Hefele v. Catanzaro

• Decision Date: 14 April 1987
• Docket Number: No. 51407,51407
• Parties: John F. HEFELE, Jr., Plaintiff-Respondent, v. David CATANZARO, et al., Defendants-Appellants.
• Court: Missouri Court of Appeals

Page 475

727 S.W.2d 475

John F. HEFELE, Jr., Plaintiff-Respondent, v. David CATANZARO, et al., Defendants-Appellants.

No. 51407.

Missouri Court of Appeals,

Eastern District,

Division One.

April 14, 1987.

Norman William Pressman, Clayton, for defendants-appellants.

Richard C. Bresnahan, Clayton, for plaintiff-respondent.

KELLY, Judge.

David Catanzaro appeals from the judgment of the trial court denying his motion to stay pending arbitration or, alternatively, to dismiss a lawsuit for damages, an accounting and the appointment of a receiver filed by respondent John F. Hefele, Jr., against appellant and The Southwest Partnership which is not a party to this appeal. The denial of appellant's motion to compel arbitration is a final appealable order. § 435.440.1(1) RSMo 1986. The judgment is affirmed.

Appellant premised his motion to dismiss the lawsuit or, alternatively, to stay it pending arbitration on the grounds that the parties had entered into a partnership agreement providing for mandatory arbitration of "any controversy or claim arising out of or relating to this contract, or the breach thereof." The arbitration clause was set forth in paragraph thirteen in the H V Investment Company General Partnership Agreement of December 1, 1977, which was attached as an exhibit to the petition when the lawsuit was filed in September 1985.

Paragraph thirteen of the HV Investment Company General Partnership Agreement ("Partnership General Agreement"), entitled "Arbitration", provides:

Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration in accordance with the rules, then obtaining, of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having jurisdiction thereof.

The issue raised by appellant is whether the trial court erred both in failing to sustain the motion to dismiss the lawsuit or to stay proceedings pending arbitration and also in appointing a receiver where the parties to the lawsuit had agreed in the earlier contract under paragraph thirteen that all controversies or claims arising out of the contract should be arbitrated.

The Uniform Arbitration Act, §§ 435.350--435.470 RSMo 1986, enacted by the Missouri legislature in 1980 specifically provides that the Act applies only to agreements made subsequent to August 13, 1980, the effective date of the Act. § 435.445 RSMo 1986. Although the original partnership agreement containing the provision for the settlement by arbitration of any controversy arising under the contract was entered into December 1, 1977, subsequent amendments to the original agreement were made as late as December 2, 1983, to reflect the purchase by new parties of the financial interests held by the original partners. The original agreement, as amended, was expressly ratified and confirmed in all respects by the new parties in the amendment of December 1983. Therefore, the subsequent amendment brings the original agreement, as amended, within the scope of the Act without violating § 435.445 RSMo 1986, the provision barring retrospective application of the Act.

Close scrutiny of the original contract with the arbitration clause, as well as its later amendment, reveals that the contract does not meet all the requisites prescribed under the Act. The Act 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." § 435.460. There is no similar provision in the Uniform Arbitration Act §§ 1-25 (1955), 7 U.L.A. 1-229 (1985), from which the Missouri Act is modelled. Without this...