Perfectstop Partners, L.P. v. U.S. Bank, WD 66865.
| Decision Date | 26 June 2007 |
| Docket Number | No. WD 66865.,No. WD 66867.,WD 66865.,WD 66867. |
| Citation | 231 S.W.3d 260 |
| Parties | PERFECTSTOP PARTNERS, L.P., et al., Respondents, v. U.S. BANK, Multi Service Corporation and Mark O'Connell, et al., Appellants. |
| Court | Missouri Court of Appeals |
Mark S. Carder, James R. Wyrsch, Co-Counsel, Kansas City, MO, for appellants U.S. Bank and Criswell.
J. Michael Grier, James M. Warden, Co-Counsel, Jennifer E. Shafer, Co-Counsel, Overland Park, KS, for appellants Multi Service Corporation and O'Connell.
Edward D. Robertson, Jr., Jefferson City, MO, Brett T. Votava, Co-Counsel, James R. Bartimus, Co-Counsel, Leawood, KS, for respondents.
Before JAMES M. SMART, JR., Presiding Judge, JOSEPH M. ELLIS, Judge and EDWIN H. SMITH, Judge.
Appellants Multi Service Corporation ("Multi Service"), U.S. Bank National Association ("U.S.Bank"), Diane Criswell, and Mark O'Connell appeal from the trial court's orders on certain motions relating to a dispute with Respondents John J. Laughlin, PerfectStop, Inc. ("PerfectStop"), and PerfectStop Partners, L.P. ("PerfectStop Partners"). Specifically, Appellants assert that the trial court erred in (1) denying their motion to dismiss or, in the alternative, stay the Missouri litigation pending an arbitration in Texas; and (2) granting Respondents' motion to stay the Texas arbitration. For the following reasons, we reverse and remand with instructions.
In March 2004, Respondent PerfectStop Partners1 was formed in Texas. The purpose of PerfectStop Partners was to own, operate, and manage the continued development of an Internet-based system to be used in the aviation industry to track expenses and coordinate trip logistics (the "PerfectStop System"). Appellant Multi Service2 was a Missouri corporation that owned and operated a non-Internet-based service system in competition with the PerfectStop System. Sometime in 2004, Multi Service entered into negotiations with PerfectStop Partners, PerfectStop, and Laughlin to create a strategic partnership to combine Multi Service's customer base with PerfectStop's technology. Three documents resulted from these negotiations, including a preliminary letter of intent (the "LOI") and two formal agreements, which are the subject of this appeal. Several months after the agreements were executed, U.S. Bank purchased Multi Service's aviation business, including its interest in PerfectStop Partners.3
On November 17, 2004, PerfectStop Partners, PerfectStop, Laughlin, and Multi Service executed a Partnership Interest Purchase Agreement (the "PIPA") to formalize the terms of the LOI. In addition to setting forth certain terms and covenants between the parties to the agreement, the PIPA indicates that the limited partnership agreement of PerfectStop Partners will be amended to reflect certain terms of the PIPA. The PIPA has one paragraph addressing the procedures and law in the event of any disputes:
24. Governing Law. This Agreement, the rights and obligations of the parties hereto and their successors and assigns hereunder, shall be interpreted, construed, and enforced in accordance with the laws of the State of Missouri, excluding any conflict-of-laws rules or principle that might refer the governance or construction of this Agreement to the law of another jurisdiction. Any action brought by any party in relation to this Agreement shall be brought in a court of appropriate jurisdiction in Jackson County, Missouri.
The next day, PerfectStop, Multi Service, Laughlin and the other limited partners of PerfectStop Partners executed an amended limited partnership agreement (the "ALPA") concerning Perfect Stop Partners. In addition to setting forth the terms of the limited partnership in general, the ALPA refers to the rights and duties of Multi Service in numerous places and restates certain provisions of the PIPA. The ALPA has two separate paragraphs addressing the procedures and law in the event of disputes:
Section XI.1 Arbitration. Upon the request of any party, whether made before or after the institution of any legal proceeding, any action, dispute, claim, or controversy of any kind now existing or hereafter arising between the parties in any way arising out of or in connection with this Agreement shall be resolved by binding arbitration, administered by the American Arbitration Association ("AAA") in accordance with the terms of Exhibit B, the Commercial Arbitration Rules of the AAA (or other Rules of the AAA selected by the General Partner), and, to the maximum extent applicable, the Federal Arbitration Act.
Section XI.6 Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Texas (excluding its conflicts of law rules).
