Stadlander v. Ryan's Family Steakhouses, Inc.

• Decision Date: 04 April 2001
• Docket Number: No. 34,384-CA.,34,384-CA.
• Citation: 794 So.2d 881
• Parties: Charles STADTLANDER and Christine Robinson, Plaintiff-Appellee, v. RYAN'S FAMILY STEAKHOUSES, INC., Defendant-Appellant.
• Court: Court of Appeal of Louisiana — District of US

Page 881

794 So.2d 881

Charles STADTLANDER and Christine Robinson, Plaintiff-Appellee, v. RYAN'S FAMILY STEAKHOUSES, INC., Defendant-Appellant.

No. 34,384-CA.

Court of Appeal of Louisiana, Second Circuit.

April 4, 2001.

Writ Denied June 22, 2001.

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Hailey, McNamara, Hall, Larmann & Papale by Frederic Theodore Le Clercq, Metarie, Darren A. Patin, Baton Rouge, Alayne R. Corcoran, Metarie, counsel for Defendant-Appellant.

Bodenheimer, Jopnes & Szwak, by David A. Szwak, Shreveport, Mary E. Winchell, Counsel for Plaintiff—Appellee.

Before NORRIS, STEWART, GASKINS, PEATROSS and KOSTELKA, JJ.

NORRIS, Chief Judge.

Ryan's Family Steakhouses, Inc. appeals the denial of their exception of no cause of action based on a binding arbitration agreement. We reverse.

Factual Background

Charles Stadtlander and Christine Robinson filed suit against their employer, Ryan's, alleging that they were forced to work without compensation when their supervisors clocked them out hours before they actually ended working.¹ Ryan's filed an exception of no cause of action based on a binding arbitration agreement Stadtlander and Robinson signed when they applied for work with Ryan's and an exception of improper cumulation of parties because there was no commonality of interests. On December 16, 1999, the trial court granted Ryan's exception of improper cumulation of parties, but apparently relying on equity in regards to Stadtlander,² denied its exception of no cause of action. The trial court also found that the arbitration agreement was between the employees and Employment Dispute Services, Inc. (EDSI), and as such Ryan's did not have standing to rely on the agreement.

With regard to Robinson's claim, Ryan's filed an application for supervisory writ challenging the denial of the exception of no cause of action. Ryan's initial writ was denied by this court on January 27, 2000 for an UCRA 4-3 violation. After various delays in the trial court, this court ultimately concluded on July 20, 2000 that the ruling denying the exception could lead to irreparable harm, and therefore was an appealable interlocutory judgment. This appeal followed.

Law and Analysis: Timeliness of the Appeal

As a threshold issue in response to Ryan's appeal, Robinson argues that this interlocutory appeal is untimely and should be dismissed. Specifically, she claims that Ryan's is seeking a writ application from a December 16, 1999 ruling,³ and, based on UCRA 4-3, the return date cannot exceed January 16, 2000, unless an extension of time is filed within the original or extended return date period. Ryan's writ (and this subsequent appeal), Robinson urges, is untimely because it was filed on June 15, 2000, six months after the original filing period for writ applications.

Appeals are favored in the law and should be maintained unless a legal ground for dismissal is clearly shown. Tucker v. Northeast Louisiana Tree Service, 27,768 (La.App.2d Cir.12/6/95), 665 So.2d 672, writ denied, 96-0063 (La.3/8/96), 669 So.2d 404; Reed v. Columbia/HCA Information Service, Inc., 99-1315 (La. App. 5th Cir.4/25/00), 761 So.2d 625; Mack v. Evans, 33,823 (La.App.2d Cir.4/7/00), 756 So.2d 1270. An appeal is not to be dismissed for a mere technicality. Tucker v. Northeast Louisiana Tree Service; supra; Reed v. Columbia/HCA Information Service, Inc., supra. Unless the ground urged for dismissal is free from doubt, the appeal should not be dismissed. Id.

By a ruling dated July 20, 2000, we found this case to be an appealable interlocutory judgment and remanded to the district court with directions to perfect an appeal within 30 days. The district court lodged the appeal with this court on August 2, 2000. Although the code of civil procedure delineates specific time lines for appeal from final judgments, La. C.C.P. art.2087, 2123, we find nothing in the code, and the plaintiffs fail to cite to anything which establishes a time frame to appeal an interlocutory judgment. We also note that interlocutory judgments may be amended at any time, see, e.g., Garner v. Carner, 97-128 (La.App. 3d Cir. 6/18/97), 698 So.2d 34. Moreover, a judgment refusing to order arbitration, if not immediately appealable, may constitute irreparable injury where the party seeking arbitration is subjected to a trial in a forum with no jurisdiction in the matter. La.C.C.P. art. 2983; Grote v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 96-551 (La.App. 3d Cir.11/6/96), 682 So.2d 926, 928; Rauscher Pierce, Refsnes, Inc. v. Flatt, 93-1672 (La.App. 4th Cir.2/11/94), 632 So.2d 807, 809. As such, considering the favored status of appeals in Louisiana law as well as the potential for irreparable injury, we decline to revisit our former ruling and find that this appeal is timely.

