Lunsford v. Deatherage
| Decision Date | 10 May 2017 |
| Docket Number | No. SD 34525,SD 34525 |
| Citation | 518 S.W.3d 890 |
| Parties | Norine LUNSFORD, Plaintiff–Respondent, v. Joshua DEATHERAGE, and Joshua Deatherage Builders, LLC, Defendants–Appellants. |
| Court | Missouri Court of Appeals |
Attorney for Appellants—Steven Privette of Willow Springs, MO
Attorneys for Respondent—Britton D. Jobe, Ryan D. Frazier of Springfield MO
Appellants, Joshua Deatherage Builders, LLC ("Contractor") and Joshua Deatherage, challenge an order1 denying their motion to stay the November 2015 lawsuit filed by Norine Lunsford ("Homeowner") and compel the parties to resolve the dispute via arbitration. See section 435.440.1(1). Count 1 of Homeowner's petition alleges that Contractor breached the parties' "CONSTRUCTION CONTRACT" ("the contract") to build an addition to Homeowner's house in Mountain Grove. Count 2 claims that Appellants' negligent performance of construction services caused "severe financial damages to [Homeowner]."
Appellants' point on appeal claims the trial court erred in denying arbitration because "the issues in dispute fall within the scope of the arbitration agreement included in [the contract]." Because the contract permitted Contractor to elect arbitration of claims brought by either party, we reverse the decision of the trial court to deny Appellants' motion to stay as to Contractor, and we remand the case for further proceedings consistent with this opinion.
We review de novo the denial of a motion to compel arbitration. Nitro Distrib., Inc. v. Dunn , 194 S.W.3d 339, 345 (Mo. banc 2006). "Missouri contract law applies to determine whether the parties have entered a valid agreement to arbitrate." State ex rel. Vincent v. Schneider , 194 S.W.3d 853, 856 (Mo. banc 2006) ; see also Eaton v. CMH Homes, Inc. , 461 S.W.3d 426, 431–32 (Mo. banc 2015).
Homeowner's Count 2 claim for negligence avers, inter alia , that Appellants acted "[i]n furtherance of the [contract]" by performing "certain construction services for [Homeowner] concerning a residential home addition[,]" but Appellants were "careless and negligent in providing construction and related services to [Homeowner.]" Homeowner invoked the contract as providing Appellants' "duty to ensure that the terms and specifications of the [contract] were carried out with the highest professional skill and knowledge, and in a satisfactory and workmanlike manner." Homeowner's petition incorporated Exhibit A as a purported copy of the contract.
Appellants responded to Homeowner's petition by filing an "ELECTION TO REQUIRE BINDING ARBITRATION " and a "MOTION TO STAY PROCEEDINGS PURSUANT TO ARBITRATION CLAUSE IN CONTRACT " ("the stay motion"). The stay motion also relied on Homeowner's Exhibit A as a correct copy of the contract, and each party relies on its content in their briefs. As a result, we presume the exhibit is a true and accurate copy of the contract. Cf. Briar Road, L.L.C. v. Lezah Stenger Homes, Inc. , 321 S.W.3d 488, 493 (Mo. App. S.D. 2010) ().
The contract is primarily preprinted, but it contains various blanks designed to receive additional information. For instance, Contractor is identified in the preprinted text as the contractor, while Homeowner is identified using hand-written text in the "Client" blank. The contract provides a blank for a signature by Homeowner as the client, and a blank for a signature by Contractor's "Authorized Agent" on behalf of Contractor.2
Preprinted Section 1 of the contract, labeled "SCOPE OF WORK" references the hand-written item, (Capitalization adjusted.) Preprinted terms in this section further describe when and how Homeowner must communicate with Contractor about nonconforming work.
