Lancaster v. West

• Decision Date: 23 January 1995
• Docket Number: No. 94-693,94-693
• Parties: Wanda LANCASTER, Appellant, v. Debbie J. WEST and the Conway Board of Realtors, Appellees.
• Court: Arkansas Supreme Court

Page 357

891 S.W.2d 357

319 Ark. 293

Wanda LANCASTER, Appellant, v. Debbie J. WEST and the Conway Board of Realtors, Appellees.

No. 94-693.

Supreme Court of Arkansas.

Jan. 23, 1995.

Ed Bethune, Russell L. Hunt, Searcy, for appellant.

Robert W. Henry, Conway, for appellees.

HOLT, Chief Justice.

This is an appeal from a decision by the Faulkner County Chancery Court finding no grounds to set aside an award to appellee Debbie J. West by the Arbitration Panel of appellee Conway Board of Realtors.

The appellant, Wanda Lancaster, raises four points for reversal, contending (1) that the controversy at issue was an employer-employee dispute and therefore not subject to the provisions of the Uniform Arbitration Act and that the trial court erred in finding that she had waived her right to object to arbitration by appearing at the hearing; (2) that the arbitration agreement of the Conway Board of Realtors requiring realtors to submit to mandatory arbitration does not apply to disputants who were members of the same realty firm and that the trial court erred in finding that she had waived her right to refuse arbitration by appearing at the hearing; (3) that, even if she were subject to arbitration, it was not established that she received sufficient notice and that the trial court erred in finding that she had waived notice by appearing at the hearing; (4) that she was deprived of a valuable property right without due process and by undue means in violation of the written agreement and Ark.Code Ann. § 16-108-212 (1987) because the arbitrators were not impartial, the notices given were insufficient and confusing, and she had no right to counsel or to call witnesses.

None of these arguments has merit, and we affirm the decision of the chancery court.

Facts

Both Ms. Lancaster and Ms. West are licensed realtors. From January 25, 1991, until July 20, 1991, Ms. West, doing business as Classic Realty Company of Conway, employed Ms. Lancaster as a sales associate for Classic Realty. Before and after her employment with Classic Realty, Ms. Lancaster was a self-employed real estate broker. Both Ms. Lancaster and Ms. West had been members of the Conway Board of Realtors for some years prior to 1991.

On July 10, 1991, while employed by Ms. West, Ms. Lancaster secured an offer and acceptance executed by the buyers and the seller for the sale of a farm in Faulkner County. Ten days later, on July 20, 1991, she quit her position as sales associate with Classic Realty. Subsequently, on July 22, 1991, Ms. Lancaster procured a cancellation of the July 10 offer-and-acceptance contract by having the seller write "Void" on the instrument. On the same day, Ms. Lancaster arranged for the execution of a new offer-and-acceptance contract between the buyers and the seller for the purchase of the same farm. Ms. Lancaster refused to pay Ms. West her share of the commission on the sale.

Ms. West then filed a request for arbitration with the Grievance Committee of the Conway Board of Realtors on July 27, 1991. The committee determined that there was probable cause for a hearing, which the board scheduled for August 22, 1991. Ms. Lancaster received notice on July 29, 1991, and filed a reply and a letter to "Grievance Committee Members" on August 1, 1991.

Ms. Joyce Hall, the chair of the Arbitration Board, received three telephone calls from Ms. Lancaster prior to the hearing. In the first, on August 5, 1991, Ms. Lancaster requested that the hearing be held as soon as possible and that she be notified of the date. Ms. Lancaster phoned a second time to ask that the hearing be conducted as soon as possible. Then, on August 20, 1991, Ms. Lancaster phoned Ms. Hall a third time and notified her that she would be unable to appear at the hearing set for August 22 because she had to attend a funeral that day. With Ms. Lancaster's consent, the hearing was rescheduled for August 23, 1991, and a notice was sent dated August 22, 1991.

Ms. Lancaster appeared at the hearing on August 23, 1991. After receiving evidence and deliberating, the Arbitration Board unanimously awarded Ms. West $7,404.80, the amount she had sought from Ms. Lancaster. After Ms. Lancaster refused to pay the sum, Ms. West, on October 23, 1991, filed a petition in the Faulkner County Chancery Court to enforce the arbitration agreement, pursuant to Ark.Code Ann. § 16-108-216 et seq. (1987). A hearing was held before the court on November 5, 1993.

In its opinion filed on February 3, 1994, the chancery court found that Ms. West was entitled to the amount set forth in the August 23, 1991 "award of arbitrators." The court noted that Ms. Lancaster had argued that the arbitration panel's action was not binding on her under Ark.Code Ann. § 16-108-201 because she was Ms. West's employee at the time the dispute arose. Yet, the court observed, "[e]ven assuming without deciding that this contention has merit, it appears that [Ms. Lancaster] waived it by agreeing to submit disputes to arbitration and actively participating in this particular arbitration panel's hearing without ever raising any objections and specifically no objections on this point."

The formal decree was entered on March 7, 1994. From that decision, this appeal arises.

I. Applicability of Uniform Arbitration Act

In her first point for reversal, Ms. Lancaster makes two related arguments. She contends that the chancery court erred in failing to find that the Uniform Arbitration Act was inapplicable under Ark.Code Ann. § 16-108-201 (1987) because the dispute was between employer and employee and, further, that the court erred in finding that Ms. Lancaster had waived her right to object to the Conway Board of Realtors' power to conduct an arbitration hearing by making an appearance.

The crucial question in this appeal concerns the applicability of the Uniform Arbitration Act. It is jurisdictional in character and must be resolved before other matters may be treated.

Although it was subsequently amended in 1993, the governing statutory provision concerning application of the Uniform Arbitration Act in 1991 read as follows:

A written agreement to submit any existing controversy to arbitration or a written provision to submit any controversy thereafter arising between the parties bound by the terms of the writing is valid, enforceable, and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract; provided, that this chapter shall have no application to personal injury or tort matters, employer-employee disputes, nor to any insured or beneficiary under any insurance policy or annuity contract.

Ark.Code Ann. § 16-108-201 (1987). ¹ (Emphasis added.)

This court, citing the same statutory section, specifically held in Jim Halsey Co. v. Bonar, 284 Ark. 461, 683 S.W.2d 898 (1985), that questions in the law of torts are not subject to written agreements to arbitrate. By the same token, employer-employee disputes, whether existing or prospective, were not, under § 16-108-201, subject to written agreements to arbitrate in 1991.

Two offer-and-acceptance contracts are at issue here, and the question of employer-employee status is directly related to the question of which is the operative instrument giving rise to the controversy. The first, subsequently voided contract of July 10, 1991, was executed during the term of Ms. Lancaster's employment by Ms. West. According to Ms. Lancaster, Ms. West's cause of action is necessarily dependent upon that first document, which was executed when Ms. Lancaster was in Ms. West's employ, and it is of no moment that a second offer-and-acceptance contract was executed later.

The second contract, dated July 22, 1991, was executed after Ms. Lancaster had severed her relationship with Classic Realty. Contrary to Ms. Lancaster's position, the sale was consummated only through that instrument, and payment of commission was due only at that point. Consequently, Ms. West's cause of action (or, more precisely, grounds for complaint to the Arbitration Board) did not ripen until the second offer-and-acceptance contract had been executed and the realtor's...