Greenwood v. Sherfield

• Citation: 895 S.W.2d 169
• Decision Date: 08 February 1995
• Docket Number: No. 19458,19458
• Parties: Wayne GREENWOOD and Vicki Greenwood, Plaintiffs-Respondents, v. Wayne SHERFIELD and Sears, Roebuck and Company, Defendants-Appellants.
• Court: Court of Appeal of Missouri (US)

Page 169

895 S.W.2d 169

Wayne GREENWOOD and Vicki Greenwood, Plaintiffs-Respondents, v. Wayne SHERFIELD and Sears, Roebuck and Company, Defendants-Appellants.

No. 19458.

Missouri Court of Appeals,

Southern District,

Division One.

Feb. 8, 1995.

Motion for Rehearing or Transfer Denied March 3, 1995.

Application to Transfer Denied

April 25, 1995.

Dan L. Birdsong, Thomas, Birdsong & Clayton, Rolla, Paul E. Starkman, Arnstein & Lehr, Chicago, IL, for defendants-appellants.

David L. Steelman, Bryan D. Scheiderer, Steelman & Gaunt, Rolla, for plaintiffs-respondents.

SHRUM, Chief Judge.

This appeal presents the question of whether Plaintiffs' claim against Defendants for tortious interference with contract must be resolved by arbitration. The trial court answered the question negatively and overruled Defendants' motion to compel arbitration. ¹ Defendants appeal from that order. We affirm.

FACTS

Plaintiffs operated a Sears catalog store in Mexico, Missouri. They were independent merchants distributing catalog merchandise pursuant to a Sears Authorized Catalog Sales Agreement (the "Merchant Contract"), a contract between Plaintiffs and Sears. Such agreements normally had a two-year term ² and contained an arbitration clause which provided that "[a]ny controversy or claims arising out of or relating to this Agreement ... shall be submitted to arbitration." ³ Under the contract, Sears had both a right of first refusal if the merchant opted to sell, and the right to approve the prospective buyer if Sears did not exercise their right of first refusal.

In February 1992, Plaintiffs contracted to sell their business to David and Cindy Isaacson. In this contract (herein the "Isaacson Contract") was a provision that the proposed sale was contingent on the Isaacsons being approved by Sears as an authorized merchant.

With the Isaacson Contract signed, Plaintiffs notified Sherfield, district manager for Sears, of the existence of the contract. On April 6, 1992, Sears waived its right of first refusal for the sale of the business operated by Plaintiffs and allowed them to proceed with the sale. On April 23, 1992, Sherfield contacted the Isaacsons and told them that "he was morally obligated to tell [them] that there would be a dramatic change in the new merchant contracts." Sherfield's statement to the Isaacsons caused them to terminate the contract for the sale of Plaintiffs' business.

Plaintiffs then sued Sherfield and Sears for actual and punitive damages on the theory that Sherfield had maliciously and tortiously procured the breach of the Isaacson Contract. Their claim against Sears was grounded in respondeat superior principles and allegations.

Defendants filed a "Motion to Stay Proceedings and Compel Arbitration," alleging that Plaintiffs' tort claim against them should be subject to arbitration because of the arbitration provision of the Sears contract. The trial court found that "the cause of action set forth in Plaintiffs['] petition arises out of circumstances separate and apart from the merchant agreement" and overruled the motion. This appeal followed.

MOTION TO DISMISS APPEAL

By a separate motion to dismiss, Plaintiffs contend we lack jurisdiction to hear this appeal.

Plaintiffs' first argument in this regard is that because Defendants brought their Motion to Compel Arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. § 1 et seq. 1988 (FAA), and their Notice of Appeal cited the Missouri's Uniform Arbitration Act, § 435.440.1(1), RSMo 1986, we do not have jurisdiction. Without citation to authority, Plaintiffs insist that as Defendants' Motion to Stay Action and Compel Arbitration was not based on § 435.355, RSMo 1986, they may not appeal pursuant to § 435.440.1(1). ⁴ We disagree.

If Plaintiffs' claim is arbitrable at all, it appears that it would be pursuant to the Federal Arbitration Act. This because Defendants assert--and Plaintiffs do not affirmatively dispute--that the Merchant Contract is a part of Sears's system of distributing general catalog merchandise and is a contract "evidencing a transaction involving commerce" within the scope of the Federal Arbitration Act. ⁵ When arbitration is pursuant to the federal act but enforcement is sought in a Missouri court, the substantive law of the Federal Arbitration Act, 9 U.S.C. § 2, is to be given effect. McClellan v. Barrath Construction Co., Inc., 725 S.W.2d 656, 658 (Mo.App.1987). However, "the procedural provisions of the Federal Arbitration Act are not binding on state courts ..., provided applicable state procedures do not defeat the [substantive] rights granted by Congress." Id. See Bunge Corp. v. Perryville Feed & Produce, Inc., 685 S.W.2d 837, 839[3, 4] (Mo. banc 1985).