Propriety of Ryan's Exception of No Cause of Action

As a purely procedural matter, we note that although Ryan's filed an Exception of No Cause of Action, the district court took evidence and rendered its judgment on the merits purporting to interpret the arbitration agreement, although it was not directly mentioned in Robinson's petition. When ruling on an Exception of No Cause of Action, a court may only consider the four corners of the petition itself, and not extrinsic evidence; as such, the district court's judgment is inherently erroneous. La.C.C.P. art. 931. However, when evidence on an exception of no cause of action is presented and considered by the court without objection, as in this case, then both sides have consented to the consideration thereof and the pleadings are deemed expanded. Crosby v. Stinson, 33,6268 (La. App.2d Cir.8/23/00), 766 So.2d 615; Giles v. Cain, 99-1201 (La.App. 1st Cir. 6/23/00), 762 So.2d 734; Byers v. Edmondson, 97-0831 (La.App. 1st Cir. 5/15/98), 712 So.2d 681, 'writ denied, 98-1596 (La.10/9/98), 726 So.2d 29, cert. denied, Time Warner Enter. Co. v. Byers, 526 U.S. 1005, 119 S.Ct. 1143, 143 L.Ed.2d 210. (1999); Boykin v. Foster, 493 So.2d 731 (La.App. 2d Cir. 1986); Borden v. West Carroll Parish Police Jury, 28,967 (La.App.2d Cir.12/11/96), 685 So.2d 454.

In the instant case, although Ryan's introduced the arbitration agreement into evidence for the first time as part of its exception, Robinson, in response, specifically disputed the agreement's applicability⁴ and enforceability; at no time did Robinson object to the consideration of the agreement itself.⁵ In addition, Robinson's petition implicitly includes the agreement, for it facially states that she was employed by Ryan's, and that her causes of action arise from that employment; of which the arbitration agreement is an incident. As such, we find that Robinson's petition was expanded to include the arbitration agreement and testimony offered at the hearing on the exception.⁶

Arbitration Clause: Standing

When Robinson applied for her job with Ryan's, she signed a "Job Application Agreement to Arbitration of Employment Related Disputes." The trial court specifically found that the arbitration agreement was in fact between EDSI, an arbitrator, and Robinson, and as such, Ryan's did not have standing to raise the issue. It apparently based this ruling on the boldface clause which stated that:

This agreement is with EDSI, not with the Company, and is not, nor is it intended to be, an employment contract or any part of an employment contract. This agreement does not affect or alter My "at will" employment relationship with the Company.

Ryan's argues that although the agreement is between EDSI and Robinson, it is an enumerated third party beneficiary to the agreement and is therefore entitled to rely on it.

A contracting party may stipulate a benefit for a third person, who is called a third-party beneficiary. La. C.C. art.1978. Under Louisiana law, such a contract for the benefit of a third party is referred to as a stipulation pour autrui. Paul v. Louisiana State Employees' Group Benefit Program, 99-0897 (La.App. 1st Cir. 5/12/00), 762 So.2d 136. A stipulation pour autrui is never presumed. Id.; Hulot v. Intracoastal Tubular Services, Inc., 98-2105 (La.App. 4th Cir.2/24/99), 730 So.2d 1012. Rather, the intent of the contracting parties to stipulate a benefit in favor of a third party must be made manifestly clear. Id. Additionally, to establish a stipulation pour autrui, the third-party relationship must form the consideration for a condition of the contract, and the benefit may not be merely incidental to the contract. Id. The party demanding performance of an obligation pursuant to a stipulation pour autrui bears the burden of proving the existence of this obligation. Paul v. Louisiana State Employees' Group Benefit Program, supra.

The Arbitration agreement in the instant case specifically states that:

The Company ... [is a] "third party beneficiary" of My agreement with EDSI, and I am a "third party beneficiary" of others' agreements with EDSI. A "third party beneficiary" is someone who benefits legally from a contract between other parties.

In the preamble, the "Company" is defined as Robinson's "potential employer," which in this situation was Ryan's.

In addition to specifically designating Ryan's as a third party beneficiary of the agreement between Robinson and EDSI, the instant agreement clearly binds both Ryan's and Robinson to submit any applicable employment-related disputes to EDSI. See infra, pp. 6-7, at 887-88. As such, we find that the intended benefit to Ryan's is not merely incidental.

The trial court's finding that Ryan's did not have standing was based solely on the clause printed in boldface which was obviously designed to insure that a potential employee would not interpret the agreement as a promise to hire and to emphasize that any subsequent employment was "at-will" and not contractual. The trial court erred by premising its finding as to Ryan's standing merely on this one clause, and not even considering the following clause which specifically designated Ryan's as a...