Kimberly Frye v. Cadillac, WD 71757.
| Citation | 321 S.W.3d 429 |
| Decision Date | 10 August 2010 |
| Docket Number | No. WD 71757.,WD 71757. |
| Parties | Kimberly FRYE, Respondent, v. SPEEDWAY CHEVROLET CADILLAC, et al., Appellants. |
| Court | Court of Appeal of Missouri (US) |
321 S.W.3d 429
Kimberly FRYE, Respondent,
v.
SPEEDWAY CHEVROLET CADILLAC, et al., Appellants.
Missouri Court of Appeals,Western District. Kimberly FRYE, Respondent,
v.
SPEEDWAY CHEVROLET CADILLAC, et al., Appellants. No. WD 71757. Aug. 10, 2010.
COPYRIGHT MATERIAL OMITTED.
COPYRIGHT MATERIAL OMITTED.
Kevin D. Case and David J. Roberts, Kansas City, MO, for appellants.
Charles K. Baldwin, Liberty, MO, for respondent.
Before Division One: JAMES M. SMART, JR., Presiding Judge, MARK PFEIFFER, Judge and CYNTHIA L. MARTIN, Judge.
CYNTHIA L. MARTIN, Judge.
Speedway Chevrolet Cadillac, Inc. (“Speedway”), Daniel F. Ladd (“Ladd”), the President of Speedway, and Brice Ackerman (“Ackerman”), the General Sales Manager of Speedway, (collectively the “Defendants”) appeal from the trial court's order denying Defendants' motion to compel arbitration of Kimberly Frye's employment related claims. The Defendants contend that a program adopted by Speedway after Kimberly Frye began employment with Speedway is a legally enforceable contract. We affirm the trial court's denial of Defendants' motion to compel arbitration.
In early May 2003, Kimberly Frye (“Kimberly”) 1 began employment with Speedway as a finance manager. On or about March 1, 2004, Speedway implemented a dispute resolution program (“Program”) effective as of that date. Speedway contends that Kimberly signed an acknowledgement agreeing to be bound by the Program. Kimberly denies signing the acknowledgement.
Speedway's Program described four options for resolution of employee disputes, beginning with in-house efforts to resolve issues and escalating to submission of disputes to mediation and/or binding arbitration. The Program defined covered claims broadly as “any legal or equitable claim, demand or controversy, in tort, in contract, under statutory or common law doctrines to include future statutory or common law doctrines that do not exist as of the date of this policy, or alleging violation of any legal obligation, between persons bound by the Plan.” Speedway contends the Program mutually bound Speedway and its employees to submit their disputes to resolution pursuant to the Program.
The Program stated that “after March 1, 2004, your decision to accept employment
or continue your current employment will mean that you have agreed to and are bound by the terms of the Program.... This will be true both during your employment and should you terminate, after your employment.” The Program advised that the “at-will” employment relationship between the Company and its employees was modified, but only to the extent expressly stated in the Program. The Program expressly noted that “employees of the Company may still quit or be fired at any time for any reason, or for no reason.”
The Program permitted Speedway the unilateral right to modify the Program. The Program provided that “no amendment shall apply to a Dispute of which Sponsor had actual notice on the date of the amendment.”
In early December, 2004, Speedway terminated Kimberly's employment. 2 Kimberly filed claims with the Equal Employment Opportunity Commission and the Missouri Human Rights Commission asserting sex discrimination, hostile working environment, retaliation, and defamation. Following receipt of a right to sue letter, Kimberly timely filed a lawsuit on October 26, 2006, in the Circuit Court of Johnson County, Missouri. Kimberly alleged that the Defendants engaged in discrimination against her due to her sex in violation of the Missouri Human Rights Act and “comparable federal statutes,” that the Defendants created a sexually hostile work environment, that she was terminated in retaliation for her complaints regarding the Defendants' alleged discriminatory conduct, and that the Defendants made defamatory statements about her to third parties. 3
Though the Program provided that “[i]f legal action is instituted, the court will be requested to refer the matter to the Dispute Resolution Program for final resolution,” Speedway did not immediately respond to Kimberly's lawsuit with a motion to compel arbitration. Instead, on January 19, 2007, 4 the Defendants removed the case to the U.S. District Court for the Western District of Missouri since Kimberly's petition asserted claims seeking relief under federal law. Kimberly amended her petition to delete claims for relief under federal law. The case was remanded to the circuit court on March 15, 2007.