A dispute subsequently arose, and Respondents filed suit against Appellants in Jackson County, Missouri, alleging seven causes of action and asserting jurisdiction under the "governing law" provision in the PIPA. Appellants U.S. Bank and Multi Service filed a formal demand for arbitration in Texas shortly thereafter, asserting that the claims in Respondents' petition are subject to arbitration and alleging additional claims against Respondents under the PIPA and the ALPA.
Appellants did not file an answer to the Missouri suit against them but, instead, filed a timely motion to dismiss or, in the alternative, stay the action pending the outcome of the Texas arbitration. They alleged that Respondents' claims against them ultimately arose from the ALPA and are subject to arbitration. They further alleged that Missouri law and the Federal Arbitration Act ("FAA") require that the Missouri action be dismissed or stayed. Respondents opposed the motion to dismiss or stay, arguing that their claims against Appellants arose solely from the PIPA and are not covered by the ALPA's arbitration provision but by the PIPA's forum selection clause. Respondents also filed a separate motion to stay the Texas arbitration pursuant to § 435.3554 of the Missouri Uniform Arbitration Act. The arguments by both sides are substantially the same regarding both motions, except that Appellants also challenged the trial court's jurisdiction in their response to the motion to stay the arbitration.
The trial court determined that no oral arguments were necessary on the motions. The court subsequently entered its order staying the Texas arbitration5 and refusing to dismiss or stay the Missouri action. This appeal follows.
Appellants assert four points of error. The first two points relate to the trial court's order granting Respondents' motion to stay the Texas arbitration. The third and fourth points relate to the court's order denying Appellant's motion to dismiss or stay the Missouri litigation pending the outcome of the Texas arbitration. Respondents challenge this Court's jurisdiction to review the latter two points, but they agree that we have jurisdiction over the first two points.
"`The right to appeal is purely statutory, and where a statute does not give a right to appeal, no right exists.'" Jackson County v. McClain Enters., Inc., 190 S.W.3d 633, 637 (Mo.App. W.D.2006) (). "Because our jurisdiction is predicated on that of the trial court, if the trial court lacked jurisdiction over this action, then any judgment entered thereon would be void, depriving us of jurisdiction except to reverse the judgment and remand the cause for dismissal by the trial court." Gov't e-Management Solutions, Inc. v. Am. Arbitration Ass'n, 142 S.W.3d 857, 860 (Mo.App. E.D.2004). "The question of the circuit court's jurisdiction is an issue of law and, thus, our review is de novo." State ex rel. Brantingham v. Grate, 205 S.W.3d 317, 319 (Mo.App. W.D. 2006) (citing McCoy v. Caldwell County, 145 S.W.3d 427, 428 (Mo. banc 2004)).
Missouri has adopted the Uniform Arbitration Act (the "UAA"), which is set forth in §§ 435.350 through 435.470. Respondents brought their motion to stay the Texas arbitration under § 435.355, which allows a party to file a motion to compel or to stay arbitration in the event that the parties disagree as to whether a dispute is subject to arbitration.6 Section 435.440 sets forth the orders from which immediate appeals are allowed. "An order granting an application to stay arbitration made under subsection 2 of section 435.355" is appealable under § 435.440.1(2).
Appellants assert in their first point that the trial court lacked jurisdiction to grant Respondents' motion to stay the arbitration under the UAA because the arbitration is located in another state. They rely primarily on this Court's decisions in H.T.I. Corp. v. Lida Manufacturing Co., 785 S.W.2d 110 (Mo.App. W.D. 1990), and Teltech, Inc. v. Teltech Communications, Inc., 115 S.W.3d 441 (Mo.App. W.D.2003).
In H.T.I., the parties entered into a sales contract containing an arbitration agreement calling for arbitration in New York City and governed by New York law. 785 S.W.2d at 111. A dispute arose, the respondent issued a demand for arbitration in New York City, and the appellant filed a motion in Cole County to stay the arbitration pursuant to the UAA. Id. The trial court dismissed the motion for lack of jurisdiction, and this Court affirmed the dismissal on appeal. Id. The appellant in H.T.I. argued, as do Respondents in the case at bar, that § 435.430 "does not deprive the Missouri courts of jurisdiction in deciding whether or not an agreement exists in the first place under the general principles of contract interpretation." Id. at 112. This Court rejected the appellant's contention, holding that jurisdiction under the UAA, and specifically to determine the validity of an arbitration clause, "arises out of the jurisdictional mandate of § 435.430." Id.
In coming to this conclusion, we examined the text...
To continue reading
Request your trial