Parks v. Mbna America Bank
| Decision Date | 03 October 2006 |
| Docket Number | No. WD 65691.,No. WD 65646.,WD 65646.,WD 65691. |
| Citation | 204 S.W.3d 305 |
| Parties | Gary T. PARKS and Gladys F. Parks, Appellant-Respondents, v. MBNA AMERICA BANK, Respondent-Appellants. |
| Court | Missouri Court of Appeals |
David E. Herron, II, Kansas City, KS, for appellant-respondents.
Timothy M. Bosslet, St. Louis, MO, for respondent-appellant.
Before HAROLD L. LOWENSTEIN, P.J., PAUL M. SPINDEN, and THOMAS H. NEWTON, JJ.
Gary and Gladys Parks appeal a final judgment that confirmed two arbitration awards against them and denied their claim for attorney fees. MBNA America Bank, N.A. cross-appeals the denial of its motion to reform the settlement and release agreement. We affirm in part, reverse in part, and remand.
MBNA America Bank, N.A. (MBNA) is a national banking association that issues credit cards. MBNA issued two accounts to Mr. Parks and one to Mrs. Parks. Sometime around 2003, the Parks' accounts became delinquent because they were no longer able to pay those credit card bills and other debts. Each account was sent to arbitration and the arbitrator found in MBNA's favor. The break down of the arbitration awards is as follows:
Cardholder Award Amount Date
Gary $ 4,810.02 (hereinafter "Parks I") 01/07/2004
Gary $66,869.52 (hereinafter "Parks II") 06/30/2004
Gladys $ 4,408.54 (hereinafter "Parks III") 07/14/2004
On July 15, 2004, MBNA filed a Motion to Confirm the Parks I arbitration award as a judgment. On August 12, 2004, MBNA sent a dunning letter to collect on Parks II. In the middle of September 2004, the parties entered settlement negotiations. Mr. David Weimer of the Kansas City office of Kramer & Frank, P.C. represented MBNA. Mr. David Herron represented the Parks. Through a series of emails, Mr. Weimer and Mr. Herron agreed to a settle all claims for $3,500. The following are the pertinent segments of the emails:
September 15, 2004, Weimer to Herron:
Weimer states that his client has authorized him to "offer to settle all claims" upon payment of $3,900.
September 16, 2004, 9:05 a.m. Herron to Weimer:
Herron states, "I would like to make certain that both Gladys and Gary (h/w) are released from liability. . . ."
September 16, 2004, at 11:39 a.m. Weimer to Herron:
Weimer agrees to accept $3,900 as "settlement in full" if received within 30 days and agrees to continue the pending hearing date past the anticipated date of payment; and Weimer agrees to release Herron's client's wife as well as Herron's client.
September 22, 2004. Weimer to Herron:
Weimer accepts the offer of $3,500.00 as "settlement in full . . . ."
On September 22, 2004, a "Settlement and Release Agreement" (Agreement) was signed by Mr. and Mrs. Parks and MBNA through David Weimer. The sections of the release significant in this case are as follows:
• The "Recitals" section on page 1 refers only to Case No. 04 N1 AC 00089 in the Circuit Court of Chariton County, Missouri.
• The "Release" paragraph on pages 1 and 2 states that each party releases the other from any and all manner of actions, known or unknown.
• The "Attorney fees" paragraph on page 2 provides for the recovery of attorneys' fees if one party has to bring suit against the other party to enforce the agreement.
• The "Authority" paragraph on page 3 states that each party "warrants and represents" that the person executing the release on behalf of the party is authorized to do so.
Per the terms of the agreement, MBNA voluntarily dismissed the pending motion to confirm the Parks I award against Mr. Parks with prejudice. Shortly thereafter, MBNA, through the law office of Kramer & Frank, continued to call and send letters to seek collection on Parks II and III. The Parks and Mr. Herron informed MBNA's attorneys that those claims were released in the settlement agreement executed September 22.
The Parks filed a petition to vacate the arbitration awards Parks II and III because MBNA and the Parks reached an agreement that all claims against the Parks were fully and finally satisfied. They also sought attorney fees as provided for in the Agreement.1 MBNA filed an answer and a counter-claim seeking to confirm as judgments Parks II and III. The counter-claim also sought to reform the release to be limited to Parks I only. The Parks were granted summary judgment by the trial court who reasoned that the release agreement covered Parks II and III. It denied summary judgment as to the Parks' request for attorney fees under a breach of contract claim and set the matter for trial.
