation of Missouri's service letter statute, Section 290.140, et seq. (Count III)1 , arising from his employment with Napleton's and the alleged discrimination by two former employees of Napleton's Mid Rivers Imports, Defendants Hantek and Dodson.
Defendants moved to dismiss this action, or, in the alternative, to stay proceedings and compel arbitration based on the terms of the Arbitration Agreement. Plaintiff filed his opposition to Defendants' motion, arguing that the Arbitration Agreement lacks consideration and mutuality of obligation, and is unconscionable. Regarding the service letter statute claim, Plaintiff asserted:
The arbitration agreement ended when Plaintiff was no longer employed. The violation of the service letter statute is not arbitrable under the Disputed Agreement. Therefore, if arbitration is compelled, this case will be litigated in piece-meal fashion, which is not preferred.
In Defendants' reply, they stated that the plain language of the Arbitration Agreement establishes that the Arbitration Agreement survives Plaintiff's termination and that Plaintiff's service letter claim falls squarely within the scope of the claims covered by the Arbitration Agreement, in that the Arbitration Agreement includes any controversy, claim, or dispute between Plaintiff and Napleton's "arising out of Employee's employment, or termination of employment."
On January 18, 2018, the trial court entered an order granting Defendant's Motion to Compel as to Counts I and II and denying Defendant's Motion to Compel regarding the service letter statute claim in Count III. The trial court found that the "arbitration Provision is not unconscionable and that the cause of action in Counts I and II fall within the scope of the Arbitration Agreement." In denying the motion to compel arbitration regarding the service letter statute claim, the trial court also found that Count III of Plaintiff's Petition
This appeal follows.2
I. Discussion
In their sole point on appeal, Defendants allege the trial court erred in denying Defendants' motion to dismiss, or, in the alternative, to stay proceedings and compel arbitration as to Count III because Plaintiff's service letter claim falls within the scope of the Arbitration Agreement in that it is a claim arising out of Plaintiff's termination from employment based upon an alleged violation of a state statute and because the Arbitration Agreement survives the termination of Plaintiff's employment. In response, Plaintiff claims the trial court's judgment denying Defendants' motion to compel arbitration must be affirmed because the disputed arbitration agreement is not a valid and enforceable contract as to a claim that Defendants committed certain acts after the termination of the employment relationship. We agree with Defendants.
Initially, we note that both the United States Congress and the Missouri General Assembly have enacted arbitration legislation. Edward D. Jones & Co. v. Schwartz, 969 S.W.2d 788, 793 (Mo. App. W.D. 1998). The Federal Arbitration Act ("FAA") is found at 9 U.S.C. § 1, et seq. (1970), and the Missouri Arbitration Act ("Missouri Act") appears at § 435.350 et seq. Both express the liberal policy of enforcing arbitration agreements as a matter of law "to further the important public policy of resolving disputes without resort to the courts." Schwartz, 969 S.W.2d at 793 ; Dunn Indus. Group, Inc. v. City of Sugar Creek, 112 S.W.3d 421, 427 (Mo. banc 2003). Whereas arbitration is an alternative to litigation, judicial oversight of arbitration is narrow and strictly limited. CPK/Kupper Parker Communications, Inc. v. HGL/L. Gail Hart, 51 S.W.3d 881, 883 (Mo. App. E.D. 2001) ; Western Waterproofing Co., Inc. v. Lindenwood Colleges, 662 S.W.2d 288, 291 (Mo. App. E.D. 1983). Both the federal and state acts also express that a written agreement to submit a present or future dispute to arbitration is valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract. McIntosh v. Tenet Health Sys. Hosp., Inc., 48 S.W.3d 85, 89 (Mo. App. E.D. 2001). It is a firmly established principle that parties can be compelled to arbitrate against their will only pursuant to an agreement whereby they have agreed to arbitrate claims. Morrow v. Hallmark Cards, Inc., 273 S.W.3d 15, 21 (Mo. App. W.D. 2008).
As a general rule, an arbitration clause contained in a contract is enforceable under the FAA, which preempts any contrary Missouri statute. Sturgeon v. Allied Prof'ls Ins. Co., 344 S.W.3d 205, 212 (Mo. App. E.D. 2011). Under conventional application of the supremacy clause and rules of statutory construction, the FAA, a federal statute, preempts the Missouri Act, a state statute, insofar as it contravenes the FAA. See id. Thus, under the supremacy clause, we are obliged to apply federal law when reviewing an action under the FAA. Boogher v. Stifel Nicolaus & Co., Inc., 825 S.W.2d 27, 29 (Mo. App. E.D. 1992). Although the FAA creates substantive rights to be enforced in state courts, our courts are not bound by the procedural provisions of the FAA and state procedural rules may be applied when arbitration is pursuant to the FAA. Duggan v. Zip Mail Services, Inc., 920 S.W.2d 200 (Mo. App. E.D. 1996). The FAA provides:
If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement....
9 U.S.C. § 3. Section 4 of the FAA also empowers the...
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