On April 12, 2007, each Defendant filed an answer. Although the answers raised numerous affirmative defenses, none of the answers asserted that Kimberly was obligated to arbitrate her claims pursuant to the Program. Speedway's answer asserted a counterclaim against Kimberly alleging fraud, breach of fiduciary duty, and
civil conspiracy. On April 20, 2007, Kimberly filed a reply to Speedway's counterclaim. On March 27, 2008, Kimberly propounded discovery on the Defendants. 5
On April 29, 2008, eighteen months after Kimberly's lawsuit was filed, the Defendants filed a joint motion to compel arbitration. Kimberly opposed the motion. Kimberly argued that Defendants had waived their right to seek enforcement of the Program; that the acknowledgment and agreement form the Defendants' claimed Kimberly had signed did not comport with section 435.460; 6 that the Program was an adhesive, illusory, and unconscionable contract; that the Program did not cover her claims against co-employees Ladd and Ackerman; and that the Program did not cover her claim of defamation.
On June 27, 2008, the trial court heard arguments regarding the Defendants' motion to compel arbitration. 7 Kimberly filed supplemental suggestions opposing the Defendants' motion to compel arbitration on July 17, 2008, relying on the analysis set forth in this court's June 30, 2008 opinion in Morrow v. Hallmark Cards, Inc., 273 S.W.3d 15 (Mo.App. W.D.2008).
On August 26, 2009, the trial court denied Defendants' motion to compel arbitration by a docket entry. On September 25, 2009, the Defendants requested that the trial court's docket entry be modified to denote that it was a “judgment.” On November 9, 2009, the trial court entered an Order Denying Motion to Compel Arbitration. 8 The order stated that “this formal, written order compl[ies] with the requirements of Mo.Rev.Stat. Section 435.440.1 and 9 U.S.C. Section 16(a)(1)(B).” 9
Defendants appeal. 10
When faced with a motion to compel arbitration, we must consider three factors. First, we must “determine whether a valid arbitration agreement exists.” Nitro Distrib., Inc. v. Dunn, 194 S.W.3d 339, 345 (Mo. banc 2006) (citations omitted). Second, if a valid arbitration agreement exists, we must determine “whether the specific dispute falls within the scope of the arbitration agreement.” Id. Third,
if a valid arbitration contract exists, and if the subject dispute is within the scope of the arbitration provision, then we must determine whether the arbitration agreement is subject to revocation under applicable contract principles. See Kansas City Urology, P.A. v. United Healthcare Servs., 261 S.W.3d 7, 11, 14 (Mo.App. W.D.2008). 11 “In making these determinations, [we] should apply the usual rules of state contract law and canons of contract interpretation.” Nitro Distrib., Inc., 194 S.W.3d at 345.
Appellate review of a trial court's denial of a motion to compel arbitration is de novo. Lawrence v. Beverly Manor, 273 S.W.3d 525, 527 (Mo. banc 2009). We also review de novo whether the right to insist on arbitration, if present, has been waived. MFA, Inc. v. HLW Builders, Inc., 303 S.W.3d 620, 625 (Mo.App. W.D.2010).
The trial court's order denying the Defendants' motion to compel arbitration does not specify the basis for the trial court's decision. We do not know, therefore, whether the trial court found there was no enforceable contract to arbitrate, whether the trial court found that there was an enforceable contract but that the claims asserted by the parties were in whole or in part beyond the scope of an enforceable contract to arbitrate, whether the trial court found that there was an enforceable contract to arbitrate but that the contract was subject to revocation because it was procedurally and substantively unconscionable, or whether the trial court found there was an enforceable contract to arbitrate but that the right to seek its enforcement had been waived. The absence of such guidance, however, is not critical to our review. Our primary focus is on whether the trial court's result is correct, not the route taken to reach it. City of Kansas City v. N.Y.-Kan. Bldg. Assocs., L.P., 96 S.W.3d 846, 853 (Mo.App. W.D.2002).
Speedway asserts four points on appeal. Each point begins with the statement that the trial court erred in denying Defendants' motion to compel arbitration because the parties entered into a valid and enforceable contract and Kimberly's claims fall within the scope of that contract. Following this common statement, each point then registers a specific argument in support of the general statement. First, Speedway contends that the Program is not illusory or unconscionable as Speedway reserved the right to make only prospective changes and as the mutual promises exchanged between Speedway and its employees were sufficient to provide consideration for the contract. Second, Speedway contends that it did not waive the right to compel arbitration. Third, Speedway contends that the Program covers Kimberly's claims against co-employees Ladd and Ackerman. Fourth, Speedway contends that the Program is subject to the Federal Arbitration Act and that the requirements of section 435.460 are not applicable. As point one and point two are dispositive of this appeal, we will focus our discussion accordingly and need not address the issues raised in Speedway's third or fourth points.
Speedway contends...
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