Preprinted Section 6 of the contract, labeled "LITIGATION, ATTORNEY'S FEES AND COSTS [,]" states:
In the event of a breach by either party to this Contract and in the event it shall be necessary for the non-breaching party to retain an attorney or commence legal proceedings in order to enforce the terms of this contract, the breaching party shall be responsible to pay all reasonable attorney's fees and expenses as are actually incurred to enforce this contract. In the event of any claim be [sic] either party, Contractor shall have the option to require binding arbitration to be conducted by a [sic] appropriate and authorized arbitration entity.3
The parties filed written suggestions in support of and in opposition to the stay motion. After the trial court entered a docket entry denying the stay motion, Appellants filed a "MOTION FOR RECONSIDERATION OF [APPELLANTS'] MOTION TO STAY PROCEEDINGS PURSUANT TO ARBITRATION CLAUSE IN CONTRACT " ("the reconsideration motion") that claimed Homeowner had not met her "burden of proof" to exclude her claims from arbitration. Homeowner filed suggestions in opposition to the reconsideration motion, a hearing was held, and the trial court denied the reconsideration motion in a July 2016 docket entry. This appeal timely followed.4
In support of their point on appeal, Appellants argue that where the "agreement ... is silent as to who will conduct the arbitration, the Court will imply such terms" under section 435.360, which permits the appointment of an arbitrator, and Appellants insist the arbitration clause is broad enough to cover Count 2, which asserts negligence-based claims against both Contractor and Mr. Deatherage. Homeowner responds that the arbitration clause is invalid because it "is vague, ambiguous, illusory, and leaves for future determination the essential terms of the purported arbitration [clause.]" Homeowner further maintains that the "arbitration clause does not apply to [her] claim against [Mr.] Deatherage because [he] is not a party to the [contract]."5
"Under Missouri law, arbitration proceedings are favored and encouraged to further the public policy of dispute resolution without resort to the courts[,]" Riley v. Lucas Lofts Inv'rs, LLC , 412 S.W.3d 285, 290 (Mo. App. E.D. 2013), and an arbitration agreement that provides only one party the option of requiring arbitration is not automatically invalid if the agreement otherwise satisfies mutuality of contract. See Eaton , 461 S.W.3d at 434. Thus, even if "one party is more obligated than the other" to participate in arbitration, as long as both parties exchanged consideration for the contract, the agreement "will not be invalidated for lack of mutuality of obligation of the arbitration clause." Vincent , 194 S.W.3d at 859 (quotation omitted).
An arbitration "provision is treated like any other contract." State ex rel. Hewitt v. Kerr , 461 S.W.3d 798, 808 (Mo. banc 2015). "The guiding principle of contract interpretation under Missouri law is that a court will seek to ascertain the intent of the parties and to give effect to that intent." Triarch Indus., Inc. v. Crabtree , 158 S.W.3d 772, 776 (Mo. banc 2005). We presume that their intent is "expressed by the ordinary meaning of the contact's terms." Id.
"If the parties have reserved the essential terms of the contract for future determination, there can be no valid agreement." Gateway Exteriors, Inc. v. Suntide Homes, Inc. , 882 S.W.2d 275, 279 (Mo. App. E.D. 1994). But the reservation of some matters for future agreement does not automatically void a contract. See, e.g., Smith Moore & Co. v. J.L. Mason Realty & Inv., Inc. , 817 S.W.2d 530, 531, 532–33 (Mo. App. E.D. 1991) (); Allied Disposal, Inc. v. Bob's Home Service, Inc. , 595 S.W.2d 417, 421 (Mo. App. E.D. 1980) ().
"When an arbitration agreement is valid, but specific provisions are silent or unconscionable, the failure of the terms is remedied by implying the terms from statutes within the [UAA.]" Hewitt , 461 S.W.3d at 811 (); see also Vincent , 194 S.W.3d at 861 ().
We disagree with Contractor's assertion that the arbitration clause is "silent as to who will conduct the arbitration" as the phrase "to be conducted by a[n] appropriate and authorized arbitration entity"—even if read only in one's head and not aloud—strikes us as ten words beyond silence and constitutes an attempt to describe the intended qualities of the arbitrator to be chosen. But no other language in the contract suggests that the precise identity of the arbitrator is essential to any other term in the contract. "The essential terms of unperformed promises must be stated; details or particulars need not." Shellabarger v. Shellabarger , 317 S.W.3d 77, 82 (Mo. App. E.D. 2010) (internal quotations omitted).
Assuming, arguendo , that the arbitrator's precise identity is a matter the parties agreed to agree upon in the future, the arbitration clause does not thereby lose all meaning. Section 435.360 is not limited to remedying missing or unconscionable terms. It allows the court to appoint an arbitrator "if the agreed method fails or for any reason cannot be followed [.]" Section 435.360 (emphasis added). Therefore, simply because the selection of an "appropriate and authorized arbitration entity" by the parties to the contract might fail, the basic agreement to allow Contractor to elect arbitration to resolve...
To continue reading
Request your trial
-
Mackey v. Schooler's Constr., L. L.C.
... ... may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute." Lunsford v. Deatherage , 518 S.W.3d 890, 896 (Mo. App. 2017) (quoting Dunn Indus. Grp., Inc. v. City of Sugar Creek , 112 S.W.3d 421, 429 (Mo. banc 2003) ) ... ...
-
T&M Inventions LLC v. Bluescope Bldgs. N. Am., Inc.
...parties may reserve some matters for future agreement without automatically voiding the entire contract. Lunsford v. Deatherage, 518 S.W.3d 890, 895 (Mo. Ct. App. 2017). "The essential terms of unperformed promises must be stated; details or particulars need not." Shellabarger v. Shellabarg......