Accordingly, we may look to Missouri law to determine whether a litigant may appeal a trial court's order on an arbitration issue, provided we do nothing to thwart the substantive rights granted in the federal act. McClellan, 725 S.W.2d at 659 n. 7. The order being reviewed denied a motion to compel arbitration and is among the various orders designated as appealable, both under 9 U.S.C. § 16 and § 435.440.1(1), RSMo 1986. Brookfield R-III School District v. Tognascioli Gross Jarvis Kautz Architects, Inc., 845 S.W.2d 103, 104 (Mo.App.1993).

Missouri Rules of Civil Procedure 81.08(a) mandates a notice of appeal and that it "specify ... the judgment or order appealed from." Defendants' notice of appeal complied with that rule. It specified clearly that the appeal was from the "Order ... denying [Defendants'] Motion to Stay Action and Compel Arbitration." The formal allegations in a notice of appeal are to be liberally construed to permit appellate review so long as the opposing party has not been misled to his irreparable harm. Allison v. Sverdrup & Parcel and Associates, Inc., 738 S.W.2d 440, 443 (Mo.App.1987). Plaintiffs do not contend nor does the record reflect they were misled to their "irreparable harm" by any perceived deficiencies in the notice of appeal. Plaintiffs' contention that we are without jurisdiction because of alleged deficiency in the notice of appeal is rejected.

Plaintiffs next urge dismissal of Defendants' appeal because of noncompliance with § 435.460 of the Missouri's Uniform Arbitration Act. Section 435.460 specifically requires that any contract containing an arbitration agreement also contain a statement in ten-point capital letters: "THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES." Because the § 435.460 statement was not in the Merchant Contract, Plaintiffs contend that we lack jurisdiction over this appeal, citing Hefele v. Catanzaro, 727 S.W.2d 475, 477 (Mo.App.1987), as supporting authority.

Plaintiffs' reliance on Hefele is misplaced. The arbitration agreement in Hefele was within the coverage of Missouri's Uniform Arbitration Act, not the federal arbitration act. The requirements of § 435.460 cannot be applied to defeat the arbitration provision of a contract that is within the coverage of the federal statute. Bunge Corp., 685 S.W.2d at 839; McCarney v. Nearing, Staats, Prelogar and Jones, 866 S.W.2d 881, 888 (Mo.App.1993); Brookfield R-III School District, 845 S.W.2d at 105.

Finally, Plaintiffs contend that we lack jurisdiction as the trial court's order that denied Defendants' "Motion to Stay Proceeding and Compel Arbitration" was not a final appealable order or judgment as provided in § 512.020, RSMo 1986. They argue that finality is a prerequisite to appellate jurisdiction, and an order is not "final" unless it disposes of all parties, explicitly disposes of all issues, and disposes of all issues on the merits, citing Hill v. Boles, 583 S.W.2d 141, 148 (Mo. banc 1979); Maurer v. Clark, 727 S.W.2d 210, 211 (Mo.App.1987); Chura v. Bank of Bourbon, 674 S.W.2d 675, 678 (Mo.App.1984).

A sufficient answer to this argument is found in Madden v. Ellspermann, 813 S.W.2d 51 (Mo.App.1991).

"There is a conflict between § 435.440 and § 512.020 because the former allows an appeal from an order which does not constitute a final judgment while the latter requires a final judgment before an appeal is allowed. When there is a conflict between two statutes, one of which deals with a subject in a general way and the second treats a part of the same subject in a more detailed way, the specific statute will govern.... Section 512.020 deals with appeals in a general way but § 435.440 deals specifically with an appeal from an order denying an application to compel arbitration. In that instance the special statute allowing an appeal from an order denying arbitration will prevail and the order denying arbitration in this case is appealable."

Id. at 53[1, 2] (citation omitted).

On the authority of Madden, we reject Plaintiffs' claim that the trial court's order had to comply with all the requirements of § 512.020 to be an appealable order.

Having considered and rejected Plaintiffs' three challenges to our jurisdiction, we deny Plaintiffs' motion to dismiss appeal.

SCOPE OF THE ARBITRATION CLAUSE

Plaintiffs' suit charges that Sherfield tortiously interfered with the Isaacson Contract. ⁶ The issue presented by this case is whether Plaintiffs' tort claim constitutes an arbitrable issue within the meaning of the "broad" arbitration clause contained in the Merchant Contract. ⁷ That question appears to be a matter of first impression for a Missouri appellate court.

A summary of general arbitration principles places Defendants' motion to arbitrate in the proper context.

There exists a public policy of actively enforcing private arbitration agreements under both the Federal and Missouri arbitration acts so that disputes might be resolved without resort to the courts. McCarney, 866 S.W.2d at 887; Village of Cairo v. Bodine Contracting Co., 685 S.W.2d 253, 258 (Mo.App.1985). Although arbitration statutes are interpreted liberally, Village of Cairo, 685 S.W.2d at 258, and doubts are resolved in favor of...