A bench trial was held in May 2005. Mr. Parks testified that he and his wife had defaulted on all three of their MBNA credit cards. He claimed, however, the release agreement excused them from paying the owed amounts. Mr. Weimer testified that he thought the release pertained only to Parks I when he signed it because he was unaware of the other two awards (Parks II and III), the agreement referenced Parks I as the case being settled, and Parks I is the only case he had the authority to settle. Mr. Herron testified that he never informed Mr. Weimer that Parks II and III existed. Subsequently, the trial court ruled that it lacked jurisdiction to vacate the arbitration awards of Parks II and III and set aside its summary judgment. Therefore, it confirmed Parks II and III, entered judgment against the Parks, and denied their request for attorney fees. It also denied MBNA's request to reform the release provision in the Agreement and entered judgment for the Parks. Both parties appeal.
The trial court heard this case without a jury. As such, the judgment will be upheld unless it is not based on substantial evidence, goes against the weight of the evidence, or is based on an erroneous declaration or application of the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). The evidence and all reasonable inferences will be "viewed in the light most favorable to the trial court's judgment, and all contrary evidence and inferences must be disregarded." Miller v. Gammon & Sons, Inc., 67 S.W.3d 613, 618 (Mo.App. W.D.2001).
In their first point on appeal, Mr. and Mrs. Parks argue that the trial court erroneously confirmed the arbitration awards of Parks II and III because MBNA did not prove the three elements necessary to entitle it to confirmation. Specifically, MBNA did not establish that a written agreement to arbitrate existed between the parties; MBNA failed to show that the dispute between the parties fell within the scope of any such arbitration agreement; and MBNA did not present evidence as to the authenticity of the arbitrator's awards. MBNA responds that it did not need to satisfy the three elements because they only apply to proceedings to compel arbitration and not to those confirming arbitration awards. We agree with MBNA.
A motion to confirm an arbitration award is governed substantively by section 9 of the Federal Arbitration Act (FAA)2 and procedurally by the Missouri Uniform Arbitration Act (MUAA), sections 435.400 and 435.425.3 Edward D. Jones & Co. v. Schwartz, 969 S.W.2d 788, 793 (Mo.App. W.D.1998). Both the FAA and the MUAA are clear on the confirmation of an arbitration award. Contrary to what the Parkses argue, section 435.400 and 9 U.S.C. § 9, do not require the party moving to confirm the award to provide evidence that an agreement to arbitrate exists. The cases Mr. and Mrs. Parks rely on that state the existence of an agreement is required to arbitrate involve disputes about compelling or staying arbitration under section 435.355 and 9 U.S.C. § 4 (1999). There is no indication that MBNA asked the court to compel arbitration, as no evidence exists that the Parks objected to their debts being arbitrated after receiving notices to arbitrate from MBNA.
The only requirement of a party moving for confirmation is that he apply or move for it. 9 U.S.C. § 9; §§ 435.400 & 435.425. Upon application of a party to confirm the arbitration award as judgment, the court must confirm the award, unless the opposing party moves to vacate or modify the award. 9 U.S.C. § 9; § 435.400; see also Doyle v. Thomas, 109 S.W.3d 215, 218 (Mo.App. E.D.2003). In vacating or modifying an arbitration award, the trial court is limited to the grounds set forth in sections 435.405 and 435.410. Holman v. Trans World Airlines, Inc., 737 F.Supp. 527, 530 (E.D.Mo. 1989). "The party challenging the arbitration award has the burden of demonstrating its invalidity." Doyle, 109 S.W.3d at 218. Unless the party moving to vacate or modify prevails, the court must confirm the award. Id.
On October 1, 2004, the Parks filed a motion to vacate4 the Parks II and III arbitration awards, and on November 11 2004, MBNA filed a counter-motion seeking to confirm the awards. As the party challenging the arbitration awards, the Parks had the burden of demonstrating that the awards were not valid. Id. Although the petition alleged all four statutory grounds for vacating the awards, no evidence was adduced to support those allegations. Conclusory allegations are insufficient to establish the invalidity of an award. See Air Shield Remodelers, Inc. v. Biggs, 969 S.W.2d 315, 317 (Mo.App. E.D. 1998). Without the Parkses bringing forth any evidence that the grounds set forth in sections 435.405 and 435.410 have been violated, the trial court's decision that it lacked jurisdiction to vacate and had to confirm the award was based on substantial evidence and an accurate application of the law. Therefore, we affirm the trial court's decision to confirm the Parks II and III arbitration awards.
In their second and third points, the Parkses argue that the trial court erred in denying their breach of contract claim because MBNA's conduct breached the Agreement, and consequently, they incurred attorney fees in their attempt